Tag Archives: Annual Policy Statement

SB-392 (Archuleta) Common interest developments: document delivery.

Would require an association to provide individual delivery by email. Would also require an association of at least 50 units to maintain a website to provide general information to the membership.

Current Status: Chaptered

FindHOALaw Quick Summary:

The Davis-Stirling Common Interest Development Act, requires an association to deliver documents to members of a common interest development, if those documents are required to be delivered by individual delivery or notice, by either first-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service carrier or by email, facsimile, or other electronic means, if the recipient has consented, in writing or by email, to receive documents by that electronic means.
This bill would amend Civil Code Section 4041 to instead require, on and after January 1, 2023, an association to deliver those documents by email unless the member has not provided a valid email address to the association or has revoked consent to receiving documents by email, in which case the association would be required to deliver the documents by traditional mail, as described above. The bill would require an association to deliver those documents either by email or traditional mail, at its discretion, if 2/3 of the members approve. The bill would require an association to annually notify each member that by providing an email address to the association, the member agrees that communication between the member and the association shall be conducted by email.
The bill would also amend Civil Code Section 4040 to require an association to make a good faith effort to obtain an email address for each member on or before June 1, 2022.
The act also requires an association to provide, by specified means, documents to members that are required to be delivered by general delivery or notice.
This bill would add Civil Code Section 4801 to require an association that manages a common interest development of at least 50 separate interests to maintain an internet website to provide general information to members and would amend Civil Code Section 4045 to authorize an association to satisfy the general delivery requirement described above by posting the document on that internet website. The bill would exempt an association from the requirement to maintain an internet website if 2/3 of the members approve.

**UPDATE:  SB 392 was signed by the Governor on October 7, 2021.  Its changes to the law take effect January 1, 2022.

View more info on SB 392
from the California Legislature's website

Related Links

SB 261 Signed!  Changes to Individual and General Notice - Published on HOA Lawyer Blog (September 2018)  

AB 2141 (Cunningham). Common interest developments: association: annual policy statement.

Would change the time requirements for distribution of the annual policy statement to be within 31 to 91 days before the fiscal year end.

Current Status: Dead

FindHOALaw Quick Summary:

Existing law requires the association to distribute an annual policy statement, containing specified information, to the members within 30 to 90 days before the fiscal year end.  This bill would amend Civil Code Section 5310 to change the time requirements for distribution to be within 31 to 91 days before the fiscal year end.

To read the current text of AB 2141, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 2141 as it progresses through the Legislature. 

View more info on AB 2141
from the California Legislature's website

Related Links

Are You Prepared for the New Annual Disclosures? - Published on HOA Lawyer Blog (September 19, 2014)  

AB 1079 (Cunningham). Common interest developments: association: annual policy statement.

Would change the time requirements for distribution of the annual policy statement to be within 31 to 91 days before the fiscal year end.

Current Status: Dead

FindHOALaw Quick Summary:

Existing law requires the association to distribute an annual policy statement, containing specified information, to the members within 30 to 90 days before the fiscal year end.  This bill would amend Civil Code Section 5310 to change the time requirements for distribution to be within 31 to 91 days before the fiscal year end.

To read the current text of AB 1079, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 10179 as it progresses through the Legislature. 

View more info on AB 1079
from the California Legislature's website

Related Links

Are You Prepared for the New Annual Disclosures? - Published on HOA Lawyer Blog (September 19, 2014)  

Annual Policy Statement

Civil Code Section 5310 requires an association to distribute an annual policy statement that provides members with information about the association’s policies. The annual policy statement must include all of the following information:

