California HOA Guide
California HOA Budgets, Reporting and Records
The annual reports every California board must send, the monthly financial review the law requires and the rules for opening the association’s records to owners.
What the law requires
The Annual Budget Report and Policy Statement
Both annual reports go out 30 to 90 days before your fiscal year ends.
Every year the board owes owners two reports before the new fiscal year starts, plus an accountant’s review once income passes $75,000.
The annual budget report. Whatever your governing documents say, the association must distribute an annual budget report 30 to 90 days before the end of its fiscal year (section 5300). Unless your documents require more, it must include:
- a pro forma operating budget showing estimated revenue and expenses on an accrual basis
- a summary of the association’s reserves and a summary of the reserve funding plan the board adopted, with notice that the full plan is available on request
- whether the board has decided to defer or skip repairs or replacements of major components with a remaining life of 30 years or less, and why
- whether the board expects special assessments to be needed for major components or reserves and, if so, the estimated amount, start date and duration
- how the board will fund reserves and how the reserve calculations were made
- any outstanding loans with an original term of more than one year
- a summary of the association’s property, general liability, earthquake, flood and fidelity insurance, with the statement the law requires
- for condominiums, separate statements on whether the project is FHA-approved and VA-approved
- a completed “Charges for Documents Provided” disclosure.
The Assessment and Reserve Funding Disclosure Summary form must go out with the budget report. Getting this report right matters beyond disclosure: a board can raise regular assessments only if it has met most of these requirements for the year (see Assessments and Collections).
The annual policy statement. In the same 30-to-90-day window, the board must distribute an annual policy statement (section 5310). It covers who receives official communications for the association, owners’ options for where and how they get notices, the right to receive meeting minutes, the assessment collection notice and lien enforcement policies, the discipline policy and any fine schedule, a summary of dispute resolution procedures, the rules for approving physical changes to property, the overnight payment address and anything else the law or your documents require.
How the reports are delivered. For each report, the association sends every member either the full report or a summary by individual delivery. A summary must describe the report on its first page and explain, in at least 10-point bold type, how to get the full report at no cost. Members who ask for full reports get them every time (section 5320).
The accountant’s review. For any fiscal year in which the association’s gross income is more than $75,000, a licensee of the California Board of Accountancy must prepare a review of the financial statement under generally accepted accounting principles, unless your documents require more. Copies go to members by individual delivery within 120 days after the fiscal year ends (section 5305).
What the law requires
The Monthly Financial Review
The full board is responsible for the monthly review, even when a manager prepares the reports.
California makes the board look at the association’s money every month, and it limits how much can move between accounts without written board approval.
Unless your governing documents set stricter standards, the board must review these every month (section 5500):
- a current reconciliation of the operating accounts
- a current reconciliation of the reserve accounts
- the current year’s actual operating revenue and expenses compared with the budget
- the latest statements from the financial institutions holding the operating and reserve accounts
- an income and expense statement for the operating and reserve accounts
- the check register, monthly general ledger and delinquent assessment receivable reports.
Reviewing outside a meeting. Every director, or a subcommittee of the treasurer and at least one other director, can do the review outside a board meeting, as long as the board ratifies it at its next meeting and the minutes show it (section 5501).
Limits on transfers. Transfers from the reserve or operating accounts need the board’s prior written approval unless they’re below the lesser of $5,000 or 5 percent of the operating budget’s estimated income, for associations with 50 or fewer separate interests, or the lesser of $10,000 or 5 percent for associations with 51 or more (section 5502).
New for 2027: management fees. Starting January 1, 2027, AB 739 adds a yearly review: the board must review an annual statement of the fees charged by its managing agent. That statement is an association record, available to members on written request.
What the law requires
Owner Access to Association Records
Current-year records within 10 business days. The prior two years within 30 calendar days.
Owners have a legal right to see most of the association’s books and papers, on a set schedule and at a limited cost.
What counts as a record. section 5200 lists them. They include the annual reports and other financial documents owners are entitled to, interim financial statements, executed contracts that aren’t privileged, written board approvals of vendor proposals or invoices, tax returns, reserve account balances and payments, agendas and minutes of member, board and committee meetings (but not executive session minutes), membership lists, check registers, the governing documents, election materials and balcony inspection reports under section 5551. “Enhanced” records count too: invoices, receipts, canceled checks, purchase orders, bank and credit card statements and reimbursement requests.
How long and how fast. Records are open to inspection for the current fiscal year and the previous two, and minutes of member and board meetings are open permanently. The association must provide current-year records within 10 business days of receiving a request and records from the prior two years within 30 calendar days (section 5210). Election materials must be kept for one year after the election (section 5200).
