1363.04. (a) Association funds shall not be used for campaign
purposes in connection with any association board election. Funds of
the association shall not be used for campaign purposes in connection
with any other association election except to the extent necessary
to comply with duties of the association imposed by law.
(b) For the purposes of this section, "campaign purposes"
includes, but is not limited to, the following:
(1) Expressly advocating the election or defeat of any candidate
that is on the association election ballot.
(2) Including the photograph or prominently featuring the name of
any candidate on a communication from the association or its board,
excepting the ballot and ballot materials, within 30 days of an
election. This is not a campaign purpose if the communication is one
for which subdivision (a) of Section 1363.03 requires that equal
access be provided to another candidate or advocate.



1363.05. (a) This section shall be known and may be cited as the
Common Interest Development Open Meeting Act.
(b) Any member of the association may attend meetings of the board
of directors of the association, except when the board adjourns to
executive session to consider litigation, matters relating to the
formation of contracts with third parties, member discipline,
personnel matters, or to meet with a member, upon the member's
request, regarding the member's payment of assessments, as specified
in Section 1367 or 1367.1. The board of directors of the association
shall meet in executive session, if requested by a member who may be
subject to a fine, penalty, or other form of discipline, and the
member shall be entitled to attend the executive session.
(c) Any matter discussed in executive session shall be generally
noted in the minutes of the immediately following meeting that is
open to the entire membership.
(d) The minutes, minutes proposed for adoption that are marked to
indicate draft status, or a summary of the minutes, of any meeting of
the board of directors of an association, 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 of the association upon request and upon
reimbursement of the association's costs for making that
distribution.
(e) Members of the association shall be notified in writing at the
time that the pro forma budget required in Section 1365 is
distributed, or at the time of any general mailing to the entire
membership of the association, of their right to have copies of the
minutes of meetings of the board of directors, and how and where
those minutes may be obtained.
(f) Unless the time and place of meeting is fixed by the bylaws,
or unless the bylaws provide for a longer period of notice, members
shall be given notice of the time and place of a meeting as defined
in subdivision (j), except for an emergency meeting, at least four
days prior to the meeting. Notice shall be given by posting the
notice in a prominent place or places within the common area and by
mail to any owner who had requested notification of board meetings by
mail, at the address requested by the owner. Notice may also be
given, by mail or delivery of the notice to each unit in the
development or by newsletter or similar means of communication. The
notice shall contain the agenda for the meeting.
(g) An emergency meeting of the board may be called by the
president of the association, or by any two members of the governing
body other than the president, if there are circumstances that could
not have been reasonably foreseen which require immediate attention
and possible action by the board, and which of necessity make it
impracticable to provide notice as required by this section.
(h) The board of directors of the association shall permit any
member of the association to speak at any meeting of the association
or the board of directors, except for meetings of the board held in
executive session. A reasonable time limit for all members of the
association to speak to the board of directors or before a meeting of
the association shall be established by the board of directors.
(i) (1) Except as described in paragraphs (2) to (4), inclusive,
the board of directors of the association may not discuss or take
action on any item at a nonemergency meeting unless the item was
placed on the agenda included in the notice that was posted and
distributed pursuant to subdivision (f). This subdivision does not
prohibit a resident who is not a member of the board from speaking on
issues not on the agenda.
(2) Notwithstanding paragraph (1), a member of the board of
directors, a managing agent or other agent of the board of directors,
or a member of the staff of the board of directors, may do any of
the following:
(A) Briefly respond to statements made or questions posed by a
person speaking at a meeting as described in subdivision (h).
(B) Ask a question for clarification, make a brief announcement,
or make a brief report on his or her own activities, whether in
response to questions posed by a member of the association or based
upon his or her own initiative.
(3) Notwithstanding paragraph (1), the board of directors or a
member of the board of directors, subject to rules or procedures of
the board of directors, may do any of the following:
(A) Provide a reference to, or provide other resources for factual
information to, its managing agent or other agents or staff.
(B) Request its managing agent or other agents or staff to report
back to the board of directors at a subsequent meeting concerning any
matter, or take action to direct its managing agent or other agents
or staff to place a matter of business on a future agenda.
(C) Direct its managing agent or other agents or staff to perform
administrative tasks that are necessary to carry out this
subdivision.
(4) (A) Notwithstanding paragraph (1), the board of directors may
take action on any item of business not appearing on the agenda
posted and distributed pursuant to subdivision (f) under any of the
following conditions:
(i) Upon a determination made by a majority of the board of
directors present at the meeting that an emergency situation exists.
An emergency situation exists if there are circumstances that could
not have been reasonably foreseen by the board, that require
immediate attention and possible action by the board, and that, of
necessity, make it impracticable to provide notice.
(ii) Upon a determination made by the board by a vote of
two-thirds of the members present at the meeting, or, if less than
two-thirds of total membership of the board is present at the
meeting, by a unanimous vote of the members present, that there is a
need to take immediate action and that the need for action came to
the attention of the board after the agenda was posted and
distributed pursuant to subdivision (f).
(iii) The item appeared on an agenda that was posted and
distributed pursuant to subdivision (f) for a prior meeting of the
board of directors that occurred not more than 30 calendar days
before the date that action is taken on the item and, at the prior
meeting, action on the item was continued to the meeting at which the
action is taken.
(B) Before discussing any item pursuant to this paragraph, the
board of directors shall openly identify the item to the members in
attendance at the meeting.
(j) As used in this section, "meeting" includes any congregation
of a majority of the members of the board at the same time and place
to hear, discuss, or deliberate upon any item of business scheduled
to be heard by the board, except those matters that may be discussed
in executive session.


