Category Archives: Topic Index

Election Rules

Associations are required to adopt election rules that comply with the requirements set forth in Civil Code Section 5105 in order to conduct any association election that requires the use of secret ballots. (Civ. Code § 5105(a).) To satisfy those requirements, the election rules must:

  • Provide Equal Access to Association Media – The election rules must ensure that if any candidate or member advocating a point of view is provided access to association media (i.e., newsletters, websites, etc.) during a complain “for purposes that are reasonable related to that election,” equal access must also be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election. (Civ. Code § 5105(a)(1); See also “Equal Access During Campaigns.”) The association may not edit or redact any content from those communications, but may include a statement specifying that the candidate or member is responsible for the content, not the association. (Civ. Code § 5105(a)(1).)
  • Provide Access to Common Area Meeting Space – The election rules must ensure access to the association’s common area meeting space (if any exists) during a campaign at no cost, to all candidates (including non-incumbents), and to all members advocating a point of view (including those not endorsed by the board), for purposes reasonably related to the election. (Civ. Code § 5105(a)(2); See also “Equal Access During Campaigns.”)
  • Specify Candidate Qualifications – The election rules must specify the qualifications for candidates for the board and any other elected position, consistent with the association’s governing documents. (Civ. Code § 5105(a)(3); See also “Director Qualifications.”)
  • Specify Nomination Procedures – The election rules must specify the procedures for the nomination of candidates, consistent with the association’s governing documents. A nomination or election procedure is not reasonable if it disallows any member from nominating himself or herself for election to the board. (Civ. Code § 5105(a)(3); See also “Candidate Nomination.”)
  • Specify Qualifications for Voting – The election rules must specify the qualifications for voting, the voting power of each membership, the authenticity, validity, and effect of proxies, and the voting period for elections, including the times at which polls will open and close, consistent with the association’s governing documents. (Civ. Code § 5105(a)(4).)
  • Specify Method of Selecting Inspector(s) of Elections – The election rules must specify a method of selecting the association’s inspector(s) of elections, utilizing one of the following methods: (a) appointment of the inspector(s) by the board, (b) election of the inspector(s) by the membership, or (c) any other method for selecting the inspector(s). (Civ. Code § 5105(a)(5); See also “Inspectors of Elections.”)
  • Allow Inspector(s) to Appoint/Oversee Additional Persons – The election rules must allow for the inspector(s) of elections to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector or inspectors deem appropriate, provided that the persons are “independent third parties” within the meaning of Civil Code Section 5110(b). (Civ. Code § 5105(a)(6); See also “Inspectors of Elections.”)
  • Require Retention of Voter List and Candidate List as Election Materials – The election rules must require retention of, as association election materials, both a candidate registration list and a voter list. The voter list must include the name, voting power, and either the physical address of the voter’s separate interest, the parcel number, or both. The mailing address for the ballot must be listed on the voter list if it differs from the physical address of the voter’s separate interest or if only the parcel number is used. The association must permit members to very the accuracy of their individual information at least 30 days before the ballots are distributed. The association or member must report any errors or omissions to either list to the inspector(s) who must make the corrections within two (2) business days. (Civ. Code § 5105(a)(7).)
  • Prohibit the Denial of a Ballot to a Member – The election rules must prohibit the denial of a ballot to a member for any reason other than not being a member (an owner of a separate interest within the association) at the time when ballots are distributed. (Civ. Code § 5105(g)(1).)
  • Ballots for Persons with a General Power of Attorney – The election rules must prohibit the denial of a ballot to a person with a general power of attorney for a member. The election rules must also require the ballot of a person with a general power of attorney for a member to be counted if returned in a timely manner. (Civ. Code § 5105(g)(2)-(3).)

Delivery of Election Rules with Ballots
The election rules must also require the inspector(s) of election to deliver, or cause to be delivered, at least 30 days before an election: (a) the ballots, and (b) a copy of the election rules. (Civ. Code § 5105(g)(4).)

