California Senate Bill 323 amended the Davis-Stirling Act as of January 2020 regarding HOA election inspectors. According to the amendment, HOA management companies will no longer be allowed to act as election inspectors for associations they serve.
Instead, election inspectors should be independent third parties that an HOA hires to manage the election process. The independent third parties may not be business entities, persons, or subdivisions currently under contract or employed by the association.
According to Civil Code 5110(b), HOA election inspectors may include, but are not limited to the following:
• A volunteer who is a poll worker with the county registrar of voters
• A notary public
• A CPA professional licensed by the California Board of Accountancy
• A member of the association. However, the member should not be a candidate for a position on the board of directions. He or she should not be a current member of the board or related to someone that is a member or a candidate to the board of directors.
Use of Professional Inspectors of Election
SB 323 does not prevent HOAs from hiring professional inspectors of election to offer their services. HOAs can hire professional companies to prepare election ballots, mail them, collect the ballots, and count votes. Hiring a professional election inspector does not violate the rule stating that election inspectors should be independent third parties. If the association has not hired the company for any other task prior to the election, it can be hired to manage the election.
Duties of Appointed Inspectors of Election
Homeowner associations should select inspectors early in the election process to carry out their mandate in good time. The hired third parties should perform their duties in good faith, impartially, and as expeditiously as they are able. Here are some of their duties.
• Determine the number of members entitled to vote and the voting power of each member.
• Determine the validity, effect, and authenticity of any proxies in the elections.
• Receive, count and tabulate all the votes.
• Hear and determine questions and challenges arising in connection with the right to vote.
• Go through the governing document and determine when the HOA polls will close as set in the governing laws.
• Perform all tasks required to conduct a fair election according to the Corporations code, HOA governing documents, and the Davis-Stirling Act.
• Determine winners from the tabulated results from the vote count
• Be custodians of election materials and make them available for inspection should there be legal challenges
Where the HOA has appointed three inspectors, the majority decision will carry the day in all acts. The report made by them becomes prima facie evidence of facts as contained in the election report. The law allows them to delegate some of the duties to independent third parties and the association management company, as determined by law.
California HOAs should follow the provisions of the amended Act in regards to the updated Act on the use of third-party election inspectors. The rest of the Davis-Stirling Act applies in the management of HOAs.