October 2019
Each year condo owners are provided with audited financial statements and a budget few understand. Great condo boards make an effort to explain this financial data.
Best practice is to include a single page explaining key points in whatever financial data is being provided. Be clear and concise without expressing opinion or speculation. All residents have an interest in knowing certain information:
Condo Fees – How they are changing from the prior year.
Reserve Fund – How its’ balance has changed over the past year. Explain major expenditures over the prior year and anticipated major expenditures in the coming year.
Budget – Identify significant increases or decreases from the prior year and provide explanations.
Common Areas and Activities – Identify recent or planned changes to amenities, common areas or social programming.
Be transparent. Don’t spin the data or make inferences about the overall financial status of the corporation. Such statements are likely to meet with skepticism and can lead to future problems.
Communicate the budget using all available communication methods. Make it as public as possible both electronically and in hard copy. Don’t force residents to hunt for this information.
