Exceeding the budget question

Are you sure this part of the statute applies to your community? Some HOA laws apply to all of them, while others apply to communities established on or after a certain date. Check out the beginning of this statute and compare that to your documents (the date your community was established) so you'll know for certain.

Any budget (including your household budget) is a guide at best, and as you know from your own household budget, there are a number of reasons why the actual amount spent may be different from what you budgeted for. In this case, you didn't say which line items went up - for example, the electric bill may have been budgeted at X, but then the utility company decided to raise the rates for whatever reason.

This section also says an increase may be necessary because of "conditions which, if not corrected, could reasonably result in a threat to the health or safety of the unit owners or a significant risk of damage to the condominium," the ASSESSMENTS may have to increase beyond the 15% already approved and THAT would require the budget to be amended at a special homeowner's meeting. Has the board announced that assessments will be going up? If so, they should call a special meeting and then you can express your concerns.

Otherwise, the numbers worth paying attention to are the actual costs and for that, you'll need to start reading monthly income/expense statements. Even if the budgeted amount for that line item is 15% above last year, the actual expenditure may be less, so you need to read monthly income/expense reports. Don't forget, there is something called inflation. There may also be instances of delayed maintenance and the line items are going up because the can can't be kicked down the road anymore and repairs must be made.

Finally, statements like "personally I think they use the reserve fund as a big slush fund" aren't helpful. Do you know what the reserve fund is for? If you don't have one, you'd risk being faced with a special assessment to pay for major repairs and I guarantee you'd really hate that.

It would appear your board may need to provide more education on the budget (you may not be the only one with questions). Instead of speculating, go to the next board meeting and ask why certain line items went up. You should have received an itemized copy of the budget - if you didn't, get one, along with a copy of the last reserve study, which should provide details on what the capital expenses are and how they should be funded. Hopefully, you get all your questions answered and can see the thought process behind the decisions (you may not like the decision, but should be able to see that they didn't just make up numbers as they went along). Perhaps you can also suggest the board publish a special report on the new budget providing details - it could be published in the community newsletter or on the website (preferably both).

Jeff,

Are you on the board? Assisting with any committee?

The law says the budget can be delegated to any other body. In your previous post, you quoted your bylaws that stated your board handles the budget. So in answer to your question, this means that there does not need to be a special meeting of the council. Your board can meet to adopt or amend the budget, which is the usual arrangement for HOA or condo boards.

Also, the law you quoted here speaks of "any expenditure ... that would result in an increase in an amount of assessments". The law does not say an(y) expenditure that exceeds the budget or a budget line item. So the law only applies if the board increases assessments by 15% or more.

I view this law as a sort of consumer protection that only kicks in when actual assessments go up, not otherwise.

Your board needs to do a better job of the budget and tracking expenditures. In particular, you need a Reserve Study.

The Council of Unit Owners is the owners, not the board. It is the legal name in MD for what we would call the owners association (with some differences that don't matter here).