By now, most of us have heard about AB805 and AB806 being chaptered. The new laws created by these bills will take effect on January 1, 2014. While the changes appear fairly widespread, they are designed to make the code easier to read and understand. The entire Act has been renumbered and similar provisions have been placed together for ease of reference. While we will have to re-learn an entirely different set of numbers for our old favorite code sections, the change should make things easier for everyone.
One area that has been cleaned up deals with Annual Disclosures and Reports. The current Act has requirements for various annual disclosures in Civil Code Sections 1363.005, 1365, 1365.5, 1365.2.5, 1363.05, 1363.850, 1369.590, 1378, 1365.1, 1363, and when dealing with transfer of interests, disclosure of documents is also discussed in 1368.
With the passage of AB805 and AB806, annual reports will be conveniently located in Civil Code Sections 5300 to 5320. The new sections are fairly short, very direct and simple to read and follow. Briefly noted, these sections require as follows:
Section 5300 requires an association to distribute an annual budget report 30-90 days before the end of the fiscal year and specifies minimum standards for items to be included in the budget report.
Section 5305 requires associations with gross income in any fiscal year exceeding $75,000 to obtain a review of the financial statements by a licensee of the California Board of Accountancy.
Section 5310 requires an association to distribute an annual policy statement within 30-90 days before the end of its fiscal year and describes the information to be included.
Section 5320 details how the reports required by 5300 or 5310 are to be delivered.
The myriad of changes made to the Act by AB805 and AB806 are not to be feared. Sure, things are changing, but no one ever said change was always a bad thing. At least with reference to figuring out what annual disclosures your association has to make, this change is a good thing.