Everyone has a change of heart sometimes, including, it seems, the California Legislature. By now, most people in the community association field are familiar with Senate Bill 323 (“SB 323”). SB 323 was chaptered into law in October 2019. It significantly amended Civil Code sections 5100, et seq., which govern community association elections. Among other things, SB 323 revised the law to only permit community associations to impose a few, specific qualifications on candidates running for an association’s board of directors. Term limits were not included among them, meaning that associations were effectively prohibited from disqualifying board candidates who had termed out.
That has now changed. The Governor signed Assembly Bill 502 (“AB 502”) into law in October 2021, which took effect on January 1, 2022. This new law added Section 5103 to the Civil Code, which permits elections by acclamation, provided certain requirements have been met. These requirements include:
(d) (1) The association permits all candidates to run if nominated, except for nominees disqualified for running as allowed or required pursuant to subdivisions (b) to (e), inclusive, of Section 5105.
(2) Notwithstanding paragraph (1), an association may disqualify a nominee if the person has served the maximum number of terms or sequential terms allowed by the association.
(3) If an association disqualifies a nominee pursuant to this subdivision, an association in its election rules shall also require a director to comply with the same requirements.
Section 5103(d)(2) effectively reintroduced the concept of permitting director term limits. Arguably, associations may now impose term limits on director candidates, so long as such term limit is clearly set forth in the association’s Election Rules.
This raises a question as to whether term limits only apply in elections by acclamation. It is curious that the Legislature reintroduced the concept of imposing term limits in the context of elections by acclamation, rather than simply stating that associations may impose this candidate qualification in all elections. Hopefully, the Legislature will clarify this issue with some clean up legislation in the coming years.
Another question is whether term limits in Bylaws are now enforceable again. We believe they likely are, but the association’s Election Rules will need to be amended accordingly.
Please reach out to your community association counsel if you have any questions regarding imposing term limits in your association’s board elections, the enforceability of term limits in Bylaws, or the procedure to amend Election Rules.