Where and what it costs. Records are made available at the association’s business office in the development or another agreed place, or the association can send copies of specifically identified records. It can charge the direct and actual cost of copying and mailing, after telling the owner the amount and getting agreement. For enhanced records, it can also charge up to $10 an hour, capped at $200 per written request, for time spent redacting. Owners can choose to receive records electronically in a format that can’t be altered (section 5205).
What can be withheld. The association may withhold or redact information likely to lead to identity theft or fraud, privileged information or information that would compromise a member’s privacy. It can also hold back other members’ discipline, collection and payment plan records, personal identification numbers, executive session minutes and most personnel records. It can’t withhold compensation paid to employees, vendors or contractors, and if the owner asks, it must explain in writing the legal basis for any denial or redaction (section 5215).
Membership lists and privacy. An owner who asks for the membership list must state a purpose reasonably related to their interest as a member (section 5225), and any member can opt out of having their contact information shared (section 5220). Records can’t be sold or used for commercial purposes, and the association and its manager can’t sell members’ personal information without consent (section 5230).
If a request is refused. An owner can sue, including in small claims court. If a court finds the association unreasonably withheld records, it must award the owner’s reasonable costs and attorney’s fees and may impose a civil penalty of up to $500 for each separate written request that was denied (section 5235).
How to do it
Running the Board’s Financial Year
Put every deadline on one calendar, counted back from your fiscal year end.
A predictable yearly rhythm keeps the reports on time, the monthly review routine and records requests from becoming fights.
- Build the calendar. Count back 90 and 30 days from your fiscal year end to set the window for the budget report and policy statement, and count forward 120 days for the accountant’s review.
- Start the budget early. Pull the reserve study, insurance renewals and vendor contracts together well before the window opens.
- Adopt the budget and reserve funding plan. Check any assessment increase against the limits in Assessments and Collections.
- Update the policy statement. Refresh the fine schedule, the dispute resolution summary, the architectural approval rules and the overnight payment address.
- Deliver both reports. Send the full reports or summaries by individual delivery, with the Assessment and Reserve Funding Disclosure Summary, and honor every request for full copies.
- Order the accountant’s review. If gross income was more than $75,000, engage a California-licensed accountant and distribute the review within 120 days after year end.
- Make the monthly review routine. Put the six required items on every agenda, or have directors review them between meetings and ratify the review in the minutes.
- Approve transfers in writing. Any transfer at or above the section 5502 limit needs the board’s prior written approval.
- Log every records request. Date-stamp it on receipt and calendar 10 business days or 30 calendar days, depending on the records’ age. The free records request tracker does the counting.
- Starting in 2027, review management fees. Get the managing agent’s annual fee statement and review it as a board.
For the budget itself, the free Annual HOA Budget Checklist lists the steps in order, from gathering this year’s numbers to adopting the budget and sending it to owners.
Board checklist
- ☐ Our budget report and policy statement go out 30 to 90 days before our fiscal year ends.
- ☐ The budget report has every item section 5300 lists, plus the disclosure summary form.
- ☐ Summaries explain in 10-point bold type how to get the full report free.
- ☐ We keep a list of members who asked for full reports.
- ☐ We get an accountant’s review when gross income tops $75,000 and send it within 120 days.
- ☐ The board reviews all six monthly items, or ratifies an outside-the-meeting review in the minutes.
- ☐ Transfers above the section 5502 limit have prior written board approval.
- ☐ Records requests are logged and answered within 10 business days or 30 calendar days.
- ☐ We charge only actual copying and mailing costs, plus capped redaction time for enhanced records.
- ☐ Members who opted out of the membership list are excluded from it.
Common mistakes
Where Boards Slip Up
A late or incomplete budget report can block the next assessment increase.
These are the errors we see most often with California budgets, reports and records.
- Missing the 30-to-90-day window. A budget report or policy statement sent too early or too late doesn’t meet sections 5300 and 5310.
- Raising assessments on an incomplete budget report. Section 5605 ties a board-approved increase to meeting the section 5300 requirements.
- Leaving the monthly review to the manager. Section 5500 makes it the board’s job. If directors review between meetings, the board has to ratify it in the minutes (section 5501).
- Skipping the accountant’s review. Once gross income passes $75,000, a review by a California-licensed accountant is required (section 5305).
- Moving money without written approval. Transfers at or above the section 5502 limit need the board’s prior written approval.
