ABC CONDOMINIUM ASSOCIATION
456 Community Avenue
Anytown, Ohio 12345
October 15, 2006
RE: 2007 Budget/Reserve Funding
Dear Unit Owner:
As of July 20, 2004, a change in Ohio Law requires all condominium associations to budget reserves “adequate to repair and replace major capital items in the normal course of operations, without the necessity of special assessments. . .unless the reserve requirement is waived annually by the unit owners exercising not less than a majority of the voting power of the association.” [ORC 5311.081(A)(1)] Your Board must comply with this law. As a result, all board are required to make a choice: either 1) adopt a budget that provides sufficient reserves to avoid special assessments (pay a little more now), or 2) obtain a majority vote of the ownership waiving the reserves required for that particular year (and pay a lot more later).
A*. Our association has obtained a professional reserve study and it projects the necessity of $53,760 to fully fund our 2007 reserves. If the Board were to place this amount in our budget for reserves for next year, fees would increase $62.05 or 36% per month.
B*. Our association has completed an informal reserve study and it projects the necessity of $53,760 to fully fund our 2007 reserves. If the Board were to place this amount in our budget for reserves for next year, fees would increase $62.05 or 36% per month.
If you believe that fully funding the reserves will cause too drastic of an increase in your monthly fees, you need to cast your vote on the enclosed ballot. If a majority of the voting power of the association votes to waive fully funding reserves, the Board will reduce the reserve required to a more reasonable amount.
Ohio law requires the Board to obtain a majority of the voting power of the association to budget less than fully funded reserves. By providing this consent, unit owners acknowledge that lower reserves WILL result in future special assessments, drastically higher monthly fees in the future and/or the necessity of the association obtaining a future bank loan.
Enclosed please find a ballot along with a self-addressed, stamped envelope. Our governing documents mandate that the Board of Directors approve the budget no later than December 1st. Therefore, if you agree that the requirement to fully fund the reserves be waived, your ballot must be returned by November 15th. If the Board does not receive majority approval, it will fully fund the reserves, resulting in increased monthly maintenance fees.
Thank you for taking the time to vote.
ABC Condominium Association
Board of Directors