- Q: Why do we need to update our documents?
A: If your documents have out-of-date revisions, it can lead to errors or omissions that can harm the owners or association.
- Q: What happens if members meet and elect a Board of Directors or take action to approve a contract without proper notice and agenda?
A: An improper election of directors is open to challenge by a concerned homeowner or any person who litigates to void improper Board actions by challenging the Board election as non-compliant with the new DS Act Requirements.
- Q: I have been told that our current “annual report,” which consists of an income statement, balance sheet, and pro forma budget for the coming year, is no longer adequate. Can we keep using our current annual report if our Board believes the new DS Act’s Annual Report requirements are unnecessary for our small HOA?
A: No. The Davis-Sterling Act’s Annual Reports are more comprehensive. The new DS Act applies to all California HOA from 2 units to 900 units. Real estate agents, buyers, and lenders reviewing the purchase of a high-end condominium expect the HOA to provide a full annual report which provides valuable financial information about the project, including the Reserve Study report and mandatory disclosures. The trend is that brokers, buyers, and lenders are beginning to ask for the New DS Act annual report in more condominium sales.