Annual Policy Statement Overview

The Annual Policy Statement is one of two main collections of disclosures required under the New Davis-Stirling Act. The second main collection of disclosures is contained in the Annual Budget Report. Formerly, the individual disclosures contained in each report were part of a single disclosure package, often called the “annual budget package.” For more information about how disclosures are organized under the New Davis-Stirling Act, click here.

Format and Delivery

The Annual Policy Statement is a report that contains important information about policies that govern the members of an association. Effective January 1st, 2014, the board is required to prepare and distribute this report within 30-90 days before the end of the association’s fiscal year. The report must be prepared pursuant to Civil Code Section 5310, and the association must deliver one of the following documents by individual delivery (§4040) to each member:

  1. The full report, if requested.
  2. A summary of the report that includes a general description of the content of the report. Instructions on how to request a complete copy of the report must be printed in at least 10-point boldface type on the first page of the summary.

Required Elements of the Annual Policy Statement

Unless governing documents impose more stringent standards, the association is required to prepare and distribute to each of its members the following documents (or summary) 30 -90 days before the end of the fiscal year.

Name and Address

The association must disclose the name and address of the person designated to receive official communications for the association, pursuant to Civil Code Section 4035, and the mailing address for overnight payment of assessments (§5655(c)).

Statement of Right to Receive Notices

The association must include a statement explaining members’ right to submit a request to have notices sent to two additional specified addresses, pursuant to §4040(b).

Posting General Notices

The Policy Statement must disclose the location, if any, designated for posting a general notice, pursuant to §4045(a)(3).

Notice of Specific Rights

The association must include a notice of members’ option to receive general notices by individual delivery upon request (§4045(b)), as well as notice of members’ right to receive copies of meeting minutes (§4950(b)).

Notice of Collection Rights & Duties – Form

This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them.

To learn more about collection rights and duties, click here.

View the form here: §5730

Discipline Policy

Any association that has a policy regarding monetary penalties is required to adopt and distribute to each member a schedule of these penalties, in accordance with authorization for member discipline contained in the governing documents (§5850).

Click the link to learn about the Discipline Policy requirements.

Dispute Resolution Summary

The Annual Policy Statement must include a description of the internal dispute resolution (IDR) process (§5920) and a summary of the provisions of the Article 3 regarding Alternative Dispute Resolution (ADR) that specifically references this article (§5965). The ADR summary shall include the following language:
“Failure of a member of the association to comply with the alternative dispute resolution requirements of Section 5930 of the Civil Code may result in the loss of the member’s right to sue the association or another member of the association regarding enforcement of the governing documents or the applicable law.”  

Notice of Architectural Guidelines and Procedures

An association must disclose its requirements for members to obtain association approval of physical changes to property. The notice shall describe the types of changes that require association approval and shall include a copy of the procedure used to review and approve or disapprove a proposed change (§4765c).

Additional Information

Any other information that is required by law or the governing documents or that the board determines to be appropriate for inclusion.