Election Rules Delivery Methods – Delivery of the election rules as indicated above may be accomplished by individual delivery (e.g., mailing a copy to each member with the ballots) or posting the election rules to an internet website and including the corresponding website address on the ballot together with the phrase, in at least 12-point font:
“The rules governing this election may be found here:”

Candidate Qualifications
The election rules may be used to establish qualifications for candidates for the board as permitted under Civil Code Section 5105(c). (See “Candidate Qualifications.”)

Floor Nominations & Write-Ins
Notwithstanding any other provision of law, the election rules may provide for the nomination of candidates from the floor of membership meetings or nomination by any other matter; those rules may also permit write-in candidates for ballots. (Civ. Code § 5105(b); See also “Candidate Nomination.”)

Adopting & Amending Election Rules
Election rules are “operating rules” within the meaning of Civil Code Section 4355. (Civ. Code § 4355(a)(7).) As such, they may be adopted and amended by the board without membership approval provided that the required amendment procedure mandated by Civil Code Section 4360 is followed (i.e., providing the membership with 28 days notice of a proposed amendment to the election rules). (See “Adopting & Amending Operating Rules.”)

*No Changes to Election Rules within 90 Days of an Election –Election rules may not be changed less than ninety (90) days prior to an election. (Civ. Code § 5105(h).)

Related Links

The New State of HOA Election Laws – Article published by Tinnelly Law Group

Inspectors of Elections

When an association’s election requires the use of secret ballots in accordance with Civil Code Section 5100, an association is required to “select an independent third party or parties as an inspector of elections.” (Civ. Code § 5110(a).) The number of inspector(s) must either be one (1) or three (3). (Civ. Code § 5110(a).)

“Independent Third Party” Defined
An independent third party allowed to serve as an association’s inspector of elections includes, but is not limited to, the following: (Civ. Code § 5110(b))

  • A volunteer poll worker with the county registrar of voters;
  • A licensee of the California Board of Accountancy (CBA);
  • A notary public; or
  • A member of the association, provided that the member is not a director, a candidate for director, or related to a director or to a candidate for director.

Professionals – an independent third party allowed to serve as an association’s inspector of election may not include any “person, business entity, or subdivision of a business entity who is currently employed or under contract to the association for any compensable service other than serving as inspector of elections.”  (Civ. Code § 5110(b).)

Prohibited Persons – as referenced above, an association’s inspector of elections may not include any person who is a member of the board, a candidate for the board, or related to a member of the board or a candidate for the board, nor may it include any person or business entity that is employed or under contract with the association for any service other than serving as inspector of elections. (Civ. Code § 5110(b).)

Selection Methods
The association’s election rules must specify a method for selecting one (1) or three (3) independent third parties as inspector(s) of elections utilizing one of the following methods:

Most associations utilize the first method (appointment by board) for the selection of its inspector(s) of elections.

Additional Persons Assisting Inspector(s) – The association’s election rules must also allow the inspector(s) to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector(s) deem appropriate, provided that the persons are also independent third parties in accordance with the above. (Civ. Code § 5105(a)(6).)

Duties of Inspectors
An association’s inspector(s) of elections are required to do all of the following: (Civ. Code § 5110(c))

  • Determine the number of memberships entitled to vote and the voting power of each;
  • Determine the authenticity, validity, and effect of proxies, if any;
  • Receive ballots;
  • Hear and determine all challenges and questions in any way arising out of or in connection with the right to vote;
  • Count and tabulate all votes;
  • Determine when the polls shall close, consistent with the governing documents;
  • Determine the tabulated results of the election;
  • Perform any acts as may be proper to conduct the election with fairness to all members in accordance with the required secret balloting procedures, the Corporations Code, and all applicable election rules of the association.

All of the above must be performed “impartially, in good faith,  to the best of the inspector of election’s ability, as expeditiously as practical, and in a manner that protects the interests of all members of the association.” (Civ. Code § 5110(d).)

