Condominium management surplus and deficit: how they are shared

At the close of each financial year the condominium report shows the result of the management: a surplus, when the sums collected exceed the expenses actually incurred, or a deficit, in the opposite case. These results are not a profit or a loss in a business sense, because the condominium is not for profit, but differences to settle among the owners. When approving the report, the meeting decides how to distribute the surplus or cover the deficit, always according to the ownership thousandths (millesimi). Here is how it works.

What surplus and deficit are

The management surplus is the positive difference between what the owners paid in and what was spent on running the year. It arises, for example, when the budget was prudent and some planned expenses turned out lower. The deficit is the negative difference: the expenses incurred exceeded the instalments collected, perhaps due to unforeseen costs or an underestimated budget. Both emerge from comparing the final expense account with the year's receipts.

The principle of thousandth allocation

Both surplus and deficit are shared among the owners according to the criteria by which the expenses that generated them were allocated. The general principle is that of Article 1123 of the Italian Civil Code: expenses are divided in proportion to the value of each owner's property, unless otherwise agreed, and therefore by thousandths. If an expense follows a particular table, such as that of the lift or heating, the resulting difference is shared by the same criterion, to keep consistency between the charge and the entitlement.

How the balancing adjustment is handled

Settling the surplus or deficit takes place through the balancing adjustment. In practice, once the report is approved, each owner is assigned their share of the difference.

• In case of surplus, the share may be refunded, carried as a credit to the following year, or set aside in a fund, according to the meeting's decision.
• In case of deficit, each owner is asked for their balancing share to cover the difference.
• The adjustment is calculated by applying the thousandths to the overall difference, consistently with the expense allocation.
• Arrears must not be confused with the deficit: they are receivables from individual owners, not a management shortfall.

Surplus: refund or carry-over

When management closes with a surplus, the meeting decides the destination of the excess sums. It may order their refund to the owners, their carry-over as a credit against the following year's instalments, or their setting aside in a fund for future expenses. It is important that the decision be explicit and recorded in the minutes: the manager cannot retain or use the surplus on their own initiative, because those sums belong to the owners according to their respective shares.

Deficit: the balancing request

If management closes with a deficit, the meeting, by approving the report, resolves the balancing charge on the owners. Each pays their share calculated on the thousandths, so as to cover the difference between the expenses incurred and the receipts. The report-approval resolution that quantifies the adjustment is the title on which the manager can request the payments. The adjustment concerns the year's actual expenses, distinct from the current year's budget instalments.

Do not confuse deficit and arrears

A frequent mistake is confusing the deficit with arrears. The deficit is the difference between expenses and the resolved instalments: it concerns the overall balance of the management. Arrears, instead, are the sums that individual owners have not paid despite being required to: they remain receivables of the condominium against those owners and must not be shifted onto the others as if they were an extra cost. A clear statement of financial position keeps the two items separate, avoiding that owners in good standing pay for the defaulters.

Calculating surplus and deficit with software

Correctly determining a surplus or deficit and sharing it by thousandths requires cross-referencing expenses, receipts and allocation tables. Management software calculates the management result, applies the correct thousandths to each item and produces the balancing statements for each owner, keeping arrears separate from the year's result. The risk of errors in the allocation is reduced and the calculations remain verifiable.

AmministraPro calculates the management result and the per-owner adjustments by applying the correct thousandth tables, with a clear distinction between deficit and arrears. You can see how it works on the features page or review the plans in the pricing section.