Tag Archives: Manager

Manager Disclosure Requirements

Certification Disclosures
Pursuant to Business & Professions Code Section 11504, managers of a common interest development (CID) are required to annually disclose to the association’s board of directors the following information:

Whether or not the CID manager has satisfied the requirements of Business & Professions Code Section 11502 governing when the manager may be called a “certified common interest development manager.” (Bus. & Prof. Code § 11504(a).)
The name, address, and telephone number of the professional association that certified the common interest development manager, the date the manager was certified, and the status of the certification. (Bus. & Prof. Code § 11504(b).)
The location of his or her primary office. (Bus. & Prof. Code § 11504(c).)
Prior to entering into or renewing a contract with an association, the common interest development manager must disclose to the board of directors whether the fidelity insurance of the common interest development manager or his or her employer covers the current year’s operating and reserve funds of the association. This requirement does not compel an association to require a common interest development manager to obtain or maintain fidelity insurance. (Bus. & Prof. Code § 11504(d).)
Whether the common interest development manager possesses an active real estate license. (Bus. & Prof. Code § 11504(e).)

“Managing Agent” Disclosures
Civil Code Section 5375 additionally requires a prospective “managing agent” of a CID to disclose in a written statement certain information to the association’s board of directors “as soon as practicable, but in no event more than 90 days, before entering into a management agreement” with the association. The information which must be disclosed in that written statement includes the following:

The names and business addresses of the owners or general partners of the managing agent. If the managing agent is a corporation, the written statement must include the names and business addresses of the directors and officers and shareholders holding greater than 10 percent of the shares of the corporation. (Civ. Code § 5375(a).)
Whether or not any relevant licenses such as architectural design, construction, engineering, real estate, or accounting have been issued by the State of California and are currently held by the persons specified above. If a license is currently held by any of those persons, the statement must contain the following information: (a) What license is held; (b) The dates the license is valid; and (c) The name of the licensee appearing on that license. (Civ. Code § 5375(b).)
Whether or not any relevant professional certifications or designations such as architectural design, construction, engineering, real property management, or accounting are currently held by any of the persons specified above including, but not limited to, a professional common interest development manager. If any certification or designation is held, the statement must include the following information: (a) What the certification or designation is and what entity issued it; (b) The dates the certification or designation is valid; and (c) The names in which the certification or designation is held. (Civ. Code § 5375(c).)

“Managing Agent” Defined – The term “managing agent” in this context does not include a full-time employee of the association or a regulated financial institution operating within the normal course of its regulated business practices. (Civ. Code §§ 5385, 4158(b); See also “Association Manager (Managing Agent).”)

Business & Professions Code Section 11502.5. CID Manager Education Requirements.

The course related competency examination or examinations and education provided to a certified common interest development manager pursuant to Section 11502 by any professional association for common interest development managers, or any postsecondary educational institution, shall be developed and administered in a manner consistent with standards and requirements set forth by the American Educational Research Association’s “Standards for Educational and Psychological Testing,” and the Equal Employment Opportunity Commission’s “Uniform Guidelines for Employee Selection Procedures,” the Civil Rights Act of 1991, and the Americans with Disabilities Act of 1990, or the course or courses that have been approved as a continuing education course or an equivalent course of study pursuant to the regulations of the Real Estate Commissioner.

Business & Professions Code Section 11502. CID Manager Certification.

In order to be called a “certified common interest development manager,” a person shall meet one of the following requirements:

(a) Prior to July 1, 2003, has passed a knowledge, skills, and aptitude examination as specified in Section 11502.5 or has been granted a certification or a designation by a professional association for common interest development managers, and who has, within five years prior to July 1, 2004, received instruction in California law pursuant to paragraph (1) of subdivision (b).

(b) On or after July 1, 2003, has successfully completed an educational curriculum that shall be no less than a combined 30 hours in coursework described in this subdivision and passed an examination or examinations that test competence in common interest development management in the following areas:

(1) The law that relates to the management of common interest developments, including, but not limited to, the following courses of study:

(A) Topics covered by the Davis-Stirling Common Interest Development Act, contained in Part 5 (commencing with Section 4000) of Division 4 of the Civil Code, including, but not limited to, the types of California common interest developments, disclosure requirements pertaining to common interest developments, meeting requirements, financial reporting requirements, and member access to association records.

(B) Personnel issues, including, but not limited to, general matters related to independent contractor or employee status, the laws on harassment, the Unruh Civil Rights Act, the California Fair Employment and Housing Act, and the Americans with Disabilities Act.

(C) Risk management, including, but not limited to, insurance coverage, maintenance, operations, and emergency preparedness.