1363.07. (a) After an association acquires fee title to, or any
easement right over, a common area, unless the association's
governing documents specify a different percentage, the affirmative
vote of members owning at least 67 percent of the separate interests
in the common interest development shall be required before the board
of directors may grant exclusive use of any portion of that common
area to any member, except for any of the following:
(1) A reconveyance of all or any portion of that common area to
the subdivider to enable the continuation of development that is in
substantial conformance with a detailed plan of phased development
submitted to the Real Estate Commissioner with the application for a
public report.
(2) Any grant of exclusive use that is in substantial conformance
with a detailed plan of phased development submitted to the Real
Estate Commissioner with the application for a public report or in
accordance with the governing documents approved by the Real Estate
Commissioner.
(3) Any grant of exclusive use that is for any of the following
reasons:
(A) To eliminate or correct engineering errors in documents
recorded with the county recorder or on file with a public agency or
utility company.
(B) To eliminate or correct encroachments due to errors in
construction of any improvements.
(C) To permit changes in the plan of development submitted to the
Real Estate Commissioner in circumstances where the changes are the
result of topography, obstruction, hardship, aesthetic
considerations, or environmental conditions.
(D) To fulfill the requirement of a public agency.
(E) To transfer the burden of management and maintenance of any
common area that is generally inaccessible and not of general use to
the membership at large of the association.
(F) Any grant in connection with an expressly zoned industrial or
commercial development, or any grant within a subdivision of the type
defined in Section 1373.
(b) Any measure placed before the members requesting that the
board of directors grant exclusive use of any portion of the common
area shall specify whether the association will receive any monetary
consideration for the grant and whether the association or the
transferee will be responsible for providing any insurance coverage
for exclusive use of the common area.



1363.09. (a) A member of an association may bring a civil action
for declaratory or equitable relief for a violation of this article
by an association of which he or she is a member, including, but not
limited to, injunctive relief, restitution, or a combination thereof,
within one year of the date the cause of action accrues. Upon a
finding that the election procedures of this article, or the adoption
of and adherence to rules provided by Article 4 (commencing with
Section 1357.100) of Chapter 2, were not followed, a court may void
any results of the election.
(b) A member who prevails in a civil action to enforce his or her
rights pursuant to this article shall be entitled to reasonable
attorney's fees and court costs, and the court may impose a civil
penalty of up to five hundred dollars ($500) for each violation,
except that each identical violation shall be subject to only one
penalty if the violation affects each member of the association
equally. A prevailing association shall not recover any costs, unless
the court finds the action to be frivolous, unreasonable, or without
foundation.
(c) A cause of action under Section 1363.03 with respect to access
to association resources by a candidate or member advocating a point
of view, the receipt of a ballot by a member, or the counting,
tabulation, or reporting of, or access to, ballots for inspection and
review after tabulation may be brought in small claims court if the
amount of the demand does not exceed the jurisdiction of that court.