Correction of Errors on Candidate List and Voter List
If a member or the association reports an error on the voter list or candidate list to the inspector of elections, the inspector must make the corrections within two (2) business days. (Civ. Code § 5105(a)(7).)

Decisions & Reports
If there are three (3) inspectors of elections, the decision or act of a majority of the inspectors is effective “in all respects” as the decision or act of all the inspectors. (Civ. Code § 5110(d).) Any report made by the inspector(s) is prima facie evidence of the facts stated in the report. (Civ. Code § 5110(d).)

Custody of Ballots, Envelopes, Voter List & Candidate List
The sealed ballots, signed voter envelopes, voter list, and candidate list must at all times be in the custody of the association’s inspector(s) of election or at a location designated by the inspector(s) of elections until after the tabulation of the vote, and until the time allowed by Civil Code Section 5145 for challenging the election has expired (one year). (Civ. Code § 5125; See also “Legal Challenge to Election.”) Once that time has expired, the custody of the ballots must be transferred from the inspector(s) of elections to the association. (Civ. Code § 5125.) If there is a recount or other challenge to the election process, the inspector(s) of elections must, upon written request, make the ballots available for inspection and review by any member of the association or the member’s authorized representative. (Civ. Code § 5125; See also “Inspection of Ballots.”)

Related Links

The New State of HOA Election Laws – Article published by Tinnelly Law Group

Election Entirely by Mail

Unless otherwise specified in an association’s governing documents, an election may be conducted entirely by mail. (Civ. Code § 5115(d).) Corporations Code Section 7513 allows for any action which may be taken at a membership meeting to be taken without a meeting provided that:

  • Written Ballots are Distributed – the association distributes a written ballot to every member entitled to vote on the matter; (Corp. Code § 7513(a).)
  • Proposed Action Specified – the ballot sets forth the proposed action to be voted on; (Corp. Code § 7513(a).)
  • Opportunity to Specify Approval or Disapproval – the ballot provides an opportunity for the voter to specify the voter’s approval or disapproval of any proposed action; (Corp. Code § 7513(a).)
  • Reasonable Time to Return Ballot – the ballot provides a reasonable time within which to return the ballot to the association; (Corp. Code § 7513(a).)  (Note* – at least thirty (30) days of balloting must be provided pursuant to Civil Code Section 5115(a).)
  • Number of Responses Needed to Meet Quorum – the ballot must indicate the number of responses needed to meet the applicable quorum requirement; (Corp. Code § 7513(c).)
  • Percentage of Approval Needed to Pass the Measure – except for elections of directors, the ballot must state percentage of approvals necessary to pass the measure being voted on; (Corp. Code § 7513(c).) and
  • Deadline to Return Ballot – the ballot must specify the time by which the ballot must be received in order to be counted. (Corp. Code § 7513(c).)

Quorum & Approval Requirements
Approval by written ballot is valid only when the number of votes cast by ballot within the required time period equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals must equal or exceed the number of votes that would be required to approve at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot. (Corp. Code § 7513(b).)

Additional Balloting & Election Requirements
There are also other procedures and requirements which must be satisfied in connection with the election (i.e., the use of secret ballots with two (2) sealed envelopes, conducting the election in accordance with written election rules, etc.) and, even where an election may be conducted entirely by mail, a noticed meeting of the members or the board must still be held in order to count the ballots and tabulate the votes. (See “Balloting Requirements & Procedures.”)

Balloting Requirements & Procedures

Where a matter to be voted on by the association’s members requires the use of a secret ballot, the following balloting procedures must be utilized in order to preserve the confidentiality of the vote and to comply with other legal requirements contained in the Davis-Stirling Act:

Ballot with 2 Preaddressed Envelopes
Ballots and two (2) preaddressed envelopes must be mailed by first class mail or delivered by the association to every member not less than thirty (30) days prior to the deadline for voting. Instructions on how a member may return his/her ballot must also be included. (Civ. Code § 5115(a).)

