2912 AB


NEW FINANCIAL REQUIREMENTS


By Nathan R. McGuire, Esq. A


ssembly Bill 2912 (AB 2912) took effect January 1, 2019. The bill was authored by Assemblymem- ber Jacqui Irwin and sponsored by CAI’s Califor- nia Legislative Action Committee (CAI-CLAC). As stated in the bill, the changes are intended “to take im- portant initial steps to protect the owners in a common interest development from fraudulent activity by those entrusted with the management of the association’s fi- nances.” Fraud and embezzlement have become far too common in the industry. And while impossible to completely stop, the bill takes important steps in preventing fraud and protecting community associations in the event it does occur. While the requirements imposed may be somewhat cumbersome and result in some additional expense to community associations, the ben- efits of AB 2912 are worth the effort and cost of compliance. Other organizations (some of which hold an unreasonably negative view towards community as- sociations) have been seeking to intro- duce legislation on this topic for the last few years. By taking the lead, CAI-CLAC demonstrated leader- ship in the industry and helped to ensure a common sense and balanced approach would be taken.


AB 2912 imposes several new requirements cover- ing fidelity insurance, fund transfers, and the review of financials.


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