QUESTION: We have tried to get all members to receive information and disclosures by email. Many members have not yet signed up. Can we charge them for "snail mail" distribution of information such as the annual disclosures? Banks and other institutions charge for paper copies of statements, can this apply to HOAs?
ANSWER: The law is not clear on this issue. An argument can be made that associations can charge for the cost of sending disclosures and notices by snail mail.
Going Green. Everyone is going green, which includes going paperless. The Davis-Stirling Act allows for the delivery of certain documents by email if the recipient has agreed to that method of delivery. (Civ. Code § 4040(a)(2).) Doing so saves the environment and saves HOAs the expense of printing and mailing documents. Since electronic delivery is an environmentally friendly and low-cost means of delivering documents, it is reasonable that owners who insist on paper be charged for the cost of that particular form of delivery.
Fee Limitation. Associations are limited on how much they can charge owners for paper copies. As provided for in Civil Code § 5600 associations may not impose a fee that exceeds the amount necessary to defray the costs for which it is levied. If their management company prepares the records, associations can include their charges as well.
The costs incurred by the association, for which it . . . charges a fee, necessarily include the fees and profit the vendor charges for its services. While section 1366.1 prohibits an association from marking up the incurred charge to generate a profit for itself, the vendor is not similarly restricted. (Brown v. PCM)
Electronically Challenged Owners. What about members who don't have an email address? The cost of printing and mailing documents can be passed on to everyone who wants paper deliveries, including those who don't have email. Owners who wish to avoid those costs still have the option of going to the management office to review documents.
Recommendation: Boards should work with legal counsel to develop an email consent form consistent with the conditions for obtaining consumer consent described in Corporations Code § 20. When it comes to charging for snail mail, boards should follow the advice of their association's counsel.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.