Condo association board members have a fiduciary responsibility to make financial decisions that are in the best interest of the association. As a check and balance to this process, there must be transparency with assessment collection and allocation. These decisions cannot be locked behind a safe.
If you’re a condo association board member in Chicago, there are certain steps you must take during budget planning and board meetings to ensure all unit owners are up to speed on financial decisions. Members must also know how these decisions impact them.
Maintaining Transparency With Assessment Collection and Allocation
Part of an Illinois condo board member’s fiduciary responsibility is making budgetary decisions that serve the community as a whole. Before approving any financial decisions or finalizing the annual budget, these issues must be discussed at board meetings.
All assessments collected from association members must be allocated appropriately, and their intended use must be included in the annual budget. This is also true of any special assessments. Each unit owner should receive a copy of the proposed annual budget. Within the budget, assessments should be allocated for annual expenses as well as money set aside to fund the reserves.
Maintaining accurate financial records is one of the most important things board members can do to ensure transparency with assessments collection and allocation. Consider working with a condo association management company that can help you prepare budgets and maintain accurate financial statements.
What Happens if an Association Member Fails to Pay the Required Assessments?
When owners fail to make their required assessment payments, a collection process will be initiated. Your association should have clear and accessible documentation that outlines the steps for assessment collection. Failure to make on-time payments to the association could lead to foreclosure, so it’s imperative to be transparent with this process.
If you have questions about serving on your condo association’s board or need help with any of your association management needs in Chicago, including financial management, please contact us at First Community Management.