2009 California Civil Code - Section 1363.1-1363.2 :: Article 3. Managing Agents

CIVIL CODE
SECTION 1363.1-1363.2

1363.1.  (a) A prospective managing agent of a common interest
development shall provide a written statement to the board of
directors of the association of a common interest development as soon
as practicable, but in no event more than 90 days, before entering
into a management agreement which shall contain all of the following
information concerning the managing agent:
   (1) The names and business addresses of the owners or general
partners of the managing agent. If the managing agent is a
corporation, the written statement shall include the names and
business addresses of the directors and officers and shareholders
holding greater than 10 percent of the shares of the corporation.
   (2) Whether or not any relevant licenses such as architectural
design, construction, engineering, real estate, or accounting have
been issued by this state and are currently held by the persons
specified in paragraph (1). If a license is currently held by any of
those persons, the statement shall contain the following information:
   (A) What license is held.
   (B) The dates the license is valid.
   (C) The name of the licensee appearing on that license.
   (3) Whether or not any relevant professional certifications or
designations such as architectural design, construction, engineering,
real property management, or accounting are currently held by any of
the persons specified in paragraph (1), including, but not limited
to, a professional common interest development manager. If any
certification or designation is held, the statement shall include the
following information:
   (A) What the certification or designation is and what entity
issued it.
   (B) The dates the certification or designation is valid.
   (C) The names in which the certification or designation is held.
   (b) As used in this section, a "managing agent" is a person or
entity who, for compensation or in expectation of compensation,
exercises control over the assets of a common interest development. A
"managing agent" does not include either of the following:
   (1) A full-time employee of the association.
   (2) Any regulated financial institution operating within the
normal course of its regulated business practice.

1363.2.  (a) A managing agent of a common interest development who
accepts or receives funds belonging to the association shall deposit
all such funds that are not placed into an escrow account with a
bank, savings association, or credit union or into an account under
the control of the association, into a trust fund account maintained
by the managing agent in a bank, savings association, or credit union
in this state. All funds deposited by the managing agent in the
trust fund account shall be kept in this state in a financial
institution, as defined in Section 31041 of the Financial Code, which
is insured by the federal government, and shall be maintained there
until disbursed in accordance with written instructions from the
association entitled to the funds.
   (b) At the written request of the board of directors of the
association, the funds the managing agent accepts or receives on
behalf of the association shall be deposited into an interest-bearing
account in a bank, savings association, or credit union in this
state, provided all of the following requirements are met:
   (1) The account is in the name of the managing agent as trustee
for the association or in the name of the association.
   (2) All of the funds in the account are covered by insurance
provided by an agency of the federal government.
   (3) The funds in the account are kept separate, distinct, and
apart from the funds belonging to the managing agent or to any other
person or entity for whom the managing agent holds funds in trust
except that the funds of various associations may be commingled as
permitted pursuant to subdivision (d).
   (4) The managing agent discloses to the board of directors of the
association the nature of the account, how interest will be
calculated and paid, whether service charges will be paid to the
depository and by whom, and any notice requirements or penalties for
withdrawal of funds from the account.
   (5) No interest earned on funds in the account shall inure
directly or indirectly to the benefit of the managing agent or his or
her employees.
   (c) The managing agent shall maintain a separate record of the
receipt and disposition of all funds described in this section,
including any interest earned on the funds.
   (d) The managing agent shall not commingle the funds of the
association with his or her own money or with the money of others
that he or she receives or accepts, unless all of the following
requirements are met:
   (1) The managing agent commingled the funds of various
associations on or before February 26, 1990, and has obtained a
written agreement with the board of directors of each association
that he or she will maintain a fidelity and surety bond in an amount
that provides adequate protection to the associations as agreed upon
by the managing agent and the board of directors of each association.
   (2) The managing agent discloses in the written agreement whether
he or she is deriving benefits from the commingled account or the
bank, credit union, or savings institution where the moneys will be
on deposit.
   (3) The written agreement provided pursuant to this subdivision
includes, but is not limited to, the name and address of the bonding
companies, the amount of the bonds, and the expiration dates of the
bonds.
   (4) If there are any changes in the bond coverage or the companies
providing the coverage, the managing agent discloses that fact to
the board of directors of each affected association as soon as
practical, but in no event more than 10 days after the change.
   (5) The bonds assure the protection of the association and provide
the association at least 10 days' notice prior to cancellation.
   (6) Completed payments on the behalf of the association are
deposited within 24 hours or the next business day and do not remain
commingled for more than 10 calendar days.
   (e) The prevailing party in an action to enforce this section
shall be entitled to recover reasonable legal fees and court costs.
   (f) As used in this section, a "managing agent" is a person or
entity, who for compensation or, in expectation of compensation,
exercises control over the assets of the association. However, a
"managing agent" does not include a full-time employee of the
association or a regulated financial institution operating within the
normal course of business, or an attorney at law acting within the
scope of his or her license.
   (g) As used in this section, "completed payment" means funds
received which clearly identify the account to which the funds are to
be credited.


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