Manager Disclosure Requirements
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MANAGER DISCLOSURE REQUIREMENTS

Manager Certification Disclosure. Managers are not required to be licensed. Instead, as provided for in Bus. & Prof. §11504, managers of common interest developments must annually disclose to the board of directors of the association the following information:

  1. Whether or not the CID manager has met the requirements of Section 11502 so he or she may be called a certified common interest development manager.
  2. 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.
  3. The location of his or her primary office.
  4. 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.
  5. Whether the common interest development manager possesses an active real estate license.

Management Agent Disclosures. Civil Code §5375 further requires that before entering into a management agreement, a prospective managing agent other than a full-time employee of the association (Civ. Code §5385) or any regulated financial institution operating within the normal course of its regulated business practice (Civ. Code §4158) must provide a board of directors with a written statement which contains all of the following information:

  1. 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.
  2. 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 above. If a license is currently held by any of those persons, the statement shall contain the following information:
    • What license is held.
    • The dates the license is valid.
    • The name of the licensee appearing on that license.
  3. 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 paragraph (1), 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:
     
    • The certification and the issuing entity.
    • The dates the certification or designation is valid.
    • The names in which the certification or designation is held.

Documents and Manager Conflicts of Interest. Managers and management companies must facilitate the delivery of documents into escrow and also disclose conflicts of interest, including:

  • receiving any referral fee or other financial benefit that could be derived from a business or company providing products or services to the association;
     
  • ownership interests or profit-sharing arrangements with service providers recommended to, or used by, the association;
     
  • receiving a referral fee or other financial benefit from a third-party provider distributing documents pursuant to Civil Code §4528;
     
  • disclosing 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 financial incentives provided to the management firm or managing agent.

See Business & Professions Code §11504; Civil Code §4528, §4530 §5300, §5375, §5375.5, and §5376.

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Adams Stirling PLC