Information for you to know…….
AB 771 Common Interest Development (CID)
In late August, California Governor Jerry Brown signed AB 771 into law. So what is AB 771? AB771 is a bill that prevents home buyers in a common interest development (CID), such as a condominium or town home, from being charged excess document fees. I’ve personally seen requests for fees as much as $500 for basic HOA and CCR documents.
Homeowner Associations (HOA’s) are required to provide specific documents to prospective purchasers of homes in a CID — a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property. In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.
Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents. HOA’s generally have provided the documents for approximately $75 to $250. Increasingly, HOA’s have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOA’s sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.
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