CIVIL CODE
SECTION 5300-5320

Annual Reports

5300.  (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.



5305.  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.


5310.  (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 subdivision (b) of Section 4040.
   (3) The location, if any, designated for posting of a general
notice, pursuant to paragraph (3) of subdivision (a) of 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.



5320.  (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. 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.
   (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.