220 Cal. App. 4th 1152
Cal. Ct. App.2013Background
- Fowler, suing on behalf of himself and a putative class, challenges HOA transfer fees imposed by M&C Association Management Services, Inc. and Associations, Inc. (M&C).
- Fees were charged as part of a Resale Disclosure Certificate for a Diablo Grande home purchase and were paid through escrow.
- Plaintiff purchased from a bank that acquired title via foreclosure, so the prior owner did not notify the HOA of the transfer.
- M&C did not record the notice of transfer fees as required by Civil Code section 1098.5, subdivision (b).
- The trial court granted summary judgment, holding the fees were not transfer fees within section 1098, and thus no notice was required.
- The appellate court affirmed, concluding the transfers fees were authorized by the Davis-Stirling Act and not subject to the recording requirement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the notice requirement applies to the fees here | Fowler asserts the fees are transfer fees needing notice under 1098.5(b). | M&C contends the fees are not transfer fees under 1098 and thus no notice is required. | No notice required; fees not transfer fees under 1098. |
| Whether Davis-Stirling Act authorizes these fees | Fees exceed actual costs; not authorized by 1368(c)(1)(A). | Fees are authorized as costs of transfer services and may include vendor profit. | Fees fall within authorization; not prohibited by 1368. |
| Whether M&C, as HOA agent, can charge these fees | Agent charges violate the statutory limits and are not binding on the HOA’s authority. | As HOA agent, M&C may perform transfer services authorized by the HOA. | M&C’s charges valid as agent of HOA; authority extends to transfer services. |
Key Cases Cited
- Berryman v. Merit Property Mgmt., Inc., 152 Cal.App.4th 1544 (Cal. Ct. App. 2007) (vendor profits permitted; association costs include services and profits)
- Brown v. Professional Community Mgmt., Inc., 127 Cal.App.4th 532 (Cal. Ct. App. 2005) (association costs may include vendor fees; managing agent can charge for services)