In the material on the work organization of an association of condominiums, we have provided general recommendations on the formation of the association funds, the approval of budget estimate, and membership fees.

We also offer a sample association budget estimate. You can find attached a sample resolution of the association general meeting on the approval of budget estimates and on identifying the list and amounts of the association membership fees.

Please pay attention to the following aspects:

1. we suggest making a separate decision on the possible use of the budget estimate in the next fiscal year. This is done to avoid the situation when the association is left without this key financial document if the general meeting does not approve on time the budget estimate for some reason, and its expenditures become formally “inappropriate”;

2. we add notes to every section of the budget estimate. They allow the management board to promptly adjust expenses without changing the budget estimate itself;

3. in each section, the budget estimate revenues and expenditures coincide. We insist on following this logic as it complies with the appropriate receipt and spending of funds of a non-profit organization. It is best to make the adjustment at the year end (pursuant to the actual fulfillment of the budget estimate), instead of budgeting for inconsistency between revenues and expenditures;

4. an exception to the above rule is a reserve fund. As extraordinary events are extraordinary exactly because it is impossible to plan them, it is also impossible to plan the reserve fund. Therefore, instead of specific numbers, we give general permission to the management board to use money from the fund within the limits of already accumulated resources;

5. in the decision on identifying the amount of fees, please pay attention that we suggest to make contributions to the association operational fund equal for all its members, and contributions to the fund of building maintenance and reserve fund ─ depending on the space of buildings (it is obvious indirectly in the general meeting minutes from proportional distribution of votes). We present this approach only as an example ─ should members of the association wish, all the contributions will be set proportionally to space of their buildings;

6. we consciously did not present in the budget estimate detailed expenses for building maintenance with a breakdown by the buildings of the association members. We believe that this blasts the very idea of common fund for building maintenance. We recommend providing the necessary details in calculations and substantiations which are presented to the association members for familiarization before the general meeting.

SAMPLE RESOLUTION OF THE ASSOCIATION GENERAL MEETING ON THE APPROVAL OF BUDGET ESTIMATES

SAMPLE OF BUDGET ESTIMATES

We wish you success in your work!