Bill Text: CA AB2159 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Common interest developments: association governance: elections.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2024-09-22 - Chaptered by Secretary of State - Chapter 383, Statutes of 2024. [AB2159 Detail]

Download: California-2023-AB2159-Amended.html

---

Amended  IN  Assembly  May 02, 2024

Amended  IN  Assembly  April 15, 2024

Amended  IN  Assembly  April 01, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2159

---

Introduced by Assembly Member Maienschein

February 06, 2024

---

An act to amend Section 5115 of, and to add Section 5116 to, Sections 5105 and 5115 of the Civil Code, relating to common interest developments.

LEGISLATIVE COUNSEL'S DIGEST

AB 2159, as amended, Maienschein. Common interest developments: association governance: member election. elections.

Existing law, the Davis-Stirling Common Interest Development Act, governs the formation and operation of common interest developments. Existing law requires elections regarding specified matters concerning the governance of common interest developments to be held by secret ballot in accordance with certain procedures. Existing law requires an association to adopt certain operating rules that govern elections.

This bill would authorize an association to adopt operating rules that allow an association to conduct an election by electronic secret ballot unless ballot, as defined, except as specified, notwithstanding the association’s governing documents provide otherwise. documents. The bill would require an association that conducts an election by electronic secret ballot pursuant to these provisions to ensure, among other things, that the electronic secret ballots provide a method to authenticate the member’s identity to the online voting system and a method for the member to confirm that their electronic device can successfully communicate with the online voting system at least 14 days before the voting deadline. The bill would require the online voting system to have the ability to to, among other things, authenticate the member’s identity, authenticate the validity of each electronic vote, and to transmit a receipt to a member that casts an electronic vote. If an electronic secret ballot is conducted by an internet website, the bill would require individual notice of the ballot be delivered to each member and would require that notice to also include specified information, including instructions on specified instructions, including how to vote by electronic secret ballot. The bill would specify that an electronic secret ballot is effective when transmitted and irrevocable. The bill would prohibit the use of an electronic secret ballot unless the association creates procedures that provide an opportunity for members a member to vote by written secret ballot. The bill would prohibit an association from using an electronic secret ballot for levying regular or special assessments. ballot and opt out of voting by electronic secret ballot.

Existing law, for elections of directors and for recall elections, requires an association to provide general notice of specified information at least 30 days before the ballots are distributed. Existing law requires the notice to include, among other things, (1) the date and time by which ballots are to be returned by mail or handed to the inspector or inspectors of elections, (2) the date, time, and location of the meeting at which a quorum will be determined, and (3) a list of all candidates’ names that will appear on the ballot.

This bill, for an association that conducts the election by electronic secret ballot, as described above, would require the notice to specify whether the ballot will be conducted by email or internet website, and would require the notice to include instructions on how to vote by electronic secret ballot.

Existing law requires an association to mail ballots and 2 preaddressed envelopes with instructions on how to return ballots by first-class mail or delivered by the association to every member not less than 30 days prior to the deadline for voting.

This bill, for an association that conducts an election by electronic secret ballot, as described above, would make this requirement to mail ballots and envelopes apply only to the members who have opted out of voting by electronic secret ballot, as specified.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

---

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 5105 of the Civil Code is amended to read:

5105.

 (a) An association shall adopt operating rules in accordance with the procedures prescribed by Article 5 (commencing with Section 4340) of Chapter 3, that do all of the following:

(1) Ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or internet websites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election. The association shall not edit or redact any content from these communications, but may include a statement specifying that the candidate or member, and not the association, is responsible for that content.

(2) Ensure access to the common area meeting space, if any exists, during a campaign, at no cost, to all candidates, including those who are not incumbents, and to all members advocating a point of view, including those not endorsed by the board, for purposes reasonably related to the election.

(3) Specify the qualifications for candidates for the board and any other elected position, subject to subdivision (b), 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 from nominating themself for election to the board.

(4) Specify 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.

(5) Specify a method of selecting one or three independent third parties as inspector or inspectors of elections utilizing one of the following methods:

(A) Appointment of the inspector or inspectors by the board.

(B) Election of the inspector or inspectors by the members of the association.

(C) Any other method for selecting the inspector or inspectors.

(6) Allow the inspector or inspectors to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector or inspectors deem appropriate, provided that the persons are independent third parties who meet the requirements in subdivision (b) of Section 5110.

