Glossary of Terms

an accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made

The other accounting methods include:

• Cash basis
• Modified Accrual (or Modified Cash or Hybrid) basis

https://www.investopedia.com/terms/a/accrualaccounting.asp

https://www.investopedia.com/terms/c/cashbasis.asp

https://www.investopedia.com/terms/m/modified-accrual-accounting.asp

CA Civ. Code § 5200

the report distributed by the HOA 30 to 90 days before the end of its fiscal year

Unless the governing documents impose more stringent standards,

• the HOA must provide a report on its yearly budget 30 to 90 days before the end of its financial year
• the annual budget report shall include all of the following information described in Section 5300
• the annual budget report shall be made available to the members pursuant to Section 5320
• the Assessment and Reserve Funding Disclosure Summary form, prepared pursuant to Section 5570, shall accompany each annual budget report or summary of the annual budget report that is delivered pursuant to this article.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4076

CA Civ. Code § 5300

CA Civ. Code § 5320

CA Civ. Code § 5570

CA Civ. Code § 5600

the financial plan for an HOA which estimates income, expenses, and reserves for the year

See also pro forma budget

CA Civ. Code § 5300

Read our article How to Create a HOA Budget: A Step-by-Step Guide with a Free Template

Read our article How to Prepare an Annual Budget Report for Your California HOA with a Free Template

the statement described in Section 5310

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4078

CA Civ. Code § 5310

the group that manages the aesthetic or architectural standards that govern alterations of a separate interest, including the application and approval process

The architectural guidelines are typically found in the Covenants, Conditions, and Restrictions (CC&Rs) or in the Architectural Control Guidelines section of the governing documents. Sometimes the guidelines may also be found in a separate document titled Architectural Standards or Architectural Review Committee (ARC) Guidelines.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 4355

the basic charter of a corporation which spells out the name, basic purpose, incorporators, amount and types of stock which may be issued, and any special characteristics such as being non-profit

Each state has its own system of approval of articles, prohibits names which are confusingly similar to those of existing corporations (so an incorporator can test the name by applying to reserve the name), sets specific requirements for non-profits (charitable, religious, educational, public benefit, and so forth), and regulates the issuance of shares of stock. Articles must be signed by the incorporating person or persons or by the first board of directors. Major stock issuances require application to the Securities and Exchange Commission. The starting point for filing and approval of articles of incorporation is usually the state's Secretary of State. There will be a fee and, often, a deposit of an estimated first year's taxes.

https://dictionary.law.com/Default.aspx?typed=articles of incorporation&type=1

the fee that homeowners are required to pay to an association

There are two types of assessments:

• Regular assessment: recurring fees, also known as "dues", usually paid monthly or annual, for the routine maintenance and operations of the community
• Special assessment: one-time or non-recurring fees levied to cover unexpected or large expense, like major repairs or improvements that are not covered by regular assessments

Establishment and Imposition of Assessments

1. Except in certain cases outlined in Section 5605, the association must charge regular and special fees that are enough to meet its responsibilities under its rules and this law.
2. The association cannot charge or collect a fee that is more than what is needed to cover the costs for which the fee is intended.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 5600

