Q–For as long as I have lived in my condominium unit in the southwest suburbs I have been completely dissatisfied with the way our condominium association has been run. I neither have the time nor the desire to run for any position on the board, so I am forced to battle this association every time I feel the members have done something improper.
For one thing, I have problems dealing with water infiltration blamed on my unit, which I would like to resolve.
I live on the third floor of the building and the resident below has been complaining about an intermittent water leak ever since I moved in.
After multiple inspections, the association maintenance man opened the ceiling on the second floor to inspect my shut-off valve. The next thing I know, I received a letter from the management company telling me that the cause of the leak was the shut-off valve in my unit, and I had 10 days to repair it or the board would proceed with some action.
Several weeks ago, I arrived home and found water to be leaking all the way down to the first floor. I determined that the problem was coming from a shower valve in my unit.
I replaced the cartridge in the shower apparatus, which apparently solved the problem. I also called my insurance agency and reported the incident. Since then, I have received multiple bills concerning the leak.
Although I have admitted the latest problem came from my unit, when I have reported cracks in my ceiling from the roof repair project I have been ignored.
How should I proceed?
A–A unit owner is responsible for any damage to another part of the property that originates from his or her unit. The board of directors makes the decision concerning the source of any water infiltration problem.
If a unit owner disagrees with the decision, the individual can obtain a second opinion. Ultimately, however, the final decision lies with the board.
This scenario is often the source of disputes that create aggravation between unit owners. However, the nature of condominium living is such that owners must accept decisions made by the board, regardless of whether they agree with the outcome.
You are correct in advising your insurance carrier about the damage caused by your shower equipment. Bills from the association should be sent to your insurer.
The best protection for owners in a multi-unit building is so-called HO-6 insurance coverage, which protects you against claims not arising from the common elements or which may come from your unit.
As for your general dissatisfaction with the association, no condominium director really has the time to serve on the board, but many individuals make the sacrifice.
If you are consistently dissatisfied with association decisions, the only real solution is to become more involved in the decision-making process. Either you will change the direction of the condominium board or gain a better understanding of the decisions and sacrifices board members have to make for the community.
Q–How do condominiums or any other multi-family ownership properties such as townhouses and cooperatives go away? How can one obtain control of a condominium development for the purpose of redeveloping it? Does one need to purchase every unit? Are there alternative methods to gaining control?
A–Sections 15 and 16 of the Illinois Condominium Property Act provide for the sale of all the units upon the vote of 75 percent of the unit owners and the termination of the condominium.
When the condominium development is sold, the new owner can terminate the association and the condominium regime. If all of the existing owners want to terminate the condominium, they will own the property in common.
A cooperative may be converted to a condominium by dissolving the corporation that runs the building, recording a condominium declaration and forming a new legal entity to serve as the condominium association.
Owners can terminate a town-home, non-condominium association by the requisite number of people needed to amend the declaration.
Rather than terminating an existing development, the more practical question is whether the governing document can be amended to provide the necessary changes to run the association in a more satisfactory manner.
Without some form of organization, there is no enforcement mechanism to maintain the property.
Q–Our condominium association has been collecting an additional “13th month” assessment for the last five years. This amount is above and beyond the regular 12-month assessment contained in our annual budget.
The logic behind this additional assessment is to provide a cushion against unexpected expenses. Is this practice legal?
Isn’t this additional association income taxable, since it is above and beyond normal operating expenses and, technically, a profit?
A–The 13th month assessment is legal. The additional levy is a form of special assessment that is within the discretion of the board of directors.
Keep in mind that a special assessment is a charge not included in the annual budget or an increase in assessments over the amount in the budget.
Of course, the board has the alternative of simply raising assessments each year; in effect, that is what they have done by the extra month’s assessment.
The additional funds are not taxable income. The board levies an assessment to meet increased operating expenses. Taxable income for the association includes earnings on reserve funds or revenues from extraordinary association income such as laundry room revenues or the rental of a recreational facility.
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate Section, 4th Floor, Chicago Tribune, 435 N. Michigan Ave., Chicago, IL 60611. Sorry, he can’t make personal replies.