(7) Require retention of, as association election materials, both a candidate registration list and a voter list. The candidate list shall include name and address of individuals nominated as a candidate for election to the board of directors. The voter list shall include name, voting power, and either the physical address of the voter’s separate interest, the parcel number, or both. The mailing address for the ballot shall be listed on the voter list if it differs from the physical address of the voter’s separate interest or if only the parcel number is used. The association shall permit members to verify the accuracy of their individual information on both lists at least 30 days before the ballots are distributed. The association or member shall report any errors or omissions to either list to the inspector or inspectors who shall make the corrections within two business days.

(b) An association shall disqualify a person from a nomination as a candidate for not being a member of the association at the time of the nomination. An association shall disqualify a nominee if that person has served the maximum number of terms or sequential terms allowed by the association. A director who ceases to be a member shall be disqualified from continuing to serve as a director.

(1) This subdivision does not restrict a developer from making a nomination of a nonmember candidate consistent with the voting power of the developer as set forth in the regulations of the Department of Real Estate and the association’s governing documents.

(2) If title to a separate interest parcel is held by a legal entity that is not a natural person, the governing authority of that legal entity shall have the power to appoint a natural person to be a member for purposes of this article.

(c) Through its bylaws or election operating rules adopted pursuant to subdivision (a) of Section 5105 only, an association may disqualify a person from nomination as a candidate pursuant to any of the following:

(1) Subject to paragraph (2) of subdivision (d), an association may require a nominee for a board seat, and a director during their board tenure, to be current in the payment of regular and special assessments, which are consumer debts subject to validation. If an association requires a nominee to be current in the payment of regular and special assessments, it shall also require a director to be current in the payment of regular and special assessments.

(2) An association may disqualify a person from nomination as a candidate if the person, if elected, would be serving on the board at the same time as another person who holds a joint ownership interest in the same separate interest parcel as the person and the other person is either properly nominated for the current election or an incumbent director.

(3) An association may disqualify a nominee if that person has been a member of the association for less than one year.

(4) An association may disqualify a nominee if that person discloses, or if the association is aware or becomes aware of, a past criminal conviction that would, if the person was elected, either prevent the association from purchasing the insurance required by Section 5806 or terminate the association’s existing insurance coverage required by Section 5806 as to that person should the person be elected.

(d) An association may disqualify a person from nomination for nonpayment of regular and special assessments, but may not disqualify a nominee for nonpayment of fines, fines renamed as assessments, collection charges, late charges, or costs levied by a third party. The person shall not be disqualified for failure to be current in payment of regular and special assessments if either of the following circumstances is true:

(1) The person has paid the regular or special assessment under protest pursuant to Section 5658.

(2) The person has entered into and is in compliance with a payment plan pursuant to Section 5665.

(e) An association shall not disqualify a person from nomination if the person has not been provided the opportunity to engage in internal dispute resolution pursuant to Article 2 (commencing with Section 5900) of Chapter 10.

(f) If an association disqualifies a nominee pursuant to this section, an association in its election rules shall also require a director to comply with the same requirements.

(g) Notwithstanding any other law, the rules adopted pursuant to this section may provide for the nomination of candidates from the floor of membership meetings or nomination by any other manner. Those rules may permit write-in candidates for ballots.

(h) Notwithstanding any other law, the rules adopted pursuant to this section shall do all of the following:

(1) Prohibit the denial of a ballot to a member for any reason other than not being a member at the time when ballots are distributed.

(2) Prohibit the denial of a ballot to a person with general power of attorney for a member.

(3) Require the ballot of a person with general power of attorney for a member to be counted if returned in a timely manner.

(4) Require the inspector or inspectors of elections to deliver, or cause to be delivered, at least 30 days before an election, to each member both of the following documents:

(A) The ballot or ballots.

(B) A copy of the election operating rules. Delivery of the election operating rules may be accomplished by either of the following methods:

(i) Posting the election operating rules to an internet website and including the corresponding internet website address on the ballot together with the phrase, in at least 12-point font: “The rules governing this election may be found here:”

(ii) Individual delivery.

(iii) Election operating rules adopted pursuant to this section shall not be amended less than 90 days prior to an election.

(i) Notwithstanding an association’s governing documents, the association may adopt operating rules that allow an association to conduct an election by electronic secret ballot, except for an election regarding regular or special assessments, as provided for in Chapter 8 (commencing with Section 5600).

