California CID HOA Election Rules

We have a serious problem with California Civil Code 1363.03, which covers the election rules. Specifically CVC 1363(a)(3). This paragraph (to paraphrase) basically states in the first sentence that the election rules will establish the qualifications of the candidates for Board of Directors. The last sentence states that the nomination or election procedure shall not be deemed reasonable if it
disallows any member of the association from nominating himself or
herself for election to the board of directors. Take notice of this. There are two distinct statements here and they conflict with each other. The first conflict states that the election rules shall establish the candidates qualifications. The last sentence says the proceedure shall not be deemed reasonable if it disallows any member of the association from nominating himself. How can this be conflicting? Case in point. Just recently, a Southern California judge ruled that a member, who had a litigation against the Association, could not be prevented from nominating himself as a candidate for election, even though the qualification requirements stated that a member shall not have a litigation pending against the Association. What?? This is like a member that rents his unit out, living in Oregon and coming down to California and says he wants to be a candidate for election. The qualification says he must live in the Association. No matter, the second sentence disqualifies any candidate requirement the Association establishes. How would a successful candidate in this situation work effectivly when he has a lawsuit pending and is present at an Executive Session to discuss the lawsuit?

The California Civil Code, as it pertains to CIDs was written by attorneys, for attorneys, and for their financial gain. They whole Davis-Sterling Act is so riddle with conflicting statements that there is no hope for anyone. Only attorneys will win.

If the members of an Association (all Associations) quit fighting each other and pool our energies, we could force our Sentators and Assembly members to write Bills and Laws that clearly define requirements. No, we are too busy bitching about the color of the neighbors door or the number of cats they have. We are our worst enemy and the legal community is doing nothing to help. "Your lawsuit is my holiday in Hawaii." That is the mindset of our legal system.

If we do nothing about all the discrepancies in the Civil Codes, then we deserve everything we get. It would be interesting to see how many Associatons are willing to start a movement in the State of California to stop our lawmakers from leading us around by a nose ring. No, it is easier to roll over and play dead.

Hi Michele. Yes I feel better, but obviously you have not prepared any election rules to govern the voting of the members of the Board for your association.

Good luck.

Obviously I have stirred up a hornet's nest. That was not my intention. How many of you out there have taken the time to read and study the state laws that govern your Association? The law in california, governing associations mandates for us to have election rules. These election rules are based upon the state law that requires them (if you dont perpare election rules you open the association up to some real legal ramifications).

The law for California covering these election rules has a paragraph that has two sentences. The first sentence states, "that the election rules shall establish the qualifications for a candidate." The second (and last sentence) states, "Nothing shall be established that prohibits a candidate from nominating himself/herself as a candidate for election." I have parphrased both sentences, but don't you see the conflict? The first one says establish the qualifications. The second says "we don't care what the qualifications are, you can't stop a member for nominating himself or herself." A simple matter would be to change the second sentence to include the requirement "that nothing shall be established to prohibit a member from nominating himself or herself for a candidate, providing they meet the qualifications established herein."

And herein, folks lies our problems. There is such a consumation by my input that we are overlooking the obvious. We have laws for our Associations that are so conflicting that we need to allocate a bunch of money (OUR money) to give to lawyers to interpret them. And absolutly nothing, NOTHING, is being done to help associations or board members to make solid decisions without consulting with attorneys (more money)

Also, I must have been mistaken when I joined in. I thought I was joining a group that was interested in starting a grass roots movements to improve ALL of our associations without breaking the bank due to lawyer's fees.

For further informations, enter "CVC 1363" on your search bar. After you open the file, look for 1363(a(3). If you haven't gotten involved with election rules, look out, because they are coming your way.