1. Annual increases in regular fees for any fiscal year can only be imposed if the board follows the steps listed in paragraphs (1), (2), (4), (5), (6), (7), and (8) of subdivision (b) of Section 5300 for that fiscal year, or if the majority of members present at a meeting or election (with a valid quorum as described in Section 4070) approve it.
2. Even if the HOA's rules are stricter, the board cannot raise regular fees by more than 20% compared to the previous year or impose special fees that, together, are more than 5% of the association's budgeted expenses for that year, unless a majority of members present at a meeting or election approve it (with a valid quorum as described in Section 4070).
3. 1. 1. For an HOA created after January 1, 2025, even if the HOA's rules are stricter, the board cannot raise the regular fees for owners of deed-restricted affordable housing units by more than 5% plus the percentage increase in the cost of living, but the total increase cannot exceed 10%.
      2. The “percentage change in the cost of living” refers to the change from April 1 of the previous year to April 1 of the current year, based on the regional Consumer Price Index (CPI) for the area where the property is located, published by the U.S. Bureau of Labor Statistics. If there is no regional index, the California CPI for All Urban Consumers, published by the Department of Industrial Relations, will apply.
   2. For an HOA created after January 1, 2025, the board can charge lower fees to owners of deed-restricted affordable housing units than it charges other owners, as long as the fees are proportionate to their ownership in the development.
   3. This section does not apply to the following cases:
      1. A development where the percentage of deed-restricted affordable housing units exceeds the zoning requirement in place when the project was approved.
      2. A development in a city or county without a zoning ordinance requiring a percentage of affordable units, as long as one of the following is true:
         1. The percentage of deed-restricted affordable units is more than 10% of the total units in the development at the time it was approved.
         2. If the project met the requirements in the Government Code (Section 65912.122) and was approved under Section 65912.124, more than 15% of the units are deed-restricted affordable housing.
      3. A development with 20 units or fewer.
4. For the purposes of this section, the following definitions apply:
   1. "Affordable housing unit" refers to a unit occupied by, or affordable to, lower and moderate-income households as defined in Sections 50079.5 and 50052.5 of the Health and Safety Code.
   2. "Final approval" has the same meaning as defined in Section 65589.5 of the Government Code.
   3. "Quorum" means more than 50% of the members.

(Amended by Stats. 2023, Ch. 745, Sec. 1. (AB 572) Effective January 1, 2024.)

CA Civ Code § 5605

Section 5610 does not limit assessment increases necessary for emergency situations. For purposes of this section, an emergency situation is any of the following:

1. An extraordinary expense required by an order of a court
2. An extraordinary expense necessary to repair or maintain the common interest development or any part of it for which the association is reponsible where a threat to personal safety on the properyt is discovered.
3. An extraorderinary expense needed to fix or maintain the common property that the board couldn't have reasonably predicted when creating the annual budget report. However, before charging this fee, the board must pass a resolution explaining why the expense is necessary and why it wasn't or couldn't have been foreseen. This explanation must be shared with the members along with the notice of the fee.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 5610

The association must give members individual notice, according to Section 4040, about any increase in regular or special assessments. This notice must be given at least 30 days, but no more than 60 days, before the increased assessment is due.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 5615

1. Regular assessment that the association collects to meet its responsibilities under its rules or this law are protected from being taken by someone who has won a lawsuit against the association, but only if those assessments are needed to pay for essential services like utilities and insurance. A court will decide if the exemption is appropriate and ensure that only essential services are protected.
2. This protection does not apply to any agreed-upon pledges, liens, or debts approved by a majority of members present at a meeting or election, nor does it apply to state tax liens or liens for work or materials provided to the common area.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 5620

1. Unless the association was already charging assessments based on property taxes before December 31, 2009, it cannot start charging assessments based on the taxable value of individual units, even if the governing documents say otherwise.
2. If the association is responsible for paying taxes on individual units within the community, it can charge assessments based on the taxable value of those units, but only to cover the portion of the fees that goes toward paying those taxes.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 5625

a non-profit corporation or unincorporated association created for the purpose of managing a common interest development

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 4080

1. A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board
2. A teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the association and otherwise complies with the requirements of this act. Except for a meeting that will be held solely in executive session or conducted under Section 5450, the notice of the teleconference meeting shall identify at least one physical location so that members of the association may attend, and at least one director or a person designated by the board shall be present at that location. Participation by directors in a teleconference meeting constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board.

(Amended by Stats. 2021, Ch. 276, Sec. 1. (SB 391) Effective September 23, 2021.)

CA Civ. Code § 4090

the elected body that governs a common interest development

https://dictionary.law.com/Default.aspx?selected=80

the written rules for conduct of a corporation, association, partnership or any organization

They should not be confused with the articles of incorporation, which only state the basic outline of the company, including stock structure. Bylaws generally provide for meetings, elections of a board of directors and officers, filling vacancies, notices, types and duties of officers, committees, assessments and other routine conduct. Bylaws are in effect a contract among members and must be formally adopted and/or amended.

https://dictionary.law.com/Default.aspx?selected=115

a source of funds that the HOA can use to repair and replace major capital facilities, buildings, and equipment of the association.

