Condominium regulations
What is a condominium financial statement
The condominium financial statement, known in Italian as rendiconto condominiale, is the document through which the property manager accounts to the unit owners for how the building funds were handled during the year. It is not a simple list of expenses: article 1130 bis of the Italian Civil Code, introduced by the 2012 reform, sets out a mandatory three part structure designed to make the management transparent and verifiable by anyone with an interest in it. The manager prepares it every year and submits it to the owners meeting for approval, where owners can ask for clarifications and, if needed, appoint an auditor. Understanding how the statement is built helps owners read it with confidence and genuinely exercise their right to oversee the building management.
Article 1130 bis and the three parts of the statement
Article 1130 bis, introduced by law 220 of 2012, establishes that the condominium financial statement consists of three distinct and complementary documents: the accounting ledger, the financial summary, and the explanatory summary note. Each part has a precise function, and together they form a complete picture of the year economic management.
The accounting ledger records, in chronological order, all income and expenses of the building together with their reason. The financial summary reclassifies that same data by expense category, showing the asset position, receivables and payables toward suppliers and toward the owners themselves. The explanatory summary note, finally, describes in plain language the financial relationships between the building and each owner, highlighting any significant variance from the approved budget.
- Accounting ledger: income and expenses in chronological order
- Financial summary: asset position, receivables and payables
- Explanatory summary note: plain language account of variances
Cash basis and accrual basis
In practice, the condominium statement is drafted mainly on a cash basis, meaning income and expenses are recorded when money is actually received or paid, not when the obligation arises. This makes the statement easier for owners to read, since it reflects the real movement of money through the building account.
Alongside cash figures, the explanatory summary note also has the task of flagging accrual items, that is expenses already incurred but not yet paid or collected, such as an invoice received at year end and settled the following year. A well drafted statement makes this distinction visible, so an owner does not mistakenly believe an expense has disappeared simply because it has not yet been settled in cash.
Approval at the owners meeting and owner rights
The financial statement must be attached to the notice convening the meeting that will approve it, so owners can examine it in advance. During the meeting any owner can ask for clarifications, challenge individual items and, if the majority agrees, resolve to appoint an auditor to review the accounts at the building expense.
Owners also have the right to inspect and obtain, at their own expense, copies of the supporting documents behind the expenses, such as invoices and contracts, so they can exercise genuine, not merely formal, oversight of the manager work.
The financial statement in digital condominium management
Management software such as AmministraPro helps the property manager prepare the statement by structuring it according to the three parts required by article 1130 bis, automatically reclassifying expense items and generating the documentation to attach to the meeting notice. This reduces the risk of clerical errors and makes it easier for owners to review their own accounting positions online.
Frequently asked questions
Are the financial statement and the annual budget the same document
No, they are two distinct documents serving different purposes. The budget estimates future expenses and is used to calculate the advance payments owners must pay during the year, while the financial statement reports, after the fact, the income and expenses actually recorded during the closed period, following the three part structure of article 1130 bis. The owners meeting approves both, but at different times and for different purposes: the budget before the management period begins, the statement at its end.
What happens if the owners meeting does not approve the statement
If the meeting rejects the statement, the manager must revise it taking into account the objections raised in discussion and resubmit it at a later meeting. A rejected statement does not release the manager from the ongoing duty to manage cash and current payments, but repeated and unjustified failure to obtain approval can affect the manager mandate, especially if accounting irregularities emerge.
How often must the financial statement be presented
The statement must be presented every year, in line with the end of the management period set by the building regulations or by established practice, which often coincides with the calendar year. The manager must convene the approval meeting within one hundred eighty days from the close of the period, unless valid reasons justify a delay.
Who can ask to see the documents behind the financial statement
Every owner has the right to inspect the supporting documents behind the expenses, such as invoices, contracts and receipts, and to obtain copies at their own expense, in order to verify that the statement matches the underlying documentation. This right supports the oversight the meeting can also exercise by appointing an auditor.
Can management software help prepare the financial statement
Yes: software designed for condominium management, such as AmministraPro, automatically organizes accounting entries into the three sections required by article 1130 bis, tracks accrual items, and produces the documentation to attach to the meeting notice, reducing manual work and reclassification errors for the manager.
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