Reader Questions - Budget Disclosures, Financials

governing documents h o a homefront legislation reader questions Jul 14, 2014

Good Afternoon Mr. Richardson,

We live in a small condominium complex with relatively low monthly dues. My concern is that the Board of Directors has not complied with Civil Code 5300 requiring the Board to provide the owners with a Budget 30-60 days prior to the beginning of the fiscal year. Here we are starting the 6th month of the new year, and still no budget has been provided.

When asked over the months, the board’s stock reply was, they’re working on it – but still no budget. Lately they now say the management company is working on it. Some of us are concerned that we may get hit with a large assessment.

I cut out your articles every week and find them very informative. Any recommendations you have would be greatly appreciated.

Thank You,

B.P, Yorba Linda

Dear B.P.,

Many boards are not aware of the requirement that a budget be distributed to all members no later than 30 days prior to the start of the new fiscal year, but I would expect any competent manager to know this longstanding requirement. Furthermore, as of this year, the law requires distribution of much more than simply the budget. Civil Code 5300 requires distribution of an “Annual Budget Report”, consisting of NINE ITEMS, not one, to the members at least 30 but not more than 90 days before the new fiscal year. Furthermore, if seven of those items (5300(b)(1,2, and 4-8)) are not distributed in that time frame, the board is barred by Civil Code Section 5605(a) from increasing the regular assessments during that year without a member vote.

The competent managers are already educated and know this. If your manager has by this late in the year not already made sure the proper Annual Budget Report is distributed, with all required contents, ask the manager why… or consider another manager.

Best regards,

Dear Kelly,

Hi, my question is regarding my requests to my HOA Board to have access to the monthly financial statements showing how and where money is spent. A board member shared numerous questionable expenditures with me because she was uncomfortable bringing it up. I would like to keep tabs by reviewing expenditures in advance of monthly meetings. The Board said they would give me access only at the meeting which doesn’t give me enough time to evaluate and verify. Do I have a right to request these on a regular basis in advance of a meeting? They are available electronically so there is no expense involved.


E.R., Mammoth Lakes

Dear E.R.,

Civil Code 5200 lists the financial records which you as a member are entitled to review or copy. However, most of them are annual disclosures. You probably would be more interested in reviewing the items listed in 5200(a)(3): “Interim financial statements, periodic or as compiled, containing any of the following: (a) balance sheet, (b) income and expense statement, (c) budget comparison, and (d) general ledger.” The Association has ten days to comply with your written request for these documents, so it is possible you may not receive these documents before the board meeting.

First, if the one current director is “uncomfortable” voicing her concerns about certain expenditures, why is that person a director? Second, if you really want to regularly and meaningfully review the monthly finances, consider seeking a position on the board.


Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at All rights reserved®.