  • First Sealed Envelope – The ballot itself is not signed by the voter, but is inserted into the first envelope that is sealed. (Civ. Code § 5115(a)(1).)
  • Second Signed & Sealed Envelope – the first sealed envelope is inserted into a second envelope that is sealed. In the upper left hand corner of the second envelope, the voter must sign and indicate the voter’s name, as well as indicate the address or separate interest identifier that entitles the voter to vote. (Civ. Code § 5115(a)(1).) The second envelope is addressed to the association’s inspector(s) of elections who ultimately tabulates the votes. (Civ. Code § 5115(a)(2).) The envelope may be mailed or delivered by hand to a location specified by the inspector(s) of elections, and the member may request a receipt for delivery. (Civ. Code § 5115(a)(2).)

Proposed Governing Document Amendment
If the vote is being conducted to approve amendments of the association’s governing documents (i.e., a CC&R amendment), the text of the proposed amendments must be delivered to the members with the ballot. (Civ. Code § 5115(g).)

Quorum
If a quorum is required by the governing documents, each ballot received by the inspector(s) of elections must be treated as a member present at a meeting for purposes of establishing quorum. (Civ. Code § 5115(b).)

Counting Ballots & Tabulating Votes

Meeting Required – Even if the election is being conducted entirely by mail, all ballots must be counted and tabulated by the association’s inspector(s) of elections, or by the designee of the inspector(s) of elections, in public at a properly noticed open board meeting or membership meeting. (Civ. Code § 5120(a).) No person, member of the association, or employee of the association’s management company may open or otherwise review any ballot prior to the time and place where the ballots are being counted and tabulated. (Civ. Code § 5120(a).) The inspector(s) of elections, or the designee of the inspector(s) of elections, may verify the member’s information and signature on the outer envelope prior to the meeting where the ballots will be counted. (Civ. Code § 5120(a).)

Observing the Counting – Any candidate or member of the association may witness the counting of the ballots and tabulation of the votes. (Civ. Code § 5120(a).)

Ballots are Irrevocable
Once a secret ballot is received by the association’s inspector(s) of election, the ballot is irrevocable. (Civ. Code § 5120(a).)

Reporting Results
Once the votes are counted, the tabulated results must: (Civ. Code § 5120(b).)

  • Be promptly reported to the board;
  • Recorded in the minutes of the next board meeting; and
  • Be available for review by the association’s members.

Within fifteen (15) days of the election, the board must also give general notice of the tabulated results. (Civ. Code § 5120(b).)

Custody of Ballots
The sealed ballots must at all times be in the custody of the association’s inspector(s) of election or at a location designated by the inspector(s) of elections until after the tabulation of the vote, and until the time allowed by Civil Code Section 5145 for challenging the election has expired (one year). (Civ. Code § 5125; See also “Legal Challenge to Election.”) Once that time has expired, the custody of the ballots must be transferred from the inspector(s) of elections to the association. (Civ. Code § 5125.) If there is a recount or other challenge to the election process, the inspector(s) of elections must, upon written request, make the ballots available for inspection and review by any member of the association or the member’s authorized representative. (Civ. Code § 5125; See also “Inspection of Ballots.”)

Related Links

The New State of HOA Election Laws – Article published by Tinnelly Law Group

Elections Requiring Secret Ballots

Notwithstanding any other law or provisions in an association’s governing documents, the following matters must be voted on by secret ballot in accordance with the procedures set forth in Civil Code Section 5100 et. seq.:

    • Elections Regarding Assessments Legally Requiring a Membership Vote – this would include actions to increase regular assessments over twenty percent (20%) or to levy a special assessment over five percent (5%) of the association’s annual budget. (Civ. Code § 5100(a); See also “Limitations on Assessment Increases.”)
    • Election and Removal of Directors – a membership vote to either elect directors or to remove (recall) them from the board. (Civ. Code § 5100(a); See also “Removal & Recall of Directors.”)

