Separating an association budget from an individual owners costs
Understand the clear distinction between association-wide common expenses and individual unit costs to accurately manage your monthly condo budget.
The short answer
Condo ownership involves paying a proportionate share of common expenses while remaining responsible for individual unit expenses. The Board of Managers oversees the annual budget for common elements, whereas individual owners are responsible for their own real property taxes and specific utility usages. Distinguishing these helps prevent overpayment and ensures you understand your financial obligations.
Defining Common Expenses
Common expenses cover the maintenance and operation of the entire property. Your share is determined by your unit's ownership percentage of the common elements. These payments are mandatory, and unpaid amounts can result in a lien being placed against your unit by the board.
Individual Unit Responsibilities
Unlike common expenses, real property taxes are assessed against individual units. You are also responsible for costs within your unit's finished surfaces, such as interior maintenance and insurance premiums that exceed the association's master policy. Clearly separate these line items when calculating your total monthly carrying costs.
Reviewing the Annual Budget
The Board of Managers must distribute an annual budget to all owners. Use this to identify which maintenance projects are covered by the association. If a project affects your unit directly, verify if it is an individual expense or a shared capital expenditure.
Hypothetical Expense Planning
Use this planning method: List all monthly outflows. Categorize them into 'Association-Mandated' (Common expenses, reserves) and 'Unit-Specific' (Individual taxes, personal liability insurance). This helps you see how much of your total monthly payment goes toward the collective versus your personal property ownership.
Checklist
- Review the latest annual budget document provided by the board.
- Verify your percentage of common element ownership.
- Confirm that your unit taxes are billed separately.
- Separate common expense payments from your personal utility bills.
- Ask the management company how capital expenditures are funded.
Common questions
Do I have to pay if the association misses its budget goals?
Yes, unit owners are responsible for the proportionate share of common expenses. Shortfalls in the budget may lead to special assessments as determined by the board's fiduciary authority.
Are capital improvements always a common expense?
Generally, yes, if they relate to common elements. However, verify with the association if the specific improvement is deemed a capital expenditure or a maintenance expense.
Sources
- CFPB — Closing Disclosure explainerChecked October 12, 2026
- Illinois Residential Real Property Disclosure ActChecked October 12, 2026
- Illinois Condominium Property Act — 2025 editionChecked October 12, 2026
- SQFT IO — Listing plans and termsChecked October 12, 2026
This guide is general educational content from SQFT IO, prepared with AI assistance. It is not legal, tax or loan advice. Talk with a licensed attorney, tax professional or lender about your situation. SQFT IO Illinois license 478.027617.