The costs necessary for the cleaning, maintenance and repairs of the common parts are to be divided between the apartments’ owners. However, it is impractical to collect the funds as and when an expense is incurred. Therefore, an annual budget should be drafted and the owners should make pro-rata payments, so that the expenses incurred during the oncoming year would be paid from these funds.
However, the payment one owner does at the beginning of the year is not a fix payment that will definitely cover the full year. From the sum resulting from all money collected, payments will be made for the costs of the common area. These costs are not fix, but vary from year to year according to the expenditures of the block. If in one year your block has more lift issues, or more repair or maintenance expenses, the funds may terminate before the year ends, so top-up sums must be collected during this year to cover the oncoming expenses until the budget for the new year is collected.
For these reasons, when appointing a new condominium administrator, you cannot consider that the cheapest offer is the one providing the lowest annual condominium budget. The annual budget is just an estimate and you may end up paying a higher sum yearly. The difference in cost between condominium administrators is not the budget proposed, but their own administration fees.
To conclude, the annual budget is NOT a quotation, but an estimate of costs that the owners are likely to pay for the common areas of the block. This estimate cannot be accurate. If the actual costs will be higher than estimated, further contribution would be requested. Accordingly, if the actual costs will be lower than estimated, there will be funds remaining at the end of the year.