Also known as "reserve funds" or simply "reserves"

Unless the governing documents require more stringent standards, the board must review on a monthly basis:

1. A current reconciliation of the association's operating accounts
2. A current reconciliation of the association's reserve accounts
3. The current year's actual operating revenues and expenses compared to the current year's budget.
4. The latest account statements prepared by the financial institutions where the association has its operating and reserve accounts
5. An income and expense statement for the association's operating and reserve accounts.
6. The check register, monthly general ledger, and delinquent assessment receivable reports.

CA Civ. Code § 5500

Use of Reserve Funds

1. The signatures of at least two persons, who shall be directors, or one officer who is not a director and one who is a director, shall be required for the withdrawal of moneys from the association's reserve accounts
2. The board shall not expend funds designated as reserve funds for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, major components that the association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 5510

Reserve Planning

1. The reserve funding plan required by Section 5550 shall include a schedule of the date and amount of any change in regular or special assessments that would be needed to sufficiently fund the reserve funding plan
2. The plan shall be adopted by the board at an open meeting before the membership of the association as described in Article 2 (commencing with Section 4900) of Chapter 6
3. If the board determines that an assessment increase is necessary to fund the reserve funding plan, any increase shall be approved in a separate action of the board that is consistent with the procedure described in Section 5605

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 5560

an accounting method that recognizes income and expenses at the time cash is received or paid out

The other accounting methods include:

• Accrual
• Modified Accrual (or Modified Cash or Hybrid)

https://www.investopedia.com/terms/a/accrualaccounting.asp

https://www.investopedia.com/terms/c/cashbasis.asp

https://www.investopedia.com/terms/m/modified-accrual-accounting.asp

CA Civ. Code § 5200

the entire common interest development except the separate interests

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4095

1. A community apartment project
2. A condominium project
3. A planned development
4. A stock cooperative

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4100

a development in which an undivided interest in land is coupled with the right of exclusive occupancy of any apartment located upon it

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4105

1. a non-profit entity, other than an association, that is organized to provide services to residents of the common interest development or to the public in addition to the residents, to the extent community common area or facilities are available to the public
2. "Community service organization or similar entity" does not include an entity that has been organized solely to raise moneys and contribute to other non-profit organizations that are qualified as tax exempt under Section 501(c)(3) of the Internal Revenue Code and that provide housing or housing assistance.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4110

a plan described in CA Civ. Code Section 4285

A condominium plan shall contain all of the following:

1. A description or survey map of a condominium project, which shall refer to or show monumentation on the ground.
2. A three-dimensional description of a condominium project, one or more dimensions of which may extend for an indefinite distance upwards or downwards, in sufficient detail to identify the common area and each separate interest.
3. A certificate consenting to the recordation of the condominium plan pursuant to this act that is signed and acknowledged as provided in Section 4290.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4120

1. a real property development consisting of condominiums
2. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. The area within these boundaries may be filled with air, earth, water, or fixtures, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support. The description of the unit may refer to (1) boundaries described in the recorded final map, parcel map, or condominium plan, (2) physical boundaries, either in existence, or to be constructed, such as walls, floors, and ceilings of a structure or any portion thereof, (3) an entire structure containing one or more units, or (4) any combination thereof.
3. The portion or portions of the real property held in undivided interest may be all of the real property, except for the separate interests, or may include a particular three-dimensional portion thereof, the boundaries of which are described on a recorded final map, parcel map, or condominium plan. The area within these boundaries may be filled with air, earth, water, or fixtures, or any combination thereof, and need not be physically attached to land except by easements for access and, if necessary, support.
4. An individual condominium within a condominium project may include, in addition, a separate interest in other portions of the real property.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4125

a recorded documentation that contains a legal description of the development and a statement that is a community apartment project, condominium project, planned development, or stock cooperative

The declaration must additionally include the name of the association and the restrictions on the use or enjoyment of property.

CC&Rs describe property rights and obligations of the membership, such as

1. restrictions on the use of property
2. member and association maintenance duties
3. enforcement powers
4. lender protection provisions
5. duty to insure
6. dispute resolution and attorneys' fees provisions

CA Civ. Code § 4250

the largest body of law regulating community associations in California

Other laws impacting HOAs include the Business & Professions Code, Civil Code, Code of Regulations, Corporations Code, Government Code, Health & Safety Code, Penal code, Tax Code, and the Vehicle Code.

the person or group of persons designated in the declaration as declarant, or if no declarant is designated, the person or group of persons who sign the original declaration or who succeed to special rights, preferences, or privileges designated in the declaration as belonging to the signator of the original declaration

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4130

a natural person who serves on the board

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4140

The Corporations Code defines "directors" as natural persons designated...elected or appointed...to act as members of the governing body of the corporation. A person who does not have authority to act as a member of the governing body of the corporation, including through voting rights as a member of the governing body, is not a director.

