Candidate Qualifications for Board of Directors
Effective January 1, 2020, California established qualifications for directors of homeowner associations (board members). Some are mandatory. Some are permissive, which means that a homeowner association mayor may not include certain qualifications in their election rules. If an association does not adopt election rules, the permissive qualifications will not apply. Some qualifications are not permitted.
Homeowner associations are required to disqualify nominees as candidates for election as delegates and board members who are not members of the association at the time of their nomination.
Entities such as corporations can designate a non-member person to serve on the board. To verify the authority of the designating party, boards can review a company's governing documents or the minutes of a corporation's board meeting designating their representative. For family trusts, the trustee on title to the property can serve on the board.
Associations should amend their bylaws to limit corporations and other entities that own multiple units from holding multiple seats on the board of directors.
Starting January 1, 2020, there are only four candidate qualifications homeowner associations are permitted to adopt. A person can be disqualified from serving on the board if:
- The person is delinquent in the payment of regular and special assessments unless (1) paid under protest, (2) entered into a payment plan, or (3) was not offered Internal Dispute Resolution (lDR) by the association.
- 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 as the person.
- If that person has been a member of the association for less than one year.
- A past criminal conviction that either (1) prevents the association from purchasing the fidelity bond coverage required by Section 5806 should the person be elected or (2) terminate the association's existing fidelity bond coverage as to that person should be the person elected.
Following are qualifications which are no longer permitted:
- The person must be in good standing. Currently, a person can have significant architectural and rules violations and unpaid fines and still serve on the board.
- The person must not be in litigation with the association. Even though this creates conflicts of interest and confidentiality problems, persons suing the association can simultaneously serve on the board.
- The person has been convicted of a felony in the past ten years. As long as the association's fidelity bond is not affected, felons can now serve on the board.
- The person is a second or third-tier registered sex offender. They cannot be excluded unless it affects the fidelity bond.
- The person meets minimum age and residency criteria. This affects 55+ communities. It means an 18-year-old who owns a unit through inheritance can serve on 55+ boards.
Prior to disqualifying a nominee, the association must provide the person an opportunity to participate in internal dispute resolution.
If a director is no longer qualified to serve on the board, e.g., he or she ceases to be an owner, the person's seat can be vacated by the board and a new director appointed to fill the seat (unless the bylaws require that seats be filled by vote of the membership).
Directors can be removed by disqualification via the governing documents, by action of the courts, or by the membership.
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