Glossary of Terms: A

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