First off Don you have confused being able to run for a seat on the BOD with winning a seat on the BOD. In the examples you cited if the person in litigation with the HOA won a seat the rest of the BOD could form an "Executive Committee" which excluded him to deal with the lawsuit or just claim conflict of interest and exclude him from any info on the lawsuit. In your second example of an out of state owner being on the BOD, California is just one of the States that have embraced the new millennium and allow teleconferencing during board meetings.
It's funny you bring this up, because in the October 25, 2009 Davis-Stirling newsletter they tackled the question of whether to allow a candidate everyone considered mentally incompetent:

MENTALLY INCOMPETENT?
QUESTION: At our annual meeting, there were 3 vacancies and 4 candidates. Before the results of the election were read, one of the directors resigned, with the understanding that the 4th candidate would also be seated to that vacancy. The board (other than me) refused to seat the 4th candidate, stating that the board has the right to appoint a director to that position and that the 4th candidate was mentally incompetent.

ANSWER: If one of the candidates withdrew before the election results were announced, then the remaining three directors automatically fill the three open positions. If one of the directors whose seat was not up for election resigned, the board can appoint a replacement to fill the seat (unless your governing documents state otherwise). Even though the resignation took place at the annual meeting, the board is not required to appoint the fourth candidate to fill the vacated seat.

Mentally Incompetent. The board does not have the right to decide for itself who is mentally competent to serve as a director. That is a decision for the courts to make. As a rule, homeowners who are not competent to serve on boards are elected to Congress.

Well, you have no idea what I have or have not done, or what election rules govern my HOA.

But, to be sure, I still am glad your vent has cleared your pipes.

Sorry Glen, you are wrong. The California Civil Code 1363.03(a)(3 does not establish one qualification criteria. It simpley states the elections rules shall establish the qualifications, but it does not address what the qualifications are. That is up to the individual Associaitions.

Hi Michele. Does this mean asking you out for lunch is completely out of the question?

All,

Two add my two cents and return to Dons initial question, I don't see the conflict in the act as Don described it. Being nominated and being qualified are two different things. If Davis Stirling does not require specific qualifications to be elected to the Board and/or the Associations governing documents do not require any qualifications, then any nominee would be considered qualified. However, if it says somewhere that A candidate for the Board must be a member in good standing, then it is possible that some of those nominated might not be qualified to actually serve. If this were to happen, allowing a nominee from the floor can still be allowed but the nomination rejected based on the nominee not meeting the qualifications required. Therefore, to me, Davis Stirling does not seem to be in conflict with itself (at least as Don explained it). I can see it being confusing, as most laws are, but not in conflict.

Tim

Sure about that are you? By the way you brought it up in your original post: How would a successful candidate in this situation work effectivly when he has a lawsuit pending and is present at an Executive Session to discuss the lawsuit?

All they would have to do is form an "executive committee" without the litigant to meet with the HOA's attorney.

Corporations Code §7212. Executive Committees

(a) The board may, by resolution adopted by a majority of the number of directors then in office, provided that a quorum is present, create one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. Appointments to such committees shall be by a majority vote of the directors then in office, unless the articles or bylaws require a majority vote of the number of directors authorized in the articles or bylaws. The bylaws may authorize one or more committees, each consisting of two or more directors, and may provide that a specified officer or officers who are also directors of the corporation shall be a member or members of such committee or committees. The board may appoint one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board or in the bylaws, shall have all the authority of the board, except with respect to:

(1) The approval of any action for which this part also requires approval of the members (Section 5034) or approval of a majority of all members (Section 5033).

(2) The filling of vacancies on the board or in any committee which has the authority of the board.

(3) The fixing of compensation of the directors for serving on the board or on any committee.

(4) The amendment or repeal of bylaws or the adoption of new bylaws.

(5) The amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable.

(6) The appointment of committees of the board or the members thereof.

(7) The expenditure of corporate funds to support a nominee for director after there are more people nominated for director than can be elected.

(8) With respect to any assets held in charitable trust, the approval of any self-dealing transaction except as provided in paragraph (3) of subdivision (d) of Section 5033.

(b) Subdivision (a) shall not apply to any committee which does not exercise the authority of the board.