  1. Person Receiving Communications to the Association – The name and address of the person designated by the association to receive official communications to the association pursuant to Civil Code Section 4035. (Civ. Code § 5310(a)(1).)
  2. Right to Request an Alternative Mailing Address – A statement explaining that a member may submit a request to have association documents and notices sent to up to two (2) different specified addresses, pursuant to Civil Code Section 4040(b). (Civ. Code § 5310(a)(2).)
  3. Location for Posting of General Notice – The location, if any, designated by the association for posting of a general notice, pursuant Civil Code Section 4045(a)(3). (Civ. Code § 5310(a)(3).)
  4. Right to Receive General Notices by Individual Delivery – Notice of a member’s option to receive general notices by individual delivery, pursuant to Civil Code Section 4045(b). (Civ. Code § 5310(a)(4).)
  5. Right to Receive Copies of Meeting Minutes – Notice of a member’s right to receive copies of meeting minutes, pursuant to Civil Code Section 4950(b). (Civ. Code § 5310(a)(5).)
  6. Statement of Assessment Collection Procedures – The statement of assessment collection policies and procedures required under Civil Code Section 5730. (Civ. Code § 5310(a)(6).) This statement includes a notice that members who are delinquent in the payment of assessments may request to meet with the board to discuss a payment plan. (Civ. Code §§ 5730(a); See also “Payment Plans.”)
  7. Assessment Collection Policy – A statement describing the association’s policies and practices in enforcing lien rights or other remedies for delinquent assessments. (Civ. Code § 5310(a)(7); See also “Collection Policy.”)
  8. Discipline Policy & Schedule of Penalties – A statement describing the association’s discipline policy, if any, including any schedule of penalties for violations of the governing documents pursuant to Civil Code Section 5850. (Civ. Code § 5310(a)(8); See also “Fine Policy & Schedule.”)
  9. Dispute Resolution Procedures – A summary of the dispute resolution procedures, pursuant to Civil Code Sections 5920 and 5965. (Civ. Code § 5310(a)(9); See also “Internal Dispute Resolution (IDR)” and “Alternative Dispute Resolution (ADR).”)
  10. Architectural Standards – A summary of any requirements for association approval of a physical change to property, pursuant to Civil Code Section 4765. (Civ. Code § 5310(a)(10); See also “Architectural Standards” and “Architectural Application & Approval Process.”)
  11. Address for Overnight Assessment Payments – The mailing address for overnight payment of assessments, pursuant to Civil Code Section 5655. (Civ. Code § 5310(a)(11).)
  12. Additional Required Information – Any other information that is required by law or the governing documents, or information which “the board determines to be appropriate for inclusion” in the annual policy statement. (Civ. Code § 5310(a)(12).)

When Distributed
The annual policy statement must be distributed to the members within thirty (30) to ninety (90) days before the end of the association’s fiscal year. (Civ. Code § 5310(a).)

How Distributed
The annual policy statement must be distributed to all members by individual delivery. (Civ. Code §§ 5310(b), 5320(a).)  An association is permitted to distribute the annual policy statement in one of the following forms: (Civ. Code § 5320(a)(1)-(2).)

  1. The full annual policy statement; or
  2. A summary of the annual policy statement. The summary must include a general description of the content of the annual policy statement, as well as instructions on how the member may request a complete copy of the annual policy statement at no cost to the member. The content description and instructions must be printed in at least 10-point boldface type on the first page of the summary.

Notwithstanding the above, if a member has requested to receive association reports in full, the association must deliver the full annual policy statement to that member, rather than the summary referenced above. (Civ. Code § 5320(b).)

Davis-stirling Act

Civil Code Section 5965. Summary of ADR Procedures in Annual Policy Statement.

(a) An association shall annually provide its members a summary of the provisions of this article that specifically references this article. The summary shall include the following language:

Failure of a member of the association to comply with the alternative dispute resolution requirements of Section 5930 of the Civil Code may result in the loss of the member’s right to sue the association or another member of the association regarding enforcement of the governing documents or the applicable law.

(b) The summary shall be included in the annual policy statement prepared pursuant to Section 5310.

(Added by Stats. 2012, Ch. 180, Sec. 2. Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)
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Davis-stirling Act

Civil Code Section 5730. Notice of Collection Procedure in Annual Policy Statement.

(a) The annual policy statement, prepared pursuant to Section 5310, shall include the following notice, in at least 12-point type:

NOTICE ASSESSMENTS AND FORECLOSURE

This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.

ASSESSMENTS AND FORECLOSURE

Assessments become delinquent 15 days after they are due, unless the governing documents provide for a longer time. The failure to pay association assessments may result in the loss of an owner’s property through foreclosure. Foreclosure may occur either as a result of a court action, known as judicial foreclosure, or without court action, often referred to as nonjudicial foreclosure. For liens recorded on and after January 1, 2006, an association may not use judicial or nonjudicial foreclosure to enforce that lien if the amount of the delinquent assessments or dues, exclusive of any accelerated assessments, late charges, fees, attorney’s fees, interest, and costs of collection, is less than one thousand eight hundred dollars ($1,800). For delinquent assessments or dues in excess of one thousand eight hundred dollars ($1,800) or more than 12 months delinquent, an association may use judicial or nonjudicial foreclosure subject to the conditions set forth in Article 3 (commencing with Section 5700) of Chapter 8 of Part 5 of Division 4 of the Civil Code. When using judicial or nonjudicial foreclosure, the association records a lien on the owner’s property. The owner’s property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Sections 5700 through 5720 of the Civil Code, inclusive)