Uncontested Elections (Elections by Acclamation) – Avoiding the use of secret ballots is possible in an uncontested director election. (Civ. Code § 5103(g); See also “Uncontested Elections (Elections by Acclamation)“.)

Where the use of secret ballots is required, Civil Code Sections 5105 through 5145 set forth numerous procedural requirements governing the balloting and voting process which must be utilized. For more information, see “Balloting Requirements & Procedures.”

Special Meetings of Members

Special meetings of an association’s members may be called for “any lawful purpose” by: (Corp.Code § 7510(e).)

  1. The board;
  2. The president of the association;
  3. Those designated under the association’s bylaws; or
  4. A petition of five percent (5%) or more of the association’s members.

Meeting Called by Petition
If a meeting of the members is called by a petition signed by the required minimum number of members (at least 5%), the purpose of the special meeting must be set forth in the petition in order to indicate the basis for the requested special meeting (i.e., if the special meeting is to reverse a recent change to the association’s operating rules), as well as to demonstrate that the meeting is being called for a “lawful purpose” in accordance with Corporations Code Section 7510(e).

Date of the Special Meeting
The date of the special meeting is set by the board and may not be less than thirty-five (35) nor more than one hundred and fifty (150) days from receipt of the request/petition. (Corp. Code § 7511(c).)

Notice of the Special Meeting
The board has twenty (20) days from receipt of the petition to set the date of the special meeting and to provide notice of the meeting. (Corp. Code § 7511(c).) Corporations Code Section 7511(a) generally requires the notice of meeting to be given to all members no less than ten (10) and no more than ninety (90) days before the date of the meeting. However, this 10-day minimum notice requirement is modified if the purpose of the meeting requires the use of secret ballots in accordance with Civil Code Section 5100 (i.e., if the purpose of the meeting is to conduct a vote to remove (recall) the board). In such cases, because Civil Code Section 5115 requires at least thirty (30) days of balloting, along with the solicitation and publication of a candidate list for at least thirty (30) days prior to balloting, the meeting date must take place several months from the date the notice of meeting is delivered to the members (not 10 days). (See “Balloting Requirements & Procedures.”)

Business Constrained by Notice
The notice of meeting must state the place, date and time of the meeting, as well as the “general nature of the business to be transacted” at the meeting. (Corp. Code § 7511(a).) No other business may be transacted at the meeting except for that which was stated in the notice. (Corp. Code § 7511(a).)

Method of Notice
Pursuant to Corporations Code Section 7511(b), notice may be given by any of the following methods:

  • personally,
  • electronically, or
  • by mail or other means of written communication addressed to a member at the address of the member appearing on the books of the association or given by the member to the association for purpose of notice.

Failure to Provide Notice
If the board fails to provide notice of the special meeting, “the persons entitled to call the meeting may give the notice…after notice to the [association] giving it an opportunity to be heard.” (Corp. Code § 7511(c).) However, there is no law which grants such persons the right to also distribute ballots or select an inspector of elections—actions which are required to legally hold the meeting and conduct the vote. Those actions may only be performed by the board (or the board acting on behalf of the association). (See Civ. Code §§ 5105, 5115; See also “Inspectors of Elections.”)

Court Ordered Notice
If, upon receipt of a valid petition, the board fails to set a date for the meeting and provide notice to the members, the petitioners are permitted to obtain court orders designating the time and place of the meeting, the form of notice, and any other orders “as may be appropriate.” (Corp. Code § 7511(c).)

Related Links

Court Steps in to Force Recalled HOA Board to Step Down
-Published on HOA Lawyer Blog (July, 2023)

Annual Meetings of Members

Annual Meeting Required
Every year, an association is required under its bylaws or CC&Rs to hold an annual meeting of its members for the purpose of electing directors to the association’s board. The association’s bylaws typically contain provisions governing the date, time, location, quorum requirements and the manner in which the annual meeting of the members is to be conducted. In the absence of such language, Corporations Code Section 7510 provides default provisions with respect to annual meetings. Specifically, Section 7510 provides that, when the location for the annual meeting of the members is not stated in the bylaws, the meeting shall be held at the principal executive office of the association, and “in each year in which directors are to be elected.” (Corp. Code § 7510(b).)