1363.1. (a) A prospective managing agent of a common interest
development shall provide a written statement to the board of
directors of the association of a common interest development as soon
as practicable, but in no event more than 90 days, before entering
into a management agreement which shall contain all of the following
information concerning the managing agent:
(1) The names and business addresses of the owners or general
partners of the managing agent. If the managing agent is a
corporation, the written statement shall include the names and
business addresses of the directors and officers and shareholders
holding greater than 10 percent of the shares of the corporation.
(2) Whether or not any relevant licenses such as architectural
design, construction, engineering, real estate, or accounting have
been issued by this state and are currently held by the persons
specified in paragraph (1). If a license is currently held by any of
those persons, the statement shall contain the following
information:
(A) What license is held.
(B) The dates the license is valid.
(C) The name of the licensee appearing on that license.
(3) Whether or not any relevant professional certifications or
designations such as architectural design, construction, engineering,
real property management, or accounting are currently held by any of
the persons specified in paragraph (1), including, but not limited
to, a professional common interest development manager. If any
certification or designation is held, the statement shall include the
following information:
(A) What the certification or designation is and what entity
issued it.
(B) The dates the certification or designation is valid.
(C) The names in which the certification or designation is held.
(b) As used in this section, a "managing agent" is a person or
entity who, for compensation or in expectation of compensation,
exercises control over the assets of a common interest development.
A "managing agent" does not include either of the following:
(1) A full-time employee of the association.
(2) Any regulated financial institution operating within the
normal course of its regulated business practice.



1363.2. (a) A managing agent of a common interest development who
accepts or receives funds belonging to the association shall deposit
all such funds that are not placed into an escrow account with a
bank, savings association, or credit union or into an account under
the control of the association, into a trust fund account maintained
by the managing agent in a bank, savings association, or credit union
in this state. All funds deposited by the managing agent in the
trust fund account shall be kept in this state in a financial
institution, as defined in Section 31041 of the Financial Code, which
is insured by the federal government, and shall be maintained there
until disbursed in accordance with written instructions from the
association entitled to the funds.
(b) At the written request of the board of directors of the
association, the funds the managing agent accepts or receives on
behalf of the association shall be deposited into an interest-bearing
account in a bank, savings association, or credit union in this
state, provided all of the following requirements are met:
(1) The account is in the name of the managing agent as trustee
for the association or in the name of the association.
(2) All of the funds in the account are covered by insurance
provided by an agency of the federal government.
(3) The funds in the account are kept separate, distinct, and
apart from the funds belonging to the managing agent or to any other
person or entity for whom the managing agent holds funds in trust
except that the funds of various associations may be commingled as
permitted pursuant to subdivision (d).
(4) The managing agent discloses to the board of directors of the
association the nature of the account, how interest will be
calculated and paid, whether service charges will be paid to the
depository and by whom, and any notice requirements or penalties for
withdrawal of funds from the account.
(5) No interest earned on funds in the account shall inure
directly or indirectly to the benefit of the managing agent or his or
her employees.
(c) The managing agent shall maintain a separate record of the
receipt and disposition of all funds described in this section,
including any interest earned on the funds.
(d) The managing agent shall not commingle the funds of the
association with his or her own money or with the money of others
that he or she receives or accepts, unless all of the following
requirements are met:
(1) The managing agent commingled the funds of various
associations on or before February 26, 1990, and has obtained a
written agreement with the board of directors of each association
that he or she will maintain a fidelity and surety bond in an amount
that provides adequate protection to the associations as agreed upon
by the managing agent and the board of directors of each association.

(2) The managing agent discloses in the written agreement whether
he or she is deriving benefits from the commingled account or the
bank, credit union, or savings institution where the moneys will be
on deposit.
(3) The written agreement provided pursuant to this subdivision
includes, but is not limited to, the name and address of the bonding
companies, the amount of the bonds, and the expiration dates of the
bonds.
(4) If there are any changes in the bond coverage or the companies
providing the coverage, the managing agent discloses that fact to
the board of directors of each affected association as soon as
practical, but in no event more than 10 days after the change.
(5) The bonds assure the protection of the association and provide
the association at least 10 days' notice prior to cancellation.
(6) Completed payments on the behalf of the association are
deposited within 24 hours or the next business day and do not remain
commingled for more than 10 calendar days.
(e) The prevailing party in an action to enforce this section
shall be entitled to recover reasonable legal fees and court costs.
(f) As used in this section, a "managing agent" is a person or
entity, who for compensation or, in expectation of compensation,
exercises control over the assets of the association. However, a
"managing agent" does not include a full-time employee of the
association or a regulated financial institution operating within the
normal course of business, or an attorney at law acting within the
scope of his or her license.
(g) As used in this section, "completed payment" means funds
received which clearly identify the account to which the funds are to
be credited.



