When Civil Code section 5103 became effective on January 1, 2022, many community association managers and board members celebrated the new authority for boards to approve nominees by acclamation when there are not enough candidates to hold a contested election. However, there are limitations on a board’s ability to approve nominees by acclamation and a decision needs to be made very early in the election planning process about whether approval by acclamation might be an option – long before the board will know how many nominees will ultimately emerge.
In order to approve candidates by acclamation, section 5103 requires several procedures to take place. First, notice of the nominating process and the possibility of an election by acclamation must be provided to all members by individual notice at least 90 days before the deadline for nominations. This requires the election process to begin at least 60 days earlier than is otherwise required to conduct an election under Civil Code section 5115(a). And, because 5103 requires individual notice of the nomination procedures, whereas 5115(a) only requires general notice, the additional cost of providing individual notice should be considered. Second, section 5103(b)(2) also requires providing a second, similar reminder notice to the members before the deadline for nominations, again by individual notice, that is not required by Civil Code section 5115 if acclamation is not an option.
The requirement to send notices by individual delivery places an added burden on associations. General notice of documents can be satisfied, under Civil Code section 4045, simply by posting a document in a prominent location or on the association’s website, if those locations are described in the Annual Policy Statement. (Though, it should be noted that individual delivery is required for any member who requests it.) And, while delivery by individual notice may be accomplished by email under Civil Code section 4040, most associations deliver individual notice by first class mail, postage prepaid, particularly if the association does not maintain evidence that every member has consented in writing to receive communications by email, as would be required for email delivery. So, in most cases, delivery by individual notice costs more than general notice.
The board must also consider whether there is sufficient time to provide a 90-day nomination period. For example, suppose the association’s bylaws require the annual meeting to be held in the first week of September. If, by the second week of April, the board has not instructed management or the inspector of elections to provide individual notice of a 90-day nomination period and possibility of election by acclamation, there would not be enough time to comply with the legal requirements of section 5103 to potentially allow the board to approve the nominees by acclamation.
So, as a practical matter, before nominees are sought, it would be prudent for the board to decide whether the additional time and expense of providing two notices by individual delivery is worth the benefit of potentially approving nominees by acclamation and saving the cost of mailing ballots and any other costs that might be incurred in an election.
On that note, a board that is inclined to hire a professional inspector of elections, rather than to rely on one or more homeowner volunteers, might not always save money by deciding to approve nominees by acclamation. Under Civil Code section 5115(b)(1), associations must provide notice to members of “the date and time by which, and the physical address where, ballots are to be returned by mail or handed to the inspector or inspectors of elections” at least 30 days before the ballots are distributed. Civil Code section 5115(c)(2) requires that the physical address where ballots are to be returned either be the inspector of elections’ address or an address specified by the inspector of elections. This means that the inspector of elections must be selected at least 60 days before the election date so that address will be included on the 5115(b)(1) notice. Since the board won’t know if balloting will be necessary until just before a 5115(b)(1) notice would need to be sent, it might not be practical to wait that long before hiring a professional inspector of elections. A possible option might be determining whether any prospective inspector consents to ballots being sent to the management company or some other location instead of directly to the prospective inspector.
Another issue to consider is whether the board may have any difficulty in achieving quorum on short notice at the latest opportunity to select an inspector of elections or may need to postpone the annual meeting. In addition, if the board waits that long before selecting an inspector of elections, it might be difficult to find an inspector of elections who is still available on the date of the association’s annual meeting. On the other hand, if the board signs a contract with a professional inspector of elections earlier in the process and the contract does not allow termination within 60 days of the election, the association may have an obligation to pay the inspector of elections, even if the election will be held by acclamation.
It’s also worth keeping in mind that the election of directors may be only one issue for the members to decide at the annual meeting. Ballots may still be needed for other items to be voted upon at the annual meeting, such as approval of the minutes of the prior annual meeting or an election under IRS Revenue Ruling 70-604.
Board members who are aware of this new ability to conduct elections by acclamation may be very enthusiastic to save money on unnecessary elections and might assume that management and/or the inspectors of elections will comply with all requirements to enable the board to approve nominees by acclamation. Likewise, management might assume that the board would prefer to save money on the cost of mailing notices by individual delivery – costs that may turn out to have been unnecessary if more candidates than open board positions emerge.
It’s important for the board and management to communicate their expectations long before the next annual meeting (ideally at least six months before the next annual meeting) to avoid any misunderstandings. Be prepared to discuss the association’s cost and method of providing individual notices and general notices to the members, the cost of printing and mailing ballots, the availability of various professional inspectors of elections on the date of the annual meeting, the termination provisions in the contracts proposed by those inspectors of elections, the fees charged by management to attend board meetings and annual meetings, and the likelihood of finding more nominees than seats available on the board.
The following table may provide a helpful guide for those discussions:
|Procedure||Acclamation||Election by Ballot||Comparison|
|Notice of Nomination Procedures and possibility of election by acclamation||– 90-days before deadline for nominations.
– Individual delivery required
|– 30 days before deadline for nominations
– General delivery is acceptable
|Acclamation requires a longer nomination period and may require more postage|
|Nomination and possibility of election by acclamation reminder notice||– 7-30 days before deadline for nominations
– Individual delivery
|Acclamation requires an additional notice, which may require more postage|
|Board meeting to approve by acclamation||Open board meeting required||No board meeting required.||An additional board meeting may be required to approve nominees by acclamation.|
|Inspector of Elections||Not needed since no ballots will be counted||Must be selected at least 60 days before election.||It’s prudent to select an inspector of elections before the deadline for nominations. But, if the association cannot terminate its contract with a professional inspector of elections, it may have to pay for services that are unnecessary.|
|Ballot delivery||Not necessarily required||Must be mailed or delivered to all members||Acclamation could save the cost of printing and mailing ballots|