Budget meeting

Started by MikeM8 • 9 replies • 1433 views

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MikeM8 (North Carolina)
Posts: 13

Posted:

What if?

Your MC did not send out the notice of the meeting to approve the new budget and the Board just found out about it recently, 6 months after the fact. To further complicate matters there was a dues increase associated with the new budget.

If my understanding of our Doc’s and the North Carolina planed community act is right, if a budget is not approved by a certain time, by default you continue to operate under the old budget. If that is indeed the case, what do we do about the dues increase that was added? People have already paid 2 quarters. Do we refund the extra money? Who pays to have new payment books printed?

I can see this is going to be a mess, any help would be greatly appreciated.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Mike:

While reading your post, I immediately thought the MC is a heck of an MC to allow this to fall by the wayside....then I took a step back. And thought:

- where was the Board in all of this? 6 mos. later they just realize no notice was recd by members (or themselves, too) of an annual meeting? Where was the meeting scheduled? Who scheduled the meeting? Whoever the 'who' is, they didn't follow-up?
- why did the residents not question the increase?
- why did the residents not question no annual meeting scheduled as the official documents state there must be
- where are responsible Board members and/or residents in your community?
- 'whoever' increased the dues/budget without a member vote should be held accountable

MikeM8 (North Carolina)
Posts: 13

Posted:

It would seem a lot was read into my first post that simply was not there.

Our annual meeting and our Budget Approval meeting are not held together.
We had our regular Annual meeting, therefore no questions about not having one.
The residents did question the increase and where satisfied with the reasons for it. (Most of them anyway) as presented at the annual meeting.

The Board can increase due up to 10% per year without a vote of the community. The increase was 8%.

The meeting has always been scheduled by the MC at their office. Been this way for years.

This whole topic may be moot anyway. A couple of unhappy HO’s have been saying that they did not receive the Budget meeting notice. To tell you the truth I do not remember if I got one or not. If I did, being on the Board it would have been old news and not likely to get into my permanent memory. I have the MC looking for the appropriate documentation that the notices where in deed sent out.

If you read the fist line of me fist post, it says “What if?”

HaroldS1 (Arizona)
Posts: 314

Posted:

Mike - so was there a budget meeting? Were any members there? Harold

GloriaM (North Carolina)
Posts: 829

Posted:

Mike:

When is your fiscal year end? Is it calendar year January-December?

MikeM8 (North Carolina)
Posts: 13

Posted:

If there was a budget ratification meeting, and I am assuming there was, no one came. There has not been anyone show up at this meeting for at least 7 years.

Yes our fiscal is Jan - Dec

GloriaM (North Carolina)
Posts: 829

Posted:

If your budget is calendar year then the budget would have to been approved and adopted 45-days prior to the new budget year. Therefore your dues would have increased January 1st of 2007, not 6 months later.

Did your dues increase then, or are you saying 6 months into 2007?

MikeM8 (North Carolina)
Posts: 13

Posted:

Dues went up Jan 1 '07

JM2 (Oregon)
Posts: 439

Posted:

Hi Mike:

Do your documents require that the Board approve a new budget? If so, then how is it that the budget went up with no approval? It would seem that the MC is acting on his/her own and not at the direction of the board?

J. Patrick Moore, CMCA

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Our budget is allowed to be increased annually up to 5%. It usually takes the board vote to initiate the change for the raise. However, it can be raised above 5% throughout the year if a special meeting is held with the general membership to approve the special rate adjustment. It's much like a special assessment but it's a percentage instead.
I've heard some states like California are allowed up to a 20% hike a year. Other states may have similar restriction on the amount of increase. Read your documents to find out. Often it's in regards of a percentage above the lending rate or prime. That may lead you in the right direction to look it up in your CC&Rs.

Former HOA President

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