1363.5. (a) The articles of incorporation of a common interest
development association filed with the Secretary of State on or after
January 1, 1995, shall include a statement, which shall be in
addition to the statement of purposes of the corporation, that does
all of the following:
(1) Identifies the corporation as an association formed to manage
a common interest development under the Davis-Stirling Common
Interest Development Act.
(2) States the business or corporate office of the association, if
any, and, if the office is not on the site of the common interest
development, states the nine-digit ZIP Code, front street, and
nearest cross street for the physical location of the common interest
development.
(3) States the name and address of the association's managing
agent, as defined in Section 1363.1, if any.
(b) The statement of principal business activity contained in the
annual statement filed by an incorporated association with the
Secretary of State pursuant to Section 1502 of the Corporations Code
shall also contain the statement specified in subdivision (a).



1363.6. (a) To assist with the identification of common interest
developments, each association, whether incorporated or
unincorporated, shall submit to the Secretary of State, on a form and
for a fee not to exceed thirty dollars ($30) that the Secretary of
State shall prescribe, the following information concerning the
association and the development that it manages:
(1) A statement that the association is formed to manage a common
interest development under the Davis-Stirling Common Interest
Development Act.
(2) The name of the association.
(3) The street address of the association's onsite office, or, if
none, of the responsible officer or managing agent of the
association.
(4) The name, address, and either the daytime telephone number or
e-mail address of the president of the association, other than the
address, telephone number, or e-mail address of the association's
onsite office or managing agent of the association.
(5) The name, street address, and daytime telephone number of the
association's managing agent, if any.
(6) The county, and if in an incorporated area, the city in which
the development is physically located. If the boundaries of the
development are physically located in more than one county, each of
the counties in which it is located.
(7) If the development is in an unincorporated area, the city
closest in proximity to the development.
(8) The nine-digit ZIP Code, front street, and nearest cross
street of the physical location of the development.
(9) The type of common interest development, as defined in
subdivision (c) of Section 1351, managed by the association.
(10) The number of separate interests, as defined in subdivision
(l) of Section 1351, in the development.
(b) The association shall submit the information required by this
section as follows:
(1) By incorporated associations, within 90 days after the filing
of its original articles of incorporation, and thereafter at the time
the association files its biennial statement of principal business
activity with the Secretary of State pursuant to Section 8210 of the
Corporations Code.
(2) By unincorporated associations, in July of 2003, and in that
same month biennially thereafter. Upon changing its status to that
of a corporation, the association shall comply with the filing
deadlines in paragraph (1).
(c) The association shall notify the Secretary of State of any
change in the street address of the association's onsite office or of
the responsible officer or managing agent of the association in the
form and for a fee prescribed by the Secretary of State, within 60
days of the change.
(d) On and after January 1, 2006, the penalty for an incorporated
association's noncompliance with the initial or biennial filing
requirements of this section shall be suspension of the association's
rights, privileges, and powers as a corporation and monetary
penalties, to the same extent and in the same manner as suspension
and monetary penalties imposed pursuant to Section 8810 of the
Corporations Code.
(e) The Secretary of State shall make the information submitted
pursuant to paragraph (4) of subdivision (a) available only for
governmental purposes and only to Members of the Legislature and the
Business, Transportation and Housing Agency, upon written request.
All other information submitted pursuant to this section shall be
subject to public inspection pursuant to the California Public
Records Act, Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code. The information submitted
pursuant to this section shall be made available for governmental or
public inspection, as the case may be, on or before July 1, 2004, and
thereafter.



1363.810. (a) This article applies to a dispute between an
association and a member involving their rights, duties, or
liabilities under this title, under the Nonprofit Mutual Benefit
Corporation Law (Part 3 (commencing with Section 7110) of Division 2
of Title 1 of the Corporations Code), or under the governing
documents of the common interest development or association.
(b) This article supplements, and does not replace, Article 2
(commencing with Section 1369.510) of Chapter 7, relating to
alternative dispute resolution as a prerequisite to an enforcement
action.



1363.820. (a) An association shall provide a fair, reasonable, and
expeditious procedure for resolving a dispute within the scope of
this article.
(b) In developing a procedure pursuant to this article, an
association shall make maximum, reasonable use of available local
dispute resolution programs involving a neutral third party,
including low-cost mediation programs such as those listed on the
Internet Web sites of the Department of Consumer Affairs and the
United States Department of Housing and Urban Development.
(c) If an association does not provide a fair, reasonable, and
expeditious procedure for resolving a dispute within the scope of
this article, the procedure provided in Section 1363.840 applies and
satisfies the requirement of subdivision (a).



