2010 July
2010 June Vol. 8 No. 7
Focus on...Community Budgets & Finance
Overlooked Savings
As annual and quarterly budgets come up for review, associations are looking to
cut additional costs anywhere and everywhere they can. But how much more “fat” can be trimmed from budgets? Surprisingly, there are a few unsung cost saving
measures that associations may have overlooked – and with some innovative and cooperative changes, condominiums may still be
able to pull some extra cost savings from their financial hats.
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Squeeze Play
Tighter lending requirements for Federal Housing Administration (FHA)-backed
mortgages for condos have put financial and administrative pressure on condos
around New England at a time when many are ill prepared for any new challenges.
The most onerous of the new requirements are mandated reserve fund
contributions, a 15 percent limit on condo fees delinquencies, and the
specification that the condominium itself obtain FHA approval – this resulting in reams of additional paperwork for community associations.
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Understanding Your Condo's Finances
Management of a condominium community is much like democratic government in a
small town or village. The budget process is remarkably similar, whether it’s fees or taxes being collected, and, as in local government, financial
management is a transparent system based on “GAAP” (generally accepted accounting principles).
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A Rash of Thefts
Given recent headlines, condo associations could be forgiven for thinking they
need to put an armed guard and razor wire around the petty cash box. A wave of
fraud appears to be hitting condominiums from New England to Florida and
beyond.
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Q&A: What if Secret Ballots Aren't Secret?
Our Massachusetts condo complex is composed of three phases with a separate board for each phase. In two of the phases, the board is elected at the annual meeting with a secret ballot. In my phase, the last of the three, unit owners are required to sign their name and unit number on the ballot before being checked in at the meeting. This requirement was not in the condo docs, but was passed by the board about two years ago. (Unit owners are afraid to vote for anyone not on the current board as their life would not be worth living). Many unit owners are unhappy with this situation, but havebeen afraid to complain to the board. Also, only one unit owner, appointed by the board, counts the ballots; in the past there were three. I feel it is not an election when it is not a secret ballot. Read More
