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Disclosure Requirements
Distribution of Disclosures. Upon written consent of members, associations may distribute documents and disclosures electronically; otherwise, all documents must be distributed by "First-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier." (Civ. Code §4040.)

BUDGET REPORT
30 to 90 days Prior to Start of Fiscal Year

(Civil Code §5300)
1. 
Pro Forma Budget. A full budget or a summary showing the estimated revenue and expenses on an accrual basis.
2. Reserve Summary. A summary of the reserves prepared per Section 5565.
3. Reserve Funding Plan. A summary of the reserve funding plan.
4. Major Component Repairs. A statement as to whether the board will defer or not undertake repairs or replacement of any major component with a remaining life of 30 years or less, including a justification for the deferral or decision not to undertake the repairs or replacement.
 5. Anticipated Special Assessments. A statement as to whether one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves. If so, the statement shall set out the estimated amount, commencement date, and duration of the assessment.
6.
Reserve Funding Mechanism. A statement as to the mechanism or mechanisms (including assessments, borrowing, other assets, deferral of selected replacements or repairs, or alternative mechanisms) by which reserves will be funded  to repair or replace major components.
7. Procedures for Calculating Reserves. The procedures used for the calculation and establishment of those reserves to defray the future repair, replacement, or additions to major components the association is obligated to maintain. The statement shall include, but need not be limited to, reserve calculations made using the formula described in paragraph (4) of subdivision (b) of Section 5570, and may not assume a rate of return on cash reserves in excess of 2% above the discount rate published by the Federal Reserve Bank of San Francisco at the time the calculation was made.
8.
Outstanding Loans. A statement as to whether the association has any outstanding loans with an original term of more than one year, including the payee, interest rate, amount outstanding, annual payment, and when the loan is scheduled to be retired.
9.
Insurance Summary. Distribute a summary of the association's insurance.
10.
Assessment & Reserve Form. The Assessment and Reserve Funding Disclosure Summary form, prepared pursuant to Section 5570, shall accompany each annual budget report or summary of the annual budget report.
NOTE #1: Full Report. If a member requests full reports, the association must deliver full report to that member, rather than a summary of the report. (Civ. Code §5320.)

NOTE #2: Secondary Address. Upon request pursuant to Section 5260, an additional copy of those notices must be delivered to a member's secondary address. (Civ. Code §4040.)


ANNUAL POLICY STATEMENT
30 to 90 days Prior to Start of Fiscal Year

(Civil Code §5310)
1.
Designated Recipient. The name and address of the person designated to receive official communications to the association, pursuant to Section 4035.
2.
Right to Notice to Two Addresses. A statement explaining that a member may submit a request to have notices sent to up to two different specified addresses, pursuant to subdivision (b) of Section 4040.
3.
General Notice Location. The location, if any, designated for posting of a general notice, pursuant to paragraph (3) of subdivision (a) of Section 4045.
4.
Right to Individual Delivery. Notice of a member’s option to receive general notices by individual delivery, pursuant to subdivision (b) of Section 4045.
5.
Right to Minutes. Notice of a member’s right to receive copies of meeting minutes, pursuant to subdivision (b) of Section 4950.
6.
Collection Policy. A statement of assessment collection policies per Section 5730.
7.
Lien Policy. A statement describing the association’s policies and practices in enforcing lien rights or other legal remedies for default in the payment of assessments.
8.
Rules Enforcement Policy. A statement describing the association’s discipline policy, if any, including any schedule of penalties for violations of the governing documents pursuant to Section 5850.
9.
Dispute Resolution Procedures. A summary of dispute resolution procedures, pursuant to Sections 5920 and 5965.
10.
Architectural. A summary of any requirements for association approval of a physical change to property, pursuant to Section 4765.
11.
Overnight Payments. The mailing address for overnight payment of assessments, pursuant to Section 5655.
12.
Miscellaneous. Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.
NOTE #1: Full Report. If a member requests full reports, the association must deliver full report to that member, rather than a summary of the report. (Civ. Code §5320.)

