Does your HOA budget make your eyes glaze over? You are not alone. If you own a condo in River North, that budget drives your monthly assessments, future projects, and even your resale timeline. With a few simple steps, you can read it with confidence, ask sharper questions at the annual meeting, and plan ahead for your next move. Let’s dive in.
Why River North budgets feel complex
River North is packed with mid- and high-rises, loft conversions, and mixed-use buildings with ground-floor retail. That means budgets must cover elevators, façade upkeep, roofs, windows, parking structures, and large mechanical systems. Cold winters, freeze-thaw cycles, and de-icing salts speed up exterior wear, so masonry, parapets, and sealants often need attention more frequently than you might expect.
Chicago-specific rules also shape costs and timelines. Façade work and scaffolding usually require permits, inspections, and public way protection. Local labor and materials can run higher than national averages. Many contractor bids in River North include soft costs for City coordination, which is important to see in a proposal before a project begins.
Start with the right documents
Before your annual meeting, ask for a full picture of the association’s finances and plans. The goal is to compare what was planned to what actually happened and what is coming next.
- Current year line-item budget
- Prior year actuals and year-to-date statement
- Balance sheet showing cash, reserves, and receivables
- Reserve schedule and the most recent reserve study
- Recent meeting minutes and any project proposals
These items help you spot variances, confirm reserve health, and understand how upcoming projects will be funded.
Read the operating budget first
The operating budget covers recurring income and expenses. You want to see whether routine revenues comfortably cover routine costs without dipping into reserves.
What income should you see
- Owner assessments and any parking or garage fees
- Retail lease income in mixed-use buildings
- Laundry or other service income in some associations
What expenses matter most
- Utilities, property insurance, and management fees
- Janitorial, landscaping, snow removal, and supplies
- Legal and accounting
- Routine repairs and minor maintenance
Look at the net operating result. A recurring deficit can trigger higher assessments, fee increases, or pressure to use reserves, which is not ideal for long-term building health.
Understand reserves and percent funded
Reserves are the association’s savings account for big-ticket items like roofs, elevators, mechanical systems, windows, and parking structures. Reserve contributions usually appear as a line in the operating budget and as a separate balance on the balance sheet.
What a reserve study tells you
A reserve study lists each major component, its estimated useful life, remaining life, and replacement cost. Associations update studies about every 3 to 5 years, and older or taller buildings may review more often. You may see one of two approaches:
- Component method, where each item is funded on its own schedule
- Pooled method, where all components draw from a common reserve pool
How to read “percent funded”
Percent funded compares the actual reserve balance to what the study recommends at this point in time. While every building is unique, this basic guidance can help you frame questions:
- Under 30 percent: often considered underfunded, higher risk of special assessments
- 30 to 70 percent: moderate health, watch trends and planned contributions
- Over 70 percent: stronger position, but confirm timing of large items
The right target depends on your building’s age, systems, and local costs. Use the reserve study as your main reference and ask how this year’s contribution aligns with its recommendations.
Useful lifespan ranges to keep in mind
- Flat roofs and membranes: about 15 to 30 years
- Window or curtain wall systems: 20 to 40 years
- Elevator modernizations: 20 to 30 years
- Boilers or central HVAC: 15 to 25 years
- Exterior tuckpointing and masonry: 20 to 40 years
- Parking structure rehab: 20 to 40 years
If your building’s components are nearing the end of these ranges, you want to see reserve funding and a plan that match the likely timeline.
Watch delinquency rates and cash flow
Delinquencies are unpaid assessments. The delinquency rate is typically the total past-due amount divided by annual assessments or monthly income. Higher rates can strain cash flow, which may lead to service cuts or reliance on reserves.
- Under 3 to 5 percent is generally a low risk
- Between 5 and 10 percent needs monitoring and consistent collections
- Over 10 percent can be high risk and may lead to special assessments or loans
Associations use a mix of late fees, payment plans, demand letters, liens, collection agencies, and, when needed, foreclosure actions through counsel. Ask about your association’s collection policy and current rate. On the balance sheet, review receivables to see how delinquencies trend year over year.
Evaluate capital projects like a pro
Big projects are common in River North and include façade repairs, window or glazing replacements, roof updates, garage work, and elevator modernizations. Always look for clear scope, accurate soft costs, and realistic contingencies.
What every proposal should include
- Scope and materials, phasing, and exclusions
- Line-item pricing for labor, materials, permits, scaffolding, traffic control, and insurance
- Soft costs such as design or engineering, testing, and inspections
- A 10 to 20 percent contingency for unknowns, especially in older buildings
- Warranty and maintenance details
- Proof of licensing and insurance, plus references for similar River North projects
- City coordination for permits and any public way protection
Confirm the funding plan
- Are reserves sufficient and will contributions continue during the project?
