Legality Questioned in Board’s Vote Recount

Question: At our association’s annual meeting last month the manager announced that a sufficient number of proxies had been received to constitute a quorum. There were two board positions open. Three owners who were present at the meeting were nominated. Ballots were distributed with an incumbent director’s name already printed on the ballot.

The president appointed a committee of one to count the ballots. Two new directors were elected to the board.

A few weeks later, the defeated former director insisted on a recount of the proxies and ballots. It is alleged that there were sufficient proxies to establish a quorum but several proxies were only to be counted for that purpose and not to be used for voting.

The votes were recounted and the defeated director was found to have enough votes to be elected.

Is this action by the board legal? If not, what is our recourse?

Answer: I assume your question means that the board has reviewed the recount and has accepted the director who was previously defeated. Did board members seek legal advice before they reversed the decision of the inspector of election? They may have felt it was their duty to correct the vote count or their attorney may have advised them to do so.

Corporations Code specifies that one or three inspectors of election are to oversee the election process. The law states that inspectors must “perform their duties impartially, in good faith, to the best of their ability and as expeditiously as possible” and that “any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.”

An attorney can provide legal advice about your course of action. You have nine months to file an action to challenge an election, appointment or removal of a director.

Determining if Codes Require Updating

Q: Our condominium management company urged the association to have our declaration of covenants, conditions and restrictions updated to be in compliance with the Davis-Stirling Common Interest Development Act. The association members voted not to have the document rewritten.

Doesn’t the Davis-Stirling Act supersede the codes? If that is the case, I don’t understand the need to update our declaration. If we need to update the codes each time a law is changed, this could be a costly process.

Should we have our declaration updated?

A: There are good reasons to have your codes updated, but it is important that the update is handled correctly and that the owners understand all of the reasons and ramifications if certain changes are made.

State law does not always supersede codes. For instance, if the codes include late charges for unpaid assessments that are less than the Davis-Stirling Act allows, the act clearly states that the association must charge the amount specified in the declaration.

There is a clause in Civil Code 1364 regarding “common area” and “exclusive use common area.” This section of the code states that the association’s responsibility to maintain, repair and replace these areas is controlled by the codes if the codes differ from the responsibilities spelled out in Civil Code Section 1351 and 1364.

For some associations, the incentive to change the codes would be to eliminate association responsibilities that are in the current document. For instance, maintenance of balconies, window boxes, garage doors or other exterior components or fixtures may be designated in your current codes as association responsibility. In older associations, the owners may have been relying on this and paying into reserve funds for several years.

By removing the specific wording in the codes that makes the association responsible for these components, some associations are moving this financial burden to the individual homeowners. The owners need to weigh carefully the financial impact of this change. In addition, architectural harmony and uniform maintenance standards may be affected if owners are responsible rather than the association.

In some associations, boards have been negligent in budgeting and reserve planning. They have failed to accumulate adequate reserves to fulfill the association’s responsibilities. Switching the financial burden to the individual homeowners is a questionable method to keep from having to levy special assessments in order to maintain, repair and replace components that are association responsibility.

In some cases the owners are told they are required to update their association codes when, in fact, they may be better off with the current wording. For instance, here is a scenario that is happening with great frequency. Let’s say that the owners have contributed to the reserve funds for several years and part of the money was designated as balcony repair and replacement because the balconies are the responsibility of the association. Obviously, the board has an obligation to adopt an adequate budget to take care of this responsibility but it has failed to increase the assessments for many years.

After several years of deferred or minimal maintenance, the balconies are falling apart. In this financial crisis, the board says that it won’t maintain the balconies any longer because state law says that balconies are “exclusive use common areas” that are the responsibility of the individual owners. The board fails to inform the owners that the association’s declaration is the controlling document, not the state law in this instance.

In this scenario, the board is purposely misinforming the owners in order to cover up prior negligence of maintenance responsibilities and lack of adequate financial planning.

I received a letter from another reader who said that his association’s governing documents state that the association is responsible for roofs and exterior walls. However, the association had sent out a letter stating, “the California Supreme Court had ruled that responsibility for exterior walls is ambiguous and associations may not be held responsible.” The person who wrote that letter for the association is being very creative in the interpretation of case law.

If the Lamden vs. La Jolla Shores case is the one being cited as the precedent, that particular case involved a board’s authority to determine the type of termite abatement that was being implemented. The court’s decision did not remove the association’s responsibility to maintain, repair or replace common area when that responsibility is stated in the governing documents.

Though I am not an attorney, I attend a number of legal seminars each year, and I receive legal updates and newsletters from many attorneys who practice throughout California. I’m sure that if such a landmark decision existed, I would be made aware of it immediately.

In summary, if there is specific language in your codes regarding the association’s responsibility for maintenance, repair and replacement of specific components of the property, neither state statutes nor current case law supersedes that requirement.

There are legitimate reasons for updating all of a condominium association’s governing documents. Effective Jan. 1, 2000, associations are required to remove any language that may be discriminatory. Even though the discriminatory language is unenforceable, the association should consult a legal firm that focuses its practice on the representation of community associations.

If a complete revision or restatement of the documents is proposed, owners should carefully determine what is being changed and for what reasons. The attorneys who are rewriting documents to bring them into compliance with state law are aware that the Davis-Stirling Act is changed in some way nearly every year, so provisions for future changes in the law should be included.

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Jan Hickenbottom is a community association management consultant and a founding director of the California Assn. of Community Managers. She selects questions of general interest for the column and regrets that she cannot respond to all questions. Send questions to: Condo Q&A;, Private Mailbox 263, 4790 Irvine Blvd., No. 105, Irvine, CA 92620-1998.