If estimated expenses exceed estimated revenue, what may the board be required to do to approve higher assessments?

If estimated expenses exceed estimated revenue, what may the board be required to do to approve higher assessments?

• A. Have a vote of the owners to approve an increase in assessments or to impose a special assessment
• B. Increase the reserve fund only
• C. Adjust the budget unilaterally
• D. None of the above

Answer: (D)

When a budget shows expenses higher than revenue, how to handle higher assessments is not a one-size-fits-all rule. The exact process is set by the association’s governing documents and applicable state law, so there isn’t a single universal action that must be taken. Some associations may require owner approval or a vote for any increase or for a special assessment, while others may authorize budget adjustments or use of reserves within allowed limits without a formal vote. Because the required step depends on the specific declarations, bylaws, and statutes, none of the listed options can be deemed universally correct. The board must consult the governing documents and, if needed, legal guidance to determine the correct procedure for implementing higher assessments.

When a budget shows expenses higher than revenue, how to handle higher assessments is not a one-size-fits-all rule. The exact process is set by the association’s governing documents and applicable state law, so there isn’t a single universal action that must be taken. Some associations may require owner approval or a vote for any increase or for a special assessment, while others may authorize budget adjustments or use of reserves within allowed limits without a formal vote. Because the required step depends on the specific declarations, bylaws, and statutes, none of the listed options can be deemed universally correct. The board must consult the governing documents and, if needed, legal guidance to determine the correct procedure for implementing higher assessments.