ARE HOA Elections BEING Conducted in Compliance with the Law?
It is not legally sufficient to conduct elections pursuant to the dual-envelope, secret ballot system proscribed by Civil Code Section 5115 without separate election rules. Civil Code Section 5145 provides that a member of an association may bring a civil action for any violation of the elections law, and provides that:
Upon a finding that the election procedures of this article, or the adoption of and adherence to rules provided by Article 5 (commencing with Section 4340) of Chapter 3, were not followed, a court may void any results of the election.
In other words, simply conducting a vote utilizing the dual-envelope, secret ballot procedure, without adopted and published election rules, violates the elections law, exposes the association to potential liability, and risks the nullification of any such vote or election.
Unlike other laws (such as the "internal dispute resolution" law), the Civil Code does not have a "default" set of election rules to follow if an association fails to adopt rules. Failure to adopt election rules is itself a violation of the law, period.
what happens when A Board is Elected Without Election Rules in Place?
Civil Code Section 5145 provides that a member of an association may bring a civil action for a violation of the elections law (including the fact that an election was conducted without election rules in place) within "one year of the date the cause of action accrues." If the cause of action "accrues" when a board is elected in violation of the law, and the election is subsequently voided, any action taken by the board in the interim may be invalidated. Considering the number of actions a board of directors takes in an average year (including collection and enforcement efforts, vendor contracts, etc.), the business of an association could be irreparably harmed if every action taken by a board was subsequently invalidated.
Can Board Members Draft the Rules Themselves?
This author's firm has defended associations in election challenges where the board opted to draft (or have an individual director draft) election rules without legal counsel to save money. That decision resulted in each association spending far more in attorneys' fees to defend the association and the rules themselves than it would have cost to simply hire an attorney to draft the rules on the association's behalf.
Drafting election rules is not as simple as incorporating some language from the statute. Election rules must be drafted so that they comply with the law and must be tailored to work with the association's other governing documents. Because all governing documents are different, election rules are also not "one size fits all." We have the ability to review and address your HOA's specific needs.