Condo unit owners buy property within a condo association for the shared benefits of living in the community. They pay association assessments to service and maintain those common areas, and they elect board members to act as financial fiduciaries to the association.
Because of their investment, unit owners have a right to know that the assessments they pay in are being allocated appropriately within the annual budget. So, who exactly is making those decisions and how are those decisions getting approved?
Who Prepares the Budget for Your COA?
The committee in charge of preparing your association’s annual budget is your elected condo board. They spend significant time reflecting on previous years’ budgets and estimating anticipated future expenses. They also ensure that they are setting aside enough in the reserve fund to pay for future improvement projects and unexpected emergencies.
Before going to a vote by the board, they must distribute the budget to the full association. Then, a majority of board members present must vote to approve the proposed annual budget for the following fiscal year.
How is the Budget Managed?
Again, it is the board’s responsibility to manage the association’s budget. Many condo boards choose to hire a third-party professional association management company to help them keep up with the day-to-day management responsibilities of the association. For example, our team at First Community Management helps condo boards by preparing for meetings, distributing notices, managing and maintaining the community property, and assisting with other financial aspects of managing the condo association. If your association could benefit from our professional services, please get in touch with us today to learn more.