Annual Disclosures

Besides keeping members informed, there are two chief reasons why an association should diligently comply with annual disclosure requirements. First, if the board has not complied with the disclosure and notice requirements of Section 1365 of the Davis Stirling Act, it is not authorized to impose an annual increase in the regular assessments unless 50% of owners have given their approval in an election conducted by secret ballot according to Section 7510 of the Corporations Code. Second, if the Association Collection Policy, Notice of Collection Rights, and Alternative Dispute Rights Summary are not delivered, the association may have difficulty collecting from owners who are past due on their accounts.

Here is a Summary of Annual Disclosures (taken from Chapter 16 of the 2008 Condo Bluebook):

1. Pro Forma Operating Budget or Summary
2. Assessment and Reserve Funding Disclosure Summary
3. Anticipated Special Assessment for Reserves
4. Assessment Collection Policy
5. Statutory Notice of Collection Rights
6. Association Insurance Disclosure
7. Alternative Disputes Rights Summary
8. Internal Dispute Resolution Procedures
9. Receipt and Disposition of Funds Received for Construction Defects (if any)
10. Notice of Member Rights to Minutes
11. Notice of Right to Submit Secondary Address
12. Architectural Review Procedures
13. Notice of Assessment Increases

Most of the required disclosures and notices must be delivered to homeowners within a period that runs from 30 to 90 days before the beginning of the fiscal year. A rule of thumb is to have them in the mail by November 15, 2008. However, if you are running late there is still time to get them out over the next two weeks.