BILL NUMBER: AB 899 AMENDED
BILL TEXT
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 Section 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, as amended, 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.
This bill would 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.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1363.005 is added to the Civil Code, to read:
1363.005. The association shall , at the request of any
member, annually distribute to its
those members , subject to Section 1350.7, the
following Disclosure Documents Index:
+--------------------------------------------------+
| Disclosure Documents Index |
+-----+------------------------+-------------------+
|Item |Description |Reference Code |
+-----+------------------------+-------------------+
|1 |Assessment and Reserve |Civil Code Sec. |
| |Funding Summary |1365 |
+-----+------------------------+-------------------+
| 2 |Pro Forma Operating |Civil
Code Sec. |
|2 |Budget and Pro Forma |1365(a) |
| | Operating Budget
Summary|
|1365(a) |
+-----+------------------------+-------------------+
|3 |Pro Forma Operating |Civil Code Sec. |
| | Budget Summary
| 1365(a)
|
+-----+------------------------+-------------------+
| |Assessment Collection |Civil Code Sec. |
| 4 3 |Policy |1365
(e) and |
| | |1367.1(a) |
+-----+------------------------+-------------------+
| 5 4 |Notice Assessments and |Civil
Code |
| |Foreclosure |Sec. 1365.1 |
+-----+------------------------+-------------------+
| 6 5 |Collection Rights and
|Civil Code Sec. |
| |Duties |1365.1 |
+-----+------------------------+-------------------+
| 7 6 |Insurance Coverage
|Civil Code Sec. |
| |Summary |1365(f) |
+-----+------------------------+-------------------+
| 8 7 |Board Minutes Access
|Civil Code Sec. |
| | |1363.05(e) |
+-----+------------------------+-------------------+
| 9 8 |Alternative Dispute
|Civil Code Sec. |
| |Resolution (ADR) Rights |1369.59 |
+-----+------------------------+-------------------+
| 10 9 |Internal Dispute
|Civil Code Sec. |
| |Resolution (IDR) Rights |1363.850 |
+-----+------------------------+-------------------+
|1 1 0 |Architectural Changes
|Civil Code Sec. |
| |Notice |1378 |
+-----+------------------------+-------------------+
|1 2 1 |Secondary Address
|Civil Code Sec. |
| |Notification Request |1367.1(k) |
+-----+------------------------+-------------------+
|1 3 2 |Monetary Penalties
|Civil Code Sec. |
| |Schedule |1363(g) |
+-----+------------------------+-------------------+
| | |Corp. Code Sec. |
|1 4 3 |Annual Report Right to |8321
|
| |Receive |Civil Code Sec. |
| | |1365(c) |
+-----+------------------------+-------------------+
|1 5 4 |Reserve Funding Plan
|Civil Code Sec. |
| |Right to Receive |1365(b) |
+-----+------------------------+-------------------+
SEC. 2. 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
(1) The current 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 ye a nnum r ,
and the assumed long-term
inflation rate to be applied to major component
repair and replacement costs was ____ percent per
ye a nnum r .
(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.