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Davis-Stirling Common Interest Development Act

Part 5.  Common Interest Developments

Chapter 6.  Association Governance

Article 7.  Annual Reports

§5300.
Annual Budget Report;

(a) 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.

(b) 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.

(3) A summary of the reserve funding plan adopted by the board, as specified in paragraph (5) of subdivision (b) of Section 5550. The summary shall include notice to members that the full reserve study plan is available upon request, and the association shall provide the full reserve plan to any member upon request.

(4) A statement as to whether the board has determined to 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) A statement as to whether the board, consistent with the reserve funding plan adopted pursuant to Section 5560, has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves therefor. If so, the statement shall also set out the estimated amount, commencement date, and duration of the assessment.

(6) A statement as to the mechanism or mechanisms by which the board will fund reserves to repair or replace major components, including assessments, borrowing, use of other assets, deferral of selected replacements or repairs, or alternative mechanisms.

(7) A general statement addressing the procedures used for the calculation and establishment of those reserves to defray the future repair, replacement, or additions to those major components that 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 percent above the discount rate published by the Federal Reserve Bank of San Francisco at the time the calculation was made.

(8) 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) A summary of the association's property, general liability, earthquake, flood, and fidelity insurance policies. For each policy, the summary shall include the name of the insurer, the type of insurance, the policy limit, and the amount of the deductible, if any. To the extent that any of the required information is specified in the insurance policy declaration page, the association may meet its obligation to disclose that information by making copies of that page and distributing it with the annual budget report. The summary distributed pursuant to this paragraph shall contain, in at least 10-point boldface type, the following statement:

"This summary of the association's policies of insurance provides only certain information, as required by Section 5300 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association's policies of insurance may not cover your property, including personal property or real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage."

(c) The annual budget report shall be made available to the members pursuant to Section 5320.

(d) The summary of the association's reserves disclosed pursuant to paragraph (2) of subdivision (b) shall not be admissible in evidence to show improper financial management of an association, provided that other relevant and competent evidence of the financial condition of the association is not made inadmissible by this provision.

(e) 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 that is delivered pursuant to this article.

