California · Chapter CIV-7
Davis-Stirling Act Ch. 7 — Finances and Reserves — Plain-English Summary
Every section of this body of law translated into plain English for California board members and homeowners.
Accounting
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§5500
The board shall review, on a monthly basis unless this article allows quarterly: a current reconciliation of operating and reserve accounts, the actual-to-bu…
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§5501
The reviews required by §5500 may be done at a board meeting, or by unanimous written consent, as long as the reviews are noted in the minutes.
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§5502
Transfers of greater of $10,000 or 5 percent of the association's total combined reserve and operating account deposits in a calendar month require prior wri…
Use of Reserve Funds
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§5510
The withdrawal of money from the reserve account requires two signatures: one from a director, and one from either a second director or an officer who is not…
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§5515
The board may temporarily transfer money from the reserve account to pay for litigation or other authorized expenses, but must restore the funds within one y…
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§5520
If reserve funds are used to pay for litigation, the association must notify members of that use in the next available mailing, and must identify the litigat…
Reserve Planning
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§5550
At least every three years the board shall cause a competent, diligent visual inspection of major components the association must repair, replace, restore, o…
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§5551
Condominium buildings with 3 or more units must have a licensed architect or structural engineer inspect load-bearing components and associated waterproofing…
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§5560
The board shall adopt a reserve funding plan that indicates how the association will fund the contribution needed to meet the reserve-account requirements. T…
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§5565
The annual budget report includes a summary of the association's reserves, prepared pursuant to this section: current cash reserves, percent funded, and the …
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§5570
The assessment and reserve funding disclosure summary is a statutory form the association fills out and distributes with the annual budget report so owners c…
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§5580
If a community service organization is a party to an agreement with the association, the association's budget report includes the CSO financial information t…
Frequently asked about Chapter CIV-7
- What is California Chapter CIV-7?
- California Chapter CIV-7 — the Davis-Stirling Act Ch. 7 — Finances and Reserves — is the body of law that governs how every California CID is structured, operated, and held accountable. It covers governance, voting, records, assessments, fining, and most of the day-to-day legal questions a board will face.
- How many sections are in Chapter CIV-7?
- Chapter CIV-7 contains 12 sections in this reference. Each is summarized in plain English on its own page, with links to the official text at leginfo.legislature.ca.gov.
- Is the summary on this site legal advice?
- No. These pages are plain-English summaries prepared by SoShiny for board members and managers. For binding legal advice or interpretation of how a section applies to your specific situation, consult a California-licensed attorney.
- How often does California Chapter CIV-7 change?
- The California Legislature can amend any chapter in any session. We update these summaries when we re-import the official text — see the 'Last updated' date on each section page.
- Does SoShiny enforce Chapter CIV-7 for me?
- No software 'enforces' a statute — but SoShiny is built around it. Voting, meeting minutes, records access, fining workflow, and audit trails are designed to meet this body of law's requirements out of the box, so the board can demonstrate good-faith compliance if challenged.
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