Why Do Associations Have A Budget?
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Comenta: Begoña F. Calcerrada
Operating an association can be compared to running a business. The board of directors of every corporation must have a plan to anticipated revenues and expenses for the upcoming year. The board protects the stockholders by estimating how much money must be earned in order to pay the corporation’s expenses. Condominium associations are operated in much the same manner.
An association’s budget assists the board of directors by projecting expenses and creating a benchmark by which to compare the board’s stewardship of the financial assets of the association. The budget provides for control over certain restricted funds of the association. It also identifies how much money must be collected from the unit owners and how often the collection must be made. Basically, the budget is simply a map that will guide the board in
making decisions during the course of the year. Since the budget is only an estimate of future expenses unexpected events may occur that will require the board to make changes to the budget during the budget period.
When to Begin the Budgeting Process It is a good idea to start gathering information needed to prepare the proposed budget three months before it becomes effective. This should give you plenty of time to do such things as compare historical budget versus actual performance, research the payment histories of association members, identify and talk to key people about
the costs of equipment and services, and determine whether additional expenditures are needed to maintain the property, etc.
Meetings Held While Developing the Budget Often, the board or budget committee will meet to gather and discuss information and make decisions as the proposed budget is developed. Notice of these meeting must be posted appropriately and open to the unit owners. You need to be aware of the laws about noticing these meetings.
The Condominium Act, Chapter 718 of the Florida Statutes, and the related administrative
rules provide guidance on this topic.
In short, they indicate that board meetings and committee meetings have the same notice requirements.
Some tips for preparing board and committee meeting notices are:
• Ensure you have plenty of time to prepare the notice. Specify the date, time, and location of the meeting on the notice;
• Include a list of specific agenda items to be addressed in the meeting; and
• Post the completed notice in a conspicuous location on the property at least 48 hours before
the meeting. (A specific location for posting meeting notices should have already been designated.)
If there is no property to post the notice on, it must be mailed or delivered to the unit owners at least 14 days before the meeting. Keep in mind that if the condominium documents (e.g., declaration of condominium, bylaws, and articles of incorporation) provide guidelines that are more restrictive than the statutes, then the documents must be followed. For example, the law
addressing notice of board and committee meetings requires 48 hours’ notice preceding the meeting except in an emergency.
If the condominium documents require 72 hours’ notice before the meeting, the association must provide 72 hours’ notice. On the other hand, if the documents require 24 hours’ notice before the meeting, the association must provide at least 48 hours’ notice