Approving an Expense Without Funding: Is It Valid?

A resolution that approves an expense without stating where the funds come from is, as a rule, not void simply because of the missing coverage: approval creates the owners' obligation to contribute pro rata, which is the natural source of funding. Italian law does not impose on a condominium a budget-coverage constraint like the one that governs public accounting. Extraordinary maintenance and improvements are the exception, however: Article 1135 of the Italian Civil Code requires the establishment of a special fund. Let us see when an unfunded expense remains valid and when it exposes both the meeting and the manager to real risk.

Coverage is not a validity requirement for ordinary expenses

For ordinary management expenses, the owners' meeting approves the budget and, with it, authorises the condominium manager to make the necessary payments. Each owner's obligation to contribute arises from the approving resolution: the money does not need to be already in the account. A resolution approving, for example, a cleaning contract or a routine maintenance job is therefore valid even if the condominium bank account is temporarily overdrawn, because the requirement will be covered by the instalments charged to the owners.

This does not mean that resolving without thinking about funding is good practice. If the manager advances personal money to cover an unfunded expense, they acquire a right to reimbursement from the condominium, but this introduces opaque management. The golden rule is to approve the expense together with its allocation plan and instalment deadlines, so that funding is planned rather than improvised.

Extraordinary work and improvements: the special fund is mandatory

The picture changes radically for extraordinary maintenance and for improvements. Article 1135, first paragraph, number 4, requires the meeting, when resolving on such works, to establish a special fund equal to the amount of the works. This is the typical form of advance coverage: no worksite should start without the funding having been resolved.

The rule provides a single alternative: if the works are entrusted under a contract providing for gradual payment based on progressive work stages, the fund may be established in relation to the individual payments due. In practice, the fund may follow the progress of the works instead of being paid all at once, but the logic remains the same: an extraordinary expense requires formally resolved funding.

What a resolution that ignores the fund risks

A resolution approving extraordinary works without establishing the special fund breaches a legal provision. According to the prevailing view, this defect makes the resolution voidable: an owner who was absent, dissenting or abstaining may challenge it before the court within thirty days, under Article 1137 of the Italian Civil Code. Once the deadline passes without challenge, the resolution consolidates and becomes binding.

This leads to some practical consequences worth knowing:

• An owner who wants to contest the absence of the fund has a short deadline: thirty days, running from the resolution for dissenting or abstaining owners present, and from communication of the minutes for absent owners.
• A manager who starts works without a fund and without coverage exposes the condominium to payment difficulties and themselves to management liability.
• The establishment of the fund must be minuted clearly, indicating the amount and the payment deadlines.

Urgent expenses advanced by the manager

A frequent case is urgent work carried out by the manager without prior authorisation, under Article 1135, second paragraph. In these situations the expense arises before any coverage, because urgency does not allow waiting for the meeting. The manager must, however, report it to the first available meeting, which ratifies the action and resolves on the allocation. Coverage, in other words, comes afterwards, but it must come: without ratification and without allocation the manager's position remains fragile.

How to avoid fragile spending resolutions

Correct practice involves a few concrete measures. First, always distinguish between ordinary and extraordinary expenses, because only the latter requires the fund. Second, bring to the meeting not only the cost of the work but also the allocation plan with the instalment deadlines, so that coverage is an integral part of the resolution. Finally, precisely minute the establishment of the special fund for extraordinary works, avoiding generic wording that leaves room for challenges.

Orderly management drastically reduces the risk of challengeable resolutions. With AmministraPro the manager approves the expense and simultaneously generates the owners' allocation plan, with deadlines and payment status always aligned, so that funding is planned rather than improvised. The accounting and fund management features are described on the /funzioni page, while the plans for firms of every size are on /prezzi.