Most problems in building management come down to money: charges not collected on time, spending nobody understands, and who holds the account. Financial management deals with those three. Service charges are billed monthly, notified to residents and collected. Charges and costs are recorded, payroll declarations are prepared, and the statutory ledgers are kept in full.
The monthly cycle
Every month runs in the same order:
- Billing: The service charge is written to each flat separately, according to the sharing rule for common expenses. We explain how it is shared in Common Expenses and Service Charges.
- Notification: Each owner is told their own balance.
- Collection: Payments arrive in the building’s bank account and are posted to the flat.
- Reconciliation: The bank account is compared with the records; any difference is looked into within the month.
- Report: The income-expense statement is opened to the owners.
How transparency actually works
The building’s money sits in a bank account opened in the name of the property itself, not in the management company’s account. Every invoice is entered into the system, and owners can see their own flat’s balance, the payments made and the building’s income and expense statement at any time through NovaBina, which grew out of Akal Yönetim’s experience. Why it matters who holds the money when you choose a company is covered in What to Look For When Choosing a Management Company.
Statutory ledgers
Keeping ledgers is a legal duty, not a preference. The owners’ board decision ledger, the manager’s operating ledger and the audit ledger for overseeing management must all be notarised. Which ledger covers what, and why an unnotarised ledger is a risk, is set out in Statutory Ledgers for Buildings. We write these ledgers up completely and consistently from the records held in NovaBina.
Annual budget and final accounts
At the start of the year expected income and expenses are prepared as a budget and put to the owners’ board; at year end what actually happened is reported as final accounts. So why the service charge is the amount it is, and where it went during the year, shows up in the board meeting as a record rather than a question. For how board decisions are made see The Owners’ Assembly, Meetings and Quorums.
Arrears and enforcement
Under Article 20 of the Condominium Law, an owner who fails to pay on time owes a late payment penalty. Unpaid charges are first pursued with a written notice; if that fails, enforcement proceedings are opened following a decision of the owners’ assembly. The whole process is documented. The stages and the penalty are set out in Service-Charge Arrears, Late Penalty and Enforcement.
Frequently asked
What does the management fee depend on? The number of units, the building’s equipment and the scope of service. The items are explained in How Is an Apartment and Residential Complex Management Fee Set?.
Where do service charges go? Into a bank account opened in the building’s own name. Account movements are open to owners.
Are staff wages and social-security costs part of the management fee? No. Staff wages and social-security costs are expenses the building already pays and are shown separately in the budget; the management fee is for the management service.
What happens when management passes to you from another manager? Ledgers, the bank account, the debt list and contracts are taken over. See What to Watch For When Management Changes.
To get a financial-management quote for your building, request a free survey.