Q–The members of our condominium association, which has 250 units, are not clear about the exact number of votes required to hold an annual meeting and elect members of the board.
Our documents contain a reference to a number of requirements and we are confused as to which one applies. For instance, the bylaws refer to 35 percent of the votes required for some meetings, and 75 percent approval for others.
The bylaws also state that 25 percent of the owners may call a meeting for a special purpose, but none of these three requirements reference the number of votes for a quorum to elect board members.
The only specific mention of electing board members I have found in the Illinois Condominium Property Act refers to the requirement for unit owners to call a meeting to elect the first board.
We have used the 20 percent factor for many years now, because it is difficult to obtain a large number of people to vote at the annual meeting. Are we correct in continuing to use this 20 percent factor?
A–Yes. For associations with 20 or more units, Section 18(b)(1) of the Illinois Condominium Property Act states that the appearance of 20 percent of the unit owners constitutes a quorum.
A quorum is established for an annual meeting by the number of votes present in person or by proxy.
There is a distinction between the number of owners required to establish a quorum and to hold a meeting; and the number of votes needed to approve a major decision such as an amendment to the declaration and bylaws.
Generally, if a quorum of 20 percent is established, owners may amend the declaration and bylaws by supermajority vote of either two-thirds or three-fourths of the ownership.
The section you referenced in the state law states that if the developer fails to call the turnover meeting within 60 days after 75 percent of the units are sold, 20 percent of the owners may petition to call a meeting.
Because the 20 percent represents the quorum requirement, owners then may proceed to elect the first unit owner board.
Q–My condominium association has imposed a special assessment to pay for extensive building facade repairs and elevator upgrades. The board has thoroughly explained the need for this work and unit owners are basically in agreement that the work must be done and the assessment is necessary.
Is there any possible provision in either the federal or state tax laws that would provide tax relief or a deduction for an individual unit owner or the association?
A–Regular and special assessments are not deductible. A unit owner may increase his or her cost basis for the unit by the amount of assessments paid for capital repairs such as building facade work. The increase in basis for the unit will serve to minimize any taxable gain whenever the unit is sold. Given the recent exemption increase for home sales, this “stepped-up basis” is of limited benefit. With an exemption of $250,000 for an individual and $500,000 for a married couple, your owners must achieve a substantial gain upon the sale of their units to benefit from the increase in basis.
If the association obtained a bank loan to finance these major repairs, the entity can deduct the interest payments. Unlike a cooperative, however, the association cannot pass on these deductions to the individual owners.
Q–I am getting ready to buy a fifth-floor condominium in a northern suburb. However, my inspection showed that several windows are defective, with cloudy thermal panes and rotting window sills.
In checking with the association that governs this 44-unit building, management informed me that the windows are the responsibility of the unit owner; and the board obtained a legal opinion to support this position.
I have read my condominium declaration and it states that, except where the need for repair or replacement is due to the act or omission of a unit owner, guest, occupant, family member, etc., the association is responsible for the repair and replacement of all windows.
Although I am a senior citizen, unless my eyes are failing me, I read this to say that the association should pay for repair or replacement of windows. Is the association’s opinion correct?
A. From the language you quoted, the association’s responsibility appears to be as clear as a clean window.
Window expenses are governed by the language of the declaration. Unless your declaration has been amended, the association is responsible for window repair and replacement.
While I note from your enclosure that windows are limited common elements, the governing document will determine whether maintenance and replacement responsibility is assigned to the owner or the association.
Unless there are some additional facts and provisions not cited, the legal opinion is not justified.
Winter condo conference
On Feb. 24, the Association of Condominiums, Townhouse and Homeowners Associations will hold its Winter Conference and Trade Show from 8 a.m. to 3 p.m. at the Midland Hotel. The conference will feature programs on the operation of smaller associations, telecommunications and long-range planning. A state lawmaker and Chicago alderman will be on hand for a special afternoon session. For additional information, call ACTHA at (312) 987-1906 or check the organization’s web page at www.actha.org.
———-
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, Ill., 60611. Sorry, he can’t make personal replies.