1363.830. A fair, reasonable, and expeditious dispute resolution
procedure shall at a minimum satisfy all of the following
requirements:
(a) The procedure may be invoked by either party to the dispute.
A request invoking the procedure shall be in writing.
(b) The procedure shall provide for prompt deadlines. The
procedure shall state the maximum time for the association to act on
a request invoking the procedure.
(c) If the procedure is invoked by a member, the association shall
participate in the procedure.
(d) If the procedure is invoked by the association, the member may
elect not to participate in the procedure. If the member
participates but the dispute is resolved other than by agreement of
the member, the member shall have a right of appeal to the
association's board of directors.
(e) A resolution of a dispute pursuant to the procedure, that is
not in conflict with the law or the governing documents, binds the
association and is judicially enforceable. An agreement reached
pursuant to the procedure, that is not in conflict with the law or
the governing documents, binds the parties and is judicially
enforceable.
(f) The procedure shall provide a means by which the member and
the association may explain their positions.
(g) A member of the association shall not be charged a fee to
participate in the process.



1363.840. (a) This section applies in an association that does not
otherwise provide a fair, reasonable, and expeditious dispute
resolution procedure. The procedure provided in this section is
fair, reasonable, and expeditious, within the meaning of this
article.
(b) Either party to a dispute within the scope of this article may
invoke the following procedure:
(1) The party may request the other party to meet and confer in an
effort to resolve the dispute. The request shall be in writing.
(2) A member of an association may refuse a request to meet and
confer. The association may not refuse a request to meet and confer.

(3) The association's board of directors shall designate a member
of the board to meet and confer.
(4) The parties shall meet promptly at a mutually convenient time
and place, explain their positions to each other, and confer in good
faith in an effort to resolve the dispute.
(5) A resolution of the dispute agreed to by the parties shall be
memorialized in writing and signed by the parties, including the
board designee on behalf of the association.
(c) An agreement reached under this section binds the parties and
is judicially enforceable if both of the following conditions are
satisfied:
(1) The agreement is not in conflict with law or the governing
documents of the common interest development or association.
(2) The agreement is either consistent with the authority granted
by the board of directors to its designee or the agreement is
ratified by the board of directors.
(d) A member of the association may not be charged a fee to
participate in the process.



1363.850. The notice provided pursuant to Section 1369.590 shall
include a description of the internal dispute resolution process
provided pursuant to this article.



1364. (a) Unless otherwise provided in the declaration of a common
interest development, the association is responsible for repairing,
replacing, or maintaining the common areas, other than exclusive use
common areas, and the owner of each separate interest is responsible
for maintaining that separate interest and any exclusive use common
area appurtenant to the separate interest.
(b) (1) In a community apartment project, condominium project, or
stock cooperative, as defined in Section 1351, unless otherwise
provided in the declaration, the association is responsible for the
repair and maintenance of the common area occasioned by the presence
of wood-destroying pests or organisms.
(2) In a planned development as defined in Section 1351, unless a
different maintenance scheme is provided in the declaration, each
owner of a separate interest is responsible for the repair and
maintenance of that separate interest as may be occasioned by the
presence of wood-destroying pests or organisms. Upon approval of the
majority of all members of the association, the responsibility for
such repair and maintenance may be delegated to the association,
which shall be entitled to recover the cost thereof as a special
assessment.
(c) The costs of temporary relocation during the repair and
maintenance of the areas within the responsibility of the association
shall be borne by the owner of the separate interest affected.
(d) (1) The association may cause the temporary, summary removal
of any occupant of a common interest development for such periods and
at such times as may be necessary for prompt, effective treatment of
wood-destroying pests or organisms.
(2) The association shall give notice of the need to temporarily
vacate a separate interest to the occupants and to the owners, not
less than 15 days nor more than 30 days prior to the date of the
temporary relocation. The notice shall state the reason for the
temporary relocation, the date and time of the beginning of
treatment, the anticipated date and time of termination of treatment,
and that the occupants will be responsible for their own
accommodations during the temporary relocation.
(3) Notice by the association shall be deemed complete upon
either:
(A) Personal delivery of a copy of the notice to the occupants,
and sending a copy of the notice to the owners, if different than
the occupants, by first-class mail, postage prepaid at the most
current address shown on the books of the association.
(B) By sending a copy of the notice to the occupants at the
separate interest address and a copy of the notice to the owners, if
different than the occupants, by first-class mail, postage prepaid,
at the most current address shown on the books of the association.
(e) For purposes of this section, "occupant" means an owner,
resident, guest, invitee, tenant, lessee, sublessee, or other person
in possession on the separate interest.
(f) Notwithstanding the provisions of the declaration, the owner
of a separate interest is entitled to reasonable access to the common
areas for the purpose of maintaining the internal and external
telephone wiring made part of the exclusive use common areas of a
separate interest pursuant to paragraph (2) of subdivision (i) of
Section 1351. The access shall be subject to the consent of the
association, whose approval shall not be unreasonably withheld, and
which may include the association's approval of telephone wiring upon
the exterior of the common areas, and other conditions as the
association determines reasonable.


