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Condo Association Annual Budgets - An overview

Condominium Association Annual budgets

Your annual budget calculates the total amount of assessment payments required to support the association’s expenses and savings. Since adopting a new budget typically means an increase to the monthly assessment requirements of your owners, the change can often be met with resistance. It is therefore important to make sure that your board follows all requirements of your association bylaws and the Illinois Condo Act.

Some bylaws place a restriction on the total increase to assessments that can be called for by a budget without requiring a majority approval of the unit owners. These restrictions, however, have been abolished by recent changes to the Illinois Condo Act which allow Boards full discretion in the adoption of budgets.

(The following section only applies if an adopted budget would result in the sum of all regular and special assessments payable in the current fiscal year to exceed 115% of the sum of all regular and special assessments payable during the preceding fiscal year)

After a budget has been approved by the Board unit owners have the opportunity to “veto” the decision. The unit owners have 14 days after the budget adoption to provide the Board with a petition, which must be signed by at least 20% of the association by percentage of ownership, requesting a meeting of the unit owners to vote on the budget.

The Board must hold this meeting within 30 days of receiving the petition. At this meeting a vote of all members present (Board and owners) will occur. A majority approval of the total association ownership is required to reject the budget. Otherwise the budget is ratified.

Please note the Board has no obligation to educate the Association members of the legal options available as it relates to budgets.

Passing an annual budget

The typical steps required for the Board to adopt a budget:

  1. Budget Distribution – A copy of the proposed budget must be sent to all unit owners at least 30 days prior to the board meeting where the vote will occur. The budget can be included in the board meeting notice (#2 below) if sent exactly 30 days in advance.
  2. Board Meeting Notices - A meeting notice must be sent to all unit owners. While not required, it is a good policy to also post a meeting notice in a common area.
    1. Notices should be sent via postal mail to each owner’s current mailing address on file. Delivery confirmation is not required.
    2. Notices must be sent 10-30 days before the meeting date.
    3. The notice should explain the reason for the meeting along with the meeting date, time and location.
    4. Notices should also contain a copy of the proposed budget detailing all anticipated common expenses by category as well as all anticipated assessments and other income. (see #1)
  3. Board Meeting
    1. Must be open to all unit owners.
    2. While all unit owners can participate in discussions that may be scheduled on the agenda, only Board members will vote on the budget.
    3. A simple Board majority is required to approve the budget.
  4. Budget Notices – All unit owners should be sent a notice making them aware of the adopted budget.
    1. Notices should be sent via postal mail to each owner’s current mailing address on file. Delivery confirmation is not required.
    2. Each should contain the owner’s specific assessment payment obligations.
    3. Initial payment should be required no earlier than 30 days from the date of the board action.

Have questions? 

Send our team an email with any questions that you have, budget-related or otherwise, and we'll shoot you a response as quickly as possible. 



 

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