budget

Started by SandyS10 • 9 replies • 846 views

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SandyS10 (Florida)
Posts: 3

Posted:

Our HOA documents require the budget be voted on by the BOD 6 weeks prior to the election of new directors and the annual meeting. This doesn't seem right, that an incoming BOD would have to follow the budget set by an outgoing BOD, Is there any resolution?

TimB4 (Tennessee)
Posts: 21,059

Posted:

I would expect that the new Board could adjust the budget as they see fit.

Budgets are guidelines, not regulations.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By TimB4 on 12/17/2017 3:21 PM
I would expect that the new Board could adjust the budget as they see fit.

Budgets are guidelines, not regulations.

I agree.

SandyS10 (Florida)
Posts: 3

Posted:

We want to hire a mgmt company, but the cost is not included in their budget.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Again, budgets are guidelines.

If you can save enough funds by reallocating budget line items, then hiring of a MC may be possible.
Keep in mind, that you may need to approach the membership if the costs are higher then the Board can raise assessments to cover that cost.

This Board can also do the leg work, request proposals, evaluate, negotiate, etc.
Then set the MC action in place to take effect next year.

SandyS10 (Florida)
Posts: 3

Posted:

Thanks, Tim that's the answer we were looking for. We have the money by just reallocating some. So we could do it the first of the year when the new board comes into office, correct?

KerryL1 (California)
Posts: 14,550

Posted:

Are you on the new board, Sandy?

When is the budget legally due to be sent to h'Owners? In CA it's no less than 30 nor more than 90 days before the new year.

Our new boards are elected in late Oct., so new boards can and do change the earlier approved budget in time for it to go to Owners by Dec. 1.

But it takes time to get an MC -- usually including proposals and bids and interviews.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By SandyS10 on 12/17/2017 6:09 PM
Thanks, Tim that's the answer we were looking for. We have the money by just reallocating some. So we could do it the first of the year when the new board comes into office, correct?

providing you can meet all of the Associations obligations (which includes deposits to the Reserves), you could probably hire an MC. Keep in mind that I have zero knowledge of your governing documents or any applicable statutes. Although you can reallocate funds, you might not be able to raise assessments.

Keep in mind, it can take a few months to actually find the one you want and negotiate the terms of the contract. The Board needs to look long term (not short term). MCs also do not eliminate the need to have a Board or any required committees.

Why do you want a MC?
What will they do that you can't?
Have you considered independent contractors vs. an MC?

BenA2 (Texas)
Posts: 1,273

Posted:

It is typical to prepare the budget before the annual meeting when elections are usually held. It should not be an issue normally since board members are not usually all replaced at once. You also have to look at your governing documents for guidance on changing the budget once it is approved. In many associations, the membership approves the budget at the annual meeting. It would not sit well if the new board made changes on a member-approved budget and may not be legal depending on the state.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By SandyS10 on 12/17/2017 3:07 PM
Our HOA documents require the budget be voted on by the BOD 6 weeks prior to the election of new directors and the annual meeting. This doesn't seem right, that an incoming BOD would have to follow the budget set by an outgoing BOD, Is there any resolution?

That's almost exactly how it's done here. Follow the bylaws. If enough people think it's somehow unfair then the bylaws can be amended to change how it's done.

It does hamstring the incoming board to some extent. Our bylaws say the budget may be adjusted, reduced, or increased either at the annual meeting or during the year as the needs of the association, in the board's judgment, require. That's our safety valve should extremely unusual circumstances occur.

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