Fowler v. M&C Association Management (California)
Associa’s member company M&C was sued by a resident of a client community alleging the two fees charged by M&C were in violation of California Code section 1098.5. The fees in question are common fees levied for change of records and other services provided at the time of transfer of title and authorized by the Davis-Stirling Act and exemptions found in code section 1098.5.
At issue is an attempt by a plaintiff's attorney to establish a class action suit to recover damages for lawful fees charged by Associa pursuant to the Davis-Stirling Act and allowable under California's statute that regulates transfer fees. At issue is the current legal framework governing management companies' ability to charge fees to clients and the current interpretation of California's statutory requirements and case law on allowable transfer fees for common interest communities and their agents. In this case, M&C levied a fee of $125 transfer fee and a $100 foreclosure transfer fee.
The plaintiff alleged that under the statute, Associa was required not only to disclose but also to record such fees with the county recorder's office. Additionally, the plaintiff argued that even if the fees were allowable, M&C, as an agent of the association, was limited to actual cost for these services. This claim is in direct contradiction to two important precedents established by the California courts, Brown v. Professional Community Management (2005) and Berryman v. Merit Property Management (2007).
Brief: CAI's Amicus Brief
Prior Ruling: Superior Court Decision
Status: Ruling for CAI's Position
CAI Amicus Brief Author: Richardson, Harman & Ober
CAI Amicus Brief Review Committee: Ken Chandwick, Esq; Henry Goodman, Esq; Stephen Marcus, Esq; Thomas Moriarty, Esq; David Ramsey, Esq.