How to read your condominium accounts: what to check

To read your condominium accounts, check five things: the budget against what was actually spent, the bank balances against the balance in the report, the fees owed by each flat, the movements in the fundo comum de reserva (common reserve fund) and the invoices behind the largest costs. If those five match, the accounts are in order. If one does not, that is where to ask questions before you approve them.

Budget against actual

This is the first table to look for. Each line (cleaning, electricity, lift, insurance, maintenance) should show the approved amount and the amount spent.

• Small differences are normal.
• A line well over budget needs an explanation: a breakdown, urgent repairs, a supplier price rise.
• A line well under budget does too. It may be a saving, or maintenance that was never done.

If the report only shows total spending, with no comparison to the budget, ask for one.

Bank balances

The closing balance in the report must match the bank statement on the same date. Ask for the year-end statements of every account the condominium holds, including the reserve fund account.

A mismatch is not always a problem. There may be payments issued but not yet debited. But the difference must be explained, with an amount and a reason.

Fees in arrears

The accounts should list the amount owed by each flat and for how long. Two questions cover most of it:

• Has total debt gone up or down since last year?
• What has been done about each flat in arrears, and what is the next step?

Debt that grows year after year ends up being paid by the other owners, through extra levies or postponed works. We explain how arrears are recovered in unpaid condominium fees.

Common reserve fund

Check three figures: the balance at the start of the year, what came in and what went out. Every withdrawal should match works or spending that was approved. The fund should sit in its own account, separate from the day-to-day account, so it is not drawn on without anyone noticing. More in common reserve fund.

Invoices and suppliers

You do not need to see every invoice. Pick the three or four largest costs of the year and ask for the documents: invoice, approved quote and proof of payment. Check that the supplier and the amount match what the owners' meeting approved.

Look out for contracts that renew on their own as well. A lift or cleaning contract that has never been compared with other quotes is often where the savings are. There are more ideas in reducing condominium maintenance costs.

How Condgest presents the accounts

At Condgest, every owner sees their own statement and the building's accounts in the owner portal, without having to ask. The reserve fund is kept in its own account. For the owners' meeting we prepare an accounts report that compares budget with actual and can be checked line by line. See what is included in financial management and fee collection. Find out more about our condominium management in Lisbon.

If your building's accounts are hard to follow, request a proposal.