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California · Davis-Stirling Act

The two reports every association owes, every year.

An annual budget report and an annual policy statement, both delivered in the same window, both overriding anything the governing documents say to the contrary. The second one is where a member learns where their notices will be sent — including the ones that decide an election.

Article Civ. Code §§ 5300–5320 Chapter 6, Association Governance · Article 7 Sections 4 Text verified 2026-10-11

One window, two reports

§ 5300(a) and § 5310(a) impose the same deadline in the same words: 30 to 90 days before the end of the fiscal year. It is a window, not a deadline — too early is as much a breach as too late — and § 5300 opens notwithstanding a contrary provision in the governing documents, so bylaws setting a different date do not move it.

A third report runs on its own clock. § 5305 requires a review of the financial statement, prepared under generally accepted accounting principles by a licensee of the California Board of Accountancy, for any fiscal year in which gross income exceeds $75,000 — delivered within 120 days after the year closes, by individual delivery.

Why the policy statement matters to an election

The annual policy statement is usually read as a compliance chore. Five of its twelve items are the notice machinery every election then runs on:

So the statement is not merely informative — it is the standing invitation under which members configure where everything else reaches them. An association that sends it and then keeps a single address per member in its roll has created the contradiction itself.

Full report, or a summary that says how to get the full report

§ 5320 allows a summary instead of the whole document — on one condition with a typographic specification in it. The summary must carry, on the first page, a general description of the content and instructions on requesting the complete report at no cost, printed in at least 10-point boldface type. A statute rarely sets a font size; when it does, it is because the drafters expected the notice to be buried.

And subdivision (b): a member who has asked to receive all reports in full gets the full report, not a summary. That is a second standing election a member can make, tracked per member, alongside the address choice above and the written requests that must be in writing to take effect.

What the budget report contains that nobody reads

Twelve items under § 5300(b), and two of them are statements against interest: whether the board has decided to defer repair of any major component with 30 years or less of life left, and whether it anticipates a special assessment to fund reserves. Subdivision (d) then makes the reserve summary inadmissible to show improper financial management — the disclosure is compelled, and its use as evidence is limited in the same breath.

Civil Code § 5300 — the text

The Annual Budget Report — Contents and Timing
Amended by Stats. 2017, Ch. 127, Sec. 4. (AB 690) Effective January 1, 2018.

(a)Notwithstanding a contrary provision in the governing documents, an association shall distribute an annual budget report 30 to 90 days before the end of its fiscal year.
(b)Unless the governing documents impose more stringent standards, the annual budget report shall include all of the following information:
(b)(1)A pro forma operating budget, showing the estimated revenue and expenses on an accrual basis.
(b)(2)A summary of the association’s reserves, prepared pursuant to Section 5565.
(b)(3)A summary of the reserve funding plan adopted by the board, as specified in paragraph (5) of subdivision (b) of Section 5550. The summary shall include notice to members that the full reserve study plan is available upon request, and the association shall provide the full reserve plan to any member upon request.
(b)(4)A statement as to whether the board has determined to defer or not undertake repairs or replacement of any major component with a remaining life of 30 years or less, including a justification for the deferral or decision not to undertake the repairs or replacement.
(b)(5)A statement as to whether the board, consistent with the reserve funding plan adopted pursuant to Section 5560, has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves therefor. If so, the statement shall also set out the estimated amount, commencement date, and duration of the assessment.
(b)(6)A statement as to the mechanism or mechanisms by which the board will fund reserves to repair or replace major components, including assessments, borrowing, use of other assets, deferral of selected replacements or repairs, or alternative mechanisms.
(b)(7)A general statement addressing the procedures used for the calculation and establishment of those reserves to defray the future repair, replacement, or additions to those major components that the association is obligated to maintain. The statement shall include, but need not be limited to, reserve calculations made using the formula described in paragraph (4) of subdivision (b) of Section 5570, and may not assume a rate of return on cash reserves in excess of 2 percent above the discount rate published by the Federal Reserve Bank of San Francisco at the time the calculation was made.
(b)(8)A statement as to whether the association has any outstanding loans with an original term of more than one year, including the payee, interest rate, amount outstanding, annual payment, and when the loan is scheduled to be retired.
(b)(9)A summary of the association’s property, general liability, earthquake, flood, and fidelity insurance policies. For each policy, the summary shall include the name of the insurer, the type of insurance, the policy limit, and the amount of the deductible, if any. To the extent that any of the required information is specified in the insurance policy declaration page, the association may meet its obligation to disclose that information by making copies of that page and distributing it with the annual budget report. The summary distributed pursuant to this paragraph shall contain, in at least 10-point boldface type, the following statement: “This summary of the association’s policies of insurance provides only certain information, as required by Section 5300 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association’s insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association’s policies of insurance may not cover your property, including personal property or real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage.”
(b)(10)When the common interest development is a condominium project, a statement describing the status of the common interest development as a Federal Housing Administration (FHA)-approved condominium project pursuant to FHA guidelines, including whether the common interest development is an FHA-approved condominium project. The statement shall be in at least 10-point font on a separate piece of paper and in the following form: “Certification by the Federal Housing Administration may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest. This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the Federal Housing Administration.”
(b)(11)When the common interest development is a condominium project, a statement describing the status of the common interest development as a federal Department of Veterans Affairs (VA)-approved condominium project pursuant to VA guidelines, including whether the common interest development is a VA-approved condominium project. The statement shall be in at least 10-point font on a separate piece of paper and in the following form: “Certification by the federal Department of Veterans Affairs may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest. This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the federal Department of Veterans Affairs.”
(b)(12)A copy of the completed “Charges For Documents Provided” disclosure identified in Section 4528. For purposes of this section, “completed” means that the “Fee for Document” section of the form individually identifies the costs associated with providing each document listed on the form.
(c)The annual budget report shall be made available to the members pursuant to Section 5320.
(d)The summary of the association’s reserves disclosed pursuant to paragraph (2) of subdivision (b) shall not be admissible in evidence to show improper financial management of an association, provided that other relevant and competent evidence of the financial condition of the association is not made inadmissible by this provision.
(e)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.

