As you all know we had the annual meeting on 4/9/19 to elect the new Board. Congratulations to Linda Aasen on joining the Board for the next two years.
There was also a measure on the ballot to change the CC&R’s and By-laws for ‘Member Approval Requirements’. This measure did not pass even though 80% of those voting on the measure were in favor of the change. For those that remember, this outcome was like the election on 1/11/19 when eliminating Cumulative Voting did not pass even though 70% of those voting on the measure were in favor of the change.
Let’s look at the current rules for changing the CC&R’s and By-laws: The current CC&R’s and By-laws require 51% affirmative votes of all the homes in the HOA to change a CC&R or By-law. We have 3,450 homes in the HOA. Therefore, 51% of 3450 homes means we need 1,760 votes in favor of a change, no matter how many people vote. If only 1,759 people voted, the measure would be defeated no matter how many of these people voted in favor of the change.
The problem is voter turnout. We have never had more than 63% voter turnout in the last 4 years. Given the largest voter turnout in the last 5 elections was 62.49%, or 2174 ballots, it would take an 80.96% conversion rate to pass any CC&R or By-law change. In this last election we only had 1823 ballots submitted, which is a voter turnout of 53.30%. In this last election to change the CC&R’s or By-laws it would have taken a conversion rate of 95.70% to pass. Even though 80% did vote to pass, it was not enough because no matter how many people submit a ballot, it takes 1760 affirmative votes to pass any change.
We have now tried twice to make changes to the CC&R’s and By-laws and were unsuccessful even though 70% to 80% of those people voting wanted to make the change. So, what is the alternative?
California Civil Code Section 4275, and California Corporations Code Section 7515 allows for the HOA to Petition the Court to approve a change in the CC&R’s and By-laws if rules are too restrictive and unduly difficult. Clearly the Civil Code understands and has provided for a process to implement a change in the By-laws given that trying to pass such changes might be unduly difficult, perhaps impossible for the HOA with the current voting requirements. If you Internet search on ‘Civil Code 4275’ or ‘Corp. Code 7515’ you can read the sections that describe this process.
I will be placing this item on the April 29th Agenda for a Board vote to petition the court on three items:
- From Election 1/11/19, Change the By-laws, Section 4.4.5 to Eliminate Cumulative Voting.
- From Election 4/9/19, Change the By-laws, Section 14.4.1 for Member Approval Requirements.
- From Election 4/9/19, Change the CC&R’s, Section 21.2.1 for Member Approval Requirements.
Given the past two election results, where 70% to 80% of voters wanted to make these changes, I think it is reasonable that the Board investigate this process. If the court were to grant the petition, it would mean cumulative voting would be eliminated in the future. It would also mean that to change a CC&R or By-law it would take two-thirds of the votes cast on a measure when ballots are received from at least a majority of the Voting Power of the Members. If these proposed rules had been in place in the last two elections, all three of these measures would have passed.
I have placed this item on the agenda for a Board vote because at this point, after two elections, I believe the rules for making changes to the governing documents are so restrictive and unduly difficult that change will not be possible. When yes votes outnumber no votes by about 1,000 homeowners something just might be wrong with the system. The court allows for this consideration and therefore I think the Board must consider this alternative if the HOA ever wants to make changes to the governing documents in the best interest of the HOA.
If you can’t make the meeting on Monday and have comments for the Board, please write and send your comments to me and I will distribute them to the Board for consideration. Otherwise, we will see you at the next Board meeting.
If you have further questions, please let me know.