GOOD NEWS IN 2024 FOR HOAS: REDUCED QUORUMS

HOAs often struggle to attain “quorum,” meaning the minimum member participation needed, to conduct board elections. Developer-drafted bylaws typically require a majority of the membership to participate in board elections. Consequently, some HOAs have not had a valid election for many years and the board just appoints persons to fill vacancies when they arise. In such a case, that means that nobody on the current board was elected by membership vote. HOA lawyers in drafting amended bylaws often add a provision allowing for a reduced quorum in director elections if quorum is not attained on the first attempt.

Assembly Bill 1458 provides relief to HOAs in this regard and was signed by Gov. Gavin Newsom on Oct. 4,. It allows California HOAs to reduce their board election membership quorum to 20 percent on the second attempt, starting Jan. 1.

The bill amends Civil Code Section 5115, one of the main HOA election process statutes. The announcement required by 5115(b) to be sent at least 30 days before ballots are distributed (the notification announcing the candidates and that ballots will be distributed soon) must now include a statement that if quorum is not attained the board may call a subsequent membership meeting at which time the minimum quorum will be 20 percent.

A new Civil Code 5115(d)(2) authorizes the association to adjourn a failed membership meeting to a date at least 20 days later and that the quorum at the resumed membership meeting will be 20 percent (unless the HOA governing documents provide for a lower quorum).

A new Civil Section 5115(d)(3) requires a general announcement at least 15 days before that resumed membership meeting announcing the date, time, and place of the meeting and stating the list of candidates. This new notice must be sent within a few days of the adjournment of the meeting to a new reduced quorum meeting. For most HOAs, this is a new announcement, as most reduced quorum bylaw provisions only require the new date, time, and place be announced to those attending the failed membership meeting.

It should be noted that, if the HOA has complied with Civil Code Section 5103 regarding elections by acclamation, and if there are not more candidates than open seats, this process is unnecessary because in that circumstance the board can simply declare the candidates elected. This eliminates quorum concerns and eliminates the Civil Code 5115(b) announcement.

Quorum for other HOA elections (assessments, amendments, recalls, etc.) is unchanged by this new law. Watch out for those who will overstate this new law and seek to apply it to governing document amendment votes or special assessments. The decrease in quorum applies only to board elections (and not director removal elections).

Quorum requirements may seem to be an impediment to HOA governance, and some of my colleagues recommend completely dispensing with quorum requirements. However, a reasonable quorum requirement protects the HOA membership from a small group of members making important decisions for all members.

HOA members don’t participate in votes for many reasons, including contentment, apathy, and discouragement. HOA leaders can help by communicating more with members and helping to build a sense of joint ownership.

With the legislative advances in recent years regarding technology and HOAs; who knows, maybe electronic voting will come from our legislature soon!