HOA Considers Implementing Mandatory Training for Board Directors

In recent inquiries regarding the governance of homeowners associations (HOAs) in California, several issues have emerged, particularly concerning candidate nominations and board member training requirements.

One resident from Tustin raised a question regarding the transparency of the nomination process for HOA board candidates. California’s Civil Code Section 5115 mandates that calls for nominations be announced and kept open for a minimum of 30 days. However, the statute does not explicitly state whether the names of nominees should remain confidential during this period. It is the responsibility of the inspectors of elections or HOA managers to announce the candidate list to members at least 30 days before ballots are distributed. As a result, some agents may hesitate to disclose the identities of nominees prior to this official announcement, as the law lacks specificity on this matter.

Another query from a resident in Apple Valley centered on whether new HOA board members are required to undergo orientation training. In California, there is currently no statewide mandate for board members to complete such training, aside from the requirement that candidates must be members of the HOA. This contrasts sharply with regulations in other states. For instance, Florida mandates board members to undertake an educational course every four years, with larger HOAs imposing even stricter training requirements. Similarly, Nevada requires board members to certify their understanding of the governing documents and state laws within 90 days of joining the board.

Nearly two decades ago, an initiative to require a three-hour training course for California HOA board members was put forth but ultimately vetoed by the governor. Since then, there has been little traction for mandatory training legislation. Nevertheless, the Community Associations Institute (CAI) has developed a Basic Board Education course that is offered periodically through various channels.

Furthermore, a significant change in eligibility requirements for candidacy was introduced with Civil Code Section 5105, enacted in 2020, which restricts the allowable conditions for board service. This legislative change means that requirements such as mandatory educational courses or adherence to a Code of Conduct are no longer permissible.

When assessing candidates for HOA board positions, homeowners are encouraged to weigh attributes such as a commitment to understanding HOA governance, prior volunteer leadership experience, collaborative skills, and a propensity for servant leadership.

Additionally, homeowners may find interest in the recently established Corporate Transparency Act, which necessitates HOAs to file Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network (FinCEN). Following extensive discussions surrounding the BOI Rule, a recent amendment exempting domestic corporations from these filing requirements was made permanent by the Department of the Treasury.

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