Calif. Business and Professions Code §11504, Calif. Civil Code §§4528, 4530, 5300, 5375, 5375.5, 5376
Added and amended by A. B. 690
Effective date: January 1, 2018
Any prospective manager of a residential common interest development (CID) is required to provide written disclosure of potential conflicts of interest when making a bid to provide services to the CID’s homeowners association (HOA). Conflicts of interest to be disclosed include:
- whether the manager is paid a referral fee by a third party which provides products or services to the HOA; and
- whether the manager has any interest in service providers recommended to or used by the HOA.
No earlier than 90 days of entering into a CID management agreement, a prospective CID manager is required to disclose to the HOA, in writing:
- whether the manager is paid a referral fee by a third party which distributes HOA documents; and
- any business in which the prospective manager has an ownership interest or other monetary incentive.
Annually, CID managers need to provide the following information to the HOA:
- whether the manager is paid a referral fee for distributing HOA documents; and
- a written acknowledgement that these documents are the property of the HOA, not the manager.
Prospective sellers may no longer be compelled to purchase all HOA documents listed in the “Charges for Documents Provided” disclosure in connection with a sale of their separate interest in the CID.
The HOA must provide the following notice on the “Charges for Documents Provided” disclosure:
The seller may, in accordance with Section 4530 of the Civil Code, provide to the prospective purchaser, at no cost, current copies of any documents specified by Section 4525 that are in the possession of the seller.
A seller may request to purchase some or all of these documents, but shall not be required to purchase ALL of the documents listed on this form.
The annual budget report distributed by the association is also required to contain a completed “Charges for Documents Provided” disclosure.