DISTRIBUTION OF FINANCIAL STATEMENTS
Q.
I own a townhome, but am not on the board of directors. While attending a recent board meeting, I asked our management company representative for a current financial statement. My request was denied and I was told that I am only entitled to a year-end report. Is this correct?
A.
No. California law requires a board of directors to provide every member with a year-end financial report but it does not preclude you from receiving interim reports. You are entitled to a monthly report, less the member delinquency report, but will be required to pay the cost of duplication. You are also permitted to inspect association records for any association related purpose
AUDIT REQUIREMENTS
Q.
Is it necessary for our homeowner association to be audited yearly?
A.
No, however a review of the financial statement of the association must be prepared by a licensee of the California State board of Accountancy for any fiscal year in which the gross income to the association exceeds $75,000.00. Many associations prefer an audit to a review because the examination by the accountant is more complete and the cost is not much more.
Please note that a copy of the review (or audit) of the financial statement must be distributed to each member of the association within 120 days after the close of each fiscal year.
ARCHITECTURAL RESTRICTIONS
Q.
Our homeowner association’s board of directors serves as the architectural committee of the association. We recently submitted an application to the architectural committee before having our home painted. The color is not an approved color and therefore, the architectural committee rejected the application. Can they do this?
A.
Yes. A board of directors may exercise its discretion and aesthetic judgment in deciding whether to approve or disapprove an application for an architectural change provided that its decision is made in good faith and is reasonable. In making such decisions, association boards have wide latitude.
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