(c) Unless the bylaws otherwise provide, the board may delegate to any committee, appointed pursuant to paragraph (4) of subdivision (c) of Section 7151 or otherwise, powers as authorized by Section 7210, but may not delegate the powers set forth in paragraphs (1) through (8) of subdivision (a) of this section.

Don,

Ah, the good ole CAI. Actually there have been times when the CAI lobby works well with the h/o's. They don't always get their way with the AZ legislators!!

We don't change time here in AZ (except for a small Indian Reservation in the northern part of the state!).

I have a radio controlled clock that I have to change from Pacific to Mountain time. So I'll be watching the hands spin around for a day or two! LOL

Glen, please show me one qualification that CVC 1363.03(a)(3) establihes and you can join Michele and me for lunch. (Michele, I think Glen is going to buy) You are in Kentuck, Glen is in Ohio, and I will be coming to Indiana to visit my Mom. I think we could find a mutual place

By the way Fred, would you like to join Michele, Glen, and myself for lunch? See what you started, Michele?

At least one thing is sure. Someone has come out of their box and removed their rose colored glasses and is rising above the color of the door and the number of cats. Real felony items!

Hi Glen. The Code you reference is not for CIDs. it applies to for-profit Corporations, not non-profit corporations. The Sterling-Davis act addresses these items. Sterling Davis Act are Civil Codes 1350 to 1365.

Very few of the items you list are applicable to CIDs or HOAS. (1) It is illegal for HOAs to expend funds to support candidates. (2) Compensation for serving on a Board of Directors in a CID or HOA is illegal.

Lordy, I have been under paid for 25 years. Get a rope.

But see, Glen. This is what I mean about all the conflicts that exists. Where do you draw a line?

BREAKING NEWS*****BREAKING NEWS*****BREAKING NEWS*****BREAKING NEWS
This just in - I just heard a reliable rumor that CAI also controls the black helicopters' and is a secret member of the New World Order.

Hi Glen, in regards to your comments about Black Hawk Helicopters, New World Order, here is an exert from a web site all of you may be interested in. You may have to do some searching, but there are tons of horrow storyies regarding the CAI

Their web site is www.ahrc.se hope you can access it. You may have your eyes opened. Sorry these are so long, but Glen, you are a tough nut to crack.

The article is from the AMERICAN HOMEOWNERS RESOURCE CENTER. Here is the article:

"Now that CAI has fattened up the legislators - maybe they think they can get Colorado SB06-089 passed."
Colorado homeowner advocates report that lawmakers only include CAI foreclosure lobbyists in bill discussions and hearings

February 20, 2006

By Jan Jackson (View author info)

Denver, Colorado -
Letter to the Colorado Senate Judiciary Committee

February 18, 2006

TO: Colorado Judiciary Committee (Senators: Dan Grossman (Chair), Brandon Shaffer (Vice Chair), Bob Bacon, Jim Dyer, Ken Gordon, Shawn Mitchell, Kiki Traylor)

FROM: Jan Jackson

SUBJECT: SB06-089

Senators,

Friday, I received an email from a Colorado HOA homeowners advocate. Here's the gist of his email:

"I just spoke with Jessica at the Legislative Council office at (303) 866-3521. SB06-89 ... is the first item on the agenda for the Senate Judiciary Committee on Monday, 2/20/06. It does not appear on the calendar on the web today as the information did not meet the deadline - or so I was told. I guess now that CAI has fattened up the legislators, maybe they think they can get it passed?"

I checked the Senate calendar (late Friday afternoon) and a Judiciary Committee meeting had not been scheduled for SB06-089 for Monday, February 20, 2006. Perhaps it will appear on the Senate Calendar this coming Monday, February 20th? Of course, appearing on the Senate calendar the same day and a few hours before the actual meeting would be much too short a notice for most HOA homeowners to be able to attend the Committee meeting or maybe even have the time required to send a cogent email to each member of the Judiciary Committee. But, strange as it may seem, CAI members appear to have had more than enough notice. I wonder how that came about?

