Bill Text: CA AB739 | 2025-2026 | Regular Session | Amended

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Bill Title: Common interest developments: managing agent fees.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Engrossed) 2026-06-25 - Ordered to third reading. [AB739 Detail]

Download: California-2025-AB739-Amended.html

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Amended  IN  Assembly  January 15, 2026

Amended  IN  Assembly  January 05, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 739

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Introduced by Assembly Member Jackson

February 18, 2025

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An act to amend Section 5310 5500 of, and to add Section 5403 5378 to, the Civil Code, relating to common interest developments.

LEGISLATIVE COUNSEL'S DIGEST

AB 739, as amended, Jackson. Common interest developments: managing agent fees: executive officer training. fees.

(1)Existing

Existing law, the Davis-Stirling Common Interest Development Act, governs the formation and operation of common interest developments, and requires a common interest development to be managed by an association, as specified. Existing law, unless otherwise provided by the governing documents, authorizes the board of directors of the association to hire a managing agent, defined as a person who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development. Existing law requires the association to distribute an annual policy statement, containing certain information, to the members within 30 to 90 days before the end of the fiscal year. Existing law requires, unless the governing documents impose more stringent requirements, the board of directors of the association to review various financial documents and statements on a monthly basis.

This bill would require the annual policy statement to include a statement of all fees charged by the managing agent.

(2)Existing law requires the Department of Consumer Affairs and the Department of Real Estate, to the extent existing funds are available, to develop an online education course for the board of directors of an association regarding the role, duties, laws, and responsibilities of directors and prospective directors, and the nonjudicial foreclosure process.

This bill would require the Department of Real Estate to develop an education course for executive officers, as defined, of the association that is validated by the Secretary of State on specified review requirements, fiduciary duties, management duties, and the fine details of the Davis-Stirling Common Interest Development Act. Commencing on the date of the development of the education course, the bill would require an executive officer to complete 12 hours of the education course within a specified timeframe.

This bill would require the board of directors of the association to review, on an annual basis, fees charged by the managing agent, as specified. The bill would require the association to deliver through electronic means a statement of these fees upon written request by a member.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 5378 is added to the Civil Code, to read:

5378.

 The association shall deliver through electronic means a statement of fees charged by the managing agent as, as described in subdivision (g) of Section 5500, upon written request by a member.

SEC. 2.

 Section 5500 of the Civil Code is amended to read:

5500.

 Unless the governing documents impose more stringent standards, the board shall do all of the following:

(a) Review, on a monthly basis, a current reconciliation of the association’s operating accounts.

(b) Review, on a monthly basis, a current reconciliation of the association’s reserve accounts.

(c) Review, on a monthly basis, the current year’s actual operating revenues and expenses compared to the current year’s budget.

(d) Review, on a monthly basis, the latest account statements prepared by the financial institutions where the association has its operating and reserve accounts.

(e) Review, on a monthly basis, an income and expense statement for the association’s operating and reserve accounts.

(f) Review, on a monthly basis, the check register, monthly general ledger, and delinquent assessment receivable reports.

(g) Review, on an annual basis, a statement of fees charged by the managing agent, including the following:

(1) The reporting period covered by the disclosure.

(2) The total number of residential units in the association during the reporting period.

(3) The total amount billed and paid by the association to the management company during the reporting period.

(4) The breakdown of the total amount described in paragraph (3) into the following categories:

(A) Base management fees, which include amounts paid pursuant to fixed or recurring compensation specified in the management agreement.

(B) Fee schedule charges, which include amounts paid for additional or optional services provided pursuant to a fee schedule adopted by the board of directors as part of the management agreement.

(C) Reimbursable expenses, which include amounts paid to reimburse the management company for third-party costs or expenses incurred on behalf of the association.

SECTION 1.Section 5310 of the Civil Code is amended to read:

5310.

(a)Within 30 to 90 days before the end of its fiscal year, the board shall distribute an annual policy statement that provides the members with information about association policies. The annual policy statement shall include all of the following information:

(1)The name and address of the person designated to receive official communications to the association, pursuant to Section 4035.

(2)A statement explaining that a member may submit a request to have notices sent to up to two different specified addresses, pursuant to Section 4040.

(3)The location, if any, designated for posting of a general notice, pursuant to subdivision (a) of Section 4045.

(4)Notice of a member’s option to receive general notices by individual delivery, pursuant to subdivision (b) of Section 4045.

(5)Notice of a member’s right to receive copies of meeting minutes, pursuant to subdivision (b) of Section 4950.

(6)The statement of assessment collection policies required by Section 5730.

(7)A statement describing the association’s policies and practices in enforcing lien rights or other legal remedies for default in the payment of assessments.

(8)A statement describing the association’s discipline policy, if any, including any schedule of penalties for violations of the governing documents pursuant to Section 5850.

(9)A summary of dispute resolution procedures, pursuant to Sections 5920 and 5965.

(10)A summary of any requirements for association approval of a physical change to property, pursuant to Section 4765.

(11)The mailing address for overnight payment of assessments, pursuant to Section 5655.

(12)A statement of all fees charged by the managing agent.

(13)Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.

(b)The annual policy statement shall be made available to the members pursuant to Section 5320.

SEC. 2.Section 5403 is added to the Civil Code, to read:

5403.

(a)The Department of Real Estate shall develop an education course for executive officers that is validated by the Secretary of State regarding all of the following:

(1)Information on the review requirements of Section 5500.

(2)Fiduciary duties.

(3)Management duties.

(4)All other applicable provisions of this part.

(b)Commencing on the date of the development of the education course pursuant to subdivision (a), the applicable of the following shall apply:

(1)An executive officer appointed or elected on or before the date of development of the education course pursuant to subdivision (a) shall complete 12 hours of the education course within two years of the date of the development of the education course.

(2)An executive officer appointed or elected after the date of the development of the education course pursuant to subdivision (a) shall complete 12 hours of the education course within two years of appointment or election.

(c)For the purposes of this section, “executive officer” means the president, vice president, secretary, or treasurer of the association.