Massachusetts HOA Budget Approval

Section 1: Overview — How HOA budgets are approved in Massachusetts

Massachusetts handles condominium budgets under one short statute, the Massachusetts Condominium Act (M.G.L. ch. 183A), first enacted on June 27, 1963. The Act sets a framework and then hands most of the budget mechanics to the master deed and to the bylaws or declaration of trust. The model is simple in concept. The governing documents control how the association adopts a budget, and the statute asks only this: the association must levy common-expense assessments at least once a year, based on a budget it adopts at least once a year under those documents. The governing body adopts that budget; there is no negative-option owner-ratification vote. The owners organize themselves as a corporation, a trust, or an association, and in Massachusetts the condominium trust — run by a board of trustees under a recorded declaration of trust — dominates, so trustees usually adopt the budget. Planned communities that are not condominiums fall outside ch. 183A; their recorded covenants govern them, alongside the nonprofit corporation statute (M.G.L. ch. 180) where they incorporate, or trust law where they organize as a trust. And contrary to what some practitioners assume, ch. 183A does carry a reserve-fund requirement and financial-review duties, both covered below. The quick-reference table and the sequence that follow lay out what the statute fixes and what it leaves to the governing documents.

Section 2: The budget approval mechanism

2A. Quick-Reference Budget Mechanics Table

This table reflects the Massachusetts Condominium Act (M.G.L. ch. 183A) for condominiums. Planned communities that are not condominiums fall outside ch. 183A; their recorded covenants and corporate law (M.G.L. ch. 180) or trust law govern them.

2B. The budget process and governance structure

The Massachusetts Condominium Act is an enabling statute. It gives you a framework for creating and running condominiums and then leaves the detailed budget process to the recorded governing documents. On the budget itself, the statute does two things directly. First, § 6(a) requires the association to make common-expense assessments at least annually, based on a budget it adopts at least annually under the master deed, trust, or bylaws.³ Second, § 11 lists what the bylaws must contain, including the method for maintaining, repairing, and replacing the common areas, the approval of payment vouchers, and the way the association collects each owner's share of the common expenses.¹⁰ The statute stops there. It sets no budget-summary distribution deadline, no ratification meeting, no notice window, no quorum, and no owner-rejection threshold. The governing documents set those.

The organization of unit owners may be a corporation, a trust, or an unincorporated association, as § 1 defines it.¹ The condominium trust, run by a board of trustees under a recorded declaration of trust, is the dominant Massachusetts form, and under § 10(c) the organization may manage itself through its elected trustees or managing board, or it may appoint a manager or managing agent.⁴ In practice, the board or trustees prepare and adopt the budget under the authority the governing documents grant, then assess it to unit owners in proportion to their beneficial interest under § 6(a).³ The statute does not require an owner vote to approve a routine operating budget.

Planned communities that are not condominiums work differently. Massachusetts has no statewide planned-community statute and no general statutory budget mechanism for them. Where a planned-community association incorporates, its recorded covenants govern it together with the nonprofit corporation statute, M.G.L. ch. 180; where it organizes as a trust, trust law governs, and common law fills the gaps in both cases.² Their budget-approval rules come from the recorded covenants and bylaws, not from a condominium-style statute.

The common-expense priority lien in § 6 — the provision that gives part of unpaid common expenses priority over a first mortgage — is a collections-and-liens matter, and we handle it separately rather than here.

2C. Variation by the governing documents

Because the statute fixes only a few points, the master deed and the bylaws or declaration of trust set most budget parameters. The mandatory floor is narrow. Section 6(a) requires an annually adopted budget and annual assessments tied to it; § 11 requires the bylaws to spell out how the association funds maintenance and replacement work and how it collects each owner's share; § 10(i) requires a replacement reserve fund; and § 10(d) sets the financial-report and review duties.¹¹ Beyond those, the governing documents control the adoption procedure, the meeting notice, the quorum, and any internal approval thresholds. Section 21 lets condominiums organized under certain provisions vary specified statutory rules through their bylaws.⁹ Corporate or trust formalities run alongside the budget process — trustee or director action, recorded trustee certificates, meeting and record-keeping rules — but they supply governance mechanics, not a statutory budget-approval threshold of their own.

Section 3: Budget-adjacent obligations

Reserves in the budget

Contrary to a common assumption, ch. 183A does impose a reserve-funding obligation. Section 10(i) puts it plainly: "All condominiums shall be required to maintain an adequate replacement reserve fund, collected as part of the common expenses and deposited in an account or accounts separate and segregated from operating funds." After declarant control, a 67 percent beneficial-interest vote under § 10(m) may modify the requirement.⁷ The statute mandates no reserve study, though; the bylaws and the demands of lenders and the secondary market drive study practice and funding levels.

Special assessments

Chapter 183A sets no general approval threshold for special assessments; the master deed and bylaws govern those. The statute does address specific categories: § 18 requires owner votes — 50 percent or 75 percent — for common-area improvements, and § 10(b)(6) covers assessments for energy-saving devices.⁶

Assessment increase limits

No statutory cap limits how much an assessment may rise without an owner vote. The budget the governing body adopts under the master deed and bylaws controls the amount and timing of any increase.⁵

Financial review, audit, and disclosure tied to the budget cycle

Section 10(d) requires the party responsible for the financial records to prepare an annual financial report within 120 days of the fiscal-year end and to make it available to unit owners within 30 days of completion. An independent CPA must review the records for condominiums of 50 or more units — annually, or less often under § 10(m), but never less than every two years. For condominiums of fewer than 50 units, a CPA review happens only if a majority in beneficial interest votes for one. Section 10(c) requires the organization to keep its financial records available for owners and first mortgagees to inspect.⁸

Section 4: Recent legislative and judicial activity

Recent bills

Two 2024 laws touched ch. 183A in ways that reach the budget, the assessment, and the reserve-adjacent provisions. Neither one disturbed the core annual-budget mandate or the reserve-fund requirement.

