4 Ways Your Board Can More Effectively Communicate Your Condo’s Budget
Creating your condominium corporation’s annual budget is one of the most important responsibilities your board has. It takes a lot of hard work and may require spending decisions that won’t be popular with unit owners. Consequently, owners may voice strong objections or even question the board’s ability to manage the corporation’s money.
It’s certainly understandable for condo residents to express concern. The annual budget doesn’t only impact the corporation’s overall financial and operational health. It also impacts individual unit owners’ personal finances, particularly if it results in a fee increase. “Especially in Ontario where the cost of housing has increased, any changes to the fees could have a significant impact on owners," says Jamina Richards, manager of finance for FirstService Residential in Ontario.
Your board can prevent fallout from their spending decisions simply by doing a better job of communicating with residents about the budget. If you’re only doing what’s needed to comply with statutory requirements and your condo corporation’s bylaws, you aren’t doing enough. Improve the way you communicate about your budget by following the 4 recommendations in this article.
For more tips about budgeting, fill out the form to download A Budget Checklist – Build an Actionable Budget.
- Inform owners year-round of activities that could affect the budget.
It’s not unusual for unit owners to feel like their board keeps them in the dark when it comes to corporation spending. According to Richards, “Owners may feel blindsided if they don’t really know where their money is going and are just told, ‘Here is the budget, and here are the fees for the year.’” Instead, she recommends being more transparent, “Send out communications to residents quarterly to let them know of upcoming projects or variances in the budget. Even disclose authorized repairs that you don’t have to disclose.”
Another way to keep unit owners more informed is by giving them access to the corporation’s financials. “A best practice is to have the financial statements available monthly,” says Richards. A good management company will do this for you, either by sending them out electronically or by putting them up on the corporation’s website. It’s also important to urge owners to attend open board meetings since these meetings include a discussion of the corporation’s financials.
- Incorporate feedback from unit owners in spending decisions.
Unit owners appreciate when board members ask for their input. It makes them feel engaged in the decision-making process. In the case of budgeting and spending decisions, residents who are more involved are also more inclined to be supportive of the final budget. An added bonus is that it increases their general satisfaction with the condo corporation and their sense of community.
Your board can solicit input by sending out surveys or having informal meetings where owners get to hear about financial matters, as well as ask questions and share their concerns. “Some boards have town hall meetings semi-annually to keep owners in the loop,” notes Richards. “They might discuss things they needed to spend on, where they have saved money, new contracts – things like that.”
Forming a budget committee and making an appeal for volunteers to serve on it is also a good way to involve owners in the budget process. While these volunteers are only allowed to advise the board, they will still feel like active participants if they have the opportunity to collect relevant information and provide recommendations.
- Along with the approved budget, present the rationale behind it.
Being open about the reasons that your board made its budgeting decisions will not only help you to garner the support of residents but also their trust. When you notify them of the upcoming budget – particularly if the new budget will result in higher condo fees – be sure that the notice is accompanied by an explanation. In Ontario, the annual budget must be adopted at least 30 days before the end of the fiscal year. Residents must receive the new budget within 15 days of adoption.
Consider going beyond your legal requirements to share budget information. For example, even if your statutes require that you use postal mail to send written notices, incorporate other modes of communication, such as email and your corporation’s website. You might also want to hold a town hall meeting or an informal breakfast to give owners an opportunity to ask questions in person. Remember that more board communications means less individual phone calls and emails from residents.
- Select the communication channels that make the most sense.
When sharing routine financial information, choose the methods for disseminating it based on what residents prefer and what makes economic sense. Some options include using your online or printed newsletter, sending out emails and texts, putting up flyers in your building or community, posting information on your condo website and sharing information in private groups on social media sites.
Working with an experienced property management company can be a big help. Regardless of the channels you choose to use, a good management company will have the resources to easily distribute your communications. In addition, Richards points out that in a managed community, “the property manager is usually the first person to answer any questions that owners might have.”
Learn the steps you should take to create an actionable budget! Download A Budgeting Checklist – Build an Actionable Budget today by simply filling out the form.