It’s fall. Arguably the nicest time of the year. Humidity, birds, shorts and tans all go on hiatus. And thoughts turn to the holidays and the new year.

In turn, that means, for most condominium associations, it’s time for the annual meeting. That time of year when budgets are drafted and passed, quotes for such items as snow removal and landscaping are acquired, and owners are asked to gather to, usually, vote for members to their board of directors and to ratify the budget. And that’s where it gets interesting.

In 2016, the Legislature amended that portion of the Condominium Act that deals with how budgets are to be passed. I get a lot of emails around this period of time from self-managed associations, managed associations and individual owners regarding how to conduct the process properly, and I understand why because it’s a bit tricky, even for condo attorneys. So, I hope this helps.

Boards of directors in every condo association now adopt budgets. Some older associations, usually small ones, do not even have boards of directors, previously leaving such items up to the owners themselves to gather, bandy things about and settle on a budget. No more. Implicitly, every association now has to have a board of directors or you don’t have a budget, and that’s a problem.

Once a board of directors adopts a budget, it has 30 days to send a “summary” of the budget to all of the owners. (Why they did not simply say send the budget, is beyond me, but I can’t imagine a court would have a problem with just sending the budget out, so long as it has line items for what is projected to be spent on what, essentially a summary.) Additionally, the summary has to include any reserves being set aside for a later date for the big projects like roofing, siding and paving, and a statement of how the reserves have been calculated, such as pursuant to a reserve analysis. (Another implicit directive is associations have to have a reserve study; a board cannot simply say, “We think this is what we’ll need 20 years from now.”)

Here’s where it gets a bit tricky. An association meeting has to then be scheduled for a date between 10 and 60 days after sending out the summary. At that meeting the budget is ratified unless two-thirds of the units vote against it (or if the bylaws require a larger percentage). And this is where attorneys can disagree.

The language of the Condominium Act does not indicate whether the voting is done by the percentage of interest a unit has in the association, such as if units are assessed by square footage, or if the voting is done equally regardless of how assessments are made. However, since assessments and voting are otherwise done, per the act, according to an association’s declaration, it would be odd to say the least if people were assessed according to the square footage of their unit, and otherwise vote that way, such as for election to a board of directors, but not that way on the budget. Statutes are not to be interpreted to create nonsensical results, so it’s also a fair bet a court would say voting for the budget is done as with all other voting in an association.

What if the summary sent to the owners shows a large increase that owners may not like, yet there’s little chance two-thirds of the voting interests will appear at the association Meeting to vote against it? (This is not unlikely since the suggested quorum percentage is but 33%.) Can owners boycott the meeting under the theory that if there is no quorum, there is no meeting, and therefore no budget increase? No.

In the 2016 changes to the Condominium Act the Legislature specifically noted otherwise. “Unless at that meeting two-thirds of all unit owners or any larger number specified in the declaration reject the budget, the budget is ratified, whether or not a quorum is present.” So, there’s no ducking the meeting in the hope of not having a new budget with a fee increase. If done properly, the actions of a board will withstand any legal challenge. If not, chaos may arise, and attorneys will make more money … for no good reason. Go slowly and do it right.

Final note: The same process of adoption, meeting scheduling and ratification holds true for special assessments as well.

Attorney Robert E. Ducharme is a former teacher whose civil practice is limited to condominium law, primarily in Rockingham and Strafford counties. He can be reached at red@newhampshirecondolaw.com and Ducharme Law, P.L.L.C., found at www.newhampshirecondolaw.com. His column appears bi-weekly.