Failure to Hold Annual Meeting
If an association fails to meet within sixty (60) days of the date designated for the annual meeting, or, if no date has been designated, within fifteen (15) months after the formation of the association or its last regular meeting, a member may, after notice and opportunity to be heard, petition the superior court for an order establishing a date and time for a meeting. (Corp. Code § 7510(c).)

Directors Continue to Serve
If an annual meeting is not conducted and/or is unable to take place due to a lack of quorum, the directors then in office generally continue to serve on the board until successors have been formally elected and qualified. (Corp. Code § 7220(b).)

Quorum Requirements
“Quorum” is the minimum number of member votes required before the association may engage in business at the annual meeting. With respect to voting, Civil Code Section 5115(b) provides that a “quorum shall be required only if so stated in the governing documents or other provisions of law.” If the governing documents require a quorum but do not state the quorum amount, and unless otherwise provided for by the association’s bylaws or other provisions of law, one-third (1/3) of the voting power of the association, represented in person or by proxy, constitutes a quorum. (Corp. Code § 7512(a); See also “Member Quorum Requirements” and “Failure to Achieve Quorum.”)

Continuation of Annual Meeting
In the event the association does not achieve quorum, “the chair calls the meeting to order, announces the absence of a quorum, and entertains a motion to adjourn” the meeting until a later date.  (Robert’s Rules, 11th ed., p. 349.) The time period for adjournment is typically found in the association’s bylaws. Unless stated otherwise in the bylaws, when a meeting is adjourned and continued, notice of the continued meeting need not be given if the date and time of the continued meeting was announced prior to the adjournment. If no date and time was announced, the board must provide notice to the membership. In any event, no meeting may be continued for more than forty-five (45) days. (Corp. Code § 7511(d); See also “Failure to Achieve Quorum.”)

Transfer Fees

With the exception of certain entities that qualify under Civil Code Section 4580, an association may not impose or collect any assessment, penalty, or fee in connection with the transfer of title of any property within the association’s development. (Civ. Code § 4575.)

*Exception – Actual Costs & Escrow Document Fees
Notwithstanding the above, an association is permitted to charge the following fees and costs in connection with the transfer of title of a property within the association’s development:

Deed-based Transfer Fees
The foregoing does not apply to a “transfer fee” as defined under Civil Code Section 1098. Such transfer fees are not imposed by an association, but are “imposed within a covenant, restriction, or condition contained in any deed, contract, security instrument, or other document affecting the transfer or sale of, or any interest in, real property that requires a fee be paid as a result of transfer of the real property.” (Civ. Code § 1098.) The requirement to pay such a transfer fee is often recorded by a CID’s developer at the inception of the CID within each of the owner’s respective deeds.

Transfer Disclosures & Escrow Documents

Seller’s Duty to Disclose Information
Civil Code Section 4525 requires an owner of a property within an association to provide various items of information and documents to a prospective purchaser of the owner’s property “as soon as practicable before the transfer of title or the execution of a real property sales contract.” (Civ. Code § 4525(a).) Because the association is not a party to the transaction between the owner and the prospective purchaser, the association has no general duty to disclose information to the prospective purchaser:

“The Association cannot be expected to make disclosures so as to impart information in relation to every possible sale of a unit within the development. Were there such a requirement, the Association’s time could be consumed with the preparation of disclosure statements. Any such rule would also render redundant the procedure of annual reports, meetings, and the disclosures of budgets established by statute.” (Ostayan v. Nordoff Townhomes HOA (2003) 110 Cal.App.4th 120, 130).

However, in order for the owner/seller to provide the prospective purchaser with the required documents, the association is obligated to furnish those documents to the seller upon the seller’s written request for the same (discussed further, below).