(Amended by Stats. 2015, Ch. 303, Sec. 45. (AB 731) Effective January 1, 2016.)

CA Corp. Code § 5047

the insurance for individual liability of directors and officers of the association for negligent acts or ommissions in their capacity

The association is required to maintain insurance that includes coverage for:

1. General liability of the association
2. Individual liablity of directors and officers (D&O insurance) of the association for negligent acts or ommissions in that capacity

The minimum directors and officers insurance required is:

1. At least $500,000 for developements with 100 or fewer units
2. At least $1 million for developments with more than 100 units

The minimum general liability insurance required to protect the individual owners through the association's coverage is:

1. At least $2 million for developements with 100 or fewer units
2. At least $3 million for developments with more than 100 units

CA Civ. Code § 5800

CA Civ. Code § 5805

Read our article Understanding Your HOA's Master Insurance Policy

1. a portion of the common area designated by the declaration for the exclusive use of one or more, but fewer than all, of the owners of the separate interests and which is or will be appurtenant to the separate interest or interests
2. Unless the declaration otherwise provides, any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios, exterior doors, doorframes, and hardware incident thereto, screens and windows or other fixtures designed to serve a single separate interest, but located outside the boundaries of the separate interest, are exclusive use common area allocated exclusively to that separate interest.
3. Notwithstanding the provisions of the declaration, internal and external telephone wiring designed to serve a single separate interest, but located outside the boundaries of the separate interest, is exclusive use common area allocated exclusively to that separate interest.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4145

the ethical and moral obligation of the Board to make decisions for the benefit of everyone in the community

also known as Commercial General Liability (CGL), a type of insurance that protects an HOA from "general" claims involving bodily injuries and property damage

The association is required to maintain insurance that includes coverage for:

1. General liability of the association
2. Individual liablity of directors and officers (D&O insurance) of the association for negligent acts or ommissions in that capacity

The minimum directors and officers insurance required is:

1. At least $500,000 for developements with 100 or fewer units
2. At least $1 million for developments with more than 100 units

The minimum general liability insurance required to protect the individual owners through the association's coverage is:

1. At least $2 million for developements with 100 or fewer units
2. At least $3 million for developments with more than 100 units

CA Civ. Code § 5800

CA Civ. Code § 5805

Read our article Understanding Your HOA's Master Insurance Policy

the delivery of a document pursuant to Section 4045

1. If a provision of this act requires "general delivery" or "general notice," the document shall be provided by one or more of the following methods:
   1. Any method provided for delivery of an individual notice pursuant to Section 4040.
   2. Inclusion in a billing statement, newsletter, or other document that is delivered by one of the methods provided in this section.
   3. Posting the printed document in a prominent location that is accessible to all members, if the location has been designated for the posting of general notices by the association in the annual policy statement prepared pursuant to Section 5310.
   4. If the association broadcasts television programming for the purpose of distributing information on association business to its members, by inclusion in the programming.
   5. If the association maintains an internet website for the purpose of distributing information on association business to its members, by posting the notice on the association's internet website in a prominent location that is accessible to all members if designated as a location for posting general notices in the annual policy statement prepared pursuant to Section 5310.
2. Notwithstanding subdivision (a), if a member requests to receive general notices by individual delivery, all general notices to that member, given under this section, shall be delivered pursuant to Section 4040. The option provided in this subdivision shall be described in the annual policy statement prepared pursuant to Section 5310.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4148

the declaration and any other documents, such as bylaws, operating rules, articles of incorporation, or articles of association, which govern the operation of the common interest development or association

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4150

a non-profit organization made up of volunteers and a governing body that makes an enforces rules for a subdivision of homes, condominium complex, or planned development

HOAs can be incorporated or unincorporated. It is formed for the purpose of managing a residential development. HOAs are generally associated with developments consisting of single family homes (SFH) on individual lots. The homes can either be detached, stand alone structures or they can be townhomes. In the Davis-Stirling Act, it falls under the category of planned developments.

