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To: The Membership - Mission Park of Santa Clara Homeowners Association
From: The Board of Directors
Re: 2005 Budget
With the approaching fiscal year end of your Association, your Board of Directors has undertaken a thorough review of the operating budget with the goal of providing for efficient operations and for funding adequate reserves to meet long-term requirements. As a result of this review, the Board has determined that in order to maintain the financial integrity of your Association and to meet the ongoing maintenance costs which increase with the aging process a 20% increase in assessments will be effective January 1, 2005. The items listed below are largest contributions to the increase:
- Water
- Annual pool maintenance
- Street sweeping
- Insurance
The new quarterly assessment amount will be as follows:
Single Family Homes: $143.85 Motor Court: $200.34
The amount quoted in the reserve study prepared in 2003 were used to calculate and establish the reserve amounts needed to defray the future repairs, replacement or additions to the components that the association is obligated to maintain. Some reserve item amounts have been adjusted to better meet the needs of the community.
Enclosed, please find the following items:
- Budget for fiscal year 2005
- Policy for collection of delinquent accounts
- "Notice" per California Civil Code 1365.1.B
- Summary pages of the reserve study
- Summary of California Civil Code 1354
- Insurance Summary
Your association currently has a total of $181,201.69 in actual accumulated reserve funds and anticipates that the total will increase to $198,025.69 by fiscal year end. This amount represents 11.4% of the current estimated replacement cost for all those components being funded.
The Board of Directors does not anticipate any special assessment will be required to repair, replace or restore any major components or to provide adequate reserves.
In accordance with Civil Code 1365.9, the Association is insured to the level specified in the Code, and carries General Liability insurance in the amount of $3 Million. Therefore, Owners are individually liable only for their proportionate share of assessment levied to pay any judgements, which exceed the limits of the association's insurance.
Copies of Board meeting minutes are available upon request throughout the year. Minutes will be released to you thirty days following the meeting date and any charges involded for copying and postage will be the responsibility of the requesting homeowner.
Please contact Janis Schock at 925 855-3240, should you have any questions or if you would like a copy of the complete reserve study.
2005 PRO FORMA Budget
237,948.00
240.00
238,152.00
59,487.00
51.00
59,538.00
Member Assessment
Other Income
Total Income
Reserve Funding
Operating Expenses
Utilities
Landscape Maintenance
Swimming Pool/Spa
Common Area
Insurance
Administration
Total Operating Expenses
Total Reserve Funding
Total Operating & Reserves
8,613.00
13,704.00
2,448.00
3,015.00
3,306.00
11,577.00
42,663.00
16,875.00
59,538.00
34,452.00
54,816.00
9,792.00
12,060.00
13,224.00
46,308.00
170,652.00
67,500.00
238,152.00
Utilities: electricity, gas, water
Landscape Maintenance: contract maintenance service, replacement of plant material, supplies, sprinkler repair, etc.
Common Area: handyman services, pest control, light maintenance, fencing, repair, etc.
Administration: annual audit, taxes & licenses, insurance, legal service, management fees, delinquency monitoring, etc.
ASSESSMENTS AND FORECLOSURE
This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.
ASSESSMENTS AND NONJUDICIAL FORECLOSURE
The failure to pay association assessments may result in the loss of an owner's property without court action, ofter referred to as non-judicial foreclosure. When using non-judicial foreclosure, the association records a lien on the owner's property. The owner's property may be sold to satisfy the lien if the lien is not paid. Assessments become deliquent 15 days after they are due, unless the governing documents of the association provide for a longer time. (Section 1366 and 1367.1 of the Civil Code)
In a non-judicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney's fees, late charges, and interest. The association may not use non-judicial foreclosure to collect fines or penalties, except for the cost to repair common areas damaged by a member or a member's guests, if the governing documents provide for this. (Sections 1366 and 1367.1 of the Civil Code)
The association must comply with the requirements of Section 1367.1 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner's property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association. (Section 1367.1 of the Civil Code)
At least 30 days prior to recording a lien on an owner's separate interest, the association must provide the owner of record with certain documents by certified mail. Among these documents, the association must send a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a reight to review the association's records to verify the debt. (Section 1367.1 of the Civil Code)
If a lien is recorded against an owner's property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard. (Section 1367.1 of the Civil Code)
The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.
PAYMENTS
When an owner makes a payment, he or she may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Sections 1367.1 and 1367.1 of the Civil Code)
An owner may dispute an assessment debt by giving the board of the association a written explanation, and the board must respond within 15 days if certain conditions are met. An owner may pay assessments that are in dispute in full under protest, and then request alternative dispute resolution. (Section 1366.3 and 1367.1 of the Civil Code)
An owner is not liable for charges, interest, and costs of collection, if it is established that the assessment was paid properly on time. (Section 1367.1 of the Civil Code)
MEETINGS AND PAYMENT PLANS
An owner of a separate interest that is not a time-share may request the association to consider a payment plan to satisfy a delinquent assessment. The association must inform owners of the standards for payment plans, if any exist. (Section 1367.1 of the Civil Code)
The board of the directors must meet with an owner who makes a proper written request for a meeting to discuss a payment plan when the owner has received a notice of a delinquent assessment. These payment plans must conform with the payment plan standards of the association, if they exist. (Section 1367.1 of the Civil Code)
HOMEOWNERS ASSOCIATION
INSURANCE NOTIFICATION
CIVIL CODE 1365
Effective January 1, 1997, the California Civil Code was amended to require that associations prepare and distribute summaries to the general membership of specific insurance policies carried.
