Passing an Association Budget

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One of the core requirements of living in an HOA is the sharing of expenses. It is quite literally at the heart of the definition of a common interest community. Section 38-33.3-103(8) of the Colorado Common Interest Ownership Act (“CCIOA”) states that “Common interest community means real estate described in a declaration with respect to which a person, by virtue of such person's ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration…” Therefore, it makes sense that members are given the opportunity to have some input on the budget for their association. 

Of the many functions an Executive Board is responsible for, one of the most important is arguably the creation and implementation of a budget for the community. Section 38-33.3-302 of CCIOA states that the association, without specific authorization in the declaration, may…”adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners.” Once the Board has conducted its due diligence and has adopted the budget, the next step in the budget process is outlined in CCIOA at section 38-33.3-303(4)(a).

Section 38-33.3-303(4)(a)(I) of CCIOA provides a process for allowing the membership of an association to vote on whether or not to veto a budget adopted by the executive board. It states that “Within ninety days after adoption of a proposed budget for the common interest community, the Executive Boardshall mail, by first-class mail, or otherwise deliver, including posting the proposed budget on the association's website, a summary of the budget to all the unit owners and shall set a date for a meeting of the unit owners to consider the budget. The meeting must occur within a reasonable time after mailing or other delivery of the summary, or as allowed for in the bylaws. The Executive Board shall give notice to the unit owners of the meeting as allowed for in the bylaws.”

Section 38-33.3-303(4)(a)(II)(A) goes on to state that “unless the declaration requires otherwise, the budget proposed by the Executive Board does not require approval from the unit owners and it will be deemed approved by the unit owners in the absence of a veto at the noticed meeting by a majority of all unit owners, or if permitted in the declaration, a majority of a class of unit owners, or any larger percentage specified in the declaration, whether or not a quorum is present. If the proposed budget is vetoed, the periodic budget last proposed by the Executive Board and not vetoed by the unit owners must be continued until a subsequent budget proposed by the Executive Board is not vetoed by the unit owners.”

  Colorado Common Interest Ownership Act