Recent appellate rulings

No published Massachusetts Appeals Court or Supreme Judicial Court decision from the past 36 months squarely interprets the ch. 183A annual-budget or common-expense-assessment process. One recent decision is worth noting for completeness.

One longstanding rule still controls assessment disputes: a unit owner who disputes a lawfully assessed common-expense charge must pay it under protest rather than withhold it. That principle runs from Trustees of the Prince Condominium Trust v. Prosser (Supreme Judicial Court, 1992) and Blood v. Edgar's, Inc. (Appeals Court, 1994).¹⁵

Active legislative debates

No active bill in the current General Court session proposes a statewide planned-community statute or a cap on condominium assessment increases. Recent legislative attention to ch. 183A has centered on energy, electric-vehicle charging, and electronic-meeting provisions, not on the budget-adoption process.

Section 5: National positioning and related coverage

Massachusetts is a bespoke, pre-uniform-act condominium state. Its 1963 Condominium Act predates the 1980 Uniform Condominium Act, and the Supreme Judicial Court confirmed, in Drummer Boy Homes Association, Inc. v. Britton, 474 Mass. 17 (2016), that "Massachusetts has not adopted either the UCA or its successor, the Uniform Common Interest Ownership Act."¹⁶ The statute leaves the budget-adoption procedure to the master deed and bylaws, and it stands out for its condominium-trust governance, in which a board of trustees commonly adopts the budget. It does not use the negative-option budget ratification of the UCIOA family, it does not follow the 1980 Uniform Condominium Act template, and it carries no assessment-increase cap like California's Davis-Stirling Act, which under Cal. Civ. Code § 5605(b) bars a board from imposing a regular assessment more than 20 percent greater than the prior year's, or special assessments exceeding 5 percent of budgeted gross expenses, without member approval. For a multi-state operator entering Massachusetts, the practical point is clear: the master deed and the declaration of trust, not the statute, govern how the budget gets adopted, and the governing body is often a board of trustees rather than a corporate board.

Federal frameworks — including the Fair Housing Act, the Americans with Disabilities Act, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the FCC's OTARD rule — apply to Massachusetts associations regardless of the state budget framework.

1. M.G.L. ch. 183A, § 1 (definitions, including "organization of unit owners" and "replacement reserve fund") ↩
2. M.G.L. ch. 180 (Corporations for Charitable and Certain Other Purposes), governing incorporated associations; Massachusetts has no statewide planned-community statute ↩
3. M.G.L. ch. 183A, § 6(a) (common-expense assessments made at least annually, based on a budget adopted at least annually in accordance with the master deed, trust, or by-laws) ↩
4. M.G.L. ch. 183A, § 10(c) (organization may be self-managed by elected trustees or managing board, or may appoint a manager or managing agent) ↩
5. M.G.L. ch. 183A, § 6 (no statutory cap on assessment increases; assessments based on the annually adopted budget) ↩
6. M.G.L. ch. 183A, § 18 (common-area improvement votes of 50 percent and 75 percent); § 10(b)(6) (energy-device assessments) ↩
7. M.G.L. ch. 183A, § 10(i) (every condominium shall maintain an adequate replacement reserve fund, collected as part of the common expenses and held in a separate, segregated account) and § 10(m) (67 percent beneficial-interest modification after declarant control) ↩
8. M.G.L. ch. 183A, § 10(d) (annual financial report within 120 days; available to owners within 30 days; CPA review for condominiums of 50 or more units; smaller condominiums on majority beneficial-interest vote) ↩
9. M.G.L. ch. 183A, § 21 (certain condominiums may vary specified statutory provisions by bylaw) ↩
10. M.G.L. ch. 183A, § 11 (mandatory bylaws provisions, including maintenance funding and collection of each owner's share of common expenses) ↩
11. M.G.L. ch. 183A, §§ 6(a), 10(d), 10(i), 11 (statutory floor for budget, reserves, and financial review) ↩
12. St. 2024, c. 239, §§ 84–86 (amending M.G.L. ch. 183A §§ 6 and 10 and adding § 10A), signed November 20, 2024, effective February 18, 2025 ↩
13. St. 2024, c. 150, § 47 (Affordable Homes Act, adding M.G.L. ch. 183A, § 24 on electronic meetings and voting), effective August 6, 2024 ↩
14. Geezil v. White Cliffs Condominium Four Ass'n, 105 Mass. App. Ct. 103 (2024) (Massachusetts Appeals Court) ↩
15. Blood v. Edgar's, Inc., 36 Mass. App. Ct. 402 (1994); Trustees of the Prince Condominium Trust v. Prosser, 412 Mass. 723 (1992) ↩
16. M.G.L. ch. 183A (enacted 1963); Drummer Boy Homes Ass'n, Inc. v. Britton, 474 Mass. 17 (2016) (Supreme Judicial Court: "Massachusetts has not adopted either the UCA or its successor, the Uniform Common Interest Ownership Act.") ↩