There are a bundle of new laws that went into effect on January 1, 2012 that affect real estate. One of the more interesting ones, from the perspective of buyers and sellers of condominiums in SF, affects documents that are required when a seller sells and a buyer buys in a development governed by a Homeowner’s Association.
The following summary of CA State Assembly Bill 771 is from the California Association of Realtors:
HOA Disclosures Cover Sheet
Upon request for applicable transactions, an HOA must provide a specified cover sheet itemizing: (1) the HOA sales disclosures required by law; (2) the HOA disclosures provided by the HOA; and (3) the estimated fee for providing the required HOA disclosures distinguished from other fees, fines, or assessments. Â The fee for providing the required HOA disclosures must be reasonable based upon the HOA’s actual cost for procuring, preparing, reproducing, and delivering the HOA documents.Â If such fee is paid, the HOA cannot withhold the required HOA disclosures for any reason.Â If an HOA maintains the HOA documents electronically, they must be made electronically available to a requesting party at no additional fee.Â This law also requires an HOA to, upon a buyer’s request, provide 12 months of approved minutes of the association’s board of directors meetings (excluding executive sessions).
Assembly Bill 771Â (codified as Cal. Civil Code Â§ 1368 (b)) (effective January 1, 2012).
This law makes some significant changes that should make getting these documents easier and more affordable. First, it requires the fee charged to be reasonable and based upon the actual cost of providing the documents. I’ve seen property management companies charge exorbitant fees – north of $500, to provide these documents. It prevents the association from withholding documents in cases where the seller is behind on dues payments or otherwise not in good standing with the association, and it also prevents “convenience fees” or other ridiculous add on charges to provide electronic copies of the documents.
All in all, I’m happy to see this law go into effect and think that it will result in lower fees at the time of sale.