Reader Questions - Copies Cost THAT Much

Dear Kelly,

Recently my family sold a house and paid over $700.00 in fees to the association, a large portion of which was for copies of rules and regulations to be provided to the buyer. The association provided the files to a third party website and then instructed the escrow company to download the files and print copies for the buyer once I paid – The association basically did nothing.

Can an association charge fees without explaining what the fees are for? Doesn’t the homeowner have the right to request copies of bylaws and regulations without being charged? When are the fees considered to be excessive? Do I have any legal recourse?

Thank you for your time,

G.B., Nipomo

Dear G. B.,

Management companies are often compared not by their qualifications, service level, or reputation, but typically by their “per door” monthly fee. Consequently, many management firms have found that the monthly fee does not cover their payroll, let alone provide for a profit, and companies are forced to find other ways to create revenue. One such way is to charge a variety of miscellaneous fees, including document fees. The Realtor® profession has battled these fees for years, resulting in a group of three statutes controlling document fees – Civil Code Sections 4525, 4528, and 4530.

Civil Code 4525 requires an owner to as soon as possible provide a prospective buyer with an extensive list of documents. Buyers should check the list and make sure that the buyer receives all of the items listed. There can be much valuable information in those documents.

Civil Code 4528 provides a form which is required by Civil 4530(d) to be provided along with the copies. This form provides a breakdown of what fee was charged for each document, preventing “bundling” of all the charges into one fee.

The main homeowner protections are found in Civil Code 4530. Under this statute, an association has ten days from written demand to provide the various documents covered by Civil 4525. The association can only charge its actual cost for the copies, which normally is whatever the management charges the HOA. Associations may charge a “reasonable” fee from the seller. The statute does not define what is “reasonable,” since this depends upon circumstances. The association can provide the copies electronically, but cannot charge extra for providing them in electronic instead of paper form. Owners can by written request receive a written advance estimate of the fees for the requested documents (Civil 4530(b)(2)).

Associations charging unreasonable fees for copies can under Civil 4540 be sued for refund, a civil penalty of $500, and attorney fees. However, this remedy is underused, since the amount of money is typically not perceived to be worth the effort to pursue.

An association can save members money by posting as many as possible of the Civil 4525 documents on the “members only” area of the association web site, making it easier (and cheaper) for members to provide most of the documents to their prospective buyers. Per Civil 4530(c)(6), sellers must provide copies of the documents the seller already has at no cost to the prospective buyer.

Association boards should monitor the miscellaneous fees charged by their management companies to confirm they are reasonable.

Thanks for your question,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.