The summary of the association's policies of insurance provides only certain information, as required by subdivision (e) of Section 1365 of the Civil Code, and should not be considered a substitute for the complete policy terms and conditions contained in the actual policies of insurance. Any association member may, upon request and provision of reasonable notice, review the association's insurance policies and, upon request and payment of reasonable duplication charges, obtain copies of those policies. Although the association maintains the policies of insurance specified in this summary, the association's policies of insurance may not cover your property, including personal property or, real property improvements to or around your dwelling, or personal injuries or other losses that occur within or around your dwelling. Even if a loss is covered, you may nevertheless be responsible for paying all or a portion of any deductible that applies. Association members should consult with their individual insurance broker or agent for appropriate additional coverage.
The information provided is only a summary of the identified insurance policies. The actual terms and conditions of the policies will control whether the Association has coverage for a particular claim, the limits of available insurance for the claim, and who is responsible to pay any deductible or retention.
The Association's property manager and the Association's Board members are not able to provide you with individual advice or recommendations concerning your own insurance needs. If you have questions concerning your current insurance coverage or additional coverage that may be available to you as a member of a homeowners association, please contact your insurance agent.
Insurance Summary: MISSION PARK Agent: ROBYN THAW
Policy Type Limits of Liability Deductible Carrier Exp. Date
D & O $1,000,000 1000 TRAVELERS 8/28/2005
FIDELITY $350,000 1000 TRAVELERS 8/28/2005
LIABILITY $1,000,000 0 PHILADELPHIA 8/28/2005
PROPERTY $336,000 1000 PHILADELPHIA 8/28/2005
UMBRELLA $2,000,000 0 PHILADELPHIA 8/28/2005
WORKERS COMP $1,000,000 0 ZENITH 8/28/2005
RELATING TO ENFORCEMENT OF GOVERNING DOCUMENTS
THROUGH ALTERNATIVE DISPUTE RESOLUTION
PLEASE TAKE NOTICE: California Civil Code 1354 addresses your rights to sue the association or another member of the association regarding the enforcement of the governing documents. The following is a summary of the provisions of Civil Code 1354, as amended effective January 1, 1994:
In general, Civil Code 1354 encourages parties to dispute involving enforcement of an association's governing documents to submit the dispute to a form of alternative dispute resolution (ADR) such as mediation or arbitration prior to filing a lawsuit. The intent of the statute is to promote speedy and cost-effective resolution of such disputes, to better preserve community cohesiveness and to channel CC&R disputes away from our state's court system.
Under Civil Code 1354, the form of alternative dispute resolution may be binding or non-binding and the costs will be borned as agreed to by the parties involved.
Any party to a dispute regarding enforcement of the governing documents may initiate the process of ADR by serving a Request for Resolution or another party to the dispute. A Request for Resolution must contain (1) a brief description of the nature of the dispute, (2) a request for ADR, and (3) a notice that the party receiving the Request for Resolution is required to respond within 30 days of receipt or the Request will be deemed rejected.
If the Request is accepted, the ADR must be completed within 90 days of receipt of the acceptance, unless otherwise agreed by the parties. Any Request for Resolution sent to the owner of a separate interest must include a copy of Civil Code 1354 in its entirety.
FAILURE BY ANY MEMBER OF THE ASSOCIATION TO COMPLY WITH THE PREFILING REQUIREMENTS OF SECTION 1354 OF THE CIVIL CODE MAY RESULT IN THE LOSS OF YOUR RIGHTS TO SUE THE ASSOCIATION OR ANOTHER MEMBER OF THE ASSOCIATION REGARDING ENFORCEMENT OF THE GOVERNING DOCUMENTS.
Should the association or an individual member wish to file a lawsuit for enforcement of the association's governing documents, the law requires the association or the individual to file a certificate with the court state that ADR has been completed prior to the filing of the suit. Failure to file this certificate can be grounds for dismissing the lawsuit. There are limited exceptions to the filing of this required certificate when (1) one of the other parties to the dispute refused ADR prior to the filing of the complaint, (2) preliminary or temporary injunctive relief is necessary, or (3) the statute of limitation period for filing the suit will expire within 120 days of the lawsuit being filed. Each of these exceptions, however, must be certified in writing to avoid the court's dismissing the action.
Furthermore, in any lawsuit to enforce the governing documents, while the prevailing party may be awarded attorney's fees and costs, under Civil Code 1354 the court may consider any party's refusal to participate in ADR prior to the lawsuit being filed when it determines the amount of the award.
