The New Davis-Stirling: Annual Reports and Disclosures

Civil Code sections §5300 and §5310 require an Annual Budget Report and Annual Policy Statement, respectively, to be delivered to all association members on an annual basis, replacing the existing budget and disclosure requirements under the current Davis-Stirling Act.

The Annual Budget Report is to include, at a minimum:

  1. A pro forma operating budget
  2. Summary of the association’s reserves
  3. Summary of the reserve funding plan
  4. A statement regarding outstanding loans
  5. Summary of the association’s insurance policies
  6. Statements about:
    • Deferred maintenance
    • The levy of special assessments
    • The funding of reserves
    • The procedures used to calculate reserves with respect to those major components for which the association is responsible.

The Annual Policy Statement must include, among other disclosures:

  1. Contact information for a designated association representative
  2. Information regarding the association’s assessment collection policies
  3. A description of the association’s discipline and fine policies
  4. Dispute resolution procedures
  5. Architectural modification application requirements

If an association does not update and revise its annual budget and disclosure processes and forms the association may be unable to increase regular assessments, collect delinquent assessments, or impose disciplinary measures. 

To learn about more key changes to the Davis-Stirling Act, please visit What You Need to Know: The New Davis-Stirling Act.