A new proposed law (Senate Bill 1401) is getting quite the buzz! It prohibits a manager from accepting any gift. The $10 Starbucks card, raffle movie tickets, or even paid lunch appointment may be outlawed. The consequence for violating this bill? Managers could be liable and sued for “damages!” The actual language is as follows:

THE ASSOCIATION’S … COMMUNITY MANAGERS … MAY NOT SOLICIT, RECEIVE OR ACCEPT ANY UNDISCLOSED FEE, COMPENSATION, COMMISSION OR GRATUITY WHETHER IN CASH OR IN KIND FROM ANY THIRD PARTY THAT PROVIDES OR SOLICITS TO PROVIDE GOODS OR SERVICES TO THE ASSOCIATION OR THE PLANNED COMMUNITY.

A COMMUNITY MANAGER WHO VIOLATES THIS SECTION IS LIABLE FOR DAMAGES IN AN ACTION BROUGHT BY A MEMBER AND MAY BE SUBJECT TO AN ORDER TO COMPLY WITH THE COMMUNITY DOCUMENTS AND APPLICABLE LAW. THE COURT SHALL AWARD REASONABLE ATTORNEY FEES AND COSTS TO THE PREVAILING PARTY IN AN ACTION PURSUANT TO THIS SECTION.

This proposed law is meant to curb exorbitant gifts that create unfair practices like monopolies and price-gouging. That’s actually a good thing. However, the bill goes too far because it does not allow for small reasonable gifts that we’ve all come to know and love. As written, this bill even prohibits many of our industry events like trade shows and golf tournaments! Crazy.

The bill is not yet law so it is up to the silent majority to speak up. You can register your opposition to this bill by clicking here. Please also reach out to your local representatives and express your concern! Email me if you have any questions or want further clarification (clint@goodlaw.legal).

This article was written by attorney Clint G. Goodman, a member of CAI LAC.