What Tools Are in Your Homeowner’s Association Tool Bag: Financial Edition

Running a homeowners association (HOA) isn’t just about rules and assessments—it’s about building a community that feels supported, connected, and well cared for.

In my work with Boards, I’ve seen firsthand how the right systems can transform an HOA's function. But often, these tools are overlooked—not because they aren’t needed, but because of cost.

On a broader level, expectations for our personal lives—some rooted in comfort, others in necessity—are shifting. The same goes for our communities. Technology has become essential (and more expensive), reshaping how organizations like HOAs communicate, operate, and serve their members.

Every Association has a unique set of tools in its tool bag—or, in some cases, members on its team who carry that knowledge. Not all Associations are created equal, and some may need more support than others. That support may relate to communication, maintenance systems, safety features, or community-building efforts.

In this blog entry, I’m focusing on Financial Tools, the systems that keep your HOA on solid financial ground.

Some tools we’ll explore in future entries may be optional. However, many financial tools are required by law. I’ve flagged specific Washington State statutes, especially those impacted by WUCIOA and Senate Bill 5129, but always do your due diligence to confirm what applies to your community.

Transparent Financial Practices

HOAs follow a very narrow financial path. They must collect enough to cover immediate expenses, contribute to long-term planning (like Reserves), and have cash for emergencies. Managing an HOA’s finances isn’t just about balancing the books, but also building trust. When residents understand where the money goes and why, it reduces tension, increases participation, and strengthens the community.

Here are a few financial and budgeting tools I recommend every Association keep in their tool bag:

Monthly Financial Reports + Professional Oversight

Whether your Association is self-managed or works with a management company, producing clear, regular financial reports is essential. These should include income, expenses, reserve contributions, and bank balances, giving the Board and the community a reliable snapshot of financial health.

Filing taxes through a licensed CPA is a wise investment. While it might be tempting to delegate this to a Board member, hiring a professional reduces liability, ensures compliance, and gives your community peace of mind that it’s being handled correctly.

In Washington State, annual audits are required for many Associations.¹ While audits may feel like just another budget item, they serve an important purpose: validating your records and ensuring internal controls are working properly. They also bring accountability for the Board and your management company.

Operating + Reserve Accounts

Keep them separate. Full stop. Commingling funds—even unintentionally—creates confusion, risk, and weakens oversight. Every Association should maintain two distinct accounts:

• One for daily operations (landscaping, utilities, etc.)

• One for long-term repairs and projects outlined in your Reserve Study

Separate accounts support transparency, improve budgeting, and make it easier to track reserve contributions over time. It’s a foundational step toward financial stability, no matter your size or structure.

In Washington, this isn’t just best practice—it’s a legal requirement.²

Reserve Studies

If your Reserve Study is outdated or unread in a folder, it’s time to revisit it. Reserve Studies are more than just a requirement—they’re a roadmap for major repairs and replacements. Updating them every few years helps prevent surprise assessments and supports long-term financial planning.³

In Washington, Reserve Studies must be updated regularly and reviewed annually to guide contributions. As WUCIOA expands under SB 5129, many previously exempt Associations will need to bring their Reserve practices into compliance.

Financial Transparency

Tracking income and expenses monthly supports budgeting and helps owners understand what their dues pay for.

Why can’t the Association pay for the food truck at National Night Out? Why are our dues going up?

Providing residents with abbreviated financial statements—even just a summary—helps answer those questions. You don’t need to send every line item, but keeping owners in the loop builds trust and reduces frustration. People tend to feel better about dues increases when they understand the “why.”

Final Thoughts

Every HOA needs a solid foundation, and that starts with financial tools. Monthly reports, separate accounts, updated Reserve Studies, and clear communication about money aren’t just administrative tasks. They are the guardrails that keep your community steady and sustainable.

As expectations rise and laws evolve, Boards that embrace these tools today will be better prepared for tomorrow.

What’s in your HOA’s financial tool bag?

Footnotes

¹ Under RCW 64.90.530, all Associations are required to conduct an annual audit performed by a certified public accountant. Associations with annual assessments under $50,000 may opt out of this requirement, but only if a majority of unit owners vote to waive the audit. Senate Bill 5129 expands this requirement to previously exempt Associations, with full WUCIOA compliance beginning January 1, 2026.

² Under RCW 64.90.550 (Washington Uniform Common Interest Ownership Act), Associations must maintain separate operating and reserve accounts. Senate Bill 5129 extends this expectation to previously exempt HOAs and Condos, with phased compliance beginning January 1, 2026.

³ RCW 64.90.545 requires Reserve Studies to be updated at least every three years and reviewed annually for necessary adjustments. Senate Bill 5129 expands these Reserve Study expectations to most HOAs and Condos by 2026.