- Treating every records request the same. Current-year records are due in 10 business days, not 30 (section 5210).
- Charging for staff time on ordinary records. The hourly redaction charge applies only to enhanced records, and it’s capped at $200 per request (section 5205).
- Withholding vendor or contractor pay. Compensation paid to employees, vendors and contractors can’t be withheld (section 5215).
Best practice, not a legal requirement
Habits That Keep the Books Clean
Everything in this section is a recommendation. None of it is required by California law.
The law sets the minimum. These habits make the numbers easier to trust and the reports easier to produce.
- Set a monthly close date. Ask for the financial packet by the same day each month so the board can review it before every meeting.
- Use two sets of eyes. Require two approvals for large payments and keep the person who writes checks separate from the person who reconciles the accounts.
- Read the budget variance, not just the totals. Ask about any line that’s far over or under budget.
- Keep a records request log. Note the date received, what was asked for, the deadline and the date fulfilled.
- Post routine records online. A member portal with budgets, minutes and policies cuts down on formal requests.
- Keep records longer than the minimum. Ask your attorney and accountant for a retention schedule that covers tax, contract and insurance needs.
- Have the accountant walk the board through the review. A short presentation at a board meeting helps every director understand the association’s finances.
5 guides
Budgets and the Annual Reports
California HOA Annual Disclosure Calendar
A deadline-by-deadline calendar of what a California HOA must send owners each year, from the Annual Budget Report to reviews and filings.
California HOA Compliance Calendar
A free board tool: enter your fiscal year-end to see the year’s California deadlines, then print it or add it to your calendar.
Planning Your HOA Budget
A step-by-step process for building the annual HOA budget, from reviewing past years to calculating assessments and notifying owners.
How to Manage Your HOA Budget Better
A budget only helps if the board checks it against reality every month. Here is how to track variances, control costs and correct course during the year.
What Are Operating Budgets in an HOA?
An HOA operating budget is the one-year plan for the day-to-day costs of running the community. Here is what goes in it and how it differs from reserves.
4 guides
Financial Statements, Reviews and Controls
HOA Financial Reports: Learn the Different Parts
An HOA financial report is a packet of statements, from the balance sheet to bank reconciliations. Here is what each part shows and what to check.
What You Need to Know About HOA Financial Reviews
An HOA financial review gives limited assurance from an independent CPA. How it differs from a compilation and an audit, and how to choose.
When to Hire an Accountant for Your HOA
An HOA needs a CPA for its year-end review or audit and tax return, and a forensic accountant when money may be missing. How to choose one.
Preventing HOA Fraud: Financial Controls Every Board Needs
How HOA embezzlement usually happens, the warning signs, a financial controls checklist for boards, and the California rules that apply.
5 guides
Records, Taxes and Other Money Matters
Maintaining Your HOA Records
Maintaining HOA records means keeping documents, minutes, financials and contracts organized, secure and available. What to keep and how.
HOA Records Requests: What Owners Can Inspect and When
Which HOA records owners can inspect, how to request them, what the association can charge or withhold, and California's response deadlines.
How to Deal With Taxes as a Homeowners Association
Every HOA has to file a federal income tax return. How Form 1120-H and Form 1120 work, the tests and deadlines and California's requirements.
What Are HOA Assets?
HOA assets are what the association owns or is owed: cash, reserves, assessments receivable and equipment. What counts and what does not.
How to Create Money for Your HOA
Eight ways an HOA can bring in money beyond assessments, and the governing document, tax and insurance checks a board should make first.
Sources
The Law Behind This Page
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Related Topics
California HOA Guide
Every California topic guide in one place.
Assessments and Collections
Raising assessments and collecting past-due accounts.
Finances
Budgets, reserves and collections in any state.
Management
Working with a management company.
Local Guides by City
City and neighborhood guides, county by county.
All California HOA guides: Board Basics · Governing Documents and Rules · Board Meetings · Elections and Voting · Reserves and Major Repairs · Assessments and Collections · Insurance Requirements · Maintenance and Repairs · Architectural Review and Owner Rights · Enforcement, Fines and Disputes · Buying, Selling and Renting
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Last reviewed October 21, 2026. Civil Code sections cited: 5200, 5205, 5210, 5215, 5220, 5225, 5230, 5235, 5300, 5305, 5310, 5320, 5500, 5501, 5502 and 5605, plus AB 739 (2026). By the How2HOA Editorial Team. This page is general educational information, not legal advice. Laws change and your association’s governing documents control many of these questions, so check with your association’s attorney about your situation.