Budget plan for 08??

Started by PradnyaK1 • 7 replies • 1328 views

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PradnyaK1 (New Jersey)
Posts: 17

Posted:

For year 2007, we have received a profit and loss sheet. We are scheduled for the annual meeting in march. Board have never prepared any budget documents for upcoming year in past. I would like to know how things happens in other condominiums/associations. As a homeowner, can I ask board for 2008 budget plan?

*NOTE: We are a non profit association. Board works with out pay.

GeraldT4
Posts: 1,022

Posted:

PradnyaK1 - Going forward your Board should provide an annual projected budget to it's owners. As a homeowner you can, and should request a 2008/2009 budget. If the Board has difficulty or needs assistance you can and should volunteer to assist on a finance committee to facilitate such a budget. My gov. docs. require our Boards to provide an annual budget. For specifics on New Jersey law regarding Financial Records and owner access you may wish to check out The New Jersey Condominium Act, N.J.S.A. 46:8B-14(g) or http://www.state.nj.us/dca/codes/newhome_warranty/assoc_regs_initiative.shtml

My HOA/COA is also non profit assoc, as is most in the nation.

My HOA/COA budget year runs from June to May. The budgets include all line items we budget for, and YTD and Actual Spent columns including but not limited to as follows:
Reserve Transfers
Landscaping Contract
Snow Removal Contract
Pool Contract
Pool Supplies
Front Gatehouse Attendant/Security
Sprinklers
Street Lighting
Exterminator
Clubhouse Rental
Clubhouse Electrical/Heat

PradnyaK1 (New Jersey)
Posts: 17

Posted:

GeraldT4 : Wonderful!!! Thanks so much for your reply! your response clarified my most of the questions.

Financial docs says -
"Each association, in consultation with its accountant, should identify which of its other
financial records are GAAP records and therefore open to inspection under the Condominium
Act."

We do not have any accountant hence I am not aware of what records classify under "generally accepted accounting principles" (GAPP)??

Is a homeowner allowed to inspect the electric/water bills, landscape/snow removal contract and insurance?? I always wonder if homeowner can request the bank statement for specific month? Sorry for being so specific. I did not find any reference of it in by-laws. It just says supporting documents, record of all receipts and expenditures should be made available to the owner as per request.

We do not have a financial committee but just one treasurer. I would like to receive a profit and loss numbers break down by each month and further per month there would be detail break down of expenditure by category. Do you think it is too much to ask for?

(I am a new condo-owner and many of association owners commented that ours is a non profit assoc and board works on no pay so we can not ask/demand anything.)

GeraldT4
Posts: 1,022

Posted:

Hi PradnyaK- Your condo-owners are 100% incorrect that you can not ask for review of association docs, or demand anything. Where ever did they get that idea? Hmmm. An association is bound by state law to make all information available, except that which may have legal sensitivity (pertaining to pending litigation). Problem is that requesting the info will invariably be seen as controversial and you may encounter some serious push back. I'd tread carefully on this one. Seems to me the best method to get the info is to join the Board or offer to head up a finance committee. If your request is not satisfied through a more informal request (phone call, quick email to the Management Company), what you need to do is provide the Board care of the Management Company a letter certified mail return receipt requested written notice requesting they notify you within 10 business days of the date, time, and place that the specific association documents will be available for your review. I'm thinking that asking for a profit and loss for each month may be overkill. Reason may be that it may not capture real-time balances due to the fact that expenditures tend to be seasonal. For example all payments to the snow or landscape contractor may not be paid in any given month. The important categories to try to get a handle on are the balances in the working capital, deferred maintenance, and reserve accounts, the balances in the association bank accounts. You may request to review the information on a quarterly basis rather than monthly. You have every right to request this info since it is your money that contributes towards the running of the association.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Pradnyak,

To make this clearer for you, you are a "Not for Profit" corporation, which is different than a Non Profit corp. Tax wise is a very important difference.

Almost all Board members in this country are volunteers/ elected by the membership and do not receive pay. They are put into office by the members and the statement that because they are volunteers means that you cannot as for information and copies of anything concerning the working of your association, is very false. You pay dues and are entitled to see any items that are association documents. (With the exception of legal and health items regarding your other members.

They(the Board) are probably required by your State law to provide it to you under certain time restrictions and conditions but it is yours to review.

PradnyaK1 (New Jersey)
Posts: 17

Posted:

Would anyone know if it is mandatory for homeowners to know in advance proposed budget and how much advance notice should be given? Our CCR's are silent on this. I live in NJ where can i find the info? anybody knows website/links?

GlenL (Ohio)
Posts: 5,491

Posted:

In our documents the Board must prepare the budget and get copies of it to the homeowners by December 15th. You have the right to review documents and receive copies of most of them; HOWEVER they have the right to charge you a reasonable fee for the time to pull the documents and for the time they spend while you review them. They also have the right to charge you for any and all copies; ours charge 35 cents per copy. Best solution, get on the Board and review them for free.

Studies show that 5 out of 4 people have problems with fractions

RaymondC (Minnesota)
Posts: 64

Posted:

Your documents probably require a budget be sent to all memebers at least a month prior to any voting on the subject. No dues can be set without a budget - it's how you figure them out. Read the docs, and by all means request the information you want in writing, and don't hesitate to press the issue firmly but politely.

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