Governor Newsom Signs SB 323 – Election Bill Becomes Law
On October 12, 2019, Governor Gavin Newsom signed Senate Bill 323 into law. SB 323, which enacts a series of reforms to the laws governing association elections, will become effective on January 1, 2020 and implements the following:
- It requires an association to provide members with general notice of the procedure and deadline for nominating candidates to the board at least 30 days before any deadline for submitting nominations.
- It requires an association to provide members with general notice of the list of candidates, deadline for returning ballots, time and place of the annual meeting 30 days before ballots are mailed. Accordingly, nomination must now close at least 60 days before the date of the election.
- It requires an association to deliver a copy of the association’s elections rules or notice with an online link to the election rules to every member at least 30 days before the date of the election.
- It prevents non-owners from running for the board and allows associations to disqualify candidates only if they have been an owner for less than one year, if a joint owner is on the board or a candidate, if they have been convicted of a felony which jeopardizes the association’s fidelity bond insurance coverage, or if they are delinquent in the payment of assessments (not including fines, late fees, collection costs, attorney’s fees, or assessments paid under protest). All other director qualifications contained in an association’s governing documents are null and void.
- It requires associations to provide a member the opportunity to engage in internal dispute resolution prior to disqualifying the member from nomination for one of the authorized reasons.
- It deletes the exception in the current law allowing a person or business entity currently under contract with the association for compensable services to serve as inspector of elections if authorized by rule. As such, an association’s existing manager, attorney, or accountant may no longer serve as inspector of elections.
- It designates the sealed ballots, signed voter envelopes, voter list, proxies, and candidate registration list as “association records” which must be produced for inspection by an owner upon request.
- It eliminates an association’s ability to suspend members’ voting rights for any reason and prohibits the denial of a ballot to an owner or person with general power of attorney for an owner.
- It requires associations to provide owner email addresses to any member who requests a copy of the membership list. Owners may opt out of having their email addresses included as part of the membership list.
Given the numerous new procedural and notice requirements that associations will have to comply with in connection with annual elections, boards are advised to consult their legal counsel well in advance of their annual meeting to ensure compliance with the new requirements and timelines imposed by SB 323.
