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CIVIL CODE 2007
SECTION 1365.2-1365.5

Availability of Associations Accounting Records

1365.2. (a) (1) The association shall make the accounting books and
records and the minutes of proceedings of the association available
for inspection and copying by a member of the association, or the
member's designated representative, as provided by this section.
(2) A member of the association may designate another person to
inspect and copy the accounting books and records and the minutes of
proceedings on the member's behalf. The member shall make this
designation in writing.
(b) (1) The association shall make the accounting books and
records and the minutes of proceedings available for inspection and
copying in the association's business office within the common
interest development.
(2) If the association does not have a business office within the
development, the association shall make the accounting books and
records and minutes of proceedings available for inspection and
copying at a place that the requesting member and the association
agree upon.
(3) If the association and the requesting member cannot agree upon
a place for inspection and copying pursuant to paragraph (2), or if
the requesting member submits a written request directly to the
association for copies, the association may satisfy the requirement
to make the accounting books and records and the minutes of
proceedings available for inspection and copying by mailing copies of
the requested records to the member by first-class mail within 10
days of receiving the member's request. The association may bill the
requesting member for its actual, reasonable costs for copying and
mailing requested documents. The association shall inform the member
of the amount of the copying and mailing costs before sending the
requested documents.
(c) (1) Except as provided in paragraph (2), the association may
withhold or redact information from the accounting books and records
and the minutes of proceedings for any of the following reasons:
(A) The release of the information is reasonably likely to lead to
identity theft. For the purposes of this section, "identity theft"
means the unauthorized use of another person's personal identifying
information to obtain credit, goods, services, money, or property.
(B) The release of the information is reasonably likely to lead to
fraud in connection with the association.
(C) The information is privileged under law.
(2) Except as provided by the attorney-client privilege, the
association may not withhold or redact information concerning the
compensation paid to employees, vendors, or contractors.
Compensation information for individual employees shall be set forth
by job classification or title, not by the employee's name, social
security number, or other personal information.
(d) (1) The accounting books and records and the minutes of
proceedings of an association, and any information from them, may not
be sold, used for a commercial purpose, or used for any other
purpose not reasonably related to a member's interest as a member.
An association may bring an action against any person who violates
this section for injunctive relief and for actual damages to the
association caused by the violation.
(2) This section may not be construed to limit the right of an
association to damages for misuse of information obtained from the
accounting books and records and the minutes of proceedings pursuant
to this section or to limit the right of an association to injunctive
relief to stop the misuse of this information.
(3) An association shall be entitled to recover reasonable costs
and expenses, including reasonable attorney's fees, in a successful
action to enforce its rights under this section.
(e) A member of an association may bring an action to enforce the
member's right to inspect and copy the accounting books and records
and the minutes of proceedings of the association. If a court finds
that the association unreasonably withheld access to the accounting
books and records and the minutes of proceedings, the court shall
award the member reasonable costs and expenses, including reasonable
attorney's fees, and may assess a civil penalty of up to five hundred
dollars ($500) for each violation.

1365.2.5. (a) The disclosures required by this article in regard to
an association or a property shall be summarized on the following
form:
Assessment and Reserve Funding Disclosure Summary

(1) The current assessment per unit is $_______ per ____.
Note: If assessments vary by the size or type of unit, the
assessment applicable to this unit may be found on page ____
of the attached report.

(2) Additional assessments that have already been scheduled to be
imposed or charged, regardless of the purpose, if they have
been approved by the board and/or members:

______________________________________________________________________
___
: Date assessment is: Amount per unit per : Purpose of the
assessment::
: due: : month (If assessments:
:
: :are variable, see note:
:
: : immediately below): :
:
:-------------------:----------------------:--------------------------
--:
:-------------------:----------------------:--------------------------
--:
:-------------------:----------------------:--------------------------
--:
:-------------------:----------------------:--------------------------
--:
: : Total: :
:
----------------------------------------------------------------------
---

Note: If assessments vary by the size or type of unit, the
assessment
applicable to this unit may be found on page ____ of the attached
report.

