Today's Law As Amended

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SB-434 Common interest developments: managing agent: production of client property and client records upon termination of management agreement. (2019-2020)

As Amends the Law Today


 Section 5382 is added to the Civil Code, to read:

 (a) (1) Upon receipt of a written request by the association or its legal counsel to produce client property and client records, a managing agent of a common interest development whose management agreement has been terminated shall produce client property and client records to the person designated in the request as soon as reasonably practical after the managing agent receives the request, but in no event more than 30 days from either the effective date the management agreement was terminated or the date the managing agent received the request, whichever is later.
(2) Notwithstanding paragraph (1), the managing agent and association may agree in writing to a longer period of time that the managing agent is required to produce client property and client records upon termination of the management agreement.
(3) A dispute of the management agreement termination or fees shall not affect the managing agent’s duty to produce client property and client records within the time period specified in this subdivision.
(b) A managing agent shall produce all client records in a format that the association can reasonably use. The managing agent shall not be required to produce client records in more than one format.
(c) A managing agent is not required to produce a client record only under one of the following circumstances:
(1) The record has been lost or destroyed due to unforeseen circumstances outside of the managing agent’s control, including, but not limited to, corruption of electronically stored files due to viruses, malware, or a hardware malfunction against which the managing agent has taken reasonable precautions.
(2) The record has been purged in accordance with a document retention policy that has been approved by the association board and that ensures the association can comply with subdivision (i) of Section 5210.
(d) The managing agent’s obligation to honor all association confidences and to treat the business affairs and records of the association as confidential continues after termination of the management agreement. If information is sought by a third party through legal process, including subpoena or the discovery process, the managing agent’s obligations under this subdivision shall be satisfied if the managing agent gives notice to an officer of the association no later than 10 days after receipt of the subpoena, discovery request, or other legal process.
(e) For purposes of this section, the following definitions apply:
(1) “Client property” means the association’s physical property, including, but not limited to, manuals for operation, maintenance or warranty of elevators, pool heaters, HVAC systems, security gate transponders, and pool keys.
(2) “Client records” means hard files and electronically stored information maintained by the managing agent in the ordinary course of business that the managing agent is legally required to maintain or that is reasonably necessary for the association’s continued operation, including, at a minimum, all items presented to an association board of directors for their consideration, except for items that are reasonably deemed proprietary by the managing agent. “Client records” does not include the following:
(A) Working papers, internal communications, proprietary documents, or internal notes developed or created by the managing agent.
(B) Records of telephone conversations or emails unless they previously have been included in a board packet or vendor or project file.