As the summer winds down and we approach the latter part of the year, it’s time for our community association to turn its focus to one of the most crucial tasks on our calendar: budget season. This period is not just about crunching numbers; it’s an opportunity to reflect on our achievements, plan for the future, and ensure the continued well-being and growth of our community. Here’s what budget season entails and why it’s essential for all of us.

Understanding Budget Season

Budget season is the time when the community association reviews its financial status, plans for upcoming expenses, and sets priorities for the next fiscal year. It involves several key steps:

In July, Fannie Mae and Freddie Mac released updates to project eligibility standards for condominiums and housing cooperatives.

Some insurance carriers refer to Directors and Officers (D&O) Liability as miscellaneous liability.  Take my word, it is not a coverage that should be considered miscellaneous.  There is a world of difference between D&O coverage offered to you as an endorsement on your master policy and proper D&O coverage specifically written as a stand-alone policy.  

Your association’s budget impacts the financial and physical health of the community and residents’ property values. The budget is the first, crucial step to restoring aged, once-beautiful communities to their former glory, and it determines the enjoyment residents will derive from their community.

There is a widespread belief among homeowners who live in associations, that if their assessments stay flat and do not increase, their community is in good shape and the Board is doing its job. And while it’s easy to understand the appeal of a historically flat budget, a lack of increases in an association’s assessments could be an indication of rough seas ahead. 

Winston Churchill once stated that, “Plans are of little importance, but planning is essential.” There are several different facets of a community association that allow it to operate properly and effectively, but none so important as the organization’s financial stability.  Within the next couple of months, managers, Boards, and committees will begin acquiring costs of current contracts and projections for the upcoming year to start the arduous process of creating the operating budget for next year.