Q: We are hopeful you can shed some light on these issues in our HOA:
Board members are elected for two-year terms. Unfortunately, our board did not schedule an election for the next term because the management company was unable to schedule an independent election-monitoring service until it was too late by our election deadline. The manager explained that they would rather risk challenges on term than risk challenges on not having an independent monitor oversee the election. We want to know if this guidance provided is sound and reasonable?
Currently, our board is comprised of three members elected every two years. However, one member of the board recently resigned right after the last election. The two remaining members expressed interest in appointing a third member, but they have not taken any action thus far. They have not provided any explanation for the delay.
The board accepted the manager’s recommendation to increase our monthly association dues. However, they also decided that there is no need to notify homeowners of the increase since the increase amount is less than 20%. When we questioned this decision, the board referred to a new state code that specifies notifications of fee increases are not required unless the increase constitutes a 20% or higher increase. Are fee increases now sheltered by this new 20% guideline? We would greatly appreciate your insights and possible paths forward. — A.L., Escondido.
Q: I’ll address your questions in the same order as you asked them.
A manager should not provide advice about legal risk. Such issues should be addressed by the HOA’s legal counsel. If the HOA continues to delay the election, it could be exposed to a member petition or even a court motion to compel the election to occur. The law requires an Inspector of Election, but it does not specify that the Inspector(s) must be hired professionals – one or three volunteers can fulfill that function, as long as they understand the process (or have an experienced manager or HOA lawyer guide them through it). Yes, the election processes under Civil Code 5100-5145 are very cumbersome, but procrastinating the election doesn’t benefit the HOA or board.
The board should fill the vacancy caused by the resigned director. Having only two directors in place places too much pressure on them, as they must both consistently show up and always agree. Sometimes, two directors are unable to agree on who should be the tie-breaker director, resulting in a vacant seat for an extended period. If the board is unable or unwilling to fill the vacancy, consider holding a special membership election to fill the seat unless the next annual election is 3 or fewer months away (as the process takes at least 3 months).
Your board seriously misunderstands the statute regarding assessment increases.
According to Civil Code Section 5605(b), a board may increase regular assessments up to 20% per year without a membership vote. However, the increase must be announced to the membership at least 30 (but not more than 60 days) before the assessment increase becomes due, in accordance with Civil Code 5615. Additionally, any action increasing assessments must happen in an open board meeting, which means that an agenda would need to be posted before the matter could be discussed, and minutes would reflect the decision made.
Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and a Partner at Richardson Ober LLP, a renowned California law firm that specializes in community association advice. Submit column questions to [email protected].
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