What this section used to say

Read by comparing the Legislative Counsel's biennial publications of the code, one per session. The earliest is the 2013–2014 publication, which already carries the Act in its present numbering, so changes are recorded from the publication after it onward. This matters beyond the record: § 5145 gives a member one year to challenge an election, and the text that governs is the text in force on the day it was held, not today's.

  1. AB 690in force 2018-01-01

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

    5 subdivisions changed

    See what changed
    1. (b)(3)A summary of the reserve funding plan adopted by the board, as specified in paragraph (5) of subdivision (b) of Section 5550. The summary shall include notice to members that the full reserve study plan is available upon request, and the association shall provide the full reserve plan to any member upon request.
    2. (b)(10)When the common interest development is a condominium project, a statement describing the status of the common interest development as a Federal Housing Administration (FHA)-approved condominium project pursuant to FHA guidelines, including whether the common interest development is an FHA-approved condominium project. The statement shall be in at least 10-point font on a separate piece of paper and in the following form: “Certification by the Federal Housing Administration may provide …
    3. (b)(11)When the common interest development is a condominium project, a statement describing the status of the common interest development as a federal Department of Veterans Affairs (VA)-approved condominium project pursuant to VA guidelines, including whether the common interest development is a VA-approved condominium project. The statement shall be in at least 10-point font on a separate piece of paper and in the following form: “Certification by the federal Department of …
    4. (b)(12)A copy of the completed “Charges For Documents Provided” disclosure identified in Section 4528. For purposes of this section, “completed” means that the “Fee for Document” section of the form individually identifies the costs associated with providing each document listed on the form.
    5. (f)This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed.

  2. AB 596in force 2016-01-01

    Amended by Stats. 2015, Ch. 184, Sec. 1. Effective January 1, 2016. Inoperative July 1, 2016. Repealed as of January 1, 2017, by its own provisions. See later operative version added by Sec. 2 of Stats. 2015, Ch. 184.

    2 subdivisions changed

    See what changed
    1. (b)(3)A summary of the reserve funding plan adopted by the board, as specified in paragraph (5) of subdivision (b) of Section 5550. The summary shall include notice to members that the full reserve study plan is available upon request, and the association shall provide the full reserve plan to any member upon request.
    2. (f)This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed.

Reproduced verbatim from the California Legislative Counsel's published text and verified word-for-word against a second source (leginfo (Legislative Counsel official bulk code database, LAW_SECTION_TBL) · California Public Law (Public.Law)). California statutes are government edicts and carry no copyright. This is an unofficial reproduction — the official version is published by the Legislative Counsel at leginfo.legislature.ca.gov, and that version governs.
Machine-readable: /data/5300.json — the same text with its subdivision anchors, dates and sources.

Civil Code § 5305 — the text

Review of the Financial Statement Above $75,000 Gross Income
Added by Stats. 2012, Ch. 180, Sec. 2. (AB 805) Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.

Unless the governing documents impose more stringent standards, a review of the financial statement of the association shall be prepared in accordance with generally accepted accounting principles by a licensee of the California Board of Accountancy for any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000). A copy of the review of the financial statement shall be distributed to the members within 120 days after the close of each fiscal year, by individual delivery pursuant to Section 4040.

Reproduced verbatim from the California Legislative Counsel's published text and verified word-for-word against a second source (leginfo (Legislative Counsel official bulk code database, LAW_SECTION_TBL) · California Public Law (Public.Law)). California statutes are government edicts and carry no copyright. This is an unofficial reproduction — the official version is published by the Legislative Counsel at leginfo.legislature.ca.gov, and that version governs.
Machine-readable: /data/5305.json — the same text with its subdivision anchors, dates and sources.

Civil Code § 5310 — the text

The Annual Policy Statement — Contents and Timing
Amended by Stats. 2021, Ch. 640, Sec. 10. (SB 392) Effective January 1, 2022.