* This website generally uses Homeowners Association or HOA as a catch-all. There are many variations in the usage of this term, such as homeowner association, homeowner's association, home owner association. Others insist that HOA can only refer to single-family planned developments and prefer community association or condominium owners association (COA).

the delivery of a document pursuant to Section 4040

1. 1. If a provision of this act requires an association to deliver a document by "individual delivery" or "individual notice," the association shall deliver that document in accordance with the preferred delivery method specified by the member pursuant to Section 4041.
   2. If the member has not provided a valid delivery method pursuant to Section 4041, the association shall deliver the document by first-class mail, registered or certified mail, express mail, or overnight delivery by an express service carrier addressed to the recipient at the address last shown on the books of the association.
2. Upon receipt of a request by a member identifying a secondary email or mailing address for delivery of notices, pursuant to Section 5260, the association shall deliver an additional copy of both of the following to the secondary address identified in that request:
   1. The documents to be delivered to the member pursuant to Article 7 (commencing with Section 5300) of Chapter 6.
   2. The documents to be delivered to the member pursuant to Article 2 (commencing with Section 5650) of Chapter 8 and Section 5710.
3. 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 to that method of delivery.
4. This section shall become operative on January 1, 2023.

(Repealed (in Sec. 1) and added by Stats. 2021, Ch. 640, Sec. 2. (SB 392) Effective January 1, 2022. Operative January 1, 2023, by its own provisions.)

CA Civ. Code § 4153

any action within the authority of the board, except those actions that the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4155

two or more associations that have consolidated any of their functions

Members of each participating association are

1. entitled to attend all meetings of the joint association other than executive sessions
2. given reasonable opportunity for participation in those meetings, and
3. entitled to the same access to the joint association's records as they are to the participating association's records

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 4820

1. a person who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development
2. A "managing agent" does not include any of the following:
   1. A regulated financial institution operating within the normal course of its regulated business practice.
   2. An attorney at law acting within the scope of the attorney's license.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ Code § 4158

insurance that covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.

Insuring a Co-Op or Condo

Read our article Understanding Your HOA's Master Insurance Policy

See board meeting

the official and required records of the proceedings of its members, board, and committees of the board.

1. Every corporation must keep:
   • Accurate and complete financial records
   • Written records (minutes) of meetings for members, the board, and the board committees
   • A list of members with their names, addresses, and type of membership
2. These records can be kept either on paper or in a format that can be turned into a readable physical copy, or both. If records are stored in a format that can be converted into paper form, the paper copy will be treated the same as an original paper record in legal matters, as long as it’s an accurate copy.

(Amended by Stats. 2004, Ch. 254, Sec. 27. Effective January 1, 2005.)

CA Corp Code § 8320

The minutes of any board meeting, other than an executive session, must be available to members within 30 days of the meeting. The >minutes must be distributed to any member upon request and upon reimbursement of the association's costs for making that distribution.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4950

The minutes of member and board meetings are subject to inspection. If a committee has decisionmaking authority, minutes of the meetings of that committee shall be made available starting January 1, 2007, and must be permanently subject to inspection.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 5299

Read our article How to Take HOA Meeting Minutes; A Step-by-Step Guide with a Free Template

Read our article How to Run an Effective HOA Board Meeting: A Step-by-Step Guide with a Free Agenda Template & Reference Sheet

an owner of a separate interest

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4160

an accounting method that combines accrual basis accounting with cash basis accounting

Modified accrual is allowed under the Davis-Stirling Act Civ. Code § 5200. Associations using modified accrual typically record assessments when due (accrual basis) but record expenses when paid (cash basis).

The other accounting methods include:

• Accrual basis
• Cash basis

https://www.investopedia.com/terms/a/accrualaccounting.asp

https://www.investopedia.com/terms/c/cashbasis.asp

https://www.investopedia.com/terms/m/modified-accrual-accounting.asp

CA Civ. Code § 5200

1. a regulation adopted by the board that applies generally to the management and operation of the common interest development (CID) or the conduct of the business and affairs of the association
2. "Rules change" means the adoption, amendment, or repeal of an operating rule by the board.

Rules and regulations are sometimes called “HOA Rules,” “House Rules,” or simply “Rules.”

