What are HOAs legally required to do each year?

Most HOAs are legally required to hold an annual meeting, file a state annual report, renew required insurance policies, file a federal tax return (Form 1120-H or 1120), adopt and distribute an annual budget, and maintain accurate meeting minutes. Specific requirements vary by state — always verify against your state's HOA statutes and your governing documents.

What tax form does an HOA file?

Most HOAs file IRS Form 1120-H, the U.S. Income Tax Return for Homeowners Associations. This form taxes non-exempt function income (such as interest income) at a flat 30% rate. Some HOAs instead file Form 1120 if it produces a lower tax liability. Consult a CPA familiar with HOA taxation to determine which form is appropriate for your association.

Does an HOA need an annual audit?

Requirements vary by state and HOA size. Some states require a formal audit or financial review once the HOA's annual budget exceeds a certain threshold. Even when not legally required, an annual review by a CPA is considered best practice for maintaining financial transparency and protecting the board from liability.

What is a reserve fund study and is it required?

A reserve fund study analyzes the HOA's physical assets — roofs, pavement, pools, elevators — estimates their remaining useful life, and calculates how much the association should be saving each year to cover future replacements. Many states require reserve studies every 3–5 years; some require annual updates. Even without a legal mandate, a reserve study is essential for avoiding special assessments.

When should an HOA complete its annual compliance review?

The best time to work through an annual compliance checklist is in the fourth quarter of your fiscal year or immediately after your annual meeting, while tasks are fresh and deadlines are in view. Some items — like tax returns and state filings — have fixed deadlines that should be calendared at the start of each year.

Free ChecklistBoard Governance

HOA Annual Compliance Checklist

A complete annual compliance checklist for HOA board members. Covers all six areas your board needs to review each year — governance, financials, insurance, property, and resident communications.

Updated May 2026

Why HOA annual compliance matters

Failing to complete annual compliance obligations can expose your board to personal liability, invalidate insurance coverage, trigger state penalties, or create grounds for owners to challenge board decisions. Most of these items aren't optional — they're required by state law, your governing documents, or both.

A structured annual review ensures nothing falls through the cracks. The six sections below cover the full scope of what a typical HOA board needs to address each year. Requirements vary by state — always verify specific deadlines against your state's HOA statutes and your CC&Rs or bylaws.

How to use this checklist

Download or copy the checklist before your Q4 board meeting or annual meeting.
Assign each section to a responsible board member or your property manager before the review begins.
Work through each item, marking it done or N/A. Add notes for anything that needs follow-up.
Record outstanding items in the summary section with an owner and target completion date.
Present the completed checklist to the full board and file it with your association's records for the year. HOABuddy's document storage keeps compliance records organized and accessible to your whole board.

The Checklist

Download .docx

HOA ANNUAL COMPLIANCE CHECKLIST
─────────────────────────────────────────────────────────────────────────

Association Name:  _________________________________________________
Fiscal Year:       _________________________________________________
Prepared by:       _________________________________________________
Review Date:       _________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 1 — CORPORATE / GOVERNANCE
                                                          Done   N/A
□ Annual board meeting held and minutes recorded          □      □
□ Board officer elections conducted per governing docs    □      □
□ Board officer roles and terms documented                □      □
□ New board members oriented on governing documents       □      □
□ Conflict-of-interest disclosures signed by all board    □      □
□ D&O (Directors & Officers) insurance renewed            □      □

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 2 — MEETINGS & RECORDS
                                                          Done   N/A
□ Annual meeting notice sent within required notice       □      □
  period (check governing documents for timeframe)
□ Annual meeting quorum requirements met                  □      □
□ Annual meeting minutes recorded and approved            □      □
□ All board meeting minutes from the year filed           □      □
□ Governing documents distributed to new owners           □      □
□ Governing documents reviewed for needed amendments      □      □
  (flag any changes for attorney review)

