Practical guide
How to manage the fund for extraordinary works
Under Italian condominium law, when the assembly approves extraordinary maintenance works or structural innovations, the property manager must set up a special fund equal to the full cost of the works. This is not discretionary but a legal requirement designed to prevent the condominium from advancing its own money or leaving works unfinished for lack of funds. This guide explains how the fund is established, how owner payments should be managed, how progress billing connects to fund inflows, and why separate accounting is essential for transparency and for reporting back to owners.
The legal requirement and when the fund is set up
The special fund originates from the assembly resolution approving extraordinary maintenance works or innovations: the same resolution authorizing the works must also set the fund amount, which must cover the full estimated cost, not a partial share. The property manager cannot start the works before the fund has been established, since the rule exists precisely to guarantee financial coverage before any spending commitment is made to the contractor.
The fund is split among owners according to their ownership shares (millesimi), unless the resolution sets different criteria based on the building regulation or the nature of the works, for example when the works concern common parts used only by some owners.
Owner payments: timing and follow-up
Once the amount is approved, the property manager issues payment requests to individual owners according to the approved allocation. Good practice is to set staggered deadlines tied to the project phases, rather than requesting the full amount in one instance, so that cash inflows match the actual needs of the construction site.
If an owner defaults, the property manager can seek an immediately enforceable payment order, precisely because the fund relates to an obligation already resolved by the assembly and cannot be postponed: one owner's delay cannot hold up the works or unfairly burden the other owners.
Progress billing and linking it to fund inflows
Contracts for extraordinary works commonly include progress based payments: the contractor invoices according to the percentage of work completed, verified by the works supervisor or the appointed technician. The property manager must schedule fund collections so that liquidity is available before each progress payment is due, avoiding both idle cash collected too early and the risk of being unable to pay the contractor within contractual deadlines.
To organize this connection well it helps to: align the progress billing calendar with owner payment deadlines, technically verify the work completed before authorizing each payment, and reserve a portion of the fund for possible variations during the works.
Separate accounting and reporting
The extraordinary works fund must have accounting separate from ordinary management: a distinct account or at least a clearly separate ledger that tracks inflows (owner payments) and outflows (payments to the contractor and technicians) without mixing them with day to day operating expenses. This separation is essential both for transparency towards owners and because, if funds remain unspent at the end of the works, they must be returned or offset in a traceable way.
Management software such as AmministraPro allows a dedicated ledger to be opened for extraordinary works, with a report kept separate from ordinary accounting, payment tracking by individual owner, and a link between contractor invoices and progress billing stages, so the property manager can present a clear and verifiable report to the assembly.
Frequently asked questions
Is the extraordinary works fund always mandatory?
Yes, Italian condominium law requires the property manager to set up the special fund whenever the assembly approves extraordinary maintenance works or innovations, with an amount equal to the estimated cost of the works. This is not left to the manager's discretion: the rule exists to guarantee financial coverage before the condominium commits to spending with the contractor. A property manager who starts works without having set up the fund, or without having requested payments from owners, breaches a legal obligation and can be held accountable when the accounts are reported to the assembly.
How is the fund split among owners?
The standard criterion is allocation according to general ownership shares (millesimi), unless the works concern common parts used only by some owners, in which case the specific shares or criteria set out in the building regulation for that part apply. The resolution approving the works must expressly state the fund amount and its allocation among owners, so each one knows exactly how much to pay and by when, reducing the risk of later disputes.
What happens if an owner does not pay their share of the fund?
The property manager can pursue recovery through an immediately enforceable payment order, without waiting for the outcome of ordinary litigation, because the resolution establishing the fund itself serves as the basis for the claim. One owner's non payment does not suspend the obligation for the others, nor does it justify delaying payments to the contractor, which remain due under the works contract and the agreed progress billing schedule.
Why is separate accounting needed for the extraordinary works fund?
Separate accounting prevents money collected for extraordinary works from being mixed with ordinary condominium management, keeping owner payments and payments to the contractor and technicians clearly traceable on their own. This separation also matters at the end of the project: if funds remain unspent, the property manager must be able to return or offset them in a verifiable way, which is impossible if the fund is blended with other condominium expense items. Dedicated management tools such as AmministraPro make it possible to keep this ledger separate with its own distinct report.
Does the extraordinary works fund also cover variations during the project?
The fund covers the amount approved for the originally authorized works; if significant additional costs arise from variations during construction, the property manager must return to the assembly for a supplementary resolution updating the fund amount and its allocation among owners. Planning a modest contingency reserve from the start, agreed with the works supervisor, helps reduce the risk of having to call an extraordinary assembly once the site is already underway.
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