Disclaimer: This information is intended for California residents only and should not be considered legal advice.
When an HOA controls the purse, but no one checks the receipts
Is your HOA spending money like there’s no tomorrow, while raising dues or threatening special assessments?
You’re not alone. Across California, homeowners are questioning where the money is going and why no one is checking.
Many associations hold closed-door budget meetings, skip reserve studies, or lump vague expenses into categories like “maintenance” or “professional fees.” That may sound harmless… until you realize that money is being spent with zero homeowner oversight.
So the real question becomes:
Who’s watching the board when the board watches the money?
5 Financial Red Flags Every Homeowner Should Watch For
Here are the most common financial warning signs we see in HOAs across California:
Red Flag
- No recent reserve study
- Vague spending categories (“miscellaneous costs”)
- Denied access to records
- Sudden dues increases or special assessments
- Long-term contracts with no homeowner review
Homeowners have the legal right to inspect financial records
Under California Civil Code §§5200–5240, homeowners have the legal right to inspect financial records, including:
- Bank statements
- Vendor invoices
- Contracts and bids
- Reserve study reports
- Meeting minutes related to spending
Why Financial Audits Matter More Than You Think
When money gets tight, many boards do the same thing:
– Raise dues
– Threaten a special assessment
– Blame “unexpected repairs”
The truth is often more complicated or more concerning….
In California, we’ve seen HOAs issue $4M+ assessments… only to find out homeowners were never told the real scope of spending, nor shown multiple contractor bids.
A financial audit doesn’t just fix bad accounting, it exposes the truth.
How to Demand a Financial Audit The Right Way
Ask us how by visiting HOA Victory Kit
We’ve helped communities recall entire boards without an attorney and stop multimillion-dollar assessments in their tracks.
Records You Have the Right to See (They Can’t Legally Refuse)
You are entitled to copies of:
- Annual budget
- Reserve study
- Bank statements
- All vendor contracts
- Invoices for repairs/maintenance
- HOA management company contract
- Legal fees paid to attorneys
- Meeting minutes related to spending
If they refuse, that’s not just wrong. It may be illegal, but there is a correct way to request records.
How Hidden Spending Starts and How It Ends
Here’s what we see over and over:
How It Starts
- Vague financial reports
- No homeowner input
- Board-approved vendor contracts with zero transparency
- Threat of a “necessary special assessment”
How It Ends
- Written demand for financial records
- Audit initiated under Civil Code §5305
- Homeowners unite via petitions
- Board members replaced — investigation begins
You Don’t Necessarily Need a Lawyer You Need a Strategy
California law is on your side if you use it properly.
Most homeowners lose simply because they complain verbally, and do not request accurately, and leave no paper trail. When you put it in writing, cite law, and demand transparency?
The conversation changes.
That’s exactly why we created the HOA Victory Kit — a homeowner toolkit proven to stop illegal spending and force financial transparency.
Includes:
- Financial audit request templates
- Record inspection demand letters
- Recall petition forms
- Vendor bidding inquiry documents
- Step-by-step strategy to challenge spending
If your HOA is raising dues without clear explanations, do not wait.
Your strongest tool is written action, not frustration.
Learn more about templates here:
Visit Our HOA Victory Kit Page
Final Thought
An HOA board is not royalty. They are elected managers of your money, and California law holds them to strict fiduciary standards.
Your voice matters. Your vote matters. Your rights are real.
The next step?
Not outrage – documentation.
Take back your power.
Start with one written request.
We’ll help you with the rest.