(3) Based upon the most recent reserve study and other information
available to the board of directors, will currently projected
reserve account balances be sufficient at the end of each year
to meet the association's obligation for repair and/or
replacement
of major components during the next 30 years?

Yes _____ No _____

(4) If the answer to #3 is no, what additional assessments or other
contributions to reserves would be necessary to ensure that
sufficient reserve funds will be available each year during the
next 30 years?
____________________________________________________
: Approximate date assessment : Amount per unit :
: will be due: : per month: :
:
:------------------------------:--------------------:
:------------------------------:--------------------:
:------------------------------:--------------------:
:------------------------------:--------------------:
:------------------------------:--------------------:
: : Total: :
:______________________________:____________________:

(5) The following major components, which are included in the
reserve
study, are NOT included in the existing reserve funding:

____________________________________________________________________
:Major component:: Useful remaining : Reason this major component :

: : life in years: : was not included: :

:----------------:-------------------:-----------------------------:

:----------------:-------------------:-----------------------------:

:----------------:-------------------:-----------------------------:

:----------------:-------------------:-----------------------------:

:________________:___________________:_____________________________:

(6) As of the last reserve study or update, the current balance in
the reserve fund is $____. Based on the method of calculation in

paragraph (4) of subdivision (b) of Section 1365.2.5, the
required
amount in the reserve fund is $____, and if an alternate, but
generally accepted, method of calculation is also used, the
required
amount is $____. (See attached explanation)

NOTE: The financial representations set forth in this summary
are based on the best estimates of the preparer at that time. The
estimates are subject to change.
(b) For the purposes of preparing a summary pursuant to this
section:
(1) "Estimated remaining useful life" means the time reasonably
calculated to remain before a major component will require
replacement.
(2) "Major component" has the meaning used in Section 1365.5.
Components with an estimated remaining useful life of more than 30
years may be included in a study as a capital asset or disregarded
from the reserve calculation, so long as the decision is revealed in
the reserve study report and reported in the Assessment and Reserve
Funding Disclosure Summary.
(3) The form set out in subdivision (a) shall accompany each pro
forma operating budget or summary thereof that is delivered pursuant
to this article. The form may be supplemented or modified to clarify
the information delivered, so long as the minimum information set
out in subdivision (a) is provided.
(4) For the purpose of the report and summary, the amount of
reserves needed to be accumulated for a component at a given time
shall be computed as the current cost of replacement or repair
multiplied by the number of years the component has been in service
divided by the useful life of the component. This shall not be
construed to require the board to fund reserves in accordance with
this calculation.

1365.3. Unless the governing documents impose more stringent
standards, any community service organization as defined in paragraph
(3) of subdivision (c) of Section 1368 whose funding from the
association or its members exceeds 10 percent of the organization's
annual budget shall prepare and distribute to the association a
report that meets the requirements of Section 5012 of the
Corporations Code, and that describes in detail administrative costs
and identifies the payees of those costs in a manner consistent with
the provisions of Section 1365.2. If the community service
organization does not comply with the standards, the report shall
disclose the noncompliance in detail. If a community service
organization is responsible for the maintenance of major components
for which an association would otherwise be responsible, the
community service organization shall supply to the association the
information regarding those components that the association would use
to complete disclosures and reserve reports required under this
article. An association may rely upon information received from a
community service organization, and shall provide access to the
information pursuant to the provisions of Section 1365.2.

