HOA Law Blog

(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 note    |                 |
|      Date     |                |                 |
|   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 |
| Approximate date |  ownership  |
|    assessment    |   interest  |
|                  | 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.

(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.