Q: Our HOA directors serve two-year terms per the bylaws. The board recently voted to delay the date of the HOA annual members’ meeting by six months, and to extend their terms an additional six months, declining to hold an election after expiration of their terms. There is no provision in our bylaws conferring this power to our directors. Is this legal? —LM, Rancho Mirage
A: Boards cannot normally be amended by laws without a membership vote, but sometimes HOA boards will slightly postpone an annual meeting because of scheduling concerns. However, six months seems to be more than just a normal scheduling postponement.
HOAs often get off track on their annual meeting dates. Is it possible your HOA in past years had scheduled elections on the wrong month? Most original bylaws do not state the specific month for annual meetings, but instead are tied to an event (such as the first meeting), which can create confusion.
When I update by laws, I normally state the specific calendar month for annual meetings.
LM, there might still be a reasonable explanation. Before launching any action in your HOA, ask why the postponement.
Q: A director recall petition was just turned in, and the vote for recall is scheduled for over three months from now. It seems like a long time to have to put up with a miserable, bitter human being on the board causing trouble. Isn’t there a quicker way to do it? — CB, Long Beach.
A: Recall elections are slow, because you still must call for conditional candidates and fulfill all the election processes necessary to fill the vacancies if the recall is approved. Never ask for a recall vote without also calling for an election to fill the vacancies if the recall is successful.
The election process takes a long time because of the various requirements of Civil Code Sections 5105, 5110, and 5115. This is why in 2022 Corporations Code Section 7511(c) was changed, allowing up to 150 days for petitioned elections (recalls are almost always triggered by member petitions), to allow time for all the steps necessary to fill the vacancies if the recall is successful.
Q: Our small HOA filed with Los Angeles County as an unincorporated HOA in 1989. The HOA filed the SI-CID form in 2021 and since then the state shows the HOA as an Unincorporated Common Interest Development. Are we required to file under the Corporate Transparency Act? — RA, Lawndale.
A: As of Jan. 6, there is a nationwide injunction in place against enforcement of the Corporate Transparency Act. Therefore, the original Jan. 1, 2025, deadline is currently on hold.
The Treasury Department has asked the US Supreme Court to step in and overrule the Fifth Circuit Court of Appeals. Per the FinCEN website, all HOA corporations and unincorporated HOAs that have registered with their state must comply.
Civil Code Section 5405 requires unincorporated HOAs to file the “SI-CID” form (although there is no penalty for noncompliance).
So, unincorporated HOAs filing such statements will fall under the CTA and per FinCEN must file the “Beneficial Owner Information” report.
Kelly G. Richardson CCAL is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association advice. Send column questions to Kelly@roattorneys.com