Additional Duty to Disclose Defect-Related Information – In addition to the documents and information which must be provided under Section 4525, Civil Code Section 4535 places additional duties upon an owner/seller to disclose defect-related information to a prospective purchaser required under Civil Code Section 1134. Before the transfer of title, the seller must deliver to the prospective purchaser a written statement listing all substantial defects or malfunctions in the major systems in the unit and common areas, or a written statement disclaiming knowledge of any such substantial defects or malfunctions. (Civ. Code § 1134(a).) “Major systems” includes, but is not limited to, the roof, walls, floors, heating, air conditioning, plumbing, electrical systems or components of a similar or comparable nature, and recreational facilities. (Civ. Code § 1134(c).) Failure to make such disclosures prior to the execution of the purchase agreement gives the purchaser the right to terminate the agreement within specified timelines. (Civ. Code § 1134(b).)

Association’s Obligations to Provide Requested Documents
Upon written request from an owner, an association is required to, within ten (10) days of the mailing or delivery of the request, provide the owner (or the owner’s authorized recipient) a copy of all the requested documents specified under Civil Code Section 4525. (Civ. Code § 4530(a)(1).) Those documents include copies of the association’s governing documents, financial statement review, annual budget report, statements regarding rental restrictions, etc. (See Civ. Code § 4525 and 4528.)

The required documents may be maintained in electronic form, and may be posted on the association’s web site. (Civ. Code § 4530(a)(2).) An association is not permitted to withhold delivery of the documents for any reason nor subject to any condition except for the owner’s payment of the fees authorized by Civil Code Section 4530(b) (discussed below). An association may contract with any person or entity to facilitate the production and distribution of the requested documents (i.e., its management company). (Civ. Code § 4530(c); See also Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544.)

Statutory Form: Civil Code § 4528 – The documents required under Civil Code Section 4525 are itemized in the form required under Civil Code Section 4528 (“4528 Form”). The 4528 Form is then completed by the association in order to show what documents are being provided as well as the association’s fees to be charged in providing those documents.

Fees Charged by the Association

  • Allowable Fees – An association is permitted to collect a reasonable fee based upon the association’s actual costs for procuring, preparing, reproducing and delivering the requested documents, but is not permitted to charge additional fees for delivering the documents electronically. (Civ. Code § 4530(b)(1).) The association’s costs may include fees charged by the association’s managing agent for the production of the documents. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544.)
  • Seller’s Obligation to Pay – The seller is required to compensate the association for providing the requested documents to the prospective purchaser. (Civ. Code § 5300(b)(8).)
  • Estimate Required – A written or electronic estimate of the fees that will be charged by the association must be set forth on the 4528 Form. (Civ. Code § 4530(b)(2).)
  • Fees for Cancelled Request – If the request for documents is cancelled in writing by the same party that placed the order, the association may only charge a cancellation fee if the association had already began working on the request and has not been compensated for the work it already performed. (Civ. Code § 4530(b)(3)(A).) The association is required to refund all previously collected fees reflecting work which has not yet been performed. (Civ. Code § 4530(b)(3)(B)-(C).)
  • Separate from Other Fees, Fines & Assessments – Any fees charged by the association for documents must be distinguished from other fees, fines or assessments billed as part of the property transfer or sales transaction. (Civ. Code § 4530(b)(4).)
  • Documents in Seller’s Possession – If the seller is already in possession of current copies of any of the requested documents, the seller must provide them to the prospective purchaser at no cost. (Civ. Code § 4530(b)(6).)

Violations of Disclosure Requirements
Any person who willfully violates the above requirements is liable to the purchaser of the property for actual damages and is further required to pay a civil penalty in an amount not to exceed five hundred dollars ($500). (Civ. Code § 4540.) In an action to enforce this liability, the prevailing party is entitled to an award of his/her reasonable attorney’s fees. (Civ. Code § 4540.)