Escrow Disclosures
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ESCROW DISCLOSURES

Seller Duty to Disclose. The association is not a party to the transaction between buyer and seller and has no duty to make disclosures to the buyer--that duty falls to the seller. (Ostayan v. Nordhoff; Kovich v. Paseo Del Mar.) Realtors, as agents of sellers, cannot mislead buyers about the association and must fully disclose to buyers that they are buying into a deed restricted community with rules and regulations.

Deadline for Production. Upon written request, the association shall, within ten days of the mailing or delivery of the request, provide the owner of a separate interest, or any other recipient authorized by the owner, with a copy of the requested documents. (Civ. Code §4530.)

Costs & Fees. As required by Civil Code §4530, prior to the close of escrow sellers must provide buyers with ten different categories of documents. (Civ. Code §4525.) By statute, it is the responsibility of the seller to pay those costs. (Civ. Code §4530(b)(8).) Associations may pay a person or entity to assemble the documents on behalf of the association. (Civ. Code §4530.) Associations are allowed to collect a reasonable fee (including those charged by a management company) based on their actual costs but are prohibited from charging additional fees for electronic delivery of documents. Delivery of the documents may not be withheld for any reason nor subject to any condition except the payment of the fee. (Civ. Code §4530.) The document costs may or may not be in an association's transfer fees.

Statutory Form. As provided for in Civil Code §4530, associations must fill out a form showing the documents being submitted pursuant to Section 4528 and an estimated cost for those records.

Fine for Willful Violation. There is a $500 fine for anyone who willfully violates the disclosure requirement. In addition, in an action to enforce this liability, the prevailing party shall be awarded reasonable attorneys' fees. (Civ. Code §4540.)

Estoppel Certificate. Submission of an estoppel certificate may also be required.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

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