An annual California Civil Code disclosure requirement. This disclosure requirement was initiated by the California Association of Realtors. This document primarily summarizes information contained in the annual pro forma operating budget, and adds further disclosures on replacement reserve funding.
This is required by the California Civil Code to be disclosed in both the assessments and reserve funding disclosure summary and the pro forma operating budget each year – for each different unit type if assessments are not equal for all units. For associations with variable assessments (e.g. those that vary, in whole or in part, by square footage), they must be computed each year in accordance with the formula(s) in the association’s governing documents .
An annual California Civil Code disclosure requirement. This is the primary budget disclosure document for California community associations, and is required to be prepared on the accrual basis of accounting. Under the accrual basis of accounting, the annual wearing out of reserve components is disclosed as an expense even if there are no (cash basis) reserve expenditures projected for the coming budget year.
Information from annual update of the reserve funding plan (which is usually a 30-year cash flow projection of replacement reserve receipts and expenditures) is required to be disclosed in both the assessment and reserve funding plan, and the pro forma operating budget. It is not generally sufficient, under the California Civil Code, to simply rely upon repeated disclosure of information contained in a reserve study which may have been prepared once every 3 years.
