Draft budget: the 8 questions the condo board must ask before the vote

A draft budget is voted in ten minutes and commits twelve months of charges. Here are the 8 questions that change the discussion.

The draft budget is the most consequential resolution of the general meeting, and often the most quickly dispatched. It sets what every co-owner will pay for twelve months, and it is frequently presented as a technical rollover of last year — which it almost never is.

The board is involved in preparing it. That involvement only counts if it turns into questions asked before the meeting, in writing, with time to get answers.

The 8 questions to put to the manager

1. Which lines rise by more than 5%, and on what basis? An increase must point to a specific fact: contractual review, price rise, new service.
2. Does the budget carry over exceptional items from last year? A one-off expense rolled over by mistake inflates the calls for funds for years.
3. Are contracts expiring this year budgeted at the current or the renegotiated rate? The difference can be considerable.
4. What assumption was used for utilities (water, electricity, heating)? Ask for actual consumption over the last three years rather than a percentage.
5. Are the manager fees shown in full, both the flat fee and extra services? See the accounts review checklist to tell them apart.
6. Does the budget include the contribution to the works reserve fund? See the works reserve fund for the applicable obligations.
7. What level of arrears is assumed, and is it consistent with reality? A budget that ignores arrears leads to a cash squeeze mid-year.
8. Which previously approved works remain to be funded, and in which financial year do they land?

The three lines that drift most

• Routine maintenance: the catch-all line, where non-contractual call-outs end up. Ask for a three-year breakdown.
• Utilities: often budgeted by simple indexation, although actual consumption may have fallen after insulation works.
• Fees for extra services: unpredictable by nature, but a three-year history gives a credible order of magnitude.

A budget that cannot be explained line by line is not a budget: it is a rollover.

Asking at the right moment

Send your questions in writing at least three weeks before the meeting, asking for an answer before the session. A question asked in the room gets an improvised answer nobody can check; the same question asked three weeks earlier gets a figure.

The answers obtained — and those that were not — belong in your annual report, and in the opinion the board gives on the budget resolution.

What the board can recommend

The board does not vote in place of the meeting, but its opinion carries weight. Three useful formulations: "in favour", "in favour subject to an explanation of line X", and "reserved, line X not having been justified despite our request of [date]".

That last one is the most powerful, and the most demanding: it presupposes a written, dated request that went unanswered. Without that trace, a reserved opinion reads as bad temper.

Prepare next year starting now

The best budget questions come from the year just gone: a recurring issue, a contract poorly performed, a project drifting. You just have to remember them twelve months later.

With CoproHarmony, issues, quotes and exchanges stay available all year with their dates. When budget time comes, you are not starting from a blank page. Create your space for free.