Annual Disclosures

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AB 1079 - Annual Policy Statement Distribution Deadlines

Current law requires requires the association to distribute an annual policy statement between 30 to 90 days before the end of the fiscal year. This bill would change the time requirements for distribution to be within 31 to 91 days before the end of the fiscal year.

2015 Legislation - AB 596 - HOAs Must Disclose FHA Status

Updated on 7/6/15: AB 596 proposes to add another disclosure to an HOA's annual budget report: a statement describing the status of the common interest development as a condominium project approved by the Federal Housing Administration (FHA).

How to Plan Your HOA's Budget

Budgeting in condo associations and other HOAs takes planning: gathering the right disclosure documents, anticipating rate changes in utilities and insurance, and following the Davis-Stirling Act. Get started with all the right information.

Annual Policy Statement

Annual Policy Statement Overview

The Annual Policy Statement is one of two main collections of disclosures required under the New Davis-Stirling Act. The second main collection of disclosures is contained in the Annual Budget Report. Formerly, the individual disclosures contained in each report were part of a single disclosure package, often called the "annual budget package." For more information about how disclosures are organized under the New Davis-Stirling Act, click here.

Annual Disclosures under the New Davis-Stirling Act

Disclaimer: The rules and procedures described below are taken from the New Davis-Stirling Act, effective January 1st, 2014. To revisit the current requirements, review all sections (and subsections) of Civil Code §1365.

§5320 - Report Delivery

  1. When a report is prepared pursuant to Section 5300 or 5310, the association shall deliver one of the following documents to all members, by individual delivery pursuant to Section 4040:
    1. The full report.
    2. A summary of the report. The summary shall include a general description of the content of the report. Instructions on how to request a complete copy of the report at no cost to the member shall be printed in at least 10-point boldface type on the first page of the summary.

§5310 - Annual Policy Statement

  1. Within 30 to 90 days before the end of its fiscal year, the board shall distribute an annual policy statement that provides the members with information about association policies. The annual policy statement shall include all of the following information:
    1. The name and address of the person designated to receive official communications to the association, pursuant to §4035.

§5305 - Financial Statement Review

Unless the governing documents impose more stringent standards, a review of the financial statement of the association shall be prepared in accordance with generally accepted accounting principles by a licensee of the California Board of Accountancy for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of the review of the financial statement shall be distributed to the members within 120 days after the close of each fiscal year, by individual delivery pursuant to Section 4040.

§5300 - Annual Budget Report

  1. Notwithstanding a contrary provision in the governing documents, an association shall distribute an annual budget report 30 to 90 days before the end of its fiscal year.
  2. Unless the governing documents impose more stringent standards, the annual budget report shall include all of the following information:
    1. A pro forma operating budget, showing the estimated revenue and expenses on an accrual basis.
    2. A summary of the association’s reserves, prepared pursuant to Section 5565.

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