(a)Within 30 to 90 days before the end of its fiscal year, the board shall distribute an annual policy statement that provides the members with information about association policies. The annual policy statement shall include all of the following information:
(a)(1)The name and address of the person designated to receive official communications to the association, pursuant to Section 4035.
(a)(2)A statement explaining that a member may submit a request to have notices sent to up to two different specified addresses, pursuant to Section 4040.
(a)(3)The location, if any, designated for posting of a general notice, pursuant to subdivision (a) of Section 4045.
(a)(4)Notice of a member’s option to receive general notices by individual delivery, pursuant to subdivision (b) of Section 4045.
(a)(5)Notice of a member’s right to receive copies of meeting minutes, pursuant to subdivision (b) of Section 4950.
(a)(6)The statement of assessment collection policies required by Section 5730.
(a)(7)A statement describing the association’s policies and practices in enforcing lien rights or other legal remedies for default in the payment of assessments.
(a)(8)A statement describing the association’s discipline policy, if any, including any schedule of penalties for violations of the governing documents pursuant to Section 5850.
(a)(9)A summary of dispute resolution procedures, pursuant to Sections 5920 and 5965.
(a)(10)A summary of any requirements for association approval of a physical change to property, pursuant to Section 4765.
(a)(11)The mailing address for overnight payment of assessments, pursuant to Section 5655.
(a)(12)Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.
(b)The annual policy statement shall be made available to the members pursuant to Section 5320.

Sources differ. Text taken verbatim from the Legislative Counsel of California official code database and checked word for word against an independent publisher. The two sources disagree on one word: the official database reads “Sections 5920 and 5965” where california.public.law reads “Section”. The plural is what the Legislative Counsel publishes and is what the citation list requires. The same substitution appears at §§ 4210, 5310, 5350 and 5375 — in every case immediately before a list of two or more section numbers, and nowhere else, which is where the second source's own citation-linking rewrites the word.

What this section used to say

Read by comparing the Legislative Counsel's biennial publications of the code, one per session. The earliest is the 2013–2014 publication, which already carries the Act in its present numbering, so changes are recorded from the publication after it onward. This matters beyond the record: § 5145 gives a member one year to challenge an election, and the text that governs is the text in force on the day it was held, not today's.

  1. SB 392in force 2022-01-01

    Amended by Stats. 2021, Ch. 640, Sec. 10. (SB 392) Effective January 1, 2022.

    2 subdivisions changed

    See what changed
    1. (a)(2)… to two different specified addresses, pursuant to subdivision (b) of Section 4040.
    2. (a)(3)The location, if any, designated for posting of a general notice, pursuant to paragraph (3) of subdivision (a) of Section 4045.

Reproduced verbatim from the California Legislative Counsel's published text and verified word-for-word against a second source (leginfo (Legislative Counsel official bulk code database, LAW_SECTION_TBL) · California Public Law (Public.Law)). California statutes are government edicts and carry no copyright. This is an unofficial reproduction — the official version is published by the Legislative Counsel at leginfo.legislature.ca.gov, and that version governs.
Machine-readable: /data/5310.json — the same text with its subdivision anchors, dates and sources.

Civil Code § 5320 — the text

Delivering a Report in Full or in Summary
Amended by Stats. 2021, Ch. 640, Sec. 11. (SB 392) Effective January 1, 2022.

(a)When a report is prepared pursuant to Section 5300 or 5310, the association shall deliver one of the following documents to all members by individual delivery pursuant to Section 4040:
(a)(1)The full report.
(a)(2)A summary of the report that includes, on the first page, a general description of the content of the report and instructions, printed in at least 10-point boldface type, regarding how to request a complete copy of the report at no cost to the member.
(b)Notwithstanding subdivision (a), if a member has requested to receive all reports in full, the association shall deliver the full report to that member, rather than a summary of the report.

What this section used to say

Read by comparing the Legislative Counsel's biennial publications of the code, one per session. The earliest is the 2013–2014 publication, which already carries the Act in its present numbering, so changes are recorded from the publication after it onward. This matters beyond the record: § 5145 gives a member one year to challenge an election, and the text that governs is the text in force on the day it was held, not today's.

  1. SB 392in force 2022-01-01

    Amended by Stats. 2021, Ch. 640, Sec. 11. (SB 392) Effective January 1, 2022.

    2 subdivisions changed

    See what changed
    1. (a)… one of the following documents to all members, members by individual delivery pursuant to Section 4040:
    2. (a)(2)A summary of the report. The summary shall include report that includes, on the first page, a general description of the content of the report. Instructions on report and instructions, printed in at least 10-point boldface type, regarding how to request a complete copy of the report at no cost to the member shall be printed in at least 10-point boldface type on the first page of the summary. member.

Reproduced verbatim from the California Legislative Counsel's published text and verified word-for-word against a second source (leginfo (Legislative Counsel official bulk code database, LAW_SECTION_TBL) · California Public Law (Public.Law)). California statutes are government edicts and carry no copyright. This is an unofficial reproduction — the official version is published by the Legislative Counsel at leginfo.legislature.ca.gov, and that version governs.
Machine-readable: /data/5320.json — the same text with its subdivision anchors, dates and sources.

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