"(3) Specify the qualifications for candidates for the board of directors and any other elected position, and procedures for the nomination of candidates, consistent with the governing documents. A nomination or election procedure shall not be deemed reasonable if it disallows any member of the association from nominating himself or herself for election to the board of directors. (4) Specify the qualifications for voting, the voting power of each membership, the authenticity, validity, and effect of proxies, and the voting period for elections, including the times at which polls will open and close, consistent with the governing documents."

Notice, I underlined the words "consistent with the governing documents."

This was a change from the first go-round of the law. And it is important.

I would like to establish that I am not in favor of people serving on the boards of their association if they are not in "good standing". By "good standing", I mean current with assessments and in compliance with the governing documents and rules. But neither my opinion nor that of any other person controls this issue. The documents of the Association control the issue. So, do your HOA documents say that a board member must be "in good standing" to serve? (This could be in the Articles of Incorporation, the Bylaws or the CC&Rs). If they do, then obviously a board member must be in "good standing" to serve. And it makes sense I believe to suggest the leap of logic that if a candidate for the Board is not in "good standing", he or she will not be able to serve if they are still not in "good standing" when elected. So how do you handle this?

My suggestion is that you first check the governing documents. In this case, I am referring to the specific documents listed above, because although rules are part of the governing documents, I do not believe a Board can adopt good standing requirements without substantiation in one of the big three documents listed. You would be checking to see if there is a hearing requirement in order to find a member is not in good standing. If there is, then of course it makes sense, and is safest, to schedule and hold the hearing before the election is finalized, and preferably, if time, before the ballots go out. If there is no hearing requirement in order to declare an owner not in good standing, then the next best thing, in my view, is to give the candidate notice that they have to be in good standing to serve, and so if they are not, by the time it is time to count ballots, that no ballots for this candidate will be counted. In order to avoid this stress and complication, some attorneys say to Boards: "Just tell the candidate they cannot run at all because they are not in good standing." Sometimes rules state that candidates who are not in good standing cannot run for the Board. That makes it easy, but is not very often the case.

This latter view (just telling candidates they cannot run for the board because they are not in good standing) does eliminate the problems that might arise if members are allowed to vote for a candidate that might not be in good standing by the time the votes are counted. However, if a hearing is required by the documents and none is held, then that leaves the election open to challenge. Honestly, I do not know how a challenge by an owner who is prevented from running for the Board would resolve before a hearing officer, but presume that failure of simple due process could work against an association, so I am in favor of at least some kind of notice to the candidate and opportunity to cure the defect.

As for allowing owners to vote, or not, based on good standing, again, the governing documents are critical. If there are requirements such as a hearing to determine an owner is not in good standing, by all means, follow them. Sometimes documents simply say that owners' voting rights are automatically revoked if the owner is not in good standing. Some associations are vigilant in declaring members not in good standing. Others don't even go through the motions or try to keep any members from voting. Pay attention to what the documents say. And I do not recommend commencing an election, sending everyone ballots, and then - half way through, deciding to start disqualifying owners for various (what the owners would probably believe were bogus) violations. I have seen this done and for me, it does not pass the "taste" test. I believe that leaves the election open to challenge. Of course, I do not have a string of cases to recite because the law is too new, but this is something to think about. Good faith could have a lot to do with surviving any election challenge.

Where do you find the definition of "good standing"? It could be in the Articles of Incorporation, the Bylaws or the CC&Rs. Many forget to check the Articles of Incorporation but they are an important document. I recently advised on an election where the Board member "good standing" requirement was in the Articles of Incorporation, not the Bylaws or CC&Rs, but the definition of good standing was in the Bylaws. Sometimes "good standing" is limited to nonpayment of assessments and does not include other violations. If it is not defined specifically, then a reasonable definition would likely be paid up with assessments and in compliance with the governing documents. The question of fines might come up. What if the owner has corrected the violation and does not owe any back assessments but owes fines. This is just a toss up. I have not had this question come up yet but if it did, I would certainly want to know the circumstances around the fines, whether they were justified and handled properly, and whether they were being paid and especially whether it was likely that they would be paid in full by the time the ballots are to be counted.

And remember that other areas of California law may factor into the whole process as well. In order to impose disciplinary action in California in any matter other than assessment delinquencies, there are various requirements including: notice to owner, a hearing or board meeting, and written decision, and it is very possible that suspending someone's right to vote or right to run for the Board without going through this process to identify the violation and/or to determine whether the rights should be suspended could be found improper under the law. It's a lot to think about.

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Beth A. Grimm is an attorney who serves homeowner associations and homeowners alike. She is a frequent contributor to the Echo Journal and other similar publications in the State of California and on a national level. She is provides several publications written in plain English to help people who information about California law as it relates to homeowner associations. . Check out her new book called THE CONDO ANSWER BOOK.

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