Bill Text: CA AB899 | 2009-2010 | Regular Session | Chaptered
Bill Title: Common interest developments: disclosures.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 484, Statutes of 2009. [AB899 Detail]
Download: California-2009-AB899-Chaptered.html
BILL NUMBER: AB 899 CHAPTERED
BILL TEXT
CHAPTER 484
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE AUGUST 24, 2009
PASSED THE ASSEMBLY AUGUST 27, 2009
AMENDED IN SENATE JUNE 26, 2009
AMENDED IN SENATE JUNE 17, 2009
AMENDED IN ASSEMBLY MAY 26, 2009
AMENDED IN ASSEMBLY APRIL 1, 2009
INTRODUCED BY Assembly Member Torres
(Coauthor: Assembly Member Eng)
FEBRUARY 26, 2009
An act to amend Sections 1350.7 and 1365.2.5 of, and to add
Section 1363.005 to, the Civil Code, relating to common interest
developments.
LEGISLATIVE COUNSEL'S DIGEST
AB 899, Torres. Common interest developments: disclosures.
The Davis-Stirling Common Interest Development Act provides for
the creation and regulation of common interest developments. Under
existing law, a common interest development is managed by an
association pursuant to the provisions of the governing documents of
the development. Existing law requires an association to provide
specified disclosure documents to its members. Existing law allows
the required disclosure documents to be delivered electronically.
This bill would provide that a document that uses an electronic
record to provide or make available the document satisfies the
writing requirement, as provided. This bill would also require an
association to distribute annually to its members a Disclosure
Documents Index, as specified.
Existing law requires an association to distribute to its members
a pro forma operating budget for each fiscal year, as specified.
Existing law also requires an association to distribute, with the pro
forma operating budget, an Assessment and Reserve Funding Disclosure
Summary containing specified information regarding the association's
assessments and reserves.
This bill would require that Assessment and Reserve Funding
Disclosure Summary to include a specified statement regarding the
interest rate earned on reserve funds and the assumed inflation rate
applied to major component repair and replacement costs.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1350.7 of the Civil Code is amended to read:
1350.7. (a) This section applies to delivery of a document listed
in Section 1363.005 or to the extent the section is made applicable
by another provision of this title.
(b) A document shall be delivered by one or more of the following
methods:
(1) Personal delivery.
(2) First-class mail, postage prepaid, addressed to a member at
the address last shown on the books of the association or otherwise
provided by the member. Delivery is deemed to be complete on deposit
into the United States mail.
(3) E-mail, facsimile, or other electronic means, if the recipient
has agreed to that method of delivery. The agreement obtained by the
association shall be consistent with the conditions for obtaining
consumer consent described in Section 20 of the Corporations Code. If
a document is delivered by electronic means, delivery is complete at
the time of transmission.
(4) By publication in a periodical that is circulated primarily to
members of the association.
(5) If the association broadcasts television programming for the
purpose of distributing information on association business to its
members, by inclusion in the programming.
(6) A method of delivery provided in a recorded provision of the
governing documents.
(7) Any other method of delivery, provided that the recipient has
agreed to that method of delivery.
(c) A document may be included in or delivered with a billing
statement, newsletter, or other document that is delivered by one of
the methods provided in subdivision (b).
(d) For the purposes of this section, an unrecorded provision of
the governing documents providing for a particular method of delivery
does not constitute agreement by a member of the association to that
method of delivery.
SEC. 2. Section 1363.005 is added to the Civil Code, to read:
1363.005. The association shall, at the request of any member,
distribute to the member, in the manner described in Section 1350.7,
the following Disclosure Documents Index:
+----------------------------------------------------+
| Disclosure Documents Index |
+----+--------------------------+--------------------+
|Item|Description |Reference Code |
+----+--------------------------+--------------------+
| |Assessment and Reserve |Civil Code Sec. |
|1 |Funding Disclosure |1365.2.5 |
| |Summary (form) | |
+----+--------------------------+--------------------+
| |Pro Forma Operating |Civil Code Sec. |
|2 |Budget or Pro Forma |1365(a) |
| |Operating Budget Summary | |
+----+--------------------------+--------------------+
| |Assessment Collection |Civil Code Sec. |
|3 |Policy |1365(e) and |
| | |1367.1(a) |
+----+--------------------------+--------------------+
|4 |Notice/Assessments and |Civil Code Sec. |
| |Foreclosure (form) |1365.1 |
+----+--------------------------+--------------------+
| | | |
+----+--------------------------+--------------------+
|5 |Insurance Coverage Summary|Civil Code Sec. |
| | |1365(f) |
+----+--------------------------+--------------------+
|6 |Board Minutes Access |Civil Code Sec. |
| | |1363.05(e) |
+----+--------------------------+--------------------+
| |Alternative Dispute |Civil Code Sec. |
|7 |Resolution (ADR) Rights |1369.590 |
| |(summary) | |
+----+--------------------------+--------------------+
| |Internal Dispute |Civil Code Sec. |
|8 |Resolution (IDR) Rights |1363.850 |
| |(summary) | |
+----+--------------------------+--------------------+
|9 |Architectural Changes |Civil Code |
| |Notice |Sec.1378(c) |
+----+--------------------------+--------------------+
|10 |Secondary Address |Civil Code Sec. |
| |Notification Request |1367.1(k) |
+----+--------------------------+--------------------+
|11 |Monetary Penalties |Civil Code Sec. |
| |Schedule |1363(g) |
+----+--------------------------+--------------------+
| | | |
+----+--------------------------+--------------------+
|12 |Reserve Funding Plan |Civil Code Sec. |
| |(summary) |1365(b) |
+----+--------------------------+--------------------+
|13 |Review of Financial |Civil Code Sec. |
| |Statement |1365(c) |
+----+--------------------------+--------------------+
|14 |Annual Update of Reserve |Civil Code Sec. |
| |Study |1365(a) |
+----+--------------------------+--------------------+
SEC. 3. Section 1365.2.5 of the Civil Code is amended to read:
1365.2.5. (a) The disclosures required by this article with
regard to an association or a property shall be summarized on the
following form:
Assessment and Reserve Funding Disclosure Summary For the
Fiscal Year Ending _____
(1) The regular assessment per ownership interest is $_____ per
____. Note: If assessments vary by the size or type of ownership
interest, the assessment applicable to this ownership interest may be
found on page _____ of the attached summary.