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4340

a natural person, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, limited liability company, association, or other entity.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4170

a real property development other than a community apartment project, a condominium project, or a stock cooperative, having either or both of the following features:

1. Common area that is owned either by an association or in common by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.
2. Common area and an association that maintains the common area with the power to levy assessments that may become a lien upon the separate interests in accordance with Article 2 (commencing with Section 5650) of Chapter 8.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4175

an operating budget showing estimated revenue and expenses on an accrual basis

"Pro forma" is from the Latin meaning "according to form."

(Amended by Stats. 2017, Ch. 127, Sec. 4. (AB 690) Effective January 1, 2018.)

CA Civ. Code § 5300

CA Civ. Code § 5320

How to Create a HOA Budget: A Step-by-Step Guide with a Free Template

How to Prepare an Annual Budget Report for Your California HOA with a Free Template

the number of people required to be present before a meeting can conduct business.

Unless stated differently in bylaws, articles, regulations or other rules established by the HOA, a quorum is usually a majority of members. A quorum for meetings of corporate boards of directors, homeowners associations, clubs and shareholders meetings are usually set in the bylaws.

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the estimated funds that the board has determined are required to be available at a specified point in time to repair, replace, or restore those major components that the association is obligated to maintain

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014 by Sec. 3 of Ch. 180.)

CA Civ. Code § 4178

1. Moneys that the board has identified for use to defray the future repair or replacement of, or additions to, those major components that the association is obligated to maintain.
2. The funds received, and not yet expended or disposed of, from either a compensatory damage award or settlement to an association from any person for injuries to property, real or personal, arising from any construction or design defects. These funds shall be separately itemized from funds described in subdivision (a).

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4177

a long-term capital budget planning tool, completed at least once every 3 years, identifying the current status of the reserve fund and a stable and equitable funding plan to offset ongoing deterioration, resulting in sufficient funds when those anticipated major common area expenditures actually occur

The reserve study process can be simplified as follows:

1. A reserve company retained by the board identifies all major common area components, the cost to repair/replace them, and their remaining life span.
2. The reserve company calculates how much money is needed and when.
3. The board decides how to fund the reserves--whether through increased assessment contributions, special assessments or a combination of the two.
4. The funding plan is annually disclosed to the membership in the year-end budgeting process.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 5550

1. a regulation adopted by the board that applies generally to the management and operation of the common interest development (CID) or the conduct of the business and affairs of the association
2. “Rules change” means the adoption, amendment, or repeal of an operating rule by the board.

Rules and regulations are sometimes called “HOA Rules,” “House Rules,” or simply “Rules.”

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4340

a community association that is solely managed by an HOA board of directors elected by homeowners

1. 1. In a community apartment project, "separate interest" means the exclusive right to occupy an apartment, as specified in Section 4105
   2. In a condominium project, "separate interest" means a separately owned unit, as specified in Section 4125
   3. In a planned development, "separate interest" means a separately owned lot, parcel, area, or space
   4. In a stock cooperative, "separate interest" means the exclusive right to occupy a portion of the real property, as specified in Section 4190
2. Unless the declaration or condominium plan, if any exists, otherwise provides, if walls, floors, or ceilings are designated as boundaries of a separate interest, the interior surfaces of the perimeter walls, floors, ceilings, windows, doors, and outlets located within the separate interest are part of the separate interest and any other portions of the walls, floors, or ceilings are part of the common area.
3. The estate in a separate interest may be a fee, a life estate, an estate for years, or any combination of the foregoing.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4185

1. a development in which a corporation is formed or availed of, primarily for the purpose of holding title to, either in fee simple or for a term of years, improved real property, and all or substantially all of the shareholders of the corporation receive a right of exclusive occupancy in a portion of the real property, title to which is held by the corporation. The owners' interest in the corporation, whether evidenced by a share of stock, a certificate of membership, or otherwise, shall be deemed to be an interest in a common interest development and a real estate development for purposes of subdivision (f) of Section 25100 of the Corporations Code
2. A "stock cooperative" includes a limited equity housing cooperative which is a stock cooperative that meets the criteria of Section 817.

(Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

CA Civ. Code § 4190

CA Corp Code § 25100

two or more persons have an interest in a property but there is no way to identify which part he or she owns

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