Davis-Stirling Common Interest Development Act
Part 5.  Common Interest Developments
Chapter 1. General Provisions
Article 1. Preliminary Provisions
§ 4000.Citation
§ 4005.Headings
§ 4010.Effect of Act on Documents or Actions Before January 1, 2014
§ 4020.Construction of Zoning Ordinances
§ 4035.Delivery of Documents to Association
§ 4040.Individual Delivery or Individual Notice
§ 4045.General Delivery or General Notice
§ 4050.Completion of Delivery
§ 4055.Electronic Delivery
§ 4065.Approval by Majority Vote
§ 4070.Approval by Majority of a Quorum
Article 2. Definitions
§ 4075.Definitions
§ 4076.Annual Budget Report
§ 4078.Annual Policy Statement
§ 4080.Association
§ 4085.Board
§ 4090.Board Meeting
§ 4095.Common Area
§ 4100.Common Interest Development
§ 4105.Community Apartment Project
§ 4110.Community Service Organization or Similar Entity
§ 4120.Condominium Plan
§ 4125.Condominium Project
§ 4130.Declarant
§ 4135.Declaration
§ 4140.Director
§ 4145.Exclusive Use Common Area
§ 4148.General Notice
§ 4150.Governing Documents
§ 4153.Individual Notice
§ 4155.Item of Business
§ 4158.Managing Agent
§ 4160.Member
§ 4170.Person
§ 4175.Planned Development
§ 4177.Reserve Accounts
§ 4178.Reserve Account Requirements
§ 4185.Separate Interest
§ 4190.Stock Cooperative
Chapter 2. Application of Act
§ 4200.Application of Act; Creation of Common Interest Development
§ 4201.Requirement of Common Area
§ 4202.Nonapplicable Provisions for Commercial CIDs
Chapter 3. Governing Documents
Article 1. General Provisions
§ 4205.Controlling Authority
§ 4210.Assessments; Board Statements
§ 4215.Liberal Construction of Instruments
§ 4220.Boundaries of Units; Presumption
§ 4225.Discriminatory Restrictive Covenants; Removal from Governing Documents
§ 4230.Amendment of Governing Documents for Certain Declarant Provisions
§ 4235.Amendment of Governing Documents to Reflect Changes in the Davis-Stirling Common Interest Development Act
Article 2. Declaration
§ 4250.Declaration; Contents
§ 4255.Declaration; Notice of Airport in Vicinity; Notice of San Francisco Bay Conservation and Development Commission Jurisdiction.
§ 4260.Permissible Amendment of Declaration
§ 4265.Extension of Term of Declaration
§ 4270.Amendment of Declaration; Effective Date
§ 4275.Amendment of Declaration; Power of Court to Approve Amendment; Recording Amendment; Mailing
Article 3. Articles of Incorporation
§ 4280.Articles of Incorporation; Identifying Corporation as Association; Business Office Address; Managing Agent's Name and Address
Article 4. Condominium Plan
§ 4285.Condominium Plan; Requirements
§ 4290.Certificate Consenting to Recordation of Condominium Plan; Signature Requirement
§ 4295.Condominium Plan; Amendment or Revocation
Article 5. Operating Rules 20
§ 4340.Operating Rules; Definitions
§ 4350.Validity of Operating Rules
§ 4355.Application of §4360 and §4365
§ 4360.Notice of Rule Change
§ 4365.Notice of Reversal of Rule Change
§ 4370.Application of Article
Chapter 4. Ownership and Transfer of Interests
Article 1. Ownership Rights and Interests
§ 4500.Ownership of Common Area
§ 4505.Common Area Rights and Easements
§ 4510.Access to Owners' Separate Interest
Article 2. Transfer Disclosure
§ 4525.Sale or Title Transfer; Provisions of Specified Items to Prospective Purchasers
§ 4528.Billing Disclosures
§ 4530.Sale or Title Transfer; Copies; Fees
§ 4535.Application of §1133 and §1134
§ 4540.Enforcement of Act
§ 4545.Validity of Title Transferred in Violation
Article 3. Transfer Fee
§ 4575.Prohibition of Fees
§ 4580.Exceptions
Article 4. Restrictions on Transfer
§ 4600.Granting Exclusive Use of Common Area
§ 4605.Actions for Violations
§ 4610.Partition
§ 4615.Labor Performed, Services or Materials
Article 5. Transfer of Separate Interest
§ 4625.Community Apartment Project Transfer of Separate Interest
§ 4630.Condominium Project Transfer of Separate Interest
§ 4635.Planned Development Transfer of Separate Interest
§ 4640.Stock Cooperative Transfer of Separate Interest
§ 4645.Transfer of Exclusive Use Areas
§ 4650.Restrictions on Partition
Chapter 5. Property Use and Maintenance
Article 1. Protected Uses
§ 4700.Limitations on Regulation of Separate Interest
§ 4705.Display of the Flag of the United States of America
§ 4710.Sign Restrictions
§ 4715.Restrictions on Pets
§ 4720.Roof Coverings; Fires and Fire Protection
§ 4725.Video or Television Antennas; Satellite Dish Systems; Restrictions on Installation; Application for Approval
§ 4730.Prohibition of Marketing Limitations
§ 4735.Low Water-using Plants; Water-Efficient Landscape Ordinances; Emergency Water Use Regulations
§ 4740.Rental or Lease of Separate Interest
§ 4745.Electric Vehicle Charging Stations; Prohibition of Unreasonable Restrictions; Requirements; Maintenance by Owner; Maintenance by Association; Attorney's Fees
Article 2. Modification of Separate Interest
§ 4760.Permissive Modification of Separate Interest; Requirements
§ 4765.Architectural or Design Review; Procedures for Approval
Article 3. Maintenance
§ 4775.Association Responsibility for Repair, Replacement or Maintenance; Cost Allocation
§ 4780.Damage by Wood-Destroying Pests or Organisms
§ 4785.Notice of Removal of Occupants; Treatment of Wood-Destroying Pests and Organisms
§ 4790.Access for Maintenance of Telephone Wiring
Chapter 6. Association Governance
Article 1. Association Existence and Powers
§ 4800.Management
§ 4805.Powers of Association
§ 4820.Joint Neighborhood Associations; Membership rights
Article 2. Board Meeting
§ 4900.Common Interest Development Open Meeting Act
