Q — The members of the board of our condo association, on which I serve, is having a very tough time trying to reason with the developer of our 10-unit complex. At issue: unit owner assessments.
Our association consists of an existing, renovated three-story, three-unit building, along with seven new townhouse units, all constructed around a central courtyard.
The developer began collecting assessments sometime in 1999 and continued to do so until all the units were sold, but without any records or bookkeeping.
On his own, the developer decided to charge the first six units sold only 50 percent of the required assessment until October 1999.
In January, when 60 percent of the units had been sold, a new owner board of directors was elected. This election took place about six months late, because, under our local ordinance, the turnover should have taken place in June 1999.
I informed the developer at our first meeting of the new board that he must pay assessments for all unsold units. Because the developer is also president of the new board, he immediately dismissed this claim, stating that he never had to pay assessments on previous projects he constructed in Chicago and Louisiana.
Attempts to reach the developer’s attorney on this question have been unsuccessful.
When must the developer begin paying assessments for unsold units?
The declaration and bylaws are not clear, nor does our local ordinance give a clear indication of when the developer’s assessment obligation begins.
As we see it, the developer owes the association more than $4,000 in back assessments. What can we do to collect this sum?
A — The developer owes assessments on unsold units after the first sale.
Section 9(a) of the Illinois Condominium Property Act states clearly that it is the duty of each unit owner, including the developer, to pay his proportionate share of the common expenses commencing with the first conveyance.
The owner’s share of common expenses is the assessment. The first conveyance means upon the first closing. The proportionate share of expenses equals the percentage of ownership listed in the declaration for each unit. This obligation cannot be more clear.
Your local ordinance states that the developer is required to pay all assessments on condominium units pursuant to the Illinois Condominium Property Act. Therefore, the city condominium ordinance also requires the developer to pay assessments starting with the first closing.
New condo associations frequently run into problems because of payments of reduced assessments from the original budget. If a developer prepares and publishes the first budget for the association while in control of the board, the developer must collect assessments on the basis of that budget.
Any revisions or reductions in the budget must be authorized at an open board meeting called upon 10 to 30 days’ notice of the unit owners.
While I question the wisdom of making the developer the first president of the new unit owner board, he is not in a position to prevent the proper collection of assessments.
A majority of the directors must take action to collect the unpaid assessments by legal action, which includes filing a lien against the developer-owned units, instituting eviction proceedings, or filing suit against the developer for breach of contract to collect assessments that were due prior to unit sales.
Section 9(h) of the Illinois Condominium Property Act also states that if the developer is the manager of the association or controls a majority of seats on the board of directors, any unit owner may record a notice of lien for assessments against a delinquent unit.
Your small association hasn’t received a significant sum of money to which you are entitled, and the unit owner board members must take action to collect it.
Q — One of the owners in our 12-unit condominium association asked if it was possible to attach a satellite dish to his unit, complaining that he doesn’t get a clear picture on some of his stations. What rules apply to this request? A — Under the Telecommunications Act of 1996 and regulations of the Federal Communications Commission, a condominium owner may install a satellite dish on portions of his unit or areas outside the unit which are under his or her exclusive control, such as a balcony or patio.
The owner cannot attach the satellite dish to portions of the condominium’s common elements not under his or her control, such as the building walls or roof, without prior consent of the board of directors.
The board can prohibit any installation of a satellite dish only if the association has a central television antenna system that offers the same channels, picture quality and price as the individual will receive from the satellite dish.
Your board may adopt safety rules for installation of the dish and may require owners to reimburse the association for any damage caused from the installation.
Q — The board of directors of our association was short of money in our operating account so the directors borrowed money from the reserves with the intent to pay it back by the end of the year.
Our declaration states that the association shall maintain a special reserve account to be used solely for making capital expenditures for the common elements. The reserve is collected by a special assessment or regular assessments.
There is no mention in our declaration of loans made to the board from the reserve to the operating account.
Does the Illinois Condominium Property Act override our declaration and give the board the right to borrow these funds from the reserve and place the money in the operating account?
A — Case law supports the actions of the board in borrowing money from the reserve account to meet operating expenses. This interfund borrowing can be done to meet emergencies or extraordinary circumstances.
However, fund borrowing should be done infrequently and the board should replenish the reserve account with lost interest by increased assessments and contributions from the operating fund.
