Beaumont Tashjian Law Blog

Monday, November 8, 2021

New Election Laws: Term Limits are BACK

Board, managers and owners alike will recall back to 2020, when Senate Bill 323 (“SB 323”) shook up association elections by limiting the number and type of candidate qualifications that could be enforced. Under current law for example, directors and candidates must be members of the association. SB 323 also provided for just four (4) disqualifiers that an association could enforce, through their governing documents: a) the owner is delinquent, b) they’ve been an owner for just one (1) year, c) they’ve had a past criminal conviction that would impact the association’s fidelity bond coverage, and d) if elected, they would be serving on the board at the same time as another board member/candidate who holds a joint ownership interest in the same separate interest.

One seemingly unintended consequence of SB 323 was that it made term limits effectively, unenforceable. In other words, associations could no longer set or enforce a maximum number of sequential terms that any one person could serve on the board, through their governing documents.

After clarifying some drafting confusion with the Legislature, Assembly Bill 502 does in fact reinstate term limits. As of January 1, 2022, associations can now enforce existing term limits or, through their governing documents, adopt rules/restrictions that limit the number of sequential terms any director may serve on the board. This means that it’s critical for boards to consult with their association’s legal counsel and determine whether term limits are in the governing documents and how they might impact upcoming elections. If not, boards will want to work with counsel to determine if term limits make sense for the community; if they do, amending the bylaws or election rules are the probable next step.

Both Assembly Bill 502 and Senate Bill 432 added several changes to the election process (again!), including procedures for employing election by acclamation in uncontested elections, potential changes to the election timeline, etc. These bills reinforce that it’s that time of year to shore up your election rules and ensure that the association is meeting its notice and disclosure requirements under new laws. If ever in doubt about what’s coming down the pike, contact legal counsel for peace of mind.

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