(2) Additional regular or special assessments that have already
been scheduled to be imposed or charged, regardless of the purpose,
if they have been approved by the board and/or members:
+---------------+----------------+-----------------+
| | Amount per | |
| | ownership | |
| | interest per | |
| | month or year | |
| | (If assessments| |
| | are variable, | |
| | see | |
| Date | note | |
| assessment | immediately | Purpose of the |
| will be due: | below): | assessment: |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| | | |
+---------------+----------------+-----------------+
| |Total: | |
+---------------+----------------+-----------------+
Note: If assessments vary by the size or type of ownership
interest, the assessment applicable to this ownership interest may be
found on page ____ of the attached report.
(3) Based upon the most recent reserve study and other
information available to the board of directors, will currently
projected reserve account balances be sufficient at the end of each
year to meet the association's obligation for repair and/or
replacement of major components during the next 30 years?
Yes _____ No _____
(4) If the answer to (3) is no, what additional assessments or
other contributions to reserves would be necessary to ensure that
sufficient reserve funds will be available each year during the next
30 years that have not yet been approved by the board or the members?
+------------------+-------------+
| | Amount per |
| | ownership |
| Approximate date | interest |
| assessment | per month or|
| will be due: | year: |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| | |
+------------------+-------------+
| |Total: |
+------------------+-------------+
(5) All major components are included in the reserve study and
are included in its calculations.
(6) Based on the method of calculation in paragraph (4) of
subdivision (b) of Section 1365.2.5, the estimated amount required in
the reserve fund at the end of the current fiscal year is $____,
based in whole or in part on the last reserve study or update
prepared by ____ as of ____ (month), ____ (year). The projected
reserve fund cash balance at the end of the current fiscal year is
$____, resulting in reserves being ____ percent funded at this date.
If an alternate, but generally accepted, method of calculation is
also used, the required reserve amount is $____. (See attached
explanation)
(7) Based on the method of calculation in
paragraph (4) of
subdivision (b) of Section 1365.2.5 of the
Civil Code, the estimated
amount required in the reserve fund at the
end of each of the next
five budget years is $______, and the
projected reserve fund cash
balance in each of those years, taking into
account only assessments
already approved and other known revenues,
is $______, leaving the
reserve at ______ percent funding. If the
reserve funding plan
approved by the association is implemented,
the projected reserve
fund cash balance in each of those years
will be $______, leaving the
reserve at ______ percent funding.
Note: The financial representations set forth in
this summary are based on the best estimates of
the preparer at that time. The estimates are
subject to change. At the time this summary was
prepared, the assumed long-term before-tax
interest rate earned on reserve funds was ____
percent per year, and the assumed long-term
inflation rate to be applied to major component
repair and replacement costs was ____ percent per
year.
(b) For the purposes of preparing a summary pursuant to this
section:
(1) "Estimated remaining useful life" means the time reasonably
calculated to remain before a major component will require
replacement.
(2) "Major component" has the meaning used in Section 1365.5.
Components with an estimated remaining useful life of more than 30
years may be included in a study as a capital asset or disregarded
from the reserve calculation, so long as the decision is revealed in
the reserve study report and reported in the Assessment and Reserve
Funding Disclosure Summary.
(3) The form set out in subdivision (a) shall accompany each pro
forma operating budget or summary thereof that is delivered pursuant
to this article. The form may be supplemented or modified to clarify
the information delivered, so long as the minimum information set out
in subdivision (a) is provided.
(4) For the purpose of the report and summary, the amount of
reserves needed to be accumulated for a component at a given time
shall be computed as the current cost of replacement or repair
multiplied by the number of years the component has been in service
divided by the useful life of the component. This shall not be
construed to require the board to fund reserves in accordance with
this calculation.
