Management can’t set rule on board candidates

Question: Our association’s management company sent out a candidacy notice to all owners that required a nominee’s signature under this statement: “I certify that I have not been convicted of a felony or declared of unsound mind by a court of competent jurisdiction, and I otherwise meet the qualifications for the association’s board of directors set by the association’s bylaws.” It also limited a candidate’s statement to 100 words.

Our association’s governing documents, including bylaws, do not include any type of certification sentence as a prerequisite for nomination or running for a seat on the board. Nor do our governing documents require a candidacy statement or determine how long or short a statement should be. Are these items legal?

Answer: The management company does not have the authority to create and require any such certification statement, and a titleholder-candidate can refuse to sign it.

The qualifications certification is not legal unless it is already contained in and required by your governing documents and articles of incorporation, and even then this certification verbiage appears questionable. Depending on the actual language used and the board’s intent for requiring such disclosures, it may still not be legal.

If the specific wording of the candidate statement requirement is not part of your association’s governing documents and articles of incorporation, it cannot be introduced via notice, letter or by management company fiat. Such actions would constitute an unlawful unilateral amendment to your association’s bylaws without following the law and the appropriate protocol substantiating such an amendment.

The “certification” is not required because a similar provision already exists in California’s Corporations Code Section 7221(a). That law provides that if a director has been declared of unsound mind by a final order of court, or convicted of a felony, the board may declare that director’s office vacant. The operative word is “may,” and that occurs only after a trial and any appeals on the subject. It does not prohibit that person from running for election or even serving on a board.

Section 7221(b) provides that the articles or bylaws of an association may prescribe director qualifications; however, those must already have been in effect at the beginning of the director’s term, and even this is subject to scrutiny.

To determine the validity of an election already held, such as one in which a candidate was precluded from running because of not having signed a certification, challenge it in writing to the board. If the board fails to respond within 24 hours, you may file a complaint in Superior Court pursuant to Corporations Code Section 709.

On receiving the complaint, the court enters an order fixing a hearing date to take place within five days. The court may also determine the person entitled to the office of director, may order a new election to be held, make an appointment and determine the validity, effectiveness and construction of voting agreements.

Requiring any type of so-called candidate certification places the board in a position of verifying all such statements and candidate disclosures, or risk liability for requiring the statement in the first place. In addition, the privacy and confidentiality of the certification must be preserved.

Before requiring such information, certain ascertainable security measures must be in place, including policies and procedures for determining the authenticity of such requirements. There must also be substantial protections in place to safeguard the information once it is received by the board or its agents. The company performing the verification should be reputable and bonded.

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Send questions to Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring .com.