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 3 — FINANCIAL COMPLIANCE
                                                          Done   N/A
□ Annual operating budget adopted by the board            □      □
□ Approved budget distributed to all homeowners           □      □
□ Prior year financial statements reviewed and approved   □      □
□ Annual financial audit or review completed (CPA)        □      □
□ Federal tax return filed (Form 1120-H or Form 1120)     □      □
□ State tax return filed (if required in your state)      □      □
□ Reserve fund study completed or annual update done      □      □
□ Reserve fund contributions on track with study          □      □
□ Assessment (dues) amounts confirmed for coming year     □      □
□ Delinquent accounts reviewed; collection policy         □      □
  applied consistently to all owners

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 4 — INSURANCE & LEGAL
                                                          Done   N/A
□ Property / casualty insurance policy renewed            □      □
□ General liability insurance policy renewed              □      □
□ Directors & Officers (D&O) liability insurance renewed  □      □
□ Fidelity / crime bond renewed (if applicable)           □      □
□ Workers' compensation coverage verified (if HOA         □      □
  employs any staff)
□ State annual report / registered agent filing done      □      □
□ All vendor and service contracts reviewed               □      □
□ Expiring contracts renewed or sent out for rebid        □      □
□ Legal counsel consulted on pending disputes or          □      □
  covenant enforcement matters

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 5 — PROPERTY & MAINTENANCE
                                                          Done   N/A
□ Annual inspection of all common areas completed         □      □
□ Pool / spa safety inspection and permits current        □      □
  (if applicable)
□ Playground equipment inspected for safety hazards       □      □
□ Fire safety equipment (extinguishers, alarms)           □      □
  inspected and certified
□ Elevator inspection current (if applicable)             □      □
□ Reserve fund capital items scheduled for the            □      □
  year addressed or deferred with board vote
□ Landscaping and grounds contracts reviewed              □      □
□ Parking areas, signage, and lighting reviewed           □      □

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SECTION 6 — RESIDENT COMMUNICATION & COMPLIANCE
                                                          Done   N/A
□ Annual disclosure packet sent to all owners             □      □
  (financial summary, budget, meeting notice)
□ HOA rules and regulations provided to new owners        □      □
□ Violation notices issued consistently per policy        □      □
□ Architectural review applications processed within      □      □
  required timeframe
□ Resident contact information (directory) updated        □      □
□ HOA documents and meeting schedule current on           □      □
  website, portal, or shared drive

Notes: _____________________________________________________________
___________________________________________________________________

─────────────────────────────────────────────────────────────────────────

SUMMARY

Total items:      ________
Completed:        ________
N/A:              ________
Outstanding:      ________

Outstanding items and responsible party:

  Item: ________________________________  Owner: ___________________
  Item: ________________________________  Owner: ___________________
  Item: ________________________________  Owner: ___________________
  Item: ________________________________  Owner: ___________________

─────────────────────────────────────────────────────────────────────────

CERTIFICATION

Reviewed and completed by: _______________________________
Title:                     _______________________________
Date:                      _______________________________

─────────────────────────────────────────────────────────────────────────
HOA annual compliance checklist provided free by HOABuddy — hoabuddy.org

Download the .docx to open directly in Word or Google Docs, or copy and paste into any text editor.

5 tips for a smoother annual compliance review

1.Start in Q4, not December 31. Many compliance items have fixed deadlines — tax returns, state filings, insurance renewals. Build a deadline calendar at the start of each year so nothing is rushed.
2.Assign owners, not just sections. A checklist with no named owner gets done by no one. Assign each section to a specific board member or your property manager before the review starts.
3.Verify state-specific requirements every year. HOA laws change. What wasn't required two years ago may be required now. A quick annual check with your HOA attorney costs far less than a compliance penalty.
4.Don't skip the reserve fund review. Under-funded reserves are the leading cause of special assessments. Even in years without a full reserve study, the board should confirm contributions are on track.
5.File the completed checklist with your records. A dated, signed checklist is evidence that the board exercised its duty of care. If a decision is ever challenged, it can protect individual board members from personal liability.

Keep your compliance records in HOABuddy

Store completed checklists, meeting minutes, insurance certificates, and governing documents in HOABuddy's secure document storage — organized, searchable, and accessible to your whole board. Free for 30 days.

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