No matter. What we do know is that the Community Associations Institute, aka the "CAI," has carried that date (February 20, 2006) on various pages of their web sites as the date the Judiciary Committee will meet to decide the fate of SB06-089 in their Committee for over a week (actually the same time frame wherein the Judiciary Committee met twice and laid over the bill each time). How do I know that? Because I check what's going on with the Colorado CAI on their web sites myself -- daily.

Were the advance postings of the correct meeting date on the CAI web sites just a coincidence? Or was it some nefarious CAI and some as yet unknown person or persons design? HOA homeowners may never know the answer to those questions. But, when made public knowledge, continual and often blatant "coincidences" between one or more legislators and special interest lobbying groups (such as the CAI and HOA industry leaders) often appear to result in a very strong impetus toward a statewide voter revolution.

More information of note for Senate Judiciary Committee members below.

Jan Jackson
Colorado Homeowners News
P.O. Box 997
Florissant, Colorado 80816

Class action lawsuits, Constitutional challenges to state HOA statutes/Acts, and the repealing of each state's homeowners association/common interest community legislative Acts. The below online posts and letters from HOA/CIC homeowners are from just a few of all of the states which have "had it" with their state legislators who appear to have been bought and paid for by the lobbying attorneys of the Community Associations Institute (CAI) and the leaders of the HOA industry; all business entities that have grown up around HOA statutes/Acts (CCIOA, for example) that have been enacted mainly, it appears, from the lobbying efforts of the CAI. (Written by: Jan Jackson)

[From a disgusted and angry HOA homeowner]

...the "rosy" picture that the majority of our legislature paint with 95% of these [HOA] communities "with no real problems," is getting harder each year to swallow ... They [HOA homeowners] are paying greater taxes to the city and state coffers than even the most lucrative of the lobbyist organizations (CAI) ... What the Senate has done in passing this [bill] through committee, is legitimize the CAI as a "private" governmental entity over almost 2 million homeowners in the State of Arizona ... the Senate has created a private governmental agency [the CAI] to regulate these [HOA] communities, without oversight and in violation to both contract law, and constitutional law ... this [bill] takes the cake in disregard for the citizenry and private property owner. Now, not only can a developer repossess your land under "eminent domain" for taxes, but a developer can create an HOA and through the "fixing" of excessive assessments now given a private governmental agency (CAI) today legitimized by our Senate ... You have given foreclosure attorneys and their vendors title to the property of many Arizona citizens today ... I hope Arizona's economy booms because of it, since the federal and/or class action that will eventually result in our Senate's disregard for the citizenry of Arizona will end up costing a bundle. [author's name withheld to protect the Arizona HOA homeowner writer from the retaliation of her board and their CAI attorney]

[From a Virginia HOA homeowners advocate radio show re New Jersey's recent appellate decision on Constitutional rights of HOA homeowners]

"On The Commons" is a weekly radio show dedicated to discussing the many issues surrounding mandatory homeowner associations, the fastest growing form of residential housing in the nation.

Do Americans waive their constitutional rights when moving into a homeowners' association? This question has been hotly debated for the past several decades. Members of the association industry, managers, board members and association attorneys generally believe that rights are checked at the entrance of the development. But the homeowners, for the most part, never entertained any notions of not enjoying all the freedoms guaranteed them by Constitution. And now the appellate court in New Jersey agrees with the homeowners.

On The Commons is broadcast every Saturday from 2-3 PM ET on WEBR Fairfax Radio. In the Northern Virginia area, On The Commons can be heard on Cox Cable, Channel 37 (channel 7 without a box) and Comcast channel 27, live on http://stations.swcast.net/urbancowgirl777 and on www.onthecommons.com soon after. The archives are at http://shows.onthecommons.com/

[From a California non-CAI attorney]

Until there are per se penalties against recalcitrant boards, and strong ENFORCEABLE statutory protections in place for the assets of the owners that comprise an "association," no such stockpiling of accounts ["reserves"should be mandated. Owners are losing way too much and have too much to risk. Depletion of assets is grave for those on fixed incomes (and not on fixed incomes), reserve accounts are too much of an incentive to merely "tax and spend." (gee, where have we heard THAT before). It matters NOT what the board states they will or will not spend those funds are, everyone knows, across this nation, boards do what they want to do - [CAI] attorneys in tow.

