Cal. Civ. Code §5300
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Annual Budget Report — Required Disclosures
Requires the association to distribute an annual budget report 30 to 90 days before the end of its fiscal year. Subsection (b)(1)-(b)(12) enumerates the required contents: pro forma operating budget, reserve summary, reserve funding plan, deferred maintenance statement, projected special assessments, loan summary, insurance summary, FHA/VA certification status (condos), and a copy of the completed §4528 charges-for-documents form. The Assessment and Reserve Funding Disclosure Summary (§5570) must accompany each annual budget report.
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Statutory Text
Verified Oct 17, 2026 · CA_PUBLIC_LAW
Civil Code section 5300 (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: (1) A pro forma operating budget, showing the estimated revenue and expenses on an accrual basis. (2) A summary of the association’s reserves, prepared pursuant to Section 5565 . (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. (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. (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. (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. (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. (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. (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 …
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Disclosure
| Ref | Requirement |
|---|---|
| (b)(11) | The companion to the FHA disclosure at (b)(10), and it is a separate sheet in at least 10-point font carrying a form of words fixed by statute. It applies only to condominium projects. |
| (c) | Preparing the report does not discharge the duty. Section 5320 governs how it reaches the members, and it is the delivery that satisfies the section. |
Financial
| Ref | Requirement |
|---|---|
| (a) | The annual budget report must be distributed in the 30-to-90-day window before fiscal year end. The statutory window overrides any contrary provision in the governing documents. |
| (b) | Subsection (b) introduces the 12-item required-contents list for the annual budget report. Governing documents may impose stricter requirements but cannot relax these statutory minimums. |
| (b)(1) | The annual budget report must include a pro forma operating budget showing estimated revenue and expenses on an accrual basis. Accrual basis is required by statute — cash-basis budgets do not satisfy §5300(b)(1). |
| (b)(12) | The completed §4528 charges-for-documents form — with each document's cost individually itemized — must be included in the annual budget report distribution. Members see the current §4525 disclosure fee schedule once per year through this requirement. |
| (b)(8) | Five facts per loan, and the test is the original term, not the remaining term. A loan written for eighteen months is disclosed in its final quarter. |
| (d) | The reserve summary cannot be used on its own to prove mismanagement. The rest of the financial record stays admissible. |
Insurance
| Ref | Requirement |
|---|---|
| (b)(10) | Condominium projects must disclose whether they are FHA-approved. The disclosure must be in at least 10-point font on a separate piece of paper using the statutorily-prescribed language about FHA certification benefits. |
| (b)(9) | The budget report must include a summary of property, general liability, earthquake, flood, and fidelity insurance — listing insurer name, insurance type, policy limit, and deductible amount. The association may satisfy this by attaching insurance declaration pages. |
Reserves
| Ref | Requirement |
|---|---|
| (b)(2) | The budget report must include a summary of the association's reserves, prepared according to §5565. The detailed Assessment and Reserve Funding Disclosure Summary (§5570) must also accompany the budget report per §5300(e). |
| (b)(3) | The board's reserve funding plan must be summarized in the budget report, with notice that the full reserve study plan is available on request. Members can request and receive the full reserve plan at any time. |
| (b)(4) | A deferral is disclosed with its reason. The trigger is a remaining life of 30 years or less, which reaches far more components than a board usually expects. |
| (b)(5) | Saying a special assessment is coming is not enough. The report has to carry how much, from when, and for how long. |
| (b)(6) | The report names how reserves get funded, and borrowing and deferral are named in the statute as answers -- so an association funding reserves by anything other than assessments still has a disclosure to make, not an omission. |
| (b)(7) | The method is disclosed, the Section 5570(b)(4) formula must be among the calculations shown, and the investment return the plan assumes is capped by statute at 2 percent over the San Francisco Federal Reserve discount rate on the calculation date. |
| (e) | The standardized §5570 disclosure summary form — listing reserve calculations, percent funded, 30-year sufficiency determination, and 5-year projections — must accompany every annual budget report distribution. |
Referenced By
- Cal. Civ. Code §5550 References
Legal Topics
Articles Citing This Statute
- California Resale Disclosures: What the Davis-Stirling Act Requires (a), (b)(4) Primary
Legal references last verified July 4, 2026.
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