How To Create an Annual Report for Your Condo Owners Association

Creating an HOA community association annual report can be a lot of work. However, it’s a critical aspect of managing a thriving community with integrity to build good relationships with neighbors. A well-done annual report can actually accomplish several goals, from highlighting your community association’s achievements to fostering transparency within the community about HOA fees.

How should an HOA board create a well-thought-out annual report? Our condominium management experts give insights below!

What is an HOA Annual Report?

A homeowners association annual report is a document that contains information about the services and financial status of a community association throughout the year. The purpose of this document is to inform residents about what has been going on in their association and whether or not fees collected were well spent.

Even if your condo owners association holds regular meetings and keeps residents informed about budgets, funds, expenditures, or special assessments, good governance includes providing a year-end report to homeowners. Whether the law requires it or not, making this report a requirement through your HOAs governing documents helps ensure that it gets done every year. 

Presenting a positive report each year shows the community that their HOA dues are managed well throughout the year. It’s also an opportunity to be transparent about budget shortfalls or unexpected expenses that could impact the budget for the upcoming year. 

Who Prepares the Report?

Most condo owners associations prepare annual reports using volunteers on the finance committee or working with a bookkeeper or accountant. However, if you work with one of the best local community management companies, they can handle this report for you. Your community manager can help gather the documents needed to create a comprehensive report. 

What Should Be In an HOA Annual Report?

A community association’s annual report typically includes several key elements to inform condo owners about funds used throughout the year, reserve funds, and more. 

When preparing your report this year, a community association manager recommends including:

• Your homeowners association name and address
• Budget expenditures within each category, such as community management fees, professional services, supplies, utilities, special assessments, and repairs and maintenance
• A financial balance sheet with breakdowns of funds by type (i.e., reserve accounts) and revenue vs. expenses over last year
• An update on the status of pending litigation or judgments that involve the association
• An overview of the community association’s insurance coverage 
• A summary of outstanding dues and fines owed by homeowners
• An update on capital expenditures and projects, including maintenance, repairs, and new construction 
• An overview of the reserve fund amount and where those funds are allocated
• The date of the meeting at which the report was presented
• A final summary of major topics discussed at the meeting, such as continuing education requirements for board members or new community rules

While the primary premise of the report is to provide financial updates to the community, a comprehensive HOA community association annual report should also include any resolutions adopted by your community board and a list of open positions on committees (i.e., chairman positions). In addition, if any community members made significant contributions throughout the year, consider recognizing them with an honor on your community association’s website.

Tips to Keep in Mind When Publishing an Annual Report

An insurer may reject a community association insurance claim if they believe that the community failed to follow good governance practices. That includes having a well-written annual report available for community members at each meeting. 

Keep all original documents used to compile your community’s annual report in one place, such as suspending copies of financial records at your community management office or hiring a bookkeeper to keep track of these records instead. This way, you have easy access should your condo community board have questions about specific expenses during an emergency situation or audit. 

Your HOA community manager can help keep track of all community association records and make your board aware if the community board needs to take any special steps regarding community meeting minutes, financial record-keeping, or state compliance. 

What Other Documentation is Needed for an Annual report?

In addition to community management and reserve fund activity, an HOA community association annual report should include:

• Copies of community rules, regulations, and covenants (if applicable) and any community announcements made throughout the year 
• Meeting agendas signed by the president 
• The number of authorized community managers on staff as well as their qualifications 
• Closing data from your community’s accounting software 
• Community budgeting forms 

Use charts and graphs when possible in your report, and include an index outlining the contents so residents can find specific items quickly. An executive summary highlighting major points at the top of the report is also helpful. 

A Community Association Management Company Helps Create Annual Reports

As we mentioned, annual reports can be a lot of work, but they’re a valuable resource for successful condo owner associations. If the tips we’ve provided here feel overwhelming when considering your upcoming report, or if you’ve never created one before, Trestle Community Management can help! With our financial management services, HOA boards don’t have to worry about creating these reports every year. If you’re ready to learn more about how we can help, reach out soon!