SB 323 was signed by the governor in October. It goes into effect January 1, 2020 and it has changed the HOA world! Now, management companies can be appointed inspector of elections and handle any annual meeting, special assessment voting, amendment of governing documents voting and recall of the Board for their associations. Well, that will change in January with the passing of this new bill. This bill now restricts anyone holding a contract with the association from acting as inspector of elections. What does this mean for HOAs? It means they will have to hire a third party to take care of their election needs. Costing the association additional funds and an added step. It has also changed the timeline for document mail outs. Elections and membership voting meetings have once again been changed!
Other changes included in this new law:
Increased Election Burdens. Starting January 1, SB 323:
• Limits the right of an association’s membership to set qualifications for board candidates.
• Prevents non-owners from running for the board (a blow to small associations who may want a tenant, such as a CPA, to serve on the board).
• Allows associations to only disqualify candidates who (i) have been owners for less than a year, (ii) would be on the board with a joint owner, (iii) has been convicted of a felony that jeopardizes the association’s fidelity bond insurance, or (iv) is delinquent in the payment of their assessments.
• Prohibits associations from ever suspending an owner’s right to vote.
• Requires the inspector of elections to be an entity or individual with no previous contractual relationship with the association, which disqualifies an association’s existing managers, attorneys and accountants, among others. This will increase the cost of elections for many associations.
• Requires associations to post the requirements for running for the board at least 30 days before the nomination deadline.
• Requires associations to post the list of candidates, deadline for returning ballots, time and place of the annual meeting 30 days before ballots are mailed.
• Allows owners to review the signatures of all other owners on the outside mailing envelopes, and to copy voter lists, including parcel numbers. As a condition of casting a ballot, homeowners must give up their right to keep their signatures private.
Email Addresses Made Public. SB 323 also makes your email addresses available to all members by making them part of the membership list available upon request. Members can opt out of having their email addresses included with the membership list, but the bill makes NO allowance for email addresses already provided to associations.
Costly Changes. In addition to loss of privacy, loss of control over email addresses, and loss of rights to set reasonable standards for directors, associations will need to go through costly bylaw amendments and election rule revisions to comply with SB 323.
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