Management of a condominium community is much like democratic government in a small town or village. The budget process is remarkably similar, whether it’s fees or taxes being collected, and, as in local government, financial management is a transparent system based on “GAAP” (generally accepted accounting principles).
For both towns and private communities, financial stability is essential to the shared goal of all residents – that goal being short- and long-term maintenance of commonly-owned buildings, grounds and infrastructures. And just as town residents must vote on how their taxes are spent, condo owners have control over managementof their pooled finances.
How involved in the budget process do directors or officers need to be, andhow much do they need in the way of financial knowledge?
Helping the CPA
Mark Love, CPA, a principal in the Worcester, Massachusetts-based accounting firm Love, Jarominski & Raymond, LLP, says, “They [board members and trustees] take their role seriously and they are very prepared. We’re finding that boards are [becoming] very strong – the members are notafraid to ask questions. This may be because [so many] condo buyers now have had previous experience with owning a home. These are the people who are scaling down,” he notes.
“The best-run condo associations are those that have good property managers… a strong manager really engages the board members. And it helps to have at least one volunteer (board) member with an acute understanding of finances,” says Love.