Condo Association Management Blog

Depends on what your by-laws say. As a matter of courtesy, we always include proposed budget w/notice of meeting. Saves a lot of time and aggravation at the meetings.

Usually it's the board that will vote for the budget, not all owners. After the budget is passed copies should be distributed to all homeowners.

We make extra copies and distribute at meetings (excluding owners who are past-due on fees). Plus we save trees.

The budget should be distributed to all members before meeting if possible. However, I take real issue to suggest only the board has the right to vote on the budget. All members have equal right to determine how much they want to spend in any given year on ancillary maintenance and should have opinion on how much they want to reserve. Unfortunately I live in a condo where the Board feels like they don’t have to do this. I have had an attorney send a letter pertaining to this issue of being able to vote and discuss the yearly budget. Board presents no budget, a very strange financial report from the previous year and won’t allow discussion. They hire two policemen and threaten arrest if you attempt discussion. We are collecting way too much money almost 40% more than we need and the members have yet a chance to vote. We are told there is over $60,000 in reserve (only 22 units) collected in just 4 years. I think this is a very strange situation. The Board has yet to respond to my attorney’s letter of last year however has responded to members that my “continued” legal activity has cost the Board lot of money! Are you kidding me? I had my attorney write a letter 5 years ago because the Board decided there would be no renting allowed. (By-laws allow this) and the second letter that was mentioned above. Seriously, there has never been a letter of response from the association’s attorney. I don’t even know who the association attorney is. This is an absolute lie that costs have been incurred because of my actions. I have two other condos and never have had any difficulty with the associations. This is a nightmare. In addition, I use the Law firm that wrote the Declaration and By-laws and feel that the letters written are definitely correct in interpretation of rights and privileges

Revaro, 
 
 
 
I must ask, why are members who are delinquent in paying assessments excluded from receiving a copy of the budget. I cannot understand what one has to do with the other!! 
 
 
 
Regarding providing a copy of the budget to the members b/4 the board votes: 
 
 
 
The gov docs of the assn would hold the answer as to whether or not this is requred. In some assn's the members must either vote or ratify the budget. But I believe in most assn it's the sole resp. of the board to approve the budget. In AZ a requirement of the open meeting law allows members to speak before the board votes on a particular board item, therefore members would have the opportunity to comment on the budget before a board vote is taken. So, it may also depend upon what your state laws say.

Ruth, 
 
 
 
You may believe that the members have a right to ". . .determine how much they want to spend in any given year on ancillary maintenance. . .", but if that right is not extended to them in the gov. docs., then they do NOT have it. No matter what you think, it's the gov. docs. that rule! Now, if your BOD is violating the gov docs you may take them to court otherwise there isn't much you alone can do. You can get a group of like-minded members together to confront the board about their violations of the gov. docs. and take it from there. Otherwise you alone can take them to court on your own dime.

Ruth, this forum tends to be focused on specific advise to specific people. When someone states "All members have equal right to determine how much they want to spend in any given year...." this creates a misleading and false information. 
 
Unless your governing docs state otherwise, all owners do not have the RIGHT to determine how money are spent. They have the right to see what the board has decided. 
 
You may have issues with you board and may not like what they are doing, but unless you run for one and get elected you can't change it.

Every state has an HOA Act. That axt is state law and invariably it address the budget adoption process. In general wghat the law states is that there are two options that can be employed. It offeres holding a vote and acjhieving a majority who empower the Board to prepare a draft budget, distributes it for comment and then vote to adopt at the special budget meeting. The other option is to conduct a full scale vote with all unit owners having an opportunity to vote-even by proxy. This process will take about 6 months to conduct. Obviouslythe first option is preferable. The HOA bylaws usuall simply state tjhat the BOAD willprepare and adopt an annual budget .Note it does not speciofy the adoption process-that is done by state law. Should the board ignore tyhat lasw a unit owner could legally raise a point of order and state that the budget ado0ptiopn process being used does nhot comply with state law and that any action to adopt will be illegal. 
 
IO've been thru this process in my Maryland Condo and forxced the board to comply. You can do likewise. Download a copy of your astate law by using 
 
"name of state"@HOA.com

Usually budget prepared by board but approved at the annual meeting by association members.  
 
Those who is are delinquent can't vote but have access to association documents as any other member.  
 
