What Documents Can HOAs Email to Owners?

California's community associations may distribute their budget packages and most annual financial disclosures to owners over the Internet. Owners' written consent to receive their budgets by email will be required. Once that consent is obtained, however, budget distribution can become virtually paperless. 

This article outlines the law, identifies which disclosures can be made electronically and which cannot, and what degree of owner consent is required and why. 

What Disclosures Are Required by Law?

To know what documents can be sent electronically , you need to know what documents are required to be disclosed by the Davis-Stirling Act (Civil Code Section 5300). There you will find listed the following disclosure documents that associations must send to their members and that most associations compile and distribute once a year at budget time:

  • Pro Forma Operating Budget (which includes the Reserve Study)
  • Reserve Funding Plan
  • Annual Update of Reserve Funding Plan
  • Assessment and Reserve Funding Disclosure Summary (form)
  • Assessment Collection Policy
  • Statutory Notice / Assessments and Foreclosure (form)
  • Secondary Address Notification Request
  • Insurance Coverage Summary
  • Board Minutes Access
  • Alternative Dispute Resolution Summary
  • Meet-and-Confer Program Summary
  • Architectural Changes Notice
  • Monetary Penalties (Fine) Schedule
  • Year-End Review of Financial Statement

Civil Code Section 4040 states that with a member's written consent, each of these documents can be provided electronically to that member's email address. E-delivery will satisfy the association's obligation to make the listed disclosures to that member.

What Other Notices Can Be Sent Electronically?

The law has for some time authorized the following documents and notices to be e-delivered, with member consent:

  • Notices of Proposed and Adopted Rule Changes
  • Rule Changes Themselves
  • Notices of Member Petitions to Reverse Rule Changes
  • Notices of Year-End Financial Reports ($10,000 to $75,000 in annual revenue)
  • Assessment Collection Policy
  • Some Documents for Prospective Purchasers (see Civil Code Sections 4525 & 4530)

What Disclosures Cannot Be E-Delivered?

The Davis-Stirling Act does not include all notices and disclosures that associations must make to members. Even if a member consents to e-delivery, the following must still be prepared in written form and mailed or delivered as otherwise stated in the law:

  • 30 to 60 Day Notices of Assessment Increases and Special Assessments
  • Collection and Foreclosure Notices
  • Notices of Use of Reserve Funds
  • Disclosures to Sellers
  • Notices of Disciplinary Proceedings and of Sanctions Imposed
  • Notices of Construction Defect Litigation, Resolution and Repair Plans

In short, if a particular disclosure or notice is not on the Index or not otherwise expressly permitted by law to be electronically delivered, then it can't be.

Can Member Consent Be Obtained by Adopting a Rule?

No. Even if an association's rules or other governing documents seemingly authorize e-delivery of documents, neither Davis-Stirling nor the Corporations Code allow for e-delivery on any authority other than each member's individual written consent to receive disclosures by email. And because email boxes are generally personal to individuals, arguably each owner of a lot or unit (not simply one) will need to sign the consent form.

Sandra Bonato is a partner in the Alamo office of Berding & Weil. She is a member and former chair of the ECHO Legislative Committee. She is a frequent speaker at ECHO seminars, and articles written by her are a regular feature in ECHO's Journal.