A managing agent is a person or company paid to control an HOA’s assets, and in California that usually means your management company. Before a board hands over the association’s bank accounts and records, state law requires the manager to put several facts in writing: who owns the firm, what licenses and certifications they hold, where they could profit from your vendors and whether their insurance covers your money. Starting in 2027, boards will also review a yearly statement of everything the manager charged. This article walks through each disclosure and what a board should do with it. If you’re still deciding whether to hire a manager at all, start with our comparison of HOA management options.
Who counts as a managing agent
Under the Davis-Stirling Act, a managing agent is a person who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development. Two groups are excluded: regulated financial institutions acting in the normal course of business and attorneys acting within the scope of their license (section 4158). For the disclosure and trust account rules discussed here, a full-time employee of the association isn’t a managing agent either (section 5385).
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Before the contract: the written statement
A prospective managing agent must give the board a written statement as soon as practicable, and in no event more than 90 days, before entering into a management agreement (section 5375). The statement must cover:
- Who owns the firm. The names and business addresses of the owners or general partners. For a corporation, the directors, officers and any shareholder holding more than 10 percent of the shares.
- Licenses. Whether any of those people currently hold a relevant California license, such as architectural design, construction, engineering, real estate or accounting, and for each one, the license, the dates it’s valid and the name on it.
- Certifications. Whether any of them hold a relevant professional certification or designation, including a professional common interest development manager designation, with the issuing organization, the dates and the name it’s held in. Our guide to certified HOA managers in California explains what that title means.
- Business interests. Any business in which the manager or management firm has an ownership interest, a profit-sharing arrangement or another monetary incentive.
- Resale document referral fees. Whether the manager or firm gets a referral fee or other monetary benefit from a third party that provides the documents a seller must give a buyer. Those documents are covered in our California guide to buying, selling and renting.
When bidding for a service: conflicts of interest
Whenever a manager or management firm presents a bid for a service to the board, it must disclose in writing any potential conflict of interest (section 5375.5). The law defines two kinds:
- any referral fee or other monetary benefit that could come from a business providing products or services to the association
- any ownership interest or profit-sharing arrangement with service providers recommended to or used by the association.
That applies to services the management company itself offers, such as maintenance or collections, and to vendors it recommends. Our article on how much HOA management costs explains how add-on services show up on a fee sheet.
Every year: the manager’s own disclosures
Separately, the Business and Professions Code requires anyone who provides, or plans to provide, the services of a common interest development manager to give the board certain information every year (Business and Professions Code section 11504):
- whether the manager meets the state’s requirements to be called a certified common interest development manager
- the name, address and phone number of the professional association that certified them, the date of certification and its status
- the location of the manager’s primary office
- before entering into or renewing a contract, whether the fidelity insurance of the manager or their employer covers the association’s current-year operating and reserve funds
- whether the manager holds an active real estate license
- the information section 5375 of the Civil Code requires
- whether the manager gets a referral fee or other monetary benefit from a third party that distributes the association’s annual disclosure documents
- a written acknowledgment that the resale and annual disclosure documents, and everything provided with them, belong to the association and not to the managing agent or its firm.
The fidelity insurance item is a disclosure, not a mandate. The law doesn’t require an association to make its manager carry fidelity insurance (section 11504), though the association’s own crime coverage has to include dishonest acts by its management company (section 5806). Our article on how California law protects HOA money a manager handles covers that coverage in detail.
Starting in 2027: the annual fee statement
A new law, AB 739, signed in September 2026, adds a yearly review to the board’s financial duties beginning January 1, 2027. Once a year, the board must review a statement of the fees charged by the managing agent. The statement must show (section 5500, as amended):
- the time period it covers
- the total number of homes or units in the association during that period
- the total amount billed and paid to the managing agent
- that total broken into base management fees, fee schedule charges for additional or optional services and reimbursed third-party expenses.
The same bill makes these fee statements association records, so owners can inspect them like other records (section 5200, as amended). For this review, an employee of the association isn’t treated as a managing agent. The board already reviews the association’s finances every month, as our California guide to budgets, reporting and records explains.
Who delivers resale documents
When a home sells, the association has 10 days to provide the documents the seller must give the buyer. If the management company or a third party it hires is contractually responsible for delivering those documents, it must facilitate that delivery (section 5376). A referral fee it earns from that third party must be disclosed in the written statement before the contract.
What to do with the disclosures
Everything in this section is good practice, not a legal requirement.
- Ask for them in the RFP. Requesting the section 5375 statement and the annual disclosures with every proposal lets the board compare firms on the same facts.
- Keep them on file. Store each year’s disclosures with the management contract so a future board can see what was disclosed and when.
- Read the business interests closely. An ownership tie to a landscaping, maintenance or collections company isn’t illegal, but the board should know about it before it approves that vendor.
- Verify certifications. Check any certification with the organization that issued it.
- Put the 2027 fee review on the calendar. Pairing it with the budget or contract renewal gives the board a full picture of what management really costs.
Writing a request for proposal? Our guide to writing an HOA management RFP includes a copy-ready outline. For more on working with a management company, visit the HOA Management hub.
Our free HOA Management RFP Builder turns your needs into a request for proposal for management companies, with a scoring sheet and the disclosures California managers must provide.
Frequently asked questions
Do these rules apply to a self-managed HOA?
They apply to a managing agent, a person or company paid to control the association’s assets. A board of volunteers managing its own association doesn’t make these disclosures, and a full-time employee of the association isn’t a managing agent for these rules.
What happens if a manager doesn’t make the disclosures?
Failing to make the disclosures required by Business and Professions Code section 11504 or Civil Code section 5375 is an unfair business practice under section 11505 of the Business and Professions Code.
Can owners see the disclosures?
Starting January 1, 2027, the managing agent’s annual fee statement is an association record owners can inspect. Many boards also include the other disclosures in the board packet. That is good practice, not a legal requirement.
The Law Behind This Article
Every legal point in this article comes from the official text. Each link below opens it in a new tab.
Civil Code sections: 4158 · 5200 · 5375 · 5375.5 · 5376 · 5385 · 5500 · 5806
Business and Professions Code sections: 11504 · 11505
Bills: AB 739 (2026)
Last reviewed October 21, 2026, by the How2HOA Editorial Team. This article is general educational information, not legal or financial advice. Laws change and your association’s governing documents control many of these questions, so check with your association’s attorney or another qualified professional about your situation.