TAKE ACTION! Sacramento Bill Voids Homeowner Power in Board Elections

HAVE YOU MADE THAT PHONE CALL YET?

PLEASE PHONE SENATOR TOM UMBERG, CHAIR
SENATE JUDICIARY COMMITTEE AND URGE HIM TO
VOTE ‘NO! ON AB1458/Ta
TOMORROW TUESDAY JULY 11
his phone is 916.651.4034

The association (HOA) industry has long campaigned to eliminate quorum,  that pesky rule in governing documents and in the Nonprofit Corporations Code (7512) requiring that a minimum percentage of homeowner votes is needed to seat new board directors.

AB1458 by Assemblymember Ta will gut these rules by dictating a 20% quorum for board elections, whether your HOA has 20 homes or 2500.. 

So why should we care?

First of all because boards are mini-governments with even more control over the lives and property of homeowners than, say,  city councils or the county tax collector.

Second, a little-known fact about California HOAs is that most of them are small: fewer than 25 homes.  Yet, taken together they control more than $14 billion in cash – all of it collected from homeowners. 

Who controls and spends this money?  HOA boards.

AB1458 – to be heard TUESDAY JULY 11 in Senate Judiciary will impact how boards are chosen.

Notice we used the word “chosen” – not “elected” – because AB1458 will let homeowners with as few as five votes in a typical HOA meet to “choose” board directors — with minimal “notice” to the other homeowners.

How does this work?

If a HOA has a quorum requirement for board elections, but the quorum isn’t met, then “someone” – the legislation doesn’t say who – calls another “meeting” to choose the directors using 20% as the quorum.

So, in a HOA with 25 homes only five votes would be required to choose directors.  Not five Members, but five votes, so just three owners with five lots among them can pick directors for the other 22 owners.  AB1458 doesn’t stop directors from re-electing themselves.

But the really troubling part of the bill is that these “meetings” and this new method of “choosing” is done with virtually no meaningful  legal “notice” to the other homeowners.

AB1458 says HOAs can give “general” notice of this new process and of the meetings, meaning they can stick an announcement on a remote bulletin board that no one reads and that this is sufficient “notice” to the other voters, i.e. owners.

State law already gives owners and HOAs two ways to change quorum requirements e.g. amending their governing documents.  This lets HOAs preserve their independence and their sovereignty.

AB1458 voids this independence of HOAs by dictating a one-size-fits-all “recipe” for voting.  20% is a far cry from the Nonprofit Corp Code minimum requirement that one-third of the voters constitutes quorum.

Yes, the bill does say that it will apply only to electing board directors, but once this “system” is legally in place, then it will be a short step to applying it to other kinds of elections: like eliminating quorums when voting on special assessments

To read this (short) — but dangerous — bill, go here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1458

TAKE ACTION TO STOP AB1458/Ta:

PHONE  — DON’T EMAIL –THE CHAIR OF THE SENATE JUDICIARY COMMITTEE SENATOR TOM UMBERG at 916.651.4034 AND URGE HIM TO VOTE ‘NO’ ON AB1458 ON TUESDAY.

Questions/comments? Email us at [email protected]