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Critical Financial Service, Documents, Procedures, Etc.


Preparation and distribution of financial documents

SECTION 5200-5240 & 5300-5320

5200.  For the purposes of this article, the following definitions
shall apply:
   (a) "Association records" means all of the following:
   (1) Any financial document required to be provided to a member in
Article 7 (commencing with Section 5300) or in Sections 5565 and
   (2) Any financial document or statement required to be provided in
Article 2 (commencing with Section 4525) of Chapter 4.
   (3) Interim financial statements, periodic or as compiled,
containing any of the following:
   (A) Balance sheet.
   (B) Income and expense statement.
   (C) Budget comparison.
   (D) General ledger. A "general ledger" is a report that shows all
transactions that occurred in an association account over a specified
period of time.
   The records described in this paragraph shall be prepared in
accordance with an accrual or modified accrual basis of accounting.
   (4) Executed contracts not otherwise privileged under law.
   (5) Written board approval of vendor or contractor proposals or
   (6) State and federal tax returns.
   (7) Reserve account balances and records of payments made from
reserve accounts.
   (8) Agendas and minutes of meetings of the members, the board, and
any committees appointed by the board pursuant to Section 7212 of
the Corporations Code; excluding, however,minutes and other
information from executive sessions of the board as described in
Article 2 (commencing with Section 4900).
   (9) Membership lists, including name, property address, and
mailing address, but not including information for members who have
opted out pursuant to Section 5220.
   (10) Check registers.
   (11) The governing documents.
   (12) An accounting prepared pursuant to subdivision (b) of Section
   (13) An "enhanced association record" as defined in subdivision
   (b) "Enhanced association records" means invoices, receipts and
canceled checks for payments made by the association, purchase orders
approved by the association, credit card statements for credit cards
issued in the name of the association, statements for services
rendered, and reimbursement requests submitted to the association.

5205.  (a) The association shall make available association records
for the time periods and within the time frames provided in Section
5210 for inspection and copying by a member of the association, or
the member's designated representative.
   (b) A member of the association may designate another person to
inspect and copy the specified association records on the member's
behalf. The member shall make this designation in writing.
   (c) The association shall make the specified association records
available for inspection and copying in the association's business
office within the common interest development.
   (d) If the association does not have a business office within the
development, the association shall make the specified association
records available for inspection and copying at a place agreed to by
the requesting member and the association.
   (e) If the association and the requesting member cannot agree upon
a place for inspection and copying pursuant to subdivision (d) or if
the requesting member submits a written request directly to the
association for copies of specifically identified records, the
association may satisfy the requirement to make the association
records available for inspection and copying by delivering copies of
the specifically identified records to the member by individual
delivery pursuant to Section 4040 within the time frames set forth in
subdivision (b) of Section 5210.
   (f) The association may bill the requesting member for the direct
and actual cost of copying and mailing requested documents. The
association shall inform the member of the amount of the copying and
mailing costs, and the member shall agree to pay those costs, before
copying and sending the requested documents.
   (g) In addition to the direct and actual costs of copying and
mailing, the association may bill the requesting member an amount not
in excess of ten dollars ($10) per hour, and not to exceed two
hundred dollars ($200) total per written request, for the time
actually and reasonably involved in redacting an enhanced association
record. If the enhanced association record includes a reimbursement
request, the person submitting the reimbursement request shall be
solely responsible for removing all personal identification
information from the request. The association shall inform the member
of the estimated costs, and the member shall agree to pay those
costs, before retrieving the requested documents.
   (h) Requesting parties shall have the option of receiving
specifically identified records by electronic transmission or
machine-readable storage media as long as those records can be
transmitted in a redacted format that does not allow the records to
be altered. The cost of duplication shall be limited to the direct
cost of producing the copy of a record in that electronic format. The
association may deliver specifically identified records by
electronic transmission or machine-readable storage media as long as
those records can be transmitted in a redacted format that prevents
the records from being altered.CIVIL CODE SECTION 5300-5320  
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. 
1452 W. 9th Street # 3  Upland, CA 91786

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