Q–In some of your previous columns you have told readers that any action or decision made during a closed session of a condominium association must be formalized at an open meeting.
Do you mean that the board should put into the form of a motion not only the identity of those who were involved and the specifics of the decision, but why the action was taken?
Should the votes of the individual board members be recorded in the minutes?
The reason I am wondering is that it seems that the budget for our condominium is almost a “best guess” proposition. The board always projects income a little lower and disbursements a little higher than expected. This has angered some residents.
I assume that money earmarked for normal building projects should be in the budget and any money earmarked for reserves will accumulate over the years for unknown and frequently costly projects that may arise in future years.
Is this generally the correct approach? Even if money is earmarked for a certain category, such as landscaping, should the board approve any plans made by a committee before the money is spent?
A–First of all, don’t use the words “decision” and “closed session” in the same sentence.
For subjects discussed in a closed session, the directors must make a decision by a vote at the open portion of a board meeting.
The motion and the minutes of the meeting should reflect the condo unit or units involved, the individuals who are being hired or fired if the matter concerns employment, and the board’s vote on the issue.
The directors do not have to state their reasons for the action taken or identify how each individual director voted. That being said, however, the more detail directors give for their actions, the less likely there will be grounds for owners to challenge the reasons for the decision.
Remember that actions taken by the board in good faith, even if they become the subject of criticism, protect directors from a claim for breach of their fiduciary obligation.
The good faith of the directors is shown by evidence of careful deliberation, consultation with outside counsel and consistent enforcement of association rules.
The association budget should not be a best guess proposition.
To develop the budget, management and the board determine expenses from prior years from actual paid bills, anticipated cost of living adjustments from suppliers and vendors, union contracts and a schedule of preventative maintenance projects.
Reserve contributions should take into consideration an actual reserve study, or at least an independent evaluation of the remaining useful life of the major components of the property.
Even if funds are earmarked for certain categories, the board of directors must approve contracts for services to pay those expenses.
Q–We live in a town home community, so I am assuming the Illinois Condominium Property Act also applies to us.
According to the association documents, the board and the association are responsible for repairs to all outside areas in the complex.
For several years, I have spoken to the managing agent about repairs to our damaged sidewalk. The condition of the sidewalk could cause someone to fall. I have also spoken to the agent about a damaged foundation in our home, but have received no response.
Finally, I sent the agent a registered letter.
On a regular basis, you advise readers not to withhold their monthly assessment payments. But, what other recourse do I have?
Some people tell me that as a member of the association, I cannot sue the board. Why should I have to go begging for something for which I have been paying for years?
A–Your requests for repairs, both written and oral, should go directly to the board. The agent is hired by the board and reports to its members. The directors will determine the repair projects undertaken by the agent for the association.
Only Section 18.5 of the Illinois Condominium Property Act applies to non-condominium town home communities. Section 18.5 contains certain provisions relating to open meetings, approval of the budget, annual accounting and maintenance of records that apply to town home communities in the same manner as condominiums.
The provisions of your town home declaration will govern the areas of responsibility for the association. A damaged sidewalk appears to be part of the common area that the board is obligated to maintain.
The foundation beneath your home may be the responsibility of the association only if it is specifically designated in the declaration. Most town home declarations will classify the foundation as part of the residence and the responsibility of the owner.
In either case, the failure of the board to perform required maintenance is not a basis to withhold assessments for condominiums or non-condominium town home association members. Owners may withhold assessments only if the full amount already has been paid or a court declares the assessment to be illegal. Neither situation applies to your case.
Q–I have often noted that answers to problems cited by your readers are different than the language of our declaration. Could it be that the reason for this is that the Illinois condominium law supersedes a declaration?
A–Yes. The Illinois Condominium Property Act was amended several years ago to provide clearly in Section 2.1 that the provisions of the statute apply to all condominiums in the state.
Any provisions of a condominium declaration and bylaws that are inconsistent with this state law are, as the statute says quite specifically, “void as against public policy and ineffective.”
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate Section, Chicago Tribune, 4th floor, 435 N. Michigan Ave., Chicago, IL 60611. Sorry, he can’t make personal replies.
