Governor Signs AB 771 (Butler) Into Law Requiring Associations to Itemize and Disclose Fees Charged For Documents To Be Provided to Buyer in Escrow

Assembly Bill 771 (Betsy Butler), which amends Civil Code Section 1368 regarding documents to be provided the buyer in an escrow, was sponsored by the California Association of Realtors and initially sought to place a cap on fees that may be charged by management companies and others who provide documents upon sale or transfer of a separate interest. This bill was opposed by all industry trade groups and was ultimately revised to remove the cap. As signed by the Governor, the bill sets out the items which are to be provided to a buyer as well as an estimated fee for each.

The following changes to Civil Code Section 1368(b) will become effective as of January 1, 2012 as a result of this new legislation:

• An association will be required to provide the selling owner, upon receipt of a written request, a written or electronic estimate of the fees that will be charged for providing the requested documents; this billing disclosure must be provided on the form included in new Civil Code Section 1368.2.
• The disclosure documents required under subsection (a) of Civil Code Section 1368 may be maintained in electronic form, and may be posted on the association’s website; an owner has the option of receiving the documents electronically or by hard copy.
• The association may collect a reasonable fee for the procurement, preparation, reproduction and delivery of the documents requested; no additional fees may be charged for electronic delivery of the documents requested.
• The association may not withhold delivery of the requested documents for any reason or subject to any condition, except the payment of the fees permitted.
• An association may contract with any person or entity to facilitate compliance with the document requirements on behalf of the association.
• The association is required to provide to a recipient authorized by the selling owner a copy of the completed 1368.2 form with the delivery of the requested documents.
• There are other new requirements as well. Follow this link for the full text of the revised Civil Code Section 1368 effective as of January 1, 2012.

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