Budget ratification may sound scary but it is actually a very good thing.
Let’s start here: what is budget ratification?
A budget ratification meeting is a meeting of the owners of the association to review the proposed budget that has been adopted by the executive board.
OK, great – but what does that actually mean?
It’s a meeting to review and approve the budget for the committee for the upcoming year.
What do we really need to know as a Board?
The budget ratification meeting notice (meaning: ‘Hey, this is when we’re meeting about the budget’) must be sent to all owners within 30 days of the executive board adopting the proposed budget. You also need to include a summary of the budget with the notification.
The meeting must be held within a specific time period after the mailing of the notice and summary, it’s different for every community so make sure you’re in contact with your CSI Community Manager about your specific timeline.
There are many specifications required by law; there’s a good summary here from our friends at Law Firm Carolinas.
Most Boards have the budget approved at the annual meeting. In most cases, not enough owners will attend the meeting to potentially reject the budget. The Law Firm Carolinas says “However, in the event that the proper number of owners votes to reject the budget, then the association will continue to operate pursuant to the most recently ratified budget until a new budget is approved by the executive board and then ratified by the owners.”
The three key takeaways regarding budget ratification meetings are:
- A special notice is required,
- There is no quorum requirement,
- The budget is ratified unless at least a majority of owners reject the budget.