Common interest developments: management.

Plain English Breakdown

The official source material does not provide specific enforcement mechanisms, penalties, or funding details for implementing these new rules.

Management Rules for Homeowner Associations

This law updates definitions and duties for agents managing homeowner associations, including fiduciary responsibilities and additional information requirements for property sales.

What This Bill Does

• Revises the definition of an agent to include a person or company that facilitates activities under specified provisions of the Davis-Stirling Common Interest Development Act and must provide a fiduciary duty to the board of a homeowner’s association and its members.
• Updates the meaning of 'management services' to mean acts performed by agents in an advisory capacity for associations, including implementing governing documents.
• Modifies the definition of a professional association for common interest development managers to include organizations that employ agents meeting certain criteria.
• Adds new duties for people or companies facilitating specified activities such as reviewing association operating accounts, requiring them to provide prudent and good faith efforts to the association and its members.
• Requires owners selling properties in homeowner associations to give buyers additional information about exterior elevated elements and the number of units affected upon request.

Who It Names or Affects

• People who manage homeowner associations
• Homeowners buying or selling properties in common interest developments

Terms To Know

Agent

A person or company that facilitates activities under specified provisions of the Davis-Stirling Common Interest Development Act and must provide a fiduciary duty to the board of a homeowner’s association and its members.

Management Services

Acts performed by agents in an advisory capacity for associations, including implementing governing documents.

Limits and Unknowns

• The bill does not specify how these changes will be enforced or what penalties might apply.
• It is unclear if this law will change the way current managers and agents operate immediately after it passes.
• There are no details on funding for implementing these new rules.

Official Summary Text

SB 1238, as amended, Wahab.
Common interest developments: management.
(1) Existing law, the Davis-Stirling Common Interest Development Act (act), provides for the creation and regulation of common interest developments.
Existing civil law defines an agent as one who represents another, called the principal, in dealings with third persons.
This bill would revise the above-described definition of agent to include a person or company that facilitates activities pursuant to specified provisions of the
act and that is required to provide a fiduciary duty to the board of a homeowner’s association and its members.
act.
Existing law defines “management services” for purposes of a common interest development to mean specified acts performed or offered to be performed in an advisory capacity for an association, including implementing provisions of governing documents for the operation of the common interest development.
This bill would revise the above definition to specify that it means acts performed or offered to be performed by an agent, as defined above, in an advisory capacity for an association, as prescribed.
Existing law defines “professional association for common interest development managers” to mean an organization that meets all of specified criteria, including having at least 200 members or certificants who are common interest development managers in California.
This bill would revise that definition to specify that it means an organization that employees an agent or agents, as defined, and that meets the above mentioned criteria.
Existing law imposes certain fiduciary duties on managers and agents of common interest developments.
This bill would provide that a person or entity that facilitates specified activities, including reviewing association operating accounts, owes a duty of care that is prudent and provides the highest good faith effort to the association and its members.
(2) Existing law requires the owner of a separate interest in a common interest development to provide specified documents to a prospective purchaser as soon as practicable before the transfer of title or execution of a real property sales contract, including a copy of the report issued pursuant to the most recent inspection conducted.
This
bill would require the owner to provide additional information, including, among other things, if separately requested by the purchaser, the location on the first page of the report where certain facts about the exterior elevated elements and the number of units impacted may be found. The bill would make various other related and conforming changes to those provisions.

Current Bill Text

Download Bill PDF