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2007 Annual Disclosure Checklist

The following disclosures must or should be made on an annual basis. Some of the timing is explained with footnotes (FNs). The blank provided on the left of each item is for the Association to note date accomplished. Note that these disclosures are to be made on a fiscal year basis, so make note that timing is different for some of the requirements if your fiscal year is diferent than the calendar year.

Items and Dates that Disclosures Need to Be Distributed to Owners


At "budget time" (not less than 30 nor more than 90 days before the beginning of the fiscal year)

________ "Pro Forma" Budget (including Reserve Summary and Percentage Funded Disclosure if there is common area) - OR CC_1365(a)
________ Summary of Pro Forma Budget per Statute CC_1365(c)
________ Reserves Worksheet/Form click here CC&1365.2.5
________ Notice of Assessments for the Coming Fiscal Year (Increase or Decrease) FNI CC_1366(c)
________ Assessment Collection (and Penalty/Lien Practices) - Note There are Two Policies Required - click here   FN 2 CC_1365(d) and CC1365.1
________ Notice of Anticipated Special Assessments (For Repair of Major Components or Reserves) - To Members CC_1365(a)(3)
________ Notice of Right to Inspect Board Minutes - click here   FN3 CC_1363.05(d)
________ Notice of Internal Dispute Resolution and Alternative Dispute Resolution Summary and Statutorily Required Language -  click here   FN4 CC Sec. 1363.810-1363.840,1369.510-1369.590
________ Notice of Insurance Coverage and Summary Paragraph - click here   FN5 CC_1365(c)
________ Schedule of Monetary Fines/Penalties If Adopted - click here   FN6 CC_1363(h)
________ Notice of Board Meeting Times, Dates, Places FN7 CC_1363.05
________ Architectural Policies and Procedures click here CC1378


Miscellaneous Timing


________ Accountant Review of Financial Statement within 120 days of end of Fiscal Year (if gross income exceeds $75,000.00) FN8 CC_1365(b)


________ Notice of Use of Reserves for Defect Litigaton and Availability of Accounting for Review (in the next available mailing to the membership following the Board decision) CC_1365.5(d)
________ Notice of Intent to File Construction Defect Litigaton (not less than thirty days before a lawsuit is filed) CC_1368.4, and 1375
________ Documents Requested by Owner/Sellers Pursuant to CC_1368, (Within 10 Days Of Receiving Written Request From Owner Or Owner's Appointed agent/Escrow Demand) - click here   FN9 CC_1368(b)
________ Notice to Owners of Preliminary List of Defects or Required Summary of Settlement Plan Under Civil Code Section 1368 CC_1368(5) & (6) CC_1375.1
________ If board is considering disciplinary action to be imposed upon any owner a fine schedule must have been circulated as above), and required notices must be given. FN10 CC$1363(h)
________ Any outstanding fines or violation letters for existing violations to escrow or seller demand made per CC&1368. (To be made with CC 1368 disclosure) CC_1368(4) and (5)

________ Operating Rules FN 13 CC 1357.100


Notice to Secretary of State Regarding Corporate Information (2 Required Reports)


________ Statement of Domestic Non Profit Corporation FN11 1363.5
________ Statement Identifying Geographic Location and Identifying Association as formed to Manage a Common Interest Development and new Registration of Board information FN11 CC_1363.5 & 1363.6


Tax Reporting Information


________ California Reporting Form for Independent Contractors - Beginning of tax year of withiin 30 days of contract and/or services of more than $600 FN12 Rev-Tax Code 542
________ Corporate Tax Returns - by 15th of March (not April as for individuals) If Fiscal Yr. Jan-Dec FN12 FED TAX CODE
________ 1099s - For Independent Contractors, to IC by January 28, to FEDS with report for all by February 28 for FY1-12 FN12 FED TAX CODE




FN 1. The Statute specifies not less than 30 nor more than 90 days before the effective date, but I recommend sending this information out the with the Pro Forma budget package.

FN 2.Notice is required within 60 days prior to beginning a fiscal year for the statutory policy in 1365.1, but recommend sending with annual budget packet. One policy is to provide collection policies, late fees, timelines, and lien practices and the other (added 1/1/2003) is the 1365.1 Collection Policy. click here

statutory notice requiring specific wording that spells out foreclosure rights of Association and homeowner rights to ask for records, or request a meeting with the Board or a payment plan.

FN 3. Notice may be distributed in any general mailing during the fiscal year, but recommend it be sent out with the budget information to save mailing costs. To link to this form, click here

In some associations, minutes are distributed on a regular basis (not required by statute).

FN 4. To be distributed in any general mailing during the fiscal year, but recommend it be sent out with the annual budget information package to save mailing costs. To link to this form, click here

FN 5.The requirement is within a reasonable time after renewal and/or the same time frame as the budget package annually, and A.S.A.P. after cancellation or intent not to renew. To link to the Insurance Disclosure Form click here.

FN 6. The requirement is after approval by the Board and thereafter each time the schedule is modified; recommend sending annually with the budget packet to save mailing costs. To link to a Sample Fines Policy.click here

FN 7. Notice to all members must be made at least 4 days prior to board meeting, by any general mailing, posting, or other communication (none of which is necessary if meeting date, place and time are specified in the Bylaws). Recommend sending out calendar with budget packet if schedule is available for coming year or noting schedule of meetings at least one month in advance in Association newsletter.

FN 8. If the Association governing documents specify a shorter timeline for preparing this Review, or require it be done in any case (even if there is no minimum income requirement), the governing documents provisions would apply. FN 9. It is important to send all of the items required by Civil Code Section 1368 in response to an escrow demand or request by owner for information in conjunction with sale of a Unit or Lot within 10 days of a written request). To link to the required Civil Code Section 1368 disclosures click here.

FN 10. Two written notices must be given: (1) Notice of meeting/hearing at which disciplinary action is to be considered by Board - at least 10 days before meeting/hearing; and (2) decision on discipline - within 15 days after decision. FN 11. It is important to understand that two reports must be sent by HOAs that are incorporated every year; if not sent, the Association corporate status can be suspended. For unincorporated HOAs, only the registration form is required. These forms can be found on the Secretary of State website at http://www.ss.ca.gov and the information related to filing also appears on that site.

FN 12. Tax reporting should be done with the assistance of a CPA. The notes in this table are simply to trigger the attention of the Board to tax reporting that needs to be done on an annual basis. The common recommendation for the Form 542 reporting on independent contractors (intended to provide information for collecting child support) is to do it for all contractors that the Association expects to pay more than $600 for services in the fiscal year in the beginning of the year, and for new service providers within 30 days of paying more than $600 or signing a contract providing for more than $600 in services for the year. . Otherwise, there are fairly severe penalties for failure to timely report and it is easy to do. And note that the corporate/association tax returns are due a month before the due date for individual tax returns. As for sending out 1099s, the one month period between sending the form to the provider, and the Feds, is so that the Association can investigate and make changes if a provider claims the 1099 is incorrect.

FN 13. An Association is required to send out to al members, at least 30 days before Board approval (which must be at an open board meeting), any new or changes to existing operating rules. Then, after approval by the Board, notice must be sent again to the owners indicting they have been adopted. There are exceptions and also many technical requirements to this process. Consult the statutes.  

©2006 Beth A. Grimm, A Professional Law Corporation. Associations may use this disclosure form but reproduction of it on any website or use by others for their clients without written permission and credit to Beth A. Grimm, PLC, is forbidden.