The explanatory note of the Italian condominium financial statement

The explanatory note of the condominium financial statement is the document that turns the figures of the management into words. Together with the accounting register and the financial summary, the explanatory note (nota sintetica esplicativa) is one of the three mandatory components of the statement required by article 1130 bis of the Italian Civil Code, introduced by the 2012 condominium reform (law 220/2012). It is not an optional attachment or a formality: its absence makes the resolution approving the statement voidable.

What article 1130 bis of the Civil Code requires

Article 1130 bis states that the condominium financial statement contains the income and expense items and any other data relating to the financial position, available funds and any reserves. The rule specifies that the statement is made up of an accounting register, a financial summary and an explanatory note on the management, including an indication of ongoing relationships and pending matters. It is precisely this last part that gives meaning to the first two.

What the explanatory note of the financial statement must contain

The explanatory note describes in broad terms the management activity carried out by the administrator during the financial year and guides the owner through the accounting records. In practice it covers the allocation criteria adopted, the most significant expense items, deviations from the budget, works started but not completed, open disputes and any situation likely to have effects on future years.

• Ongoing relationships, such as works contracts or supplies not yet closed.
• Pending matters, in particular disputes and payment orders in progress.
• The allocation criteria of the main expense items.
• Significant deviations between budget and final accounts.
• The status of funds and reserves set aside.

What it is really for

The purpose of the note is to put the owner in a position to cast an informed vote at the meeting. The figures in the register say how much came in and how much went out, but they do not explain why. The explanatory note fills this gap: it makes the statement readable even to those without accounting knowledge and lets owners judge whether the management was consistent with what was resolved. It is the part that turns a list of movements into an understandable statement.

Without the explanatory note the statement stays a list of numbers: it says how much, but not why.

This link between data and decisions is what sets a transparent statement apart from one that is only formally complete. The owner who receives the notice with the statement attached should be able to understand, without asking for further clarification, how the funds were used, which commitments remain open and which costs will weigh on the following year. A clear note reduces requests to inspect the documentation and prevents disputes at the meeting.

What the administrator risks by omitting it

The case law is clear: the explanatory note is an integral and essential part of the statement, and its omission entitles each owner to challenge the approving resolution. A statement without an explanatory note is considered voidable, because it deprives the meeting of the elements needed to assess the management. Even a generic or merely formal note, one that does not address ongoing relationships and pending matters, exposes the administrator to the risk of challenge.

The explanatory note and the meeting minutes

The note must be kept distinct from the minutes. The minutes record the course of the meeting and the decisions taken, while the explanatory note accompanies the accounting documents. Both contribute to the transparency of the management, but they serve different functions and are not interchangeable. Attaching good minutes does not cure the absence of the explanatory note.

How to draft it without mistakes

An effective explanatory note is short but complete: a few pages that follow the order of the items in the financial summary and clarify what the figures alone do not say. It helps to start from a stable template, refer to the resolutions that authorised the expenses and update the disputes section every year. Consistency between the note, the register and the summary is the first thing an owner or an auditor checks.

A few practical habits help avoid the most common challenges. It is worth following a constant order from one year to the next, so that comparison between financial years is immediate.

1. Follow the items of the financial summary in the same order, so the note stays tied to the figures.
2. Explain deviations from the budget by citing the resolution or the concrete cause.
3. List ongoing disputes with their updated status and possible financial outcomes.
4. Flag works started but not completed and the related outstanding commitments.
5. Date and sign the note, attaching it to the statement made available before the meeting.

The explanatory note with management software

With management software the explanatory note does not start from a blank page: ongoing relationships and pending matters are already tracked alongside movements, funds and disputes, so the note builds from data already in the accounts and stays aligned with the register and the financial summary. AmministraPro generates the statement in line with article 1130 bis with a pre-filled explanatory note, automatic millesimal allocations and attached documentation: you can see how it works on the features page or compare the plans in the pricing section.