Use this checklist to prepare, review and adopt next year’s budget. The timeline counts back from the first day of the new fiscal year, so shift it earlier if your governing documents or state law set an early deadline. For the reasoning behind each task, see planning your HOA budget.
Four to Five Months Before the Fiscal Year Starts: Gather the Numbers
- Set the budget calendar: who gathers the numbers, when the draft goes to the board, when the board votes and when the budget goes to owners.
- Find the deadlines in your governing documents and state law for adopting the budget and sending it to owners.
- Pull year-to-date actual income and expenses and compare them with this year’s budget.
- Pull the budgets and actual results for the last three years and mark the lines that ran over or under.
- List every contract and insurance policy that renews or expires next year.
- Walk the property with the manager or a maintenance vendor and write down repairs and one-time work for next year.
Three Months Before: Collect Quotes and Review Reserves
- Ask vendors for renewal pricing in writing, and get competing bids on your largest recurring contracts.
- Ask your insurance broker for a renewal estimate. Do not assume last year’s premium.
- Check announced utility rate changes, and adjust other inflation-sensitive lines that have no quote.
- Review the reserve study: the recommended contribution, the components scheduled for work next year and whether the study is due for an update. See understanding HOA reserve studies.
- Review the delinquency report and set the bad-debt line to match what you realistically expect to collect.
- Add a contingency line to the operating budget.
Two Months Before: Draft, Workshop and Owner Input
- Build the draft: operating expenses, plus the reserve contribution, minus income from other sources. What is left must come from assessments.
- Calculate each owner’s assessment the way your governing documents allocate it.
- Compare the result with the current assessment and note which lines drive the change.
- Hold a board work session on the draft, noticed the way your state and documents require for a board meeting.
- Share the draft with owners and take their comments, at an open meeting or in writing.
- Check whether the increase needs an owner vote or ratification under your state law or governing documents. If it does, schedule the vote now.
Before the Deadline Your Documents or State Law Set: Adopt and Distribute
- Adopt the budget at a properly noticed board meeting, and record the motion, the vote and the new assessment amount in the minutes.
- Send owners the adopted budget and any disclosures your state requires, with a short cover note on what changed and why.
- Send the notice of the new assessment amount within the time your law and documents require.
- Keep proof of what you sent, when and how.
After Adoption
- Update the assessment amount in the accounting system, the payment coupons and the owner portal.
- Remind owners who pay by automatic bank payment to change the amount.
- Load the new budget into the accounting system so monthly reports compare budget with actual. How to manage your HOA budget better covers what to watch during the year.
In California
Two Davis-Stirling rules shape this timeline. The association must distribute its annual budget report 30 to 90 days before the end of its fiscal year, even if the governing documents say otherwise (Civil Code section 5300). The board also may not impose a regular assessment more than 20 percent greater than the prior fiscal year’s, or special assessments that together exceed 5 percent of that fiscal year’s budgeted gross expenses, without approval by a majority of a quorum of the members. A quorum for that vote is more than 50 percent of the members (section 5605).
More checklists and worksheets are on the HOA board tools page.
The Law Behind This Page
Every legal point in this page comes from the official text. Each link below opens it in a new tab.
Civil Code sections: 5300 ยท 5605
This checklist is general educational information, not legal or financial advice. Laws vary by state and your association’s governing documents control many of these questions, so check with your association’s attorney or another qualified professional about your situation.