(1) An association that conducts an election by electronic secret ballot shall ensure all of the following:

(A) The association shall provide each member with all of the following:

(i) A method to authenticate the member’s identity to the online voting system.

(ii) For an election of directors, a method to transmit an electronic secret ballot to the online voting system that ensures the secrecy and integrity of each ballot.

(iii) A method to confirm, at least 14 days before the voting deadline, that the member’s electronic device can successfully communicate with the online voting system.

(B) The association shall utilize an online voting system that has the ability to accomplish all of the following:

(i) Authenticate the member’s identity.

(ii) Authenticate the validity of each electronic vote to ensure that the vote is not altered in transit.

(iii) Transmit a receipt from the online voting system to each member who casts an electronic vote.

(iv) For an election of directors, permanently separate any authentication or identifying information from the electronic election ballot, rendering it impossible to connect an election ballot to a specific member.

(v) Store and keep electronic votes accessible to election officials for recount, inspection, and review purposes.

(2) An electronic secret ballot may be accompanied by or contained in an electronic individual notice in accordance with paragraph (2) of subdivision (a) of Section 4040.

(3) If an electronic secret ballot is conducted by internet website, individual notice of the ballot shall be delivered to each member and shall contain instructions on both of the following:

(A) How to obtain access to that internet website.

(B) How to vote by electronic secret ballot.

(4) A vote made by electronic secret ballot is effective when it is electronically transmitted to an address, location, or system designated by the inspector or inspectors of elections for this purpose.

(5) A vote made by electronic secret ballot shall not be revoked.

(6) For purposes of determining a quorum, a member voting electronically pursuant to this subdivision shall be counted as a member in attendance at the meeting. Once the quorum is established, a substantive vote of the members shall not be taken on any issue other than the issues specifically identified in the electronic vote.

(7) The association shall not use an electronic secret ballot unless the association establishes procedures that provide a member an opportunity to do both of the following:

(A) Vote by written secret ballot.

(B) Opt out of voting by electronic secret ballot.

(8) As used in this subdivision, “electronic secret ballot” means a ballot conducted by email or internet website that ensures the secrecy and integrity of a ballot pursuant to the requirements of this article.

SECTION 1.SEC. 2.

 Section 5115 of the Civil Code is amended to read:

5115.

 (a) An association shall provide general notice of the procedure and deadline for submitting a nomination at least 30 days before any deadline for submitting a nomination. Individual notice shall be delivered pursuant to Section 4040 if individual notice is requested by a member. This subdivision shall only apply to elections of directors and to recall elections.

(b) For elections of directors and for recall elections, an association shall provide general notice of all of the following at least 30 days before the ballots are distributed:

(1) The date and time by which, and the physical address where, ballots are to be returned by mail or handed to the inspector or inspectors of elections.

(2) If the association conducts the election by electronic secret ballot as provided for in Section 5116, 5105, the election procedures pursuant to that section, whether the ballot will be conducted by email or internet website, and instructions on how to vote by electronic secret ballot.

(3) The date, time, and location of the meeting at which a quorum will be determined, if the association’s governing documents require a quorum, and at which ballots will be counted.

(4) The list of all candidates’ names that will appear on the ballot.

(5) Individual notice of the above paragraphs shall be delivered pursuant to Section 4040 if individual notice is requested by a member.

(6) If the association’s governing documents require a quorum for election of directors, a statement that the board of directors may call a subsequent meeting at least 20 days after a scheduled election if the required quorum is not reached, at which time the quorum of the membership to elect directors will be 20 percent of the association’s members voting in person, by proxy, or by secret ballot.

(c) Ballots and two preaddressed envelopes with instructions on how to return ballots shall be mailed by first-class mail or delivered by the association to every member not less than 30 days prior to the deadline for voting, unless an association conducts an election by electronic secret ballot as provided for in Section 5116, 5105, in which case only members who have opted out of voting by electronic secret ballot pursuant to subdivision (j) of Section 5116 Section 5105 shall be mailed or delivered the ballots and envelopes. In order to preserve confidentiality, a voter may not be identified by name, address, or lot, parcel, or unit number on the ballot. The association shall use as a model those procedures used by California counties for ensuring confidentiality of vote by mail ballots, including all of the following:

(1) The ballot itself is not signed by the voter, but is inserted into an envelope that is sealed. This envelope is inserted into a second envelope that is sealed. In the upper left-hand corner of the second envelope, the voter shall sign the voter’s name, indicate the voter’s name, and indicate the address or separate interest identifier that entitles the voter to vote.

