December 2016
Money is as sensitive a topic for individuals as it is for condo boards.
In a family income earners pool their resources to pay bills. Then things come up. There are unplanned dinners, clothing purchases and social events. Many of these expenditures take place without discussion or consideration of the overall budget. At the end of the month there may not be enough income to pay for all expenses.
Condo board management is similar. There is a budget estimating expenditures for the year that should be adhered to. Things change. Some estimates are too low. Some expenses are omitted from the budget. Residents make deserving requests that are approved but not budgeted.
At the end of the year, the condo corporation may find they do not have enough money to pay the bills.
What happens? In all likelihood, condo fees are raised the next year to cover this deficit.
A board should understand their fiduciary duty. They should strive to keep the condo corporation in the black by not approving expenditures without first considering the availability of funds.
