Practical guide
How to read the statement's explanatory note as an owner
The explanatory note is the part of the statement written in words, not numbers. Provided for by Article 1130-bis of the Italian Civil Code, its task is to explain how the management performed and the most relevant facts of the year: extraordinary expenses, arrears, litigation, variances from the budget. For the owner it is often the most useful document to get oriented, because it anticipates in a few lines what the accounting schedules say in figures. This guide explains what the note must contain, how to read it critically and which questions to ask yourself while examining it.
What to look for in the explanatory note
- Explanation of the main variances against the budget
- Description of the extraordinary expenses incurred during the year
- Status of arrears and the recovery actions started
- Any ongoing litigation and its economic effects
- Situation of the condominium's funds and reserves
- Relevant management facts, such as supplier changes or new contracts
- Consistency between what the note states and the figures in the schedules
What the explanatory note is for
The condominium statement is not made only of tables. Article 1130-bis of the Italian Civil Code provides that the statement also contain an explanatory note on the management, with an indication of ongoing relationships and pending matters. It is the document that gives meaning to the numbers.
For an owner not familiar with accounting, the note is the ideal starting point: it summarises in understandable language what happened during the year. If a schedule shows an unusually high expense, it is in the note that you should find the reason.
The variances from the budget
An important function of the note is to explain the differences between what was forecast and what was actually spent. Unforeseen extraordinary maintenance, an increase in a supply contract or an urgent action are legitimate causes of variance that the note should describe.
Read this part carefully and compare it with the final accounts. If an item deviates a lot from the budget but the note does not mention it, you have a precise question to ask at the meeting. The transparency of the note is itself an indicator of the quality of the management.
Arrears, funds and litigation
The note should also account for the situations that affect the condominium's financial health. The status of arrears and any recovery actions is relevant information: high arrears mean that expenses were covered thanks to the payments of the other owners or by drawing on the funds.
Also look for references to ongoing litigation and the situation of funds and reserves. Litigation may involve future legal costs; an eroded fund may require extraordinary payments. These elements help assess not only the past but also the risks of the coming years.
- Total amount of arrears at year-end
- Debt-recovery actions started
- Ongoing litigation and possible costs
- Level of funds and reserves
Check consistency with the numbers
The explanatory note must always be read together with the accounting schedules, not instead of them. The most useful check is to verify that what the note states is confirmed by the numbers: if it describes an extraordinary expense, that expense must appear in the register and in the allocation; if it mentions arrears, the amount must emerge from the balance sheet.
A generic note, limited to boilerplate formulas without explaining the concrete facts of the year, is of little use and may justify a request for more detail. Management software helps produce complete notes by automatically linking variances, arrears and funds to the accounting data: with AmministraPro the note is generated from the condominium's real numbers. You can see the features at /funzioni and the plans at /prezzi.
Frequently asked questions
Is the explanatory note mandatory?
Yes. Article 1130-bis of the Italian Civil Code includes the explanatory note on the management among the contents of the condominium statement. A statement without a note is incomplete, and its absence can be raised at the meeting as a reason not to approve until it is added.
What exactly must the note explain?
The note must illustrate how the management performed and the most relevant facts of the year: variances from the budget, extraordinary expenses, the status of arrears, ongoing relationships and pending matters such as litigation. It must give meaning to the figures in the schedules, not repeat them.
If the note is too generic, what can I do?
You can ask the manager for written clarification on the unclear points and have the request for a more detailed note recorded in the minutes. A note that does not explain the concrete facts of the year does not fulfil the function required by law and weakens the transparency of the statement.
Can the note replace checking the schedules?
No. The note is a reading aid, not accounting proof. The information it contains must always be checked against the schedules and supporting documents. Reading only the note, without verifying the numbers, would give a partial picture of the management.
Where do I find the note within the statement?
The explanatory note is one of the three documents that make up the statement, alongside the accounting register and the financial summary with the balance sheet. It is usually attached together with the schedules when you receive the documentation for the approval meeting.
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