Would require specified disclosures regarding any conflicts of interest, referral fees or financial benefits received by a manager or management firm.
Current Status: Pending
FindHOALaw Quick Summary:
Existing law requires that a common interest development manager or management firm annually provide specified disclosures to the board of directors, including the manager’s name and address, whether the manager is certified, and whether the manager holds an active real estate license. This bill would amend Business and Professions Code Section 11504 to require a prospective manager or management firm to disclose to the board of directors whether the manager receives a referral fee or other
financial monetary benefit from a third-party provider for distributing documents pursuant to Civil Code Section 5300.
This bill would also amend Civil Code Section 5300 to require that the Annual Budget Report contain specified information disclosing referral fees or financial benefits received by a manager or management firm, including the Document Disclosure Form (Civ. Code § 4528), a statement disclosing whether or not the manager or management firm receives a referral fee or other financial benefit from a third-party provider distributing documents pursuant to Civil Code Section 4528, and a statement disclosing whether or not the manager or managing agent has any conflicts of interest. “Conflict of interest” is defined as a referral fee or other financial benefit that could be derived from a business or company providing products or services to the association or any ownership interests or profit-sharing arrangements with service providers recommended to, or used by, the association.
Existing law requires a prospective managing agent to provide a written statement disclosing certain information to the board of directors no more than 90 days before entering into a management agreement. This bill would amend Civil Code Section 5375 to require that the managing agent disclose any business or company in which the manager or management company has any ownership interests, profit-sharing arrangements, or other financial incentives, and to include an itemized summary of all fees and charges assessed by the management company, third-party contractor, or subcontractor of the management firm, on a separate page within the management proposal.
Finally, this bill would add Civil Code Section 5376 to require the manager, management company, or its third-party agent facilitate the delivery of escrow documents and disclosures in accordance with Civil Code Section 4530, and would modify the specified form used to identify the charges for requesting copies of documents by requiring the form to inform the seller that he or she is not required to purchase all of the documents listed on the form and may purchase some or all of the documents as desired.
**UPDATE: On March 28, 2017, the proposed text of AB 690 was amended to change the disclosure of conflicts of interests to information relating to the charges for requests for documents in the annual budget report, and to add that a manager shall disclose any potential conflicts of interest when presenting a bid for service:
To read the current text of AB 690, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 690 as it progresses through the Legislature.
from the California Legislature's website