NOTE #2: Secondary Address. Upon request pursuant to Section 5260, an additional copy of those notices must be delivered to a member's secondary address. (Civ. Code §4040.)


120 days
After Close of Fiscal Year
Financial Statement. Unless the governing documents impose more stringent standards, a review of thefinancial statement of the association must be prepared per GAAP by a CPA for any fiscal year in which the gross income to the association exceeds $75,000 and distributed to members. (Civ. Code §5305.)

 Secretary of State
Secretary of State Filing. Every association, whether incorporated or unincorporated must annually and biennially file statements of information with the Secretary of State.

As-Needed
Assessment Increases. Notify members, not less than 30 nor more than 60 days prior to any increase in regular assessments or any special assessment. (Civ. Code §5615.)
Board Meetings. Give 4-day notice of board meetings and 2 days for executive session. 
(Civ. Code §4920.) For emergency meetings give as much notice as possible. 
Board Minutes. The minutes, draft minutes or a summary of the minutes, of any board meeting (other than an executive session) must be available to members within 30 days of the meeting. (Civ. Code §4950.)
Borrowing from Reserves. Disclose both intent to borrow as well as actual borrowing from reserves. Any delays in repayment of monies borrowed from reserves also requires disclosure to the membership. (Civ. Code §5515. and §5520.)
Committee Minutes. Minutes of meetings of committees with decisionmaking authority for meetings commencing on or after January 1, 2007, within 15 calendar days following approval. (Civ. Code §5210(b)(5).)
Construction Defects. Disclose litigation against the declarant (i) any agreements with the developer; (ii) any defects needing correction or replacement, (iii) an estimate of when defects will be corrected or replaced, and (iv) which defects will not be corrected or replaced. "Defects" includes damage resulting from the defects and (v) an settlement agreements. (Civ. Code §6100 and §6150.)
Copy Costs. Allow inspection of books and records. Disclose in advance, any copying costs that will be billed to the requesting party. (Civ. Code §5205.)
Disciplinary Hearings. Give notice of disciplinary hearings and the results of those hearings. (Civ. Code §5855.)
Election Results. Publish the results of membership elections (special assessments, amendments, board elections, etc.). (Civ. Code §5120.)
Escrow Disclosures. Within 10 days of written request by a unit owner, provide information and documents to seller or seller's agent for escrow disclosures. (Civ. Code §4525, §4528,
§4530)
Fine Policy Changes. Give notice of any changes in the association's fine policy.
Hazardous Materials. Notify members of known hazardous materials such as asbestos. (H&S Code §25915.2.)
Insurance Changes. Notify members if insurance policies are canceled and not immediately replaced or if there are any significant changes.
Lawsuits. Give notice of lawsuits when appropriate.
Lender Foreclosures. Boards should record a blanket "Request for Notification" of lender foreclosures so the association will know who to bill for assessments.
Litigation Expenses. Prepare an accounting of litigation expenses on at least a quarterly basis and make it available for inspection by members. (Civ. Code §5520.)
Management Change. Within 60 days of a change in management, file a notice with the Secretary of State. (Civ. Code §5405(c).)
Manager Certification. Managers must disclose to the board their certification status.
Membership Meetings. Publish notice of membership meetings.
Rule Changes. Give notice of proposed rule changes(Civ. Code §4360.)
Security Disclosure. Although not required, associations should annually notify members they are responsible for their own safety and security.
Transaction with Officer or Director. Provide notice of any transaction between the association and a director involving more than $50,000. (Corp. Code §8322.)
Unlawful Restrictions. Provide cover page for CC&Rs containing language prohibiting discriminatory restrictions. See statute for specific language and size of type-font. (Gov. Code §12956.1.)
Workplace Hazards. Notify employees of workplace hazards. (Labor Code §6401.7.)

ASSISTANCE: For assistance preparing disclosures, contact us. To stay current on changes in the law affecting disclosure requirements, subscribe to the Davis-Stirling Newsletter.

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