1365. Unless the governing documents impose more stringent
standards, the association shall prepare and distribute to all of its
members the following documents:
(a) A pro forma operating budget, which shall include all of the
following:
(1) The estimated revenue and expenses on an accrual basis.
(2) A summary of the association's reserves based upon the most
recent review or study conducted pursuant to Section 1365.5, based
only on assets held in cash or cash equivalents, which shall be
printed in boldface type and include all of the following:
(A) The current estimated replacement cost, estimated remaining
life, and estimated useful life of each major component.
(B) As of the end of the fiscal year for which the study is
prepared:
(i) The current estimate of the amount of cash reserves necessary
to repair, replace, restore, or maintain the major components.
(ii) The current amount of accumulated cash reserves actually set
aside to repair, replace, restore, or maintain major components.
(iii) If applicable, the amount of funds received from either a
compensatory damage award or settlement to an association from any
person or entity for injuries to property, real or personal, arising
out of any construction or design defects, and the expenditure or
disposition of funds, including the amounts expended for the direct
and indirect costs of repair of construction or design defects. These
amounts shall be reported at the end of the fiscal year for which
the study is prepared as separate line items under cash reserves
pursuant to clause (ii). Instead of complying with the requirements
set forth in this clause, an association that is obligated to issue a
review of their financial statement pursuant to subdivision (b) may
include in the review a statement containing all of the information
required by this clause.
(C) The percentage that the amount determined for purposes of
clause (ii) of subparagraph (B) equals the amount determined for
purposes of clause (i) of subparagraph (B).
(D) The current deficiency in reserve funding expressed on a per
unit basis. The figure shall be calculated by subtracting the amount
determined for purposes of clause (ii) of subparagraph (B) from the
amount determined for purposes of clause (i) of subparagraph (B) and
then dividing the result by the number of separate interests within
the association, except that if assessments vary by the size or type
of ownership interest, then the association shall calculate the
current deficiency in a manner that reflects the variation.
(3) A statement as to all of the following:
(A) Whether the board of directors of the association 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.
(B) Whether the board of directors of the association, consistent
with the reserve funding plan adopted pursuant to subdivision (e) of
Section 1365.5, 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.
(C) The mechanism or mechanisms by which the board of directors
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.
(D) 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.
(4) 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 report shall include, but
need not be limited to, reserve calculations made using the formula
described in paragraph (4) of subdivision (b) of Section 1365.2.5,
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.
The summary of the association's reserves disclosed pursuant to
paragraph (2) 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.
Notwithstanding a contrary provision in the governing documents, a
copy of the operating budget shall be annually distributed not less
than 30 days nor more than 90 days prior to the beginning of the
association's fiscal year.
(b) Commencing January 1, 2009, a summary of the reserve funding
plan adopted by the board of directors of the association, as
specified in paragraph (4) of subdivision (e) of Section 1365.5. 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.
(c) 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 within 120 days after the
close of each fiscal year.
(d) Instead of the distribution of the pro forma operating budget
required by subdivision (a), the board of directors may elect to
distribute a summary of the pro forma operating budget to all of its
members with a written notice that the pro forma operating budget is
available at the business office of the association or at another
suitable location within the boundaries of the development, and that
copies will be provided upon request and at the expense of the
association. If any member requests that a copy of the pro forma
operating budget required by subdivision (a) be mailed to the member,
the association shall provide the copy to the member by first-class
United States mail at the expense of the association and delivered
within five days. The written notice that is distributed to each of
the association members shall be in at least 10-point boldface type
on the front page of the summary of the budget.
(e) A statement describing the association's policies and
practices in enforcing lien rights or other legal remedies for
default in payment of its assessments against its members shall be
annually delivered to the members not less than 30 days nor more than
90 days immediately preceding the beginning of the association's
fiscal year.
(f) (1) A summary of the association's property, general
liability, earthquake, flood, and fidelity insurance policies, which
shall be distributed not less than 30 days nor more than 90 days
preceding the beginning of the association's fiscal year, that
includes all of the following information about each policy:
(A) The name of the insurer.
(B) The type of insurance.
(C) The policy limits of the insurance.
(D) The amount of deductibles, if any.
(2) The association shall, as soon as reasonably practicable,
notify its members by first-class mail if any of the policies
described in paragraph (1) have lapsed, been canceled, and are not
immediately renewed, restored, or replaced, or if there is a
significant change, such as a reduction in coverage or limits or an
increase in the deductible, as to any of those policies. If the
association receives any notice of nonrenewal of a policy described
in paragraph (1), the association shall immediately notify its
members if replacement coverage will not be in effect by the date the
existing coverage will lapse.
(3) To the extent that any of the information required to be
disclosed pursuant to paragraph (1) 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 to all of its members.
(4) The summary distributed pursuant to paragraph (1) 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 subdivision (f) of Section
1365 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."



