hoa-financial-reporting-faq

Are HOA financial statements required by law?

Discover whether HOA financial statements are legally required and understand their importance for transparency and accountability in community associations.

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Reviewed by:

D. Goren

Head of Content

Updated Jan, 12

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Are HOA financial statements required by law?

 

Are HOA Financial Statements Required by Law?

 

In most of the United States, yes, HOAs are legally required to prepare and share financial statements. The exact rules depend on your state, the HOA’s governing documents (CC&Rs, bylaws), and whether the HOA is a nonprofit corporation. A financial statement simply means a written record of the HOA’s money — income, expenses, bank balances, reserves, and debts.

 

What All States Generally Require

 

  • Basic financial records must be kept. Every state requires an HOA to maintain accurate books because the HOA collects money from owners.
  • Owners must be allowed to access records. Nearly all states give owners the legal right to inspect or copy financial documents on request, within a reasonable time.

 

What Depends on Your State

 

States differ on how detailed the financial statements must be and how often they must be provided. Here are the main variations:

  • Annual financial statements: States like California, Florida, Colorado, Arizona, and Texas require HOAs to prepare a yearly financial report. Some require it to be distributed automatically; others require it only upon request.
  • Annual audits or reviews: Some states require an outside CPA to review or audit the HOA’s finances if the budget exceeds a certain amount. For example, Colorado requires audits or reviews based on specific revenue thresholds.
  • Budget summaries: Many states require the HOA to send owners a proposed annual budget or summary, which is not the same as a full financial statement but is still a financial disclosure.

 

What Your HOA’s Governing Documents May Add

 

CC&Rs or bylaws can require stricter rules than state law, such as:

  • Quarterly or monthly statements
  • More detailed reserve fund reporting
  • Mandatory outside audits every year

If your governing documents conflict with state law, the rule that offers more transparency usually prevails unless your state says otherwise.

 

Your Right to Receive Them

 

Even in states that do not require automatic distribution, you almost always have the right to request financial statements. The HOA can charge a reasonable copying or administrative fee but cannot refuse access without a lawful reason.

Bottom line: HOAs are legally required to keep financial records everywhere in the U.S., but the rules for creating and sharing formal financial statements depend on both state law and your own governing documents.

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