Insurance change in proposed Budget

Started by BuddyJ • 3 replies • 1412 views

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BuddyJ (Maryland)
Posts: 37

Posted:

We have an Annual Meeting soon for our 18 unit condo in Maryland and there is a 30% reduction in insurance premiums to cover a new Management Company fee.
Wouldn’t we, the members, have to see the new insurance policy before approving the new budget? Our By-Laws are clear on the amount of insurance needed.

The new budget also has a 10% reduction in Reserve contribution even though our recent Reserve Study shows a short fall within the next 2 years and new assessments are imminent.

MarkM31 (Washington)
Posts: 556

Posted:

Doesn't sound like a realistic budget.

And yes, you have a right to see the items

CharlesB20 (Colorado)
Posts: 15

Posted:

NO, you do not have to see the proposed insurance policy before approving the budget. It is not within the scope of the membership's responsibility to approve a new insurance policy. That business belongs to the executive board.

The role of the membership is to elect directors and to approve or reject the proposed budget. Leave the details of governance of the community to the executive board.

LarryB13 (Arizona)
Posts: 4,099

Posted:

State law should dictate whether you have a right to see the insurance policy. The board may be within its right to withhold the details of the policy but the members are also within their right to withhold their approval of the budget.

I interpreted the OP's comment to mean that the assessments are going to remain the same but the board will pay 30% less for insurance and use that savings to pay for a new management company. Without knowing what the limits of coverage will be under the proposed policy no one can determine whether this is a wise move or the first step on the road to ruin. Adding fuel to the fires of suspicion is the reduction in reserves when they are already inadequate.

If I was a member I think I would exercise my right to vote against approval until I knew the details.

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