1365.1. (a) The association shall distribute the written notice
described in subdivision (b) to each member of the association during
the 60-day period immediately preceding the beginning of the
association's fiscal year. The notice shall be printed in at least
12-point type. An association distributing the notice 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, may delete from the
notice described in subdivision (b) the portion regarding meetings
and payment plans.
(b) The notice required by this section shall read as follows:
"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 Section 1367.4 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 1366, 1367.1, and 1367.4 of the
Civil Code)
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 areas damaged by a member or a member's
guests, if the governing documents provide for this. (Sections 1366
and 1367.1 of the Civil Code)
The association must comply with the requirements of Section
1367.1 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
1367.1 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 1367.1 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 1367.1 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, he or she 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 1367.1 of the Civil Code)
An owner may dispute an assessment debt by submitting a written
request for dispute resolution to the association as set forth in
Article 5 (commencing with Section 1368.810) of Chapter 4 of Title 6
of Division 2 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 2
(commencing with Section 1369.510) of Chapter 7 of Title 6 of
Division 2 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 1367.1 of the Civil Code)
MEETINGS AND PAYMENT PLANS

An owner of a separate interest that is not a timeshare 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 exist. (Section 1367.1 of the
Civil Code)
The board of directors 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 1367.1 of the Civil Code)"
(c) A member of an association may provide written notice by
facsimile transmission or United States mail to the association of a
secondary address. If a secondary address is provided, the
association shall send any and all correspondence and legal notices
required pursuant to this article to both the primary and the
secondary address.



