Is Your California HOA Board Compliant? A Davis-Stirling Checklist

If you're serving on a California HOA board, you're juggling more legal requirements than you probably realized when you volunteered. The Davis-Stirling Common Interest Development Act isn't just a set of guidelines—it's California law, and missing a deadline or requirement can expose board members to homeowner lawsuits and personal liability.

The challenge? These requirements are scattered across dozens of Civil Code sections, they change regularly, and there's no central system tracking what you need to do and when.

This checklist covers the essential Davis-Stirling compliance requirements every California HOA board needs to track. Whether you're a new board member or a veteran trying to stay on top of everything, use this as your reference guide.

Annual Disclosure Requirements

1. Annual Budget Report (Civil Code §5300)

Deadline: 45-60 days before your fiscal year ends
Requirement: Distribute a pro forma operating budget to all homeowners

What you need to include:

Estimated revenue and expenses for the upcoming year
Current reserve fund balance
Estimated reserve fund contributions
Summary of reserve study findings
Assessment increase breakdown (if any)

Common mistake: Boards often distribute the budget but forget to include the reserve study summary or explanation of assessment increases.

2. Annual Policy Statement (Civil Code §5310)

Deadline: Annually, within 30-90 days before the fiscal year ends
Requirement: Distribute a statement summarizing the association's policies

What you need to include:

Assessment collection and late fee policies
Discipline and hearing procedures
Dispute resolution procedures
Architectural review process
Current insurance coverage summary

Pro tip: This can be distributed with your annual budget report to reduce mailing costs.

3. Assessment and Reserve Funding Disclosure (Civil Code §5300)

Requirement: Include this summary statement on the first page of your annual budget or in a separate mailing

The disclosure must state:

"The state of California requires your association to distribute..."
Current reserve fund balance as percentage of fully funded reserves
Whether the association is funded according to the reserve study

Why it matters: This disclosure ensures homeowners understand the financial health of their reserves and whether the association is adequately preparing for future repair costs.

Reserve Study Requirements

4. Reserve Study Update (Civil Code §5550)

Deadline:

Full reserve study with site inspection: Every 3 years
Update without site inspection: Annually in the years between

What's required:

Component inventory of all common area elements
Remaining useful life estimates
Current replacement cost estimates
Reserve fund strength analysis
Funding plan recommendation

Reality check: Many boards skip the annual updates to save money. Don't. Failing to maintain current reserve studies can result in homeowner lawsuits if the board had to levy special assessments due to inadequate reserve planning.

Cost: Expect to pay $2,500-5,000 for a full study with site inspection; $800-1,500 for an update.

5. Reserve Fund Use Restrictions (Civil Code §5510)

Rule: Reserve funds can only be used for their designated purpose

What this means:

You cannot "borrow" from reserves to cover operating expenses
You cannot defer a reserve component repair to fund a different project
Emergency exceptions exist but require homeowner notification

Penalty: Board members who authorize improper reserve fund use can be held personally liable for repayment.

Meeting and Election Requirements

6. Annual Member Meeting Notice (Civil Code §4920)

Deadline: 10-90 days before the annual meeting (check your bylaws)
Method: First-class mail or electronic delivery (if member consented)

What the notice must include:

Date, time, and location of the meeting
Agenda items (general nature is sufficient)
For election meetings: list of candidates and voting procedures

7. Board Meeting Notice (Civil Code §4930)

Deadline: At least 4 days before the meeting
Exceptions: Emergency meetings require 48 hours notice

Pro tip: Post your annual board meeting schedule at the beginning of the year and you'll satisfy the 4-day notice requirement for regularly scheduled meetings.

