Annual Budgets

Steven - Check your state laws regarding HOAs and Condos. The State of NC law states "Within 30 days after adoption of any proposed budget for the planned community, the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget, including a statement that the budget may be ratified without a quorum. The executive board shall set a date for a meeting of the lot owners to consider ratification of the budget, such meeting to be held not less than 10 nor more than 60 days after mailing of the summary and notice. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board." Hope this helps.

Our process is as follows:

Our finance committee prepares a draft budget in the August - September time frame.
An open special board meeting is held in October to review the draft budget, make adjustments and decide on any new initiatives to be included. Homeowners are permitted time at this meeting to comment on the proposed budget.
Finance committee makes any changes resulting from the meeting.
The budget is distributed to the board members in spreadsheet format for final review prior to the November board meeting.
At the regular November board meeting a motion is made by the treasurer to adopt the budget.
Once approved the budget is posted to the community web site and hard copy is provided to any homeowner upon request.

Our documents permit the BOD to increase fees up to 5% over current fees (we pay monthly) - anthing higher requires 75% of homeowners to approve it (same if we'd requested a special assessment). The CCRs also state that the upcoming year's budget (itemized) must be sent out 30 days before it takes effect, so we approve it during the November meeting and our property manager mails it out so homeowners receive it on or before December 1.

If the budget requires a raise in assessments greater than 5%, our documents require the increase to be approved by the membership. Therefore, in a way that is having the budget approved by the membership (but not really).

In my research, I have seen some State condominium laws that require membership approval for the budget but I've never seen that requirement in any HOA laws.

Steve

Condos in SC are controlled by the SC Horizontal Property Act. I do not know if it says budgets must be voted on or not. Single homes and townhouses are not controlled by SC HPA but rather they are controlled by their own Articles of Incorporation, Covenants, Bylaws, and Rules and Regulations.

Personally, I think having homweowners vote on a budget would be a horror show and it would never get approved. Many will simply vote against it as a protest when what they actually want are their dues decreased. Many will also vote against it if they dislike some or all of the BOD.

I also think a BOD should have the power to implement minor dues increases (say 5% or less per year) without owners voting on it.