Percentage of votes required to approve budget

Started by ChrisP5 • 3 replies • 1330 views

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ChrisP5 (Missouri)
Posts: 165

Posted:

I am curious as to what other association's documents state as to what is required to approve or vote down a budget. Does your state have laws that determine this or is it based on your documents?

For example our documents state that the board develops a budget and at the annual meeting 60% of the total votes of the association have to vote against the budget otherwise the board developed budget was ratified.

The background to my question - We had a fairly contentious annual meeting this year where the majority of the members in attendance voted against the budget but it still passed based on the by-laws. This of course led to many upset members who thought we were making up rules, etc, etc.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

ChrisP,

Our documents and state laws are similar to yours.

According to state law (Connecticut Common Interest Ownership Act) the BOD proposes the annual budget which is presented to the unit owners. A meeting is called for the purpose ratifying the budget. At that meeting, unless a majority of all unit owners, or a larger number as specified in the declaration, votes to reject the budget, the budget is ratified (approved).

Our declaration (CCRs) does not specify a larger number but reads pretty much the same as state law.

So, example:

100 unit owners
80 unit owners present at meeting in person or by proxy.
45 unit owners vote to reject the budget.
The budget is approved because, even though 45 votes is a majority of those present at the meeting, 45 votes is less than a majority of all unit owners.

The moral to the story? If you don't want the budget to be approved, be sure to attend the meeting and vote to reject it.

I believe the purpose behind this approach is to guard against unit owner apathy. Otherwise, it would be difficult to get a new budget approved in an association with apathetic unit owners.

TimB4 (Tennessee)
Posts: 21,047

Posted:

In our Association the budget is determined by the Board. The membership is notified and provided copies but only the Board votes on it.

It should be noted that our board is also limit to increasing assessments up to 5% per year without membership approval. This typically only allows for inflation and doesn't really allow any major changes to the budget so this might be why the membership doesn't vote on the budget.

Tim

JohnM48 (Pennsylvania)
Posts: 89

Posted:

Our budget is handled as Tim describes, complete with the 5% limit on assessment increases.

Association President

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