J.A. from New Jersey writes:
Dear Mister Condo,
Is there any New Jersey law that requires budgeted amounts to be completely used up in the budget fiscal or annual year? If our snow budget amount is not used because of lack of snow removal in a given year: CAN THE BALANCE THAT WAS NOT USED BE CARRIED INTO THE NEXT YEAR SNOW BUDGET to act as a buffer in case we get a lot of snow in that year? This practice, if allowed, would reduce snow assessments currently used when we go over budget on snow removal.
Mister Condo replies:
J.A., you make a good point. I am not an attorney nor am I an expert in New Jersey law so please accept my advice here as friendly. For a legal opinion, consult with a locally qualified community association attorney. Typically, budgets are prepared and voted on by the unit owners of the association. While it is ideal for the Board to stick to the budget as approved, there are many things that can happen during the course of the year that may cause the Board to use money in different ways. In other words, the snow removal was less this year but a crack opened up in the parking lot and an emergent repair was needed so the money was moved from column A to column B to cover the repair. Special Assessments, on the other hand, are required to be used for what they were levied for. Excess funds are returned to the unit owners. The Board cannot reallocate Special Assessment funds. So, in your example, the Board may be able to set aside unused snow removal money that was budgeted and not used for snow removal. The trick would be not needing it for something else. The Snow Removal Assessment on the other hand does make sense for years when the snow removal cost exceeds the budget allotment. I hope that explanation helps and I hope you don’t get hit with any other assessments any time soon. All the best!