In a judicial or nonjudicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney’s fees, late charges, and interest. The association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common area damaged by a member or a member’s guests, if the governing documents provide for this. (Section 5725 of the Civil Code)

The association must comply with the requirements of Article 2 (commencing with Section 5650) of Chapter 8 of Part 5 of Division 4 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner’s property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association. (Section 5675 of the Civil Code)

At least 30 days prior to recording a lien on an owner’s separate interest, the association must provide the owner of record with certain documents by certified mail, including a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a right to review the association’s records to verify the debt. (Section 5660 of the Civil Code)

If a lien is recorded against an owner’s property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard. (Section 5685 of the Civil Code)

The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.

PAYMENTS

When an owner makes a payment, the owner may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Section 5655 of the Civil Code)

An owner may, but is not obligated to, pay under protest any disputed charge or sum levied by the association, including, but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and by so doing, specifically reserve the right to contest the disputed charge or sum in court or otherwise.

An owner may dispute an assessment debt by submitting a written request for dispute resolution to the association as set forth in Article 2 (commencing with Section 5900) of Chapter 10 of Part 5 of Division 4 of the Civil Code. In addition, an association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party as set forth in Article 3 (commencing with Section 5925) of Chapter 10 of Part 5 of Division 4 of the Civil Code, if so requested by the owner. Binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.

An owner is not liable for charges, interest, and costs of collection, if it is established that the assessment was paid properly on time. (Section 5685 of the Civil Code)

MEETINGS AND PAYMENT PLANS

An owner of a separate interest that is not a time-share interest may request the association to consider a payment plan to satisfy a delinquent assessment. The association must inform owners of the standards for payment plans, if any exists. (Section 5665 of the Civil Code)

The board must meet with an owner who makes a proper written request for a meeting to discuss a payment plan when the owner has received a notice of a delinquent assessment. These payment plans must conform with the payment plan standards of the association, if they exist. (Section 5665 of the Civil Code)

(b) An association distributing the notice required by this section to an owner of an interest that is described in Section 11212 of the Business and Professions Code that is not otherwise exempt from this section pursuant to subdivision (a) of Section 11211.7 of the Business and Professions Code may delete from the notice described in subdivision (a) the portion regarding meetings and payment plans.

(Added by Stats. 2012, Ch. 180, Sec. 2. Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)
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Davis-stirling Act

Civil Code Section 5320. Delivery of Budget Report to Members.

(a) 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 that includes, on the first page, a general description of the content of the report and instructions, printed in at least 10-point boldface type, regarding how to request a complete copy of the report at no cost to the member.

(b) Notwithstanding subdivision (a), if a member has requested to receive all reports in full, the association shall deliver the full report to that member, rather than a summary of the report.

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Davis-stirling Act

Civil Code Section 5310. Annual Policy Statement.

(a) 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 Section 4035.

(2) A statement explaining that a member may submit a request to have notices sent to up to two different specified addresses, pursuant to Section 4040.

(3) The location, if any, designated for posting of a general notice, pursuant to Section 4045.

(4) Notice of a member’s option to receive general notices by individual delivery, pursuant to subdivision (b) of Section 4045.

(5) Notice of a member’s right to receive copies of meeting minutes, pursuant to subdivision (b) of Section 4950.

(6) The statement of assessment collection policies required by Section 5730.

(7) 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) 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) A summary of dispute resolution procedures, pursuant to Sections 5920 and 5965.

(10) A summary of any requirements for association approval of a physical change to property, pursuant to Section 4765.

(11) The mailing address for overnight payment of assessments, pursuant to Section 5655.

(12) Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.

(b) The annual policy statement shall be made available to the members pursuant to Section 5320.

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Davis-stirling Act

Civil Code Section 4950. Minutes of Meetings.

(a) The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any board meeting, other than an executive session, shall be available to members within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be distributed to any member upon request and upon reimbursement of the association’s costs for making that distribution.

(b) The annual policy statement, prepared pursuant to Section 5310, shall inform the members of their right to obtain copies of board meeting minutes and of how and where to do so.

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