Budget Ratification

By Michael Hunter, attorney. As published in the Charlotte Observer.

North Carolina law requires HOAs to allow the members to review and vote on proposed budgets. The applicable law for both condominiums and planned communities says: “Within 30 days after adoption of any proposed budget for the (condominium or planned community), the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget … The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board.”

So the budget doesn’t actually have to be affirmatively approved by the members; it is approved automatically unless a majority of all the lot owners (not simply a majority of those at the meeting) vote to reject the budget.

Note also that meeting quorum requirements do not apply to budget ratification meetings, and the notice of meeting must state this fact.

Admin Note: Why are all Associations not required to follow this procedure? Transparency is the full, accurate and timely disclosure in information.  It is to be able to witness – through communication – what is being done and understand why.

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One Response to Budget Ratification

  1. Daniel Chambers says:

    Too little has been done by condo associations and by state statutes to institute HOA policies on the budget preparation process and co-owner involvement. Note: Florida law require owners to receive at least a 14 days advance notice of the budget meeting along with a copy of the proposed annual budget by mail or personal delivery. section 718.112(2)(e), F.S.

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