As community associations hold their annual meetings, boards should be reminded that for most associations, owners do NOT need to approve the treasurer’s report or annual budget. The majority of association Bylaws provide an outline for the annual meeting agenda, which includes approval of last year’s annual meeting minutes by owners, reports of officers, and a board member election. A Bylaw provision requiring owners to approve the treasurer’s report or budget at an annual meeting would be extremely rare. However, boards often make the mistake of asking owners for their approval of these financial items at annual owners’ meetings. If no such owner approval is required by the Bylaws, owners may be confused as to their role within the association and assume a false sense of empowerment, especially regarding delicate financial decisions.
All boards should carefully review the association’s Bylaws in preparation for the annual meeting. Organization and a clear understanding of the appropriate agenda items are key tools for a smooth meeting. Approval of the budget or the treasurer’s report is generally a board function, NOT a function of the owners. As a result, such a motion at the annual owners’ meeting would NOT be appropriate.