1365.5. (a) Unless the governing documents impose more stringent
standards, the board of directors of the association shall do all of
the following:
(1) Review a current reconciliation of the association's operating
accounts on at least a quarterly basis.
(2) Review a current reconciliation of the association's reserve
accounts on at least a quarterly basis.
(3) Review, on at least a quarterly basis, the current year's
actual reserve revenues and expenses compared to the current year's
budget.
(4) Review the latest account statements prepared by the financial
institutions where the association has its operating and reserve
accounts.
(5) Review an income and expense statement for the association's
operating and reserve accounts on at least a quarterly basis.
(b) The signatures of at least two persons, who shall be members
of the association's board of directors, or one officer who is not a
member of the board of directors and a member of the board of
directors, shall be required for the withdrawal of moneys from the
association's reserve accounts.
(c) (1) The board of directors shall not expend funds designated
as reserve funds for any purpose other than the repair, restoration,
replacement, or maintenance of, or litigation involving the repair,
restoration, replacement, or maintenance of, major components which
the association is obligated to repair, restore, replace, or maintain
and for which the reserve fund was established.
(2) However, the board may authorize the temporary transfer of
moneys from a reserve fund to the association's general operating
fund to meet short-term cashflow requirements or other expenses, if
the board has provided notice of the intent to consider the transfer
in a notice of meeting, which shall be provided as specified in
Section 1363.05. The notice shall include the reasons the transfer
is needed, some of the options for repayment,and whether a special
assessment may be considered. If the board authorizes the transfer,
the board shall issue a written finding, recorded in the board's
minutes, explaining the reasons that the transfer is needed, and
describing when and how the moneys will be repaid to the reserve
fund. The transferred funds shall be restored to the reserve fund
within one year of the date of the initial transfer, except that the
board may, after giving the same notice required for considering a
transfer, and, upon making a finding supported by documentation that
a temporary delay would be in the best interests of the common
interest development, temporarily delay the restoration. The board
shall exercise prudent fiscal management in maintaining the integrity
of the reserve account, and shall, if necessary, levy a special
assessment to recover the full amount of the expended funds within
the time limits required by this section. This special assessment is
subject to the limitation imposed by Section 1366. The board may,
at its discretion, extend the date the payment on the special
assessment is due. Any extension shall not prevent the board from
pursuing any legal remedy to enforce the collection of an unpaid
special assessment.
(d) When the decision is made to use reserve funds or to
temporarily transfer moneys from the reserve fund to pay for
litigation, the association shall notify the members of the
association of that decision in the next available mailing to all
members pursuant to Section 5016 of the Corporations Code, and of the
availability of an accounting of those expenses. Unless the
governing documents impose more stringent standards, the association
shall make an accounting of expenses related to the litigation on at
least a quarterly basis. The accounting shall be made available for
inspection by members of the association at the association's office.

(e) At least once every three years, the board of directors shall
cause to be conducted a reasonably competent and diligent visual
inspection of the accessible areas of the major components which the
association is obligated to repair, replace, restore, or maintain as
part of a study of the reserve account requirements of the common
interest development, if the current replacement value of the major
components is equal to or greater than one-half of the gross budget
of the association which excludes the association's reserve account
for that period. The board shall review this study, or cause it to be
reviewed, annually and shall consider and implement necessary
adjustments to the board's analysis of the reserve account
requirements as a result of that review.
The study required by this subdivision shall at a minimum include:

(1) Identification of the major components which the association
is obligated to repair, replace, restore, or maintain which, as of
the date of the study, have a remaining useful life of less than 30
years.
(2) Identification of the probable remaining useful life of the
components identified in paragraph (1) as of the date of the study.
(3) An estimate of the cost of repair, replacement, restoration,
or maintenance of the components identified in paragraph (1).
(4) An estimate of the total annual contribution necessary to
defray the cost to repair, replace, restore, or maintain the
components identified in paragraph (1) during and at the end of their
useful life, after subtracting total reserve funds as of the date of
the study.
(f) As used in this section, "reserve accounts" means both of the
following:
(1) Moneys that the association's board of directors has
identified for use to defray the future repair or replacement of, or
additions to, those major components which the association is
obligated to maintain.
(2) The funds received and not yet expended or disposed from
either a compensatory damage award or settlement to an association
from any person or entity for injuries to property, real or personal,
arising from any construction or design defects. These funds shall
be separately itemized from funds described in paragraph (1).
(g) As used in this section, "reserve account requirements" means
the estimated funds which the association's board of directors has
determined are required to be available at a specified point in time
to repair, replace, or restore those major components which the
association is obligated to maintain.
(h) This section does not apply to an association that does not
have a "common area" as defined in Section 1351.