(D) Property protection for associations, including, but not limited to, pertinent matters relating to environmental hazards such as asbestos, radon gas, and lead-based paint, the Vehicle Code, local and municipal regulations, family day care facilities, energy conservation, Federal Communications Commission rules and regulations, and solar energy systems.

(E) Business affairs of associations, including, but not limited to, necessary compliance with federal, state, and local law.

(F) Basic understanding of governing documents, codes, and regulations relating to the activities and affairs of associations and common interest developments.

(2) Instruction in general management that is related to the managerial and business skills needed for management of a common interest development, including, but not limited to, the following:

(A) Finance issues, including, but not limited to, budget preparation; management; administration or supervision of the collection, reporting, and archiving of the financial or common area assets of an association or common interest development; bankruptcy laws; and assessment collection.

(B) Contract negotiation and administration.

(D) Management of maintenance programs.

(E) Management and administration of rules, regulations, and parliamentary procedures.

(F) Management and administration of architectural standards.

(G) Management and administration of the association’s recreational programs and facilities.

(H) Management and administration of owner and resident communications.

(I) Training and strategic planning for the association’s board of directors and its committees.

(J) Implementation of association policies and procedures.

(K) Ethics, professional conduct, and standards of practice for common interest development managers.

(L) Current issues relating to common interest developments.

(M) Conflict avoidance and resolution mechanisms.

Business & Professions Code Section 11504. Manager Disclosures.

(a) Whether or not the common interest development manager has met the requirements of Section 11502 so he or she may be called a certified common interest development manager.

(b) The name, address, and telephone number of the professional association that certified the common interest development manager, the date the manager was certified, and the status of the certification.

(d) Prior to entering into or renewing a contract with an association, the common interest development manager shall disclose to the board of directors of the association or common interest development whether the fidelity insurance of the common interest development manager or his or her employer covers the current year’s operating and reserve funds of the association. This requirement shall not be construed to compel an association to require a common interest development manager to obtain or maintain fidelity insurance.

(e) Whether the common interest development manager possesses an active real estate license.

This section may not preclude a common interest development manager from disclosing information as required in Section 5375 of the Civil Code.

*Note – As a result of AB 690’s passage, effective January 1, 2018, this section shall be amended to read as follows:

On or before September 1, 2003, and annually thereafter, a person who either provides or contemplates providing the services of a common interest development manager to an association shall disclose to the board of directors of the association the following information:
(a) Whether or not the common interest development manager has met the requirements of Section 11502 so he or she may be called a certified common interest development manager.

(e) Whether the common interest development manager possesses an active real estate license.

(f) A common interest development manager or common interest development management firm shall disclose information required in Section 5375 of the Civil Code.

(g) Whether or not the common interest development manager receives a referral fee or other monetary benefit from a third-party provider distributing documents pursuant to Section 5300 of the Civil Code.

(h) An affirmative written acknowledgment that the disclosure provided to a member or potential member pursuant to Sections 4528 and 5300 of the Civil Code, and all documents provided thereunder, are the property of the association and not its managing agent or the agent’s managing firm.

Civil Code Section 5385. Employee not “Managing Agent”.

For the purposes of this article, “managing agent” does not include a full-time employee of the association.

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Davis-stirling Act

Civil Code Section 5375. Prospective Managing Agent Disclosure.

A prospective managing agent of a common interest development shall provide a written statement to the board as soon as practicable, but in no event more than 90 days, before entering into a management agreement which shall contain all of the following information concerning the managing agent:

(a) The names and business addresses of the owners or general partners of the managing agent. If the managing agent is a corporation, the written statement shall include the names and business addresses of the directors and officers and shareholders holding greater than 10 percent of the shares of the corporation.

(b) Whether or not any relevant licenses such as architectural design, construction, engineering, real estate, or accounting have been issued by this state and are currently held by the persons specified in subdivision (a). If a license is currently held by any of those persons, the statement shall contain the following information:

(1) What license is held.

(2) The dates the license is valid.

(3) The name of the licensee appearing on that license.

(c) Whether or not any relevant professional certifications or designations such as architectural design, construction, engineering, real property management, or accounting are currently held by any of the persons specified in subdivision (a), including, but not limited to, a professional common interest development manager. If any certification or designation is held, the statement shall include the following information:

(1) What the certification or designation is and what entity issued it.

(2) The dates the certification or designation is valid.

(3) The names in which the certification or designation is held.

(d) Disclose any business or company in which the common interest development manager or common interest development management firm has any ownership interests, profit-sharing arrangements, or other monetary incentives provided to the management firm or managing agent.

(e) Whether or not the common interest development manager or common interest development management firm receives a referral fee or other monetary benefit from a third-party provider distributing documents pursuant to Sections 4528 and 4530.