Monthly fees entitle owners to information by Elaine Hudson

Q: As a homeowner, how can I see how my association's monthly assessment fee money is being spent?  What documents am I entitled to view?

A: Monthly assessment fees are used to operate the association on a daily basis and to fund the reserves for future replacements.  The amount of your monthly fee is determined by the cost to operate your association as well as the money necessary to set aside for capital replacements. 

 The reserve amounts are determined by a reserve study analysis, which is required by law to be done at least every three years.  This study looks at your association's property and determines the life expectancy and the replacement cost of each item, such as pool heater, spa motors, asphalt, walls, fences, fitness room equipment, recreation room, roofs, painting, irrigation, landscape, etc. 

 The study then looks at your reserve balance and determines how much money should be placed in reserves each month in order to have the proper amount available when the life expectancy of an item ends and has to be replaced.  This amount, added to the monthly cost of doing business for such services and items as utilities, insurance, pool and landscape maintenance are the expenses your budget must cover. 

 A copy of the association's operating budget shall be distributed annually to all owners, not less than 45 days nor more than 60 days prior to the beginning of the association's fiscal year.

 A copy of the association's budget will show you how the assessment money is being spent.  In addition to the budget, the association shall supply the homeowner with a statement describing the association's policies and practices in enforcing lien rights or other legal remedies for default in payments of assessments.  Also included in this mailing is a summary of the association's property, general liability and earthquake and flood insurance policies listing the name of the insurer, the type of insurance, policy limits and deductible amount, if any, and a summary of Civil Code Section 1365.  Most associations also supply the homeowner with the current rules and regulations enforcement policy.

 To clarify, pursuant to California Corporation Code Section 8333, association members have limited inspection rights.  These limited inspection rights of a nondirector member are as follows:

 "The accounting books and records and minutes of proceedings of  the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person's interest as a member."(California Corporation Code Section 8333.)

Members of the association shall have access to association records in accordance with  the Corporation Code. (See Cal. Civ. Code Section 1363 (f).)  "The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any meeting of the board of directors of an association, other than an executive session, shall be available to members within 30 days of the meeting.  The minutes, proposed minutes, or summary minutes shall be distributed to any member of the association upon request and upon reimbursement of the association's costs for making that distribution."

(Civ. Code Section 1363.05 (d))

Elaine Hudson is a member of the Community Associations Institute (CAI) and is a Community Manager with The Prescott Companies.  Readers can visit the CAI website at www.cai-sd.org and can get their condominium or homeowners association questions answered by calling the Community Associations Institute at (619) 299-1376 or e-mail at q&a@cai-sd.org or sending questions to: Condominiums, Homes, San Diego Union-Tribune, P.O. Box 120191, San Diego 92112-0191

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