Upon written request, associations must provide an owner, or any other recipient authorized by the owner (such as an escrow officer), with documents. (Civ. Code §4530(a).) Documents provided to a prospective purchaser are specified in Civil Code §4525.
Reasonable Fee. Associations are allowed to charge a reasonable fee "based upon the association’s actual cost for the procurement, preparation, reproduction, and delivery of the documents requested." (Civ. Code §4530(b).) As described below, this includes management company expenses incurred by the association.
Management Companies. In a 2007 case, the Court of Appeal ruled that management companies are allowed to make a profit on transfer fees charged in escrows. Plaintiff argued that management companies violate the law when they charge excessive document fees and transfer fees whenever a home or condominium is sold. Plaintiff argued that Civil Code §4575 prohibits associations (and their managing agents) from charging a fee greater than their actual cost to reproduce documents or to transfer title records:
neither an association . . . or similar entity may impose or collect any assessment, penalty, or fee in connection with a transfer of title . . . except for . . . An amount not to exceed the association's actual costs to change its records.
The court disagreed. It pointed out that the statute prevents associations from charging extra fees, not managing agents. The court commented that competitive forces, not the statute, will constrain a vendors' fees and charges. (Berryman v. Merit Management; Fowler v. M&C Mgmt.) This ruling is similar to a 2005 case involving collection fees.
Fee Disclosure & Payment. Associations must use a form prescribed by statute to list the documents being delivered to escrow and the fee for each documents. The form is found in Civil Code §4528. It is the responsibility of the seller to compensate the association, person, or entity that provides the documents. (Civ. Code §4530(b)(8).)
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