Legislative Intent of the Davis Sterling HOA Act

Civil Code 1365.2 etc. which DID pass 2005 - 2006 defines the records owners can inspect. It would make available for inspection, among other things, the Association's general ledger, check register, cancelled checks, invoices, purchase orders, billing statements, and credit card statements for the current year and two prior years. Minutes for all years must also be made available. With some exceptions, the Association must make the current year's records available within 10 days of request and prior years' records must be made available within 30 days of request.

Owners would be entitled to enforce these rights in Small Claims Court and the court could fine violating associations $500 for each denial of an inspection request.

Analysis CARA comments, "In its study of the state's 36,000 common interest developments, the California Research Bureau reported that associations either do not disclose to homeowners how their money is being spent or else they report it inaccurately.

The report also states that between 14-20 percent of all lawsuits filed by shareholders against associations are for financial mismanagement. AB 1098 corrects this lack of disclosure by association boards and lack of knowledge by homeowners. It assures that association shareholders (i.e., homeowners) have access to the association financial records to find out how boards are spending the billions under their control. It makes good fiscal sense that homeowners, who have the biggest financial stake, should be watching the books.
asm_floor.html
Legislative Intent
AB 1098 2005
Get Analysis & more details State Legislative Site
Steve's highlights and "outline" format .pdf