Calls for funds and the annual adjustment: what you actually pay

What you pay each quarter is not your bill: it is an advance on a budget voted last year. The bill comes at the end.

“Why do I pay 480 a quarter when my annual statement says 2,100?” The question returns at every general meeting, and the answer rests on a simple mechanism nobody ever explains: what you pay during the year is not a bill, it is an advance.

A call for funds is a provision, not an expense

Each year the meeting votes a forecast budget: an estimate of the coming year’s running costs. That budget is then divided — usually into four — and split between owners according to their shares.

What you receive each quarter is therefore a provision computed from a forecast. It cannot match your real spending, for the good reason that nobody knows it yet. See how charges are calculated and split.

The adjustment: the moment of truth

At year end the manager compares what was actually spent with what was called. Two outcomes, only one of them unpleasant.

• Real spending exceeds the budget: a top-up is called, often after the meeting.
• Real spending falls short: the surplus comes back to you, as a refund or a deduction from the next call.

That balance is only due once the accounts are approved by the meeting. Which makes approving the accounts far more than a procedural formality. See refusing to approve the accounts.

Why the gaps repeat year after year

An isolated gap is normal: a harsh winter, an unplanned repair. A systematic gap, always in the same direction, reveals something else — a budget built by rollover, without looking at last year’s actual spending.

That is exactly what a board can correct, and its most visible contribution for owners. See questions to ask before voting the budget.

A systematically understated budget lightens nothing: it moves the bill three months out, and makes it unpredictable.

What the forecast budget does not cover

Not everything sits in the quarterly provisions. Works voted at the meeting, exceptional operations and works-fund contributions are called separately, on a schedule voted with the decision.

Confusing the two causes half the misunderstandings: the top-up that surprises you in June sometimes has nothing to do with running charges. See the works fund.

Reading your individual statement

• The year’s total charges, split by allocation key.
• Your share, computed on your units for each key.
• The total provisions you paid.
• The balance: to pay or to receive.

If your share looks abnormal, the cause is almost always the allocation key applied, rarely the total spent. See understanding shares and challenging an allocation.

And if you sell during the year?

Provisions called before the sale remain owed by whoever was the owner when they fell due, while the final adjustment follows its own rules, settled between the parties at the sale. See the pre-sale statement.

Track your charges with CoproHarmony

CoproHarmony lets the board keep budgets, statements and variances from year to year: explaining an increase no longer means digging through three binders. Create your free space.