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November 2, 2005
HOA Disclosures and Budgets
Here is a common question coming from website visitors in the last two weeks ("budget time") being the trigger I assume.
"We are ready to send out our association budget for voting; what other items must be sent out and can you refer me to someplace I can get them without having to pay?"
Whoa just a minute. [In California] ... The Board should not be submitting the budget for a vote of the members UNLESS the governing documents require member approval. The Board is responsible to determine the budget, and the assessments are that are needed to meet the budget. There is no point in seeking owner approval unless there is a proposal to raise the regular assessments or impose a special assessment that exceed the legal limits of Civil Code Section 1366. And even then, if the amount of assessment triggers the need for owner approval, take care to determine what percentage is required. Read the statute (and try to understand it) - it has a lower percentage than what some governing documents require for approval of certain assessments.
I suggest that you do not create unnecessary stress during this time of the year. If there is no owner approval requirement, don't offer it up as a choice, because if the owners vote it down, what do you plan to do then? Board members can be sued for collecting insufficient funds to meet the needs of the Association. Individual owners cannot (under most circumstances), so who should decide?
That issue aside, you can access (for California requirements) most if not all of the forms required to be sent on the first page of the condoguru website, but you probably already know this if you came from that direction. If on the other hand you came to this blog through communityassociations.net (which is a very good resource by the way), check out the californiacondoguru website for yourself. You will find a TON of helpful information including an annual checklist for disclosures and most of the forms needed. Remember, the distribution timeframe for 2005 was extended to the "not less than 30 nor more than 90 days prior to the beginning of the fiscal year." The 15 day window period of the past is gone (but not forgotten!).
Posted by Beth Grimm at November 2, 2005 2:41 PM