Amendment

The act of altering a governing document. With some exceptions, the amendment of CC&Rs and bylaws requires a member vote, while the board has the authority to amend rules. The percentages of member consent required for amendment are normally set forth in the governing documents themselves. Occasionally the consent of persons or entities other than the members (e.g., lenders) is required as well. The Davis-Stirling Act also contains a procedure for application to the Superior Court for approval of a proposed CC&R amendment when sufficient owner consents cannot be obtained. (Civ. Code §4275)

Association

This is the entity charged with the management and operation of a common interest development. (Civ. Code §4080) Associations are representative governments in which members typically have the right only to elect the board and make major decisions such as document amendments, imposing assessments that exceed statutory limits on the board’s power, etc. Otherwise, association boards typically have the right to make most day-to-day decisions. Also see Homeowners Association.

Accrual Accounting

This method of accounting recognizes economic transactions when they occur, regardless of when cash actually changes hands. The goal of this system is the matching principle, wherein revenues are matched to expenses at the time the transaction occurs, as opposed to when the cash receipt or disbursement actually occurs. While slightly more complicated than cash accounting, this method gives a more accurate picture of an association’s fiscal status.

American Flag

The governing documents may not limit or prohibit the display of the United States flag on or in the owner’s separate interest or exclusive use common area, except as needed to protect public health or safety. (Civ. Code §4705; Govt. Code §434.5; 4 U.S.C. § 5) Certain noncommercial signs and flags are also permissible in common interest developments. (Civ. Code §4710) See each statute for specific requirements and limitations.

Attorney-Client Privilege

The attorney-client privilege is perhaps one of the most valuable tools to a board. This privilege protects communications between the association’s attorney and the board of directors. This ensures the board can be candid and forthright in their discussions with their attorney. It is important to keep in mind that this privilege only exists so long as the communication itself, the contents of the communication or the content of the communication are not divulged to non-board members.

Annual Policy Statement

Every year, pursuant to Civil Code section 5310, community associations are required to provide their members with Annual Policy Disclosures. These disclosures range from the association’s discipline policy to their delinquent assessment policy. These disclosures must be provided to members no more than 90 and no less than 30 days prior to the end of the association’s fiscal year.

Attorney General

The most common situation in which a common interest development becomes involved with the California Attorney General is when someone, usually a member, files a complaint with the Attorney General’s office alleging some failure to comply with the provisions of the Corporations Code dealing with member meetings (§7510 et seq.), voting and elections (§7610 et seq.) or inspection of corporate records (§8210 et seq.). The Attorney General will send a notice of the complaint to the corporation which has 30 days to answer. If the Attorney General does not believe the answer is satisfactory, the Attorney General may take various actions and seek remedies for apparent violations.