(2) The second envelope is addressed to the inspector or inspectors of elections, who will be tallying the votes. The envelope may be mailed or delivered by hand to a location specified by the inspector or inspectors of elections. The member may request a receipt for delivery.

(d) (1) A quorum shall be required only if so stated in the governing documents or other provisions of law. If a quorum is required by the governing documents, each ballot received by the inspector of elections shall be treated as a member present at a meeting for purposes of establishing a quorum.

(2) For an election of directors of a corporation that is a common interest development, and in the absence of meeting quorum as required by the association’s governing documents or Section 7512 of the Corporations Code, unless a lower quorum is authorized by the association’s governing documents, the association may adjourn the proceeding to a date at least 20 days after the adjourned proceeding, at which time the quorum required for purposes of a membership meeting to elect directors shall be 20 percent of the association’s voting members present in person, by proxy, or by secret written ballot received.

(3) No less than 15 days prior to an election authorized pursuant to paragraph (2), the association shall provide general notice of the membership meeting, which shall include:

(A) The date, time, and location of the meeting.

(B) The list of all candidates.

(C) A statement that 20 percent of the association present or voting by proxy or secret ballot will satisfy the quorum requirements for the election of directors and that the ballots will be counted if a quorum is reached, if the association’s governing documents require a quorum.

(e) An association shall allow for cumulative voting using the secret ballot procedures provided in this section, if cumulative voting is provided for in the governing documents.

(f) Except for the meeting to count the votes required in subdivision (a) of Section 5120, an election may be conducted entirely by mail unless otherwise specified in the governing documents.

(g) In an election to approve an amendment of the governing documents, the text of the proposed amendment shall be delivered to the members with the ballot.

SEC. 2.Section 5116 is added to the Civil Code, to read:

5116.

(a)As used in this section, “electronic secret ballot” means a ballot conducted by email or internet website.

(b)Unless the governing documents provide otherwise, the association may conduct an election as provided for in Section 5100 by electronic secret ballot.

(c)An electronic secret ballot shall comply with the requirements of this article and the association’s governing documents.

(d)An association that conducts an election by electronic secret ballot pursuant to this section shall ensure that all of the following conditions are satisfied:

(1)Electronic secret ballots shall provide each member with all of the following:

(A)A method to authenticate the member’s identity to the online voting system.

(B)For an election of directors, a method to transmit an electronic ballot to the online voting system that ensures the secrecy and integrity of each ballot.

(C)A method to confirm, at least 14 days before the voting deadline, that the member’s electronic device can successfully communicate with the online voting system.

(2)The online voting system utilized by the association shall have the ability to accomplish all of the following:

(A)Authenticate the member’s identity.

(B)Authenticate the validity of each electronic vote to ensure that the vote is not altered in transit.

(C)Transmit a receipt from the online voting system to each member who casts an electronic vote.

(D)For an election of directors, permanently separate any authentication or identifying information from the electronic election ballot, rendering it impossible to connect an election ballot to a specific member.

(E)Store and keep electronic votes accessible to election officials for recount, inspection, and review purposes.

(e)For purposes of determining a quorum, a member voting electronically pursuant to this section shall be counted as a member in attendance at the meeting. A substantive vote of the members shall not be taken on any issue other than the issues specifically identified in the electronic vote.

(f)An electronic secret ballot may be accompanied by or contained in an electronic individual notice in accordance with paragraph (2) of subdivision (a) of Section 4040.

(g)If an electronic secret ballot is conducted by internet website, individual notice of the ballot shall be delivered to each member and shall contain instructions on both of the following:

(1)How to obtain access to the internet website.

(2)How to vote by electronic secret ballot.

(h)A vote made by electronic secret ballot is effective when it is electronically transmitted to an address, location, or system designated by the inspector or inspectors of elections for this purpose.

(i)A vote made by electronic secret ballot shall not be revoked.

(j)A member’s consent to vote by electronic secret ballot shall be valid until the member opts out in accordance with the procedures established by the board.

(k)The association shall not use an electronic secret ballot unless the association establishes procedures that provide an opportunity for members to vote by written secret ballot.

(l)The association shall not use an electronic secret ballot for levying regular or special assessments, as provided for in Chapter 8 (commencing with Section 5600).