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The 5570 reserve funding disclosure form

The Assessment and Reserve Funding Disclosure Summary goes to every owner with the annual budget report. Its wording is set by Civil Code 5570, so every California association's version looks much the same. Here is how to read one.

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  1. Assessment and Reserve Funding Disclosure Summary

    For the fiscal year ending December 31, 2026 · Example association, 120 homes

    Sent with the annual budget report, 30 to 90 days before the fiscal year ends (Civil Code 5300). Every owner gets one.

  2. 1

    The regular assessment per ownership interest is $425 per month.

    What each home pays now. If dues differ by unit size, the form points to a schedule.

  3. 2

    Additional assessments already approved: $1,200 per home, due July 1, 2027, for roof replacement. Total $144,000.

    Money the board or owners have already voted to collect, on top of regular dues.

  4. 3

    Based on the most recent reserve study, will projected reserve balances cover major repairs at the end of each of the next 30 years? No

    The single most important answer on the page. "No" means the plan as funded runs short at some point.

  5. 4

    If no, additional funding not yet approved: about $35 per home per month, from January 2028. Total $50,400 a year.

    What it would take to close the gap. An estimate, not a decision; the board still has to act.

  6. 5

    All major components are included in the reserve study and its calculations. Yes

    If anything was left out, the form must say what and why. Missing items are how good-looking studies go wrong.

  7. 6

    Estimated required reserve at the end of this fiscal year: $1,200,000. Projected reserve cash: $540,000. Reserves are 45 percent funded.

    This is the percent-funded figure the gauge above shows. The study's preparer and date appear on this line too.

  8. 7

    Five-year projection, based on approved assessments:

    YearRequiredProjected cashFunded
    2027$1,260,000$610,00048%
    2028$1,310,000$690,00053%
    2029$1,370,000$780,00057%
    2030$1,420,000$880,00062%
    2031$1,480,000$990,00067%

    Assumed long-term interest on reserves: 1.5% a year. Assumed inflation for repair costs: 3.0% a year.

    Where the fund is heading. The form also shows the same years if the full funding plan is carried out, so owners can compare.

Line wording paraphrased from Civil Code 5570; figures are an invented example.

Checks before it goes out

The form is only as good as the study behind it. Before the budget package is mailed, the board or manager should be able to say yes to each of these.

  • The study used for lines 3, 6 and 7 is the current one, with the annual review done this year.
  • Line 2 matches what the board has actually approved, with due dates owners will recognize from the minutes.
  • Line 4 is filled in whenever line 3 says no. Leaving it blank is the most common mistake.
  • Line 5 lists anything left out of the study and says why.
  • The interest and inflation assumptions on the form match those in the study.
  • The figures agree with the reserve summary in the budget report under Civil Code 5565.

When it is sent

The budget report and this form go out 30 to 90 days before the end of the fiscal year (Civil Code 5300). For a calendar-year association that is between early October and early December. Work back from that date when booking the study: firms get busy in late summer.

Percent funded is not the only number

Line 6 gets the attention, but line 3 matters more. A fund at 40 percent with a credible plan that answers yes on line 3 is in better shape than a fund at 60 percent that answers no. The gauge on our homepage shows how the percentage moves; the plan decides whether it keeps moving.

Statute: Civil Code 5570, with Civil Code 5300 on the budget report and Civil Code 5565 on the reserve summary. Plain-English guide only, not legal advice.

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