It is simply too risky to mandate a reserve account of any kind. [Read "Villa Appalling" for a more detailed analysis.] Frankly AZ Senators should "stay" this bill or it should be diverted to committee to investigate the fiscal impact - and there will be a fiscal impact (too lengthy of a discussion for here). Given the irrationality of bills such as this (which will have a trickle down effect throughout the states) at this time a moratorium on such laws should be in place.
You say, "you can go to jail for embezzlement under existing laws, what else is needed? Oh, the evidence? OK, strengthen the access to records bill" ... that is ridiculous, we've watched time and again blatant abuses of CRIMINAL laws where associations, management, board directors, WALK. Greater access to books you say? Surely you jest! More like greater access to CREATIVE ACCOUNTING METHODS BY BOARDS TO COVER THEIR CRIMINAL ACTIVITIES!

Compared to REAL criminal laws and REAL Corporations Code violations, ass's get off with nearly everything. I am unswayed by those arguments. To date such arguments have not proved themselves viable enough for me to want to stockpile and gift money in a reserve for the taking by the criminals I am stuck to live amongst.

I say, special assess me! PROVE WHAT YOU NEED THE MONEY FOR! THEN FOLLOW THROUGH WITH THE EXPENDITURE SHORTLY THEREAFTER OR RETURN MY MONEY WITH INTEREST. *I* know how to spend my money better than a bored board with indemnification as a license to lie to cover their pathetic [CAI] business judgment.

Don you made my day invoking Jan Jackson and the AHRC. You might want to read: http://www.hoatalk.com/Search/ForumSearch/tabid/87/forumid/1/postid/31485/view/topic/Default.aspx

Also the AHRC lost one case in California and the judge ordered them to turn over their website to the HOA they attacked which is why the content is not exactly "fresh": http://www.ahrc.se/new/index.php/src/news/sub/article/action/ShowMedia/id/4395

As to CAI I am aware of them, our HOA used to be members and they were instrumental in getting some much needed updates to Ohio's COA laws. It will be interesting to see if now that he has a temporary restraining order if he will be elected.

Hi Michele, Don't shoot the messenger. I have earlier stated that the HOA, in the election case, wrongly tried to push through some after-the-fact election rules. The HOA should have lost, just on principle. But, there still exists the conflict within the election rules. The Judge in the case did not say that the HOA was wrong (which I believe it was), but the Judge said you can't have anything in the rules that prevent a person from nomination themselves for candidates for election. All I said was the Election Code (1363.03) should be changed, or amended, to read that a member must meet the qualifications in order to be nominated as a candidate. As long as this conflict is there, some jerk (and all HOAs have them) could create a legal problem like the one stated above. The legal problem is OK, we all learn from those, but the legal cost can cause havoc with an Association's funds.

I am sorry you don't see the threat to HOAs that the CAI pose. To keep posted on their activities, go to www.ahrc.se this is a homeowner's awareness group that keeps homeowners posted on all activities across the States.

Good line of thought throughout ... points to think of:
1) While 1363.03 gives all members the right to be self-nominate, it doesn't give all members the right to be a candidate able to be elected. In order to be a candidate able to be elected, the person who self nominates or is nominated by someone else or some group (like a nominating committee) must meet the qualifications outlined in the rules and/or the governing documents.
2) The case previously mentioned where the judge supposedly said that anyone could nominate themselves ... that's not exactly what happened ... the judge simply granted a temporary restraining order to stop an election from happening so as to not damage the rights of the person who sued to be elected ... that TRO was quickly released and unfortunately, the guy who sued his association forgot to submit his grievance to ADR before filing a lawsuit, so the defendant association … I think the whole case is going nowhere because of it. The end all be all is that there never has been an actual judgment on the issue through that case and likely won’t be.