Practical guide
Keeping the ordinary account and the works fund separate
A condominium facing extraordinary works handles two pools of money with different purposes: ordinary management funds, which pay utilities, cleaning and small maintenance, and the special works fund required by Article 1135 of the Italian Civil Code, earmarked for the approved project. Keeping them mixed on a single balance almost always leads to unknowingly using utility money to advance the contractor, or the reverse. This guide explains how to organise management, either with a single account split into accounting funds or with separate bank accounts, how to record transactions and how to read balances so that ordinary and extraordinary money always stay recognisable and verifiable.
Why keep the two types of management separate
Ordinary and extraordinary management follow different logics. The ordinary side is cyclical and recurring: the owner's monthly or quarterly instalment comes in and the regular supplier's payment goes out. The extraordinary side arises from a specific owners' meeting resolution, which approves the cost of the works and the related fund, and the money collected is tied to that project until the contractor is paid in full.
If the two flows merge into a single, undifferentiated balance, the risk is real: an apparently healthy balance may hide the fact that works fund instalments have already been consumed to cover current expenses, leaving the contractor's payment uncovered. Separation, whether in the accounts or in the bank, makes every euro traceable to its purpose and protects both the owners and the manager in the event of disputes.
Two options: accounting funds or separate bank accounts
The first option is a single condominium current account with the bookkeeping internally distinguishing two or more funds: an ordinary management fund and a works fund. The money physically sits on the same account, but each transaction is allocated to the correct fund and the software shows the balance of each fund separately. It is the leanest solution and does not multiply fees and obligations.
The second option is opening an account dedicated to the works fund, distinct from the operating account. It provides a physical separation of the money, useful when the works are large or the owners' meeting demands maximum transparency. However, it means managing more banking relationships and more statements to reconcile. In both cases the principle is the same: works fund money must remain identifiable and must not finance current management.
How to allocate receipts and payments correctly
Every receipt should be assigned to the right fund at the moment it is recorded. The ordinary instalment feeds the management fund, the works fund instalment feeds the extraordinary fund. Using distinct receipt descriptions, with a reference to the works resolution for extraordinary instalments, prevents a payment from being posted to the wrong fund and distorting both balances.
The same applies to outgoings: the payment to the contractor carrying out the works draws down the extraordinary fund, the energy bill draws down the ordinary fund. When an owner pays both the ordinary and the works instalment with a single transfer, the amount must be split and allocated to the two funds in their respective shares, not recorded as a lump sum on a single management line.
Allocating costs across the two funds
Ordinary and extraordinary expenses may follow different allocation criteria and involve different groups of liable owners, for example when the works concern only some staircases or only a specific table. Keeping the two funds separate allows each to apply its own thousandths (millesimi) criterion without contamination, in line with Article 1123 and following of the Italian Civil Code.
Another practical advantage concerns adjustments: at year end the ordinary side closes with the annual statement, while the works fund closes with the reporting of the project, which is often multi-year. Keeping the balances distinct makes it possible to report the works when they are complete, without forcing them into a single year's statement.
Monitoring balances and works fund surpluses
Periodic monitoring must verify that the works fund balance is consistent with the progress of payments to the contractor and with the instalments still to be collected. A works fund that drops below the amount still owed to the contractor is a warning sign: it means part of the earmarked money has been used elsewhere, or the extraordinary instalments are overdue.
At the end of the project an unspent surplus may remain. The works fund surplus does not automatically merge with the ordinary cash: its destination must be decided by the owners' meeting, for example returning it to the owners according to the thousandths used for the works, or allocating it to a new fund. Here too, separate balances make the operation transparent.
Managing the two funds with software
A management platform helps keep the two sides aligned without double work: it links each transaction to the correct fund, shows at any moment the ordinary balance and the works balance, and flags when the extraordinary fund does not cover the commitments still open toward the contractor. Reconciliation with the bank statement stays unified even when there is more than one fund on the same account.
AmministraPro lets you distinguish ordinary management from the works fund, allocate receipts and payments to the correct fund and monitor the progress of earmarked money against the contractor's payments. To see how this structure integrates with the cash journal, cost allocation and the annual statement, you can review the features on the /funzioni page and the plans on the /prezzi page.
Frequently asked questions
Is it mandatory to open a separate bank account for the works fund?
The law requires the condominium to hold a dedicated current account for management, through which all sums must pass, but it does not require a second account for the works fund. The separation between ordinary and extraordinary money can also be achieved through the accounts, with distinct funds on the same account. A dedicated works account is a transparency choice, often adopted for major projects, not an obligation in itself.
Can I temporarily use works fund money to pay a utility bill?
No. The special works fund is tied to the project approved by the owners' meeting and cannot finance ordinary management, not even temporarily. Drawing on the works fund to cover current expenses means leaving the contractor's payment uncovered and using the owners' money for a purpose other than the one approved. The two types of management must stay separate even during cash flow tension.
How do I record a single transfer that pays both the ordinary and the works instalment?
The amount must be split and allocated to the two funds in their respective shares, not recorded as a lump sum on a single line. You record the ordinary instalment portion on the management fund and the extraordinary instalment portion on the works fund, both linked to the owner's position. That way both balances stay correct and the individual owner's situation is updated on both levels.
What happens to the works fund surplus once the project is complete?
The surplus does not automatically flow into the ordinary cash. Its destination must be decided by the owners' meeting: the most common solutions are returning it to the owners according to the thousandths used to allocate the works, or assigning it to a new provision. Keeping the works fund balance distinct until the project closes makes it transparent how much was spent and how much remains.
How do I notice if the works fund has been eroded by ordinary expenses?
By periodically comparing the works fund balance with the amount still owed to the contractor and with the extraordinary instalments already collected. If the fund balance is lower than the commitments still open toward the contractor, part of the earmarked money has been used elsewhere or instalments are overdue. A monthly check of the balance per fund, and not just the overall account balance, catches the problem before it becomes an uncovered payment.
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