- If a loan is proposed, what are the interest rate, term, and owner impact?
- If a special assessment is needed, what do the governing documents require for notice and approval?
Align the funding plan with your reserve study so today’s project does not leave the building exposed for the next one.
Prepare for the annual meeting
The annual meeting is your best chance to ask targeted questions and understand what the next 12 to 24 months look like. Get the meeting packet early and show up ready.
Documents to request in advance
- Current budget and year-to-date operating report
- Last year’s reviewed or audited financials, if available n- Most recent reserve study and reserve schedule
- Minutes from the past 12 months
- Insurance declarations and any pending claims
- Any RFPs or contractor bids for planned projects
Smart questions to ask
- Why is this project necessary now, and what reports support it?
- What alternatives did you evaluate, and why were they rejected?
- How many bids did you obtain, and how were they compared?
- What is the all-in cost including contingency and soft costs?
- How will the project be funded, and what is the assessment timeline?
- What are the milestones, start and end dates, and expected disruptions?
- Who will communicate progress to owners, and how often?
- Will performance or payment bonds be used, if appropriate?
Plan ahead for resale
If you plan to sell in the next 6 to 18 months, your association’s financial posture can affect buyer confidence and loan approval. Get ahead of questions to keep your timeline on track.
- Request an estoppel or payoff letter early so you know fees, assessments, and any delinquency status
- Disclose upcoming or pending special assessments and known capital projects
- Have recent financials, minutes, and the reserve study ready for buyers
- Talk to your listing agent about how to present the association’s plan so buyers understand the value of proactive maintenance
Well-documented reserves and a clear plan for big items can support pricing and reduce surprises during attorney review.
Quick red flags to spot
Use this short list to focus your review. If you see several of these, dig deeper and ask follow-up questions.
- Operating deficits year after year without a plan to course-correct
- Minimal or no reserve contributions compared to the reserve study
- Reserve balance that covers only a small fraction of near-term needs
- Delinquencies trending up, especially over 10 percent
- Repeated special assessments for routine large repairs
- Large jumps in insurance or utilities without an explanation in the minutes
How to compare budget vs. actuals
Variances tell a story. Look at last year’s budget next to actuals and scan for large overages. The board minutes should explain significant gaps, especially for utilities, insurance, or maintenance. If you see repeated underbudgeting, ask how the new budget addresses the pattern.
On the balance sheet, compare cash to known obligations for the next 6 to 12 months. If cash looks tight, reserves may be at risk of being tapped for operating shortfalls, which is a sign to ask about assessment plans or expense controls.
Tips for smoother projects in Chicago
In River North, the setup for exterior work often takes longer than the work itself. Permits, sidewalk canopies, and lane closures add planning and cost. A strong proposal will show these line items clearly. Confirm who handles City coordination and how those costs are tracked during the project. Ask for a communication plan so you know when to expect equipment, noise, and access limits.
Align with your governing documents
Budget approval, special assessment rules, and meeting procedures all live in your Declaration and Bylaws. When legal questions arise, boards typically consult association counsel for state and municipal requirements. If a major assessment is proposed, ask the board to cite the governing documents and explain the approval path and timeline.
The bottom line
A River North HOA budget is manageable once you separate operating costs from reserves and connect the dots between the reserve study, delinquency rates, and upcoming projects. With the right documents in hand and a few targeted questions, you can protect your monthly costs, support the building’s long-term health, and keep your future resale on track.
If you want help translating your association’s numbers into a smart plan for your next move, connect with Unknown Company to get your home valuation or book an appointment.
FAQs
How much should a River North HOA keep in reserves?
- There is no single target. Use the reserve study and percent funded as your guide. Under 30 percent is often underfunded, 30 to 70 percent is moderate, and over 70 percent is stronger, depending on your building and upcoming projects.
What delinquency rate is considered healthy for my condo building?
- Low single digits, typically under about 3 to 5 percent, is generally healthier. Rates above 10 percent can strain cash flow and increase the chance of service cuts or special assessments.
What happens to resale if reserves are low or projects are unfunded?
- Buyers and lenders may hesitate when major projects are looming without funding. Clear disclosure and a transparent plan can reduce concern and help keep your timeline on track.
Can the board impose a large special assessment without owner approval?
- It depends on your governing documents and state rules. Ask the board to point to the specific sections of the Declaration or Bylaws that outline the process and owner voting requirements.
What should I bring to the HOA annual meeting?
- Bring the budget, YTD report, prior year financials, the reserve study, recent minutes, and any project proposals, along with your prioritized questions on funding and contractor selection.