 
 

Scott, 
 
 
 
Sorry but you are wrong. Not every state has an "HOA Act" and the states that do have statutes pertaining to HOAs do not necessarily have a section pertaining to budgets. I live in AZ and we have both condo and HOA state laws but neither addresses adopting a budget. Also, not all assn gov. docs address adopting a budget. Neither my CCRs or bylaws even mention a budget. 
 
 
 
While it's fine to comment on what the laws are in your state, you should be careful not to present it as though it is the law everywhere. Every state is different.

As frequently happens in this blog, owners confuse the terms "condo" and 'HOA" in the initial question. This causes respondents to further confuse the issue. 
 
Scott (4:55 pm) just used the info re HOA and then identified his property as a MD condo. The two entities are different and the process is different. MD last year amended both the condo act and the HOA act to require distribution of draft budgets 30 days prior to the meeting at which the governing body so authorized will vote on the budget. 99% of the condos in Maryland delegate to the board of directors the obligation to approve the budget and set the assessments for the following year.  
 
Due to financial underwriting standards prior to the early 2000s by FHA, etc., on a national basis -  
> Most HOAs in the declaration delegate to the board the decision on rate of assessments. Older HOA declarations limited the yearly increase - ranging from 5 to 10% or may state "plus" taxes, etc.  
> FHA removed from their approval guidelines any limit on the increase in assessments permitted and no longer require member approval for larger increases. New HOA docs being written (nationwide) often have no limit on the permitted increase. 
 
As always - read the state condo or HOA act, check to see if local jurisdictions have restrictions, and read the condo or HOA document for your own community.  
 
All associations - owners and directors - will find that the mortgage industry is thoroughly reviewing budgets, requiring insurance, Reserve Study and reserve funding, and adequate income to address expenses. The ability of a community to support itself by regular assessments, not special assessments, and to maintain its property adequately is a major factor in financing the home each of us inhabit.  
Read materials sent in advance of a meeting, submit questions if possible in advance and in writing, attend the meetings and carefully elect your directors.  

I know it seems that we always say the same thing when we answer: What do your by-laws and Declarations say? 
 
Our HOA is required to deliver a copy of the budget at least 30 days before the new budget starts in January to all owners (even those delinquent because they may get their account current during the year, but they can't vote if they owe fees). If our board is late getting the budget out, our owners pay the same fee as the prior year even if we budgeted an increase. The Board prepares the budget and they are the only people authorized to vote on it. If an owner has a question they should be able to attend HOA meetings and ask questions at a designated time (we call it "owner input") provided everyone is respectful and business is taken care of. Believe me, it's better to have the support and input of the owners than to try to do everything on your own. Most board members volunteer their time.

I didn't realize when I posted this question on the site, that so many different comments and disagreements would be mentioned. And to the gentlemen, who arrogantly mentioned that copies of budgets are not sent out to its homeowners to save trees. Unbelievable! To add another point to my posting, I discovered that our HOA does not have any governing documents on file. The only governing document we have is the State of Illinois Property Condominium Act. Should the HOA be directed to create its own governing documents?

When it comes to making things happen , only a lawsuit has any chance of getting anything done. 
 
Boards will lie. Boards will not put anything in to writing. No responsibility or accountability will be had.  
 
Nobody is going to do the work for you and probably nobody will help you either. 
 
I started out over 3 years ago trying to stop a bunch of nonsense in my association. This is how long it takes to get something done. 
 
If you are not prepared to spend the time and do something, please stop your moaning and complaining. 
 

Ron, 
 
 
 
Please explain your comment that your HOA does not have any governing documents on file. If there are no CCRs then there is no authority to have an HOA, and most importantly, to collect assessments.

can the president single out 2 owners and charge them a fee for  
 
going to the bank and asking how 
 
the 500.000.line of was structed. 
 
and was our condo held as collateral. the board had to hire an attorney to renew line of credit.apparently. the attorney charged 100.00 and said to charge the hoa. in march 2011 the president decided to make the 2 board members to pay on june 25 2011 50.00 each . should we pay. 
 
no explanation from the board or attorney as to why the attorney had to get involved. carolyn in orange beach al

No you shouldn't pay. A president can't decide by him/herself. The decision has to come from the board. Your president has the same one vote as any other board member

Carolyn, 
 
 
 
Why does the Pres think the 2 board members should pay the attorney's fee? No way would I pay this fee!! Why does the HOA need a line of credit and why would the services of an attorney be required to renew it?