§ 4910.Board Meeting Required for Action; Electronic Transmissions
§ 4920.Notice of Board Meeting
§ 4923.Emergency Board Meeting
§ 4925.Member Attendance
§ 4930.Requirement for Action by Board; Agenda; Notice
§ 4935.Executive Session
§ 4950.Minutes of Meeting
§ 4955.Violation; Attorney's Fees; Fines
Article 3. Member Meeting
§ 5000.Member Meetings
Article 4. Member Election
§ 5100.Secret Ballot Elections
§ 5105.Election Rule Requirements; Equal Access for Candidates; Qualifications for Candidates; Qualifications for Voting; Inspectors; Nominations from Floor and Write-ins
§ 5110.Inspectors of Election; Duties
§ 5115.Secret Ballots; Procedures
§ 5120.Counting Ballots; Reporting
§ 5125.Custody of Ballots
§ 5130.Proxies
§ 5135.Prohibition of Association Funds for Campaign Purposes
§ 5145.Violation; Relief
Article 5. Record Inspection
§ 5200.Definitions
§ 5205.Availability of Records; Inspection and Copying
§ 5210.Time Periods; Access to Records
§ 5215.Permissible Redactions in Records
§ 5220.Member Opt Out
§ 5225.Reason for Request of Membership List
§ 5230.Restriction on Use of Records
§ 5235.Member Action; Attorney's Fees; Costs
§ 5240.Applicability of the Corporations Code; Applicability of Article to Community Service Organization
Article 6. Recordkeeping
§ 5260.Record Requests; Writing Requirement
Article 7. Annual Reports
§ 5300.Annual Budget Report; Requirements; Availability to Members; Admissibility as Evidence; Assessment and Reserve Funding Disclosure Summary
§ 5305.Review of Financial Statement; Distribution to Members
§ 5310.Annual Policy Statement; Requirements
§ 5320.Delivery of Full Report and Summary
Article 8. Conflict of Interest
§ 5350.Conflict of Interest; Applicability of Corporations Code
Article 9. Managing Agent
§ 5375.Prospective Managing Agent; Written Statement
§ 5380.Management of Common Interest Funds
§ 5385.Meaning of Managing Agent
Article 10. Government Assistance
§ 5400.On-Line Education for Directors
§ 5405.Identification and Registration of Community Associations
Chapter 7. Finances
Article 1. Accounting
§ 5500.Board of Directors; Duties; Operating and Reserve Accounts
Article 2. Use of Reserve Funds
§ 5510.Expenditure of Reserve Accounts
§ 5515.Borrowing from Reserve Accounts
§ 5520.Notice to Members; Accounting of Litigation Expenses
Article 3. Reserve Planning
§ 5550.Study of Reserve Accounts
§ 5560.Reserve Funding Plan; Adoption
§ 5565.Summary of Reserves
§ 5570.Disclosure
§ 5580.Community Service Organizations; Financial Disclosures
Chapter 8. Assessments and Assessment Collection
Article 1. Establishment and Imposition of Assessments
§ 5600.Levy of Assessments; Limitation on Imposition or Collection of Assessments or Fees
§ 5605.Limitation on Increases in Assessments
§ 5610.Emergency Assessments
§ 5615.Notice of Increased or Special Assessment
§ 5620.Exemption from Judgment
§ 5625.Assessments Based on Taxable Value of Separate Interest
Article 2. Assessment Payment and Delinquency
§ 5650.Assessments; Debt of Owner; Association Recovery
§ 5655.Payment of Delinquent Assessments
§ 5658.Payment Under Protest
§ 5660.Notice of Lien
§ 5665.Payment Plans
§ 5670.Meet and Confer
§ 5673.Board Approval Required to Record Lien
§ 5675.Lien; Notice of Delinquent Assessment
§ 5680.Priority of Lien
§ 5685.Release of Lien; Lien Recorded in Error
§ 5690.Failure to Comply with Article; Recommencing Notice
Article 3. Assessment Collection
§ 5700.Enforcement of Lien
§ 5705.Prior to Foreclosure of Liens for Assessment Debt Arising on or After January 1, 2006; Offer to Meet and Confer; Approval by Board; Notice by Personal Service
§ 5710.Sale by Trustee
§ 5715.Right of Redemption
§ 5720.Foreclosure of Liens for Assessment Debt Arising on or After January 1, 2006; Amount and Time Thresholds; Small Claims Court Judgments
§ 5725.Monetary Charge or Penalty Imposed by Association may become a Lien
§ 5730.Notice; Annual Policy Statement
§ 5735.Limitations on Assignment of Right to Collect
§ 5740.Application of Liens Recorded On or After January 1, 2003
Chapter 9. Insurance and Liability
§ 5800.Liability of Volunteer Officer or Director
§ 5805.Liability of Owner in Tenancy-In-Common Common Area
§ 5810.Notice of Insurance Policies
Chapter 10. Dispute Resolution and Enforcement
Article 1. Discipline and Cost Reimbursement
§ 5850.Schedule of Monetary Penalties
§ 5855.Disciplinary Actions and Monetary Charges Imposed by Board; Delivery; Notice
§ 5865.Authority of Board to Impose Monetary Penalties
Article 2. Internal Dispute Resolution
§ 5900.Dispute Resolution; Application
§ 5905.Fair, Reasonable, and Expeditious Procedures
§ 5910.Minimum Requirements; Dispute Resolution Procedures
§ 5915.Statutory Default Procedure
§ 5920.Annual Notice, Description of Association Meet and Confer Program
Article 3. Alternative Dispute Resolution Prerequisite to Civil Action
§ 5925.Definitions
§ 5930.Litigation Pre-Filing Requirements
§ 5935.Initiating the Process; Request for Resolution
§ 5940.Completing the Process; Costs
§ 5945.Statutes of Limitation
§ 5950.Certificate; Commencement of Action
§ 5955.Post-Filing Reference
§ 5960.Refusal to Participate in Pre-Filing Alternative Dispute Resolution
§ 5965.Annual Disclosure
Article 4. Civil Action
§ 5975.Enforcement of Governing Documents
§ 5980.Standing
§ 5985.Allocation of Damages
Chapter 11. Construction Defect Litigation
§ 6000.Filing a Claim for Construction Defects
§ 6100.Disclosure to Members; Resolution of Design or Construction Defect Dispute
§ 6150.Pre-Filing Notice to Members; Requirements
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