ASSEMBLY BILL 2159 – Electronic Voting

AB 2159 allows community associations to use electronic balloting when conducting elections. By amending Civil Code Sections 5105. 5110, 5120, 5125, 5200, and 5260, the language supersedes provisions in the bylaws that would prohibit or restrict electronic voting.

This bill authorizes an association to adopt election rules that allow an association to conduct an election by electronic secret ballot, regardless of limitations existing in the bylaws. All owners will vote electronically unless the owner “opts out” no later than 90 days before an election, in which case that owner will receive a traditional paper ballot. The statute includes additional notices to ensure that owners are aware of key deadlines prior to the election process.

AB 2159 does not allow electronic voting for elections on assessment increases and prohibits nominations from the floor for any director election held electronically.

This law is viewed as an important measure to facilitate community association governance and director elections. Electronic voting is expected to benefit community associations through savings of time and expense experienced in traditional paper ballot elections, and is anticipated to increase member participation in association elections.

Corporate Transparency Requirement For HOAs On Hold…

CORPORATE TRANSPARENCY ACT UPDATE: After unsuccessful legal challenges against the CTA in Oregon and Virginia, a federal court judge in Texas on December 3, 2024, issued a nationwide injunction blocking enforcement of the CTA. The government is appealing, and it is unclear if or how long the injunction will continue. While the injunction is in effect, HOAs need not comply with the CTA’s “Beneficial Ownership Information” reporting requirement. Per the FinCEN website, (fincen.gov/boi) “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force” but may voluntarily submit the reports if they choose.

For more than a decade, the California Legislature has passed laws making it easier for residents to install electric vehicle (“EV”) charging stations within HOAs.

Consistent with California’s commitment to green energy, Assembly Bill 1738 was codified paving the way for mandatory EV charging station installations in multifamily dwellings (i.e., condominium projects) during specifically defined construction activities. Through AB 1738, Section 18941.11 was added to the Health and Safety Code requiring the Department of Housing and Community Development to research and develop “mandatory building standards for the installation of electric vehicle charging stations in existing multifamily dwellings….”

Compliance with the new legislation may be difficult for some communities; particularly, those with aging infrastructure and inadequate electrical systems. Indeed, the underground electrical systems servicing many condominium projects do not provide sufficient electricity to enable multiple residents to install EV charging stations. Extensive (and costly) upgrades may be necessary, which raises issues concerning funding and membership approval.

Once these standards are incorporated into the California Building Code, common interest developments will need to inquire with its experts concerning the association’s infrastructure and ability to comply with the new standards, particularly during projects impacting the association’s parking facilities. Associations impacted by the Bill should be prepared to undertake the necessary installations and should start reserving for the expense now. Reach out to Heather@McMillsDuffy.com to order a capital improvement and budget modeling analysis for your HOA.

Addressing Requests for Installation of Solar Panels on Shared Common Area Roofs

The rising cost of electricity, environmental considerations, clean energy and tax savings, utility company programs designed to help alleviate the demand on the grid, and the proliferation of affordable residential solar energy systems have made solar power more popular than ever. Consequently, Associations are seeing a sharp rise in homeowner requests to install solar energy systems. This presents a particularly unique set of challenges for condominium developments because of their shared roofs and other similar common area components.

How to Direct Questions from Potential Homebuyers

With the real estate market’s seemingly unbounded resilience, the competition to obtain a buyer’s dream home is through the roof. Many of these potential buyers are looking to buy their next home within a community association (“HOA”). The competition to buy homes creates an increase in the number of questions from real estate agents and mortgage/escrow companies that are directed toward the association and its agents regarding any litigation involving the association. What should the Board and manager be aware of? What should they do in certain situations?

The HOA has no legal obligation to make disclosure to buyers of properties within the HOA or other third parties. These third parties may be real estate agents, loan processors, escrow companies, or anyone else looking for information regarding the HOA and is not an HOA member.