Election Rules: Why Attempting to Follow the Law Isn’t Enough

Download pdf

Got Election Rules?

We hope most community associations can answer “yes” to this question, but still come across some that say “no.” This may seem surprising, since it’s been years since California Civil Code section 1363.03, which mandates that all associations adopt election rules, became law and since failure to adopt election rules carries multiple risks and potential liabilities. Pitfalls lurk at every turn for community associations without election rules—from  the increased risk of legal challenges to member votes to limitations on the board’s ability to select the association’s manager as the inspector of elections.

 Can’t We Just Follow The Civil Code?

In 2006, former Civil Code section 1363.03 changed how most common interest developments conduct elections. The provisions of section 1363.03 have since been incorporated into Civil Code sections 5100 – 5130. In accordance with current Civil Code section 5105, community associations must adopt rules and policies covering specific voting and election issues. Following the double-envelope secret balloting requirements contained in the Civil Code or the association’s governing document provisions pertaining to member votes does not satisfy an association’s obligations under section 5105.

A Double-Whammy!

Community associations without election rules find themselves in noncompliance simply for failure to adopt the required rules, but that’s not all. These associations are also at risk of taking actions which might seem insignificant and might even seem normal – but are nevertheless unauthorized or illegal. For example, for a board to appoint a community association manager as the inspector of elections, the association must have election rules that expressly authorize the appointment of the manager to this position. Otherwise, the manager may be designated to collect ballots on behalf of the inspector(s), but may not serve as an inspector or assist the inspector(s).

While not being able to appoint the manager as an inspector may, in some cases, constitute an inconvenience, there are other more serious potential consequences to consider.  For example, the election provisions contained in a community association’s bylaws may not be consistent with current law – especially if the bylaws were written years ago.  Without election rules to address any inconsistences between the bylaws and current law, there is a greater likelihood that the association will, albeit inadvertently, violate the law when conducting board elections or other member votes.

 What’s The Big Deal?

California law permits a member to bring a civil action against a community association for violating the Civil Code sections pertaining to member votes. If a violation is proven, the court may void the election results and impose civil penalties of up to $500 per violation. Additionally, the court may require the community association to reimburse the member for his or her reasonable attorneys’ fees and court costs.  (It is worth noting that while a prevailing member may obtain his or her attorneys’ fees and court costs, a community association that prevails is not entitled to any costs unless the community association can convince the court that the lawsuit was frivolous, unreasonable or without foundation. (Civil Code section 5145)

Bottom Line?

Community association managers and boards of directors should ensure election rules that are appropriate for their association, consistent with current law and consistent with the association’s other governing docurments (to the extent the other governing documents are not inconsistent with current law)  have been adopted. Once adopted, these rules should be carefully reviewed any time a board election or other member vote is conducted.

Keep in mind that not every community association’s election rules are the same.  Nor should they be.  Simply adopting another community association’s election rules is never a good idea.  Another association’s election rules may contain provisions that are not appropriate for your association or that are inconsistent with your other governing documents – even if they are not in violation of current law.

If your community association has not adopted election rules, has borrowed election rules from another community association or has questions about member votes, please contact your association’s legal counsel for guidance.

 

[1] Former Civil Code section 1363.03, which became effective on July 1, 2006, is now Civil Code section 5105.