By Jacqueline Pagano, Esq., Roseman Law, APC
This article first appeared in the CAI Orange County Regional Chapter’s OC View Magazine, Jan/Feb 2025 Issue.
With the signing of California Assembly Bill 2159 into law, California homeowner associations have the option of utilizing electronic balloting for qualifying membership votes starting in 2025. This change presents a significant opportunity for associations to modernize their voting processes, increase accessibility, and streamline operations. Transitioning to electronic voting, however, requires thoughtful preparation and a clear understanding of the benefits and challenges.
Associations wishing to utilize electronic voting must adopt new election rules (a process which should commence at least four to six months before the next election) and adhere to the numerous procedures, deadlines, and requirements of the new law. Said requirements were discussed in-depth in a prior publication.
While association boards are understandably excited about the prospect of conducting electronic votes, there are several considerations which should play into deciding whether electronic voting is right for your community.
There are numerous benefits to be derived from electronic voting. First and foremost, it can lead to significant cost savings by reducing expenses associated with printing, mailing, and manually processing paper ballots. In addition, electronic voting streamlines the election process, enabling votes to be tabulated in seconds. This increased efficiency and cost savings will likely appeal to larger associations or those with frequent elections. Utilizing electronic voting for votes on proposed restatements of governing documents will be of particular value, given that the full texts of the restated documents may be provided electronically to members enrolled in electronic voting, rather than having to be printed and mailed to all members. Electronic voting may not be used for votes involving regular or special assessments pursuant to Civil Code section 5605.
While electronic voting brings many benefits, boards must consider the practicalities of implementation. Unless an association has 100% enrollment in electronic voting, with emails on file for all members and no members exercising their right to opt-out of electronic voting at least 90 days before an election, associations will have to conduct a hybrid election, sending paper ballots to some members and electronic ballots to others. Each type of ballot will need to comply with the specific requirements of the Civil Code, making the inspector of elections’ job more difficult and increasing the chances of error. Given the considerable duties imposed upon the inspector of elections with respect to conducting electronic votes, utilizing the services of a professional inspector of elections is recommended. Associations which have traditionally used volunteer homeowners as inspectors will need to weigh the potential cost savings of utilizing electronic ballots (which likely depends on the size of the association and level of enrollment in electronic voting) against the increased cost of hiring a professional inspector.
To implement electronic voting, the new election rules which boards are required to adopt must prohibit floor nominations. This means that floor nominations and write-in candidates can no longer be permitted in director elections, a prospect which may be undesirable for some associations. Utilizing electronic voting may further complicate and potentially prohibit members from voting by proxy (if authorized by the bylaws). While voting by proxy has become mainly obsolete in the age of mail-in, and now electronic, secret ballots, there are associations which rely heavily on proxies to conduct their elections. Such associations should consider how electronic voting will impact proxy use and discuss the same with their hired inspector of elections.
Finally, implementing electronic voting will require associations to maintain an up-to-date list identifying which members will vote electronically and which members will vote by written ballot. Members have the right to change their voting preference, via written request, at any time up to 90 days before each election. This may be an additional administrative burden for some associations.
If electronic voting is right for your community, the board must decide how to enroll members. The Civil Code permits two methods by which associations may enroll members in electronic voting: an opt-in procedure and an opt-out procedure. Regardless of which procedure is used, an association must include information on how to opt-in to or out of electronic voting in its annual policy statement distributed to members prior to the start of each fiscal year, and members have the right to change their selected voting method, via written request, at any time up to 90 days before each election.
Under the opt-in procedure, members will need to enroll in electronic voting via written request to the association. Only those members who enroll will be eligible to vote by electronic ballot; however, no additional notices will be required prior to an election. An opt-in procedure may be ideal for associations with high levels of electronic engagement, or which anticipate a strong response to eblast campaigns urging members to enroll in electronic voting. Once a member has opted-in to electronic voting, that election will remain effective until such time as the member submits a written request to change it.
In the alternative, associations may adopt an opt-out procedure whereby all members who have provided the association with email addresses will be automatically enrolled in electronic voting. Associations will be required to send paper
ballots only to the members who have opted-out or who have no email address on file. Associations utilizing an opt-out procedure will be required to send an individualized notice to every member at least 120 days before each election advising the member of their current voting method (electronic vs. paper), their email address on file if they vote electronically, their right to opt-out of electronic voting, and the procedure and deadline (at least 90 days before the election) for changing their voting method. This additional notice must be sent to all members but may be sent via electronic delivery to those members who have consented to receive email communications. By combining this notice with other required election notices, such as the call for candidates, so long as it is given via “individual delivery” within the timeframe discussed above, associations can mitigate some of the administrative burdens associated with this approach.
While the opt-out procedure requires an additional notice to all members, the potential increase in electronic voting resulting from automatic enrollment may outweigh the administrative burdens of sending an additional notice, especially if the association has a high percentage of email consents. Ultimately, boards will need to decide which enrollment method is the best fit for their associations.
Electronic voting is the way of the future, however, not all associations need be early adopters. Boards should thoughtfully consider when and how to implement electronic voting and consult with association legal counsel to gain a better understanding of the benefits and potential pitfalls of same. Whether or not your association is ready to take the plunge into electronic voting, it should start planning today for what is likely coming tomorrow, putting procedures and systems in place to ease the transition to electronic voting and bolster member participation in same when the time comes.
—Jacqueline Pagano, Esq. is a partner of Roseman Law, APC, a full-service law firm specializing in the representation of California common interest developments for over 25 years. Email: info@roseman.law.