8. Open Meeting Minutes (Civil Code §4950)

Requirement: Keep minutes of all board meetings (except executive sessions)
Availability: Must be available for inspection within 30 days of the meeting

What to record:

Date, time, location, and attendees
Motions made and how each director voted
General subject matter of executive sessions (without details)

9. Election Rules and Voting (Civil Code §5100-5145)

Requirements:

Secret ballot voting for board elections
Independent third-party to count ballots (inspector of elections)
Ballots mailed at least 30 days before election deadline
Detailed election operating rules adopted and distributed

Common violations:

Allowing candidates to count ballots
Not appointing an inspector of elections
Failing to mail ballots on time
Insufficient candidate nomination procedures

Document Access and Records Retention

10. Association Records Access (Civil Code §5200-5235)

Homeowner rights: Any member can request to inspect association records
Your deadline: 10 business days to make records available

Enhanced association records (must provide within 10 days):

CC&Rs, bylaws, and articles
Minutes of member and board meetings (past year)
Current-year financial statements
Reserve study

General association records (members can request but you have more discretion):

Historical financial statements
Vendor contracts
Invoices and receipts

Pro tip: Set up a secure online portal where members can access common documents 24/7. This reduces request volume and shows transparency.

11. Tax and Financial Records Retention

IRS requirement: Keep tax returns and supporting documents for 7 years
Best practice: Keep all financial records (bank statements, invoices, contracts) for 7 years

Insurance Requirements

12. Directors & Officers (D&O) Insurance (Civil Code §5800)

Requirement: Boards must maintain adequate D&O liability coverage
Minimum recommended: $1 million per occurrence

Why it matters: Without D&O insurance, board members can be personally sued for management decisions. Most HOA attorneys won't advise boards that don't carry this coverage.

13. Property and Liability Insurance (Civil Code §5805-5810)

Requirements:

Property insurance covering all common areas
General liability insurance
Fidelity bond coverage (for employees or managers handling funds)

Annual task: Review insurance certificates and confirm coverage amounts match current replacement cost estimates from your reserve study.

Compliance Dashboard: Track Your Status

Here's a simple way to stay on top of compliance. Create a spreadsheet or use a compliance calendar with these recurring tasks:

Requirement	Frequency	Deadline	Status
Annual Budget Report	Annually	45 days before FY end	⬜
Annual Policy Statement	Annually	30-90 days before FY end	⬜
Full Reserve Study	Every 3 years	By fiscal year end	⬜
Reserve Study Update	Annually	By fiscal year end	⬜
Annual Member Meeting	Annually	Per bylaws	⬜
Election (if applicable)	Per bylaws	Per bylaws	⬜
Board Meeting Minutes	After each meeting	Within 30 days	⬜
Insurance Review	Annually	Before policy renewal	⬜

What Happens When You're Not Compliant?

Non-compliance isn't just a theoretical risk. Here's what can happen:

Homeowner lawsuits: Members can sue the board for failing to comply with Davis-Stirling requirements. Even if the lawsuit is frivolous, your HOA will spend thousands on legal defense.

Personal liability: If a board member acts with gross negligence—like skipping required disclosures or misusing reserve funds—they can be held personally liable.

Penalty assessments: Some Davis-Stirling violations carry statutory penalties, which the association (and therefore homeowners) must pay.

Loss of D&O insurance: Many D&O policies exclude coverage for "known violations." If your carrier learns you've been ignoring compliance requirements, they may deny coverage or non-renew your policy.

The Bottom Line for Volunteer Boards

You didn't sign up to be a legal expert. But California law expects HOA boards to track and meet dozens of compliance requirements throughout the year—requirements that change regularly and carry real consequences when missed.

The good news? Compliance doesn't have to be overwhelming. With the right systems and reminders, you can automate most of the tracking and ensure nothing falls through the cracks.

Stay Compliant Without the Stress

Bursar is built for volunteer HOA boards in California. Our Davis-Stirling compliance calendar tracks every deadline, generates required disclosures automatically, and gives you an audit trail for everything.

Join the waitlist: California HOA boards launching February 2026
👉 bursar.io/waitlist

Or take our free compliance audit to see where your board stands:
👉 bursar.io/compliance-audit