As you all know, we had the annual meeting on April 9, 2019, 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&Rs and By-laws for “Member Approval Requirements.” This measure did not pass even though 80 percent of those voting on the measure were in favor of the change. For those that remember, this outcome was like the election on January 11, 2019, 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&Rs and By-laws: They require 51 percent 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 3,450 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 percent vote in the last four years. Given the largest voter turnout in the last five elections was 62.49 percent, or 2,174 ballots, it would take an 80.96 percent conversion rate to pass any CC&R or By-law change. In this last election we only had 1,823 ballots submitted, which is a voter turnout of 53.30 percent. In this last election to change the CC&Rs or By-laws, it would have taken a conversion rate of 95.70 percent to pass. Even though 80 percent did vote to pass, it was not enough because, no matter how many people submit a ballot, it takes 1,760 affirmative votes to pass any change.
We have now tried twice to make changes to the CC&Rs and By-laws and were unsuccessful, even though 70 – 80 percent of the people voting wanted to make the change. So, what is the alternative?
California Corporations Code Section 7515 allows for the HOA to petition the court to approve a change to the 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 our HOA with its current voting requirements. If you do an internet search on “Corp. Code 7515” you can read the sections that describe this process. We are not able to petition the court for a CC&R change because the rules are different and do not allow for changes given the number of affirmative votes cast in favor of the change. So, the CC&R measure will stand.
At the Board meeting on April 29, 2019, the Board passed a resolution to petition the court on the following 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.
If the court were to grant the petition, it would that mean cumulative voting would be eliminated in the future. It would also mean that, to change the By-laws, 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 this proposed rule had been in place in the last two elections, the two measures would have passed.
I 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. If we are successful, it will validate that, when 70 – 80 percent of homeowners want to make a change, it is possible.
It is now time to enjoy the sunset and know: “It doesn’t get any better than this.”