Q–The board of directors of our condo association has accomplished next to nothing during the last year. Recently, facing growing criticism, they have resorted to secrecy and intimidation.
Board members no longer want to answer questions at their meetings. Their latest trick is to limit audience questions to a few minutes and require further questions to be in writing. No one ever seems to receive an answer.
After 20 years, board members now refuse to disclose their addresses or phone numbers.
At a board meeting last January, a former board president produced a video camera at the meeting to tape the session. When the property manager advised the board that he could tape the meetings, half the directors walked out, thus eliminating the quorum for the meeting.
The board sent to the owners notice of the year 2000 budget after the November directors’ meeting. While the notice stated that the board would adopt this budget at the January meeting, adoption was delayed and the board did not pass the budget until February.
The board also passed a large special assessment with the budget at the February meeting.
Is our board acting properly? Can board members require owners to submit questions in writing? Can the board adopt a budget or a special assessment without prior notice of a meeting? Can we as owners refuse to pay either the assessment from the budget or the special assessment?
How can the owners deal with board members who are determined to do things their way instead of doing them right? Is there a proper way to remove the entire board?
A–The board is obligated to hold open meetings, which means unit owners can be present to hear the deliberations. The board has no legal obligation to allow owners to ask questions at the board meeting or respond to written questions.
The purpose of board meetings is for the directors to conduct business. The disclosure requirements of the Illinois Condominium Property Act merely require the directors to provide documents and information required by the statute.
Directors don’t have an obligation to disclose their phone numbers. For the salary they receive, directors are entitled to some privacy.
Notwithstanding these technicalities, condominium directors create antagonism when they fail to listen to or communicate with the ownership.
If at all possible, the board should provide a session at their meeting for owners to ask questions or raise issues. The board should report to the ownership on a periodic basis regarding association developments such as contracts and expenditures.
From the facts you describe, the directors properly adopted the budget. Notice was given to the ownership 30 days before the board meeting to adopt the budget.
There is no indication, however, that the special assessment was properly adopted. The owners must receive 10 to 30 days’ notice of a board meeting to adopt a special assessment.
Unit owners can remove the directors by the percentages stated in the bylaws. Most condominium documents require at least a two-thirds vote of the ownership to remove board members.
Your association would benefit from greater communication and understanding between the directors and the owners. With increased communication, there will be fewer questions and challenges from the ownership; and best of all — less legal fees!
Q–Our board members would like to know the suggested maximum percentage of renters for a condominium complex. We are aware that lenders don’t like making loans for the purchase of condominiums in buildings where a maximum number of leases have been exceeded.
A–The only published maximum leasing standard is contained in the guidelines of the Federal National Mortgage Association. FNMA, or Fannie Mae, as it is commonly known, purchases mortgages in the secondary market.
Consequently, Fannie Mae standards are followed by lenders who want to sell their loans to investors.
For existing condominium associations, Fannie Mae guidelines contain a limit of 60 percent owner occupancy. Thus, if the number of leases exceeds 40 percent of the units, Fannie Mae will not automatically purchase a loan in this association in the secondary market.
Discuss this matter with a local realty agent who regularly monitors condominium values in your community.
Q–I have been forced to redecorate a portion of my unit because of a continuing leak from the unit above. My upstairs neighbor installed new bathroom fixtures and, since then, my ceiling tiles display substantial damage.
I refuse to pay for something that is not my responsiblity. What recourse do I have?
A–Technically, you are on solid ground. If your upstairs neighbor caused the water damage in your unit, she is responsible for the cost of the repairs, including unit redecorating.
However, the association is only responsible for repairs to the common elements. You must pursue your neighbor individually to obtain decorating reimbursement.
Given the amount of your redecorating expense, a lawsuit may be impractical. For this reason, owners should have insurance to cover this type of loss, which is typically contained in what is known as an HO-6 policy.
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate News Section, 4th floor, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, he can’t make personal replies.
