HOA Law Blog
Earlier this year, California Assemblymember Swanson introduced AB 1726, a bill that would benefit California common interest developments. As amended, the bill has been watered down in some respects but improved in other respects, and it remains a valuable piece of legislation. We have recently been alerted by the California Legislative Action Committee, which supports the bill, that the bill is encountering unexpected opposition in the state senate. Please fax a message to the state senate committee members by Monday, June 28 in support of AB 1726.
The reason for the unexpected opposition is unclear, as AB 1726 is clearly beneficial to all common interest developments in California, especially those that have difficulty electing directors due to failure to reach quorum. We have several clients in this predicament, and we see no detriment to any owners if the bill were to become law.
Originally, AB 1726 provided that notwithstanding governing document provisions to the contrary and except for associations whose governing documents provide for a reduced quorum for second or subsequent elections, the quorum required for purposes of a second or subsequent members’ meeting would be 33% of the association’s voting power.
Is your head spinning yet?
To clarify, let’s say you live in an association with governing documents that define quorum as 50% of all members. Also, let’s say your governing documents do not contain a provision for reduced quorum at adjourned meetings of members (as is the case with most but not all associations). If you had to adjourn a meeting of members due to failure to reach that 50% quorum, AB 1726, in its original form, would have allowed a reduced quorum of 33% for the adjourned meeting. The point is that the business of the association would be less likely to be stalled because of non-participation by indifferent or absentee members.
Now, the bill has been amended, and the 33% reduced quorum for adjourned meetings only applies to director elections, not all meetings of members as originally drafted. Although this development lessens the positive impact of the bill, its applicability to director elections is the most important, so we are glad to see that at least this aspect has survived so far.
On the other hand, new language has been added to the bill that really brings the Davis-Stirling Open Meeting Act into the 21st century. Directors would be able to “participate in a [board] meeting through use of a conference telephone or electronic video screen communication.” It goes on to explain that such participation in a board meeting constitutes presence in person at that meeting if all board members participating in the meeting are able to hear one another and members of the association speaking on matters before the board. This is another good idea that will allow the business of California associations to move forward with greater ease. Keep in mind that the requirement of being “able to hear one another” may cause a bit of a gray area, but it is nevertheless a great improvement to the Open Meeting Act. A director’s inability to be physically present at a board meeting (due to vacation, business travel, etc.) would not stall association business.
We understand the difficulties many associations and their managers experience when trying to get out the vote and achieve quorum – often, they are met with the same enthusiasm as a door-to-door salesperson. Please follow the link above, contact the senate committee members today, and let’s help those California community associations who have had great difficulties, sometimes for years, achieving a quorum.