1365.2. (a) For the purposes of this section, the following
definitions shall apply:
(1) "Association records" means all of the following:
(A) Any financial document required to be provided to a member in
Section 1365.
(B) Any financial document or statement required to be provided in
Section 1368.
(C) Interim financial statements, periodic or as compiled,
containing any of the following:
(i) Balance sheet.
(ii) Income and expense statement.
(iii) Budget comparison.
(iv) 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 subparagraph shall be prepared in
accordance with an accrual or modified accrual basis of accounting.
(D) Executed contracts not otherwise privileged under law.
(E) Written board approval of vendor or contractor proposals or
invoices.
(F) State and federal tax returns.
(G) Reserve account balances and records of payments made from
reserve accounts.
(H) Agendas and minutes of meetings of the members, the board of
directors and any committees appointed by the board of directors
pursuant to Section 7212 of the Corporations Code; excluding,
however, agendas, minutes, and other information from executive
sessions of the board of directors as described in Section 1363.05.
(I) (i) Membership lists, including name, property address, and
mailing address, if the conditions set forth in clause (ii) are met
and except as otherwise provided in clause (iii).
(ii) The member requesting the list shall state the purpose for
which the list is requested which purpose shall be reasonably related
to the requester's interest as a member. If the association
reasonably believes that the information in the list will be used for
another purpose, it may deny the member access to the list. If the
request is denied, in any subsequent action brought by the member
under subdivision (f), the association shall have the burden to prove
that the member would have allowed use of the information for
purposes unrelated to his or her interest as a member.
(iii) A member of the association may opt out of the sharing of
his or her name, property address, and mailing address by notifying
the association in writing that he or she prefers to be contacted via
the alternative process described in subdivision (c) of Section 8330
of the Corporations Code. This opt-out shall remain in effect until
changed by the member.
(J) Check registers.
(2) "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,
provided that the person submitting the reimbursement request shall
be solely responsible for removing all personal identification
information from the request.
(b) (1) The association shall make available association records
and enhanced association records for the time periods and within the
timeframes provided in subdivisions (i) and (j) for inspection and
copying by a member of the association, or the member's designated
representative. The association may bill the requesting member for
the direct and actual cost of copying requested documents. The
association shall inform the member of the amount of the copying
costs before copying the requested documents.
(2) 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) (1) The association shall make the specified association
records 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 specified association
records 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 of specifically identified records, the
association may satisfy the requirement to make the association
records available for inspection and copying by mailing copies of the
specifically identified records to the member by first-class mail
within the timeframes set forth in subdivision (j).
(4) 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.
(5) 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 the enhanced
association records as provided in paragraph (2) of subdivision (a).
The association shall inform the member of the estimated costs, and
the member shall agree to pay those costs, before retrieving the
requested documents.
(d) (1) Except as provided in paragraph (2), the association may
withhold or redact information from the association records 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.
Examples of information that may be withheld or redacted pursuant to
this paragraph include bank account numbers of members or vendors,
social security or tax identification numbers, and check, stock, and
credit card numbers.
(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. Examples include
documents subject to attorney-client privilege or relating to
litigation in which the association is or may become involved, and
confidential settlement agreements.
(D) The release of the information is reasonably likely to
compromise the privacy of an individual member of the association.
(E) The information contains any of the following:
(i) Records of a-la-carte goods or services provided to individual
members of the association for which the association received
monetary consideration other than assessments.
(ii) Records of disciplinary actions, collection activities, or
payment plans of members other than the member requesting the
records.
(iii) Any person's personal identification information, including,
without limitation, social security number, tax identification
number, driver's license number, credit card account numbers, bank
account number, and bank routing number.
(iv) Agendas, minutes, and other information from executive
sessions of the board of directors as described in Section 1363.05,
except for executed contracts not otherwise privileged. Privileged
contracts shall not include contracts for maintenance, management, or
legal services.
(v) Personnel records other than the payroll records required to
be provided under paragraph (2).
(vi) Interior architectural plans, including security features,
for individual homes.
(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.
(3) No association, officer, director, employee, agent or
volunteer of an association shall be liable for damages to a member
of the association or any third party as the result of identity theft
or other breach of privacy because of the failure to withhold or
redact that member's information under this subdivision unless the
failure to withhold or redact the information was intentional,
willful, or negligent.
(4) If requested by the requesting member, an association that
denies or redacts records shall provide a written explanation
specifying the legal basis for withholding or redacting the requested
records.
(e) (1) The association records, 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
association records 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.
(f) A member of an association may bring an action to enforce the
member's right to inspect and copy the association records. If a
court finds that the association unreasonably withheld access to the
association records, 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 the
denial of each separate written request. A cause of action under this
section may be brought in small claims court if the amount of the
demand does not exceed the jurisdiction of that court. A prevailing
association may recover any costs if the court finds the action to be
frivolous, unreasonable, or without foundation.
(g) The provisions of this section apply to any community service
organization or similar entity, as defined in paragraph (3) of
subdivision (c) of Section 1368, that is related to the association,
and this section shall operate to give a member of the community
service organization or similar entity a right to inspect and copy
the records of that organization or entity equivalent to that granted
to association members by this section.
(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.
(i) The time periods for which specified records shall be provided
is as follows:
(1) Association records shall be made available for the current
fiscal year and for each of the previous two fiscal years.
(2) Minutes of member and board meetings shall be permanently made
available. If a committee has decisionmaking authority, minutes of
the meetings of that committee shall be made available commencing
January 1, 2007, and shall thereafter be permanently made available.

(j) The timeframes in which access to specified records shall be
provided to a requesting member are as follows:
(1) Association records prepared during the current fiscal year,
within 10 business days following the association's receipt of the
request.
(2) Association records prepared during the previous two fiscal
years, within 30 calendar days following the association's receipt of
the request.
(3) Any record or statement available pursuant to Section 1365 or
1368, within the timeframe specified therein.
(4) Minutes of member and board meetings, within the timeframe
specified in subdivision (d) of Section 1363.05.
(5) Minutes of meetings of committees with decisionmaking
authority for meetings commencing on or after January 1, 2007, within
15 calendar days following approval.
(6) Membership list, within the timeframe specified in Section
8330 of the Corporations Code.
(k) There shall be no liability pursuant to this section for an
association that fails to retain records for the periods specified in
subdivision (i) that were created prior to January 1, 2006.
(l) As applied to an association and its members, the provisions
of this section are intended to supersede the provisions of Sections
8330 and 8333 of the Corporations Code to the extent those sections
are inconsistent.
(m) The provisions of this section shall not apply to any common
interest development in which separate interests are being offered
for sale by a subdivider under the authority of a public report
issued by the Department of Real Estate so long as the subdivider or
all subdividers offering those separate interests for sale, or any
employees of those subdividers or any other person who receives
direct or indirect compensation from any of those subdividers,
comprise a majority of the members of the board of directors of the
association. Notwithstanding the foregoing, this section shall apply
to that common interest development no later than 10 years after the
close of escrow for the first sale of a separate interest to a member
of the general public pursuant to the public report issued for the
first phase of the development.
(n) This section shall become operative on July 1, 2006.



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