Q. We recently bought a new town home in a southwestern suburb. The development is 60 percent sold. The association is not legally set up as a not-for-profit corporation. The current board is made up entirely of owner/employees of the developer.
Who is not responsible for maintenance of our common areas and issues that come up? The developer tells us that we complain too much and should wait until the owners take over the board and then we can do things the way we want.
Does the developer have any responsibility to meet with owners and allow them to take part in the association? We asked for a meeting and the developer said no. Who is looking out for the owners’ benefit until the unit owners take over the association?
A. The board members of the developer are responsible for maintenance of the association and must hold open board meetings.
Your property is a common interest community. Common interest communities are associations, not condominiums or cooperatives, which are governed by a declaration and whose owners pay assessments. Common interest communities are subject to the provisions of Section 18.5 of the Illinois Condominium Property Act. Section 18.5(c)(4) requires directors to hold open meetings, prepare a budget and submit an annual accounting to the owners.
Your town home association is also governed by the recorded declaration and by-laws prepared by developer’s counsel. The declaration requires the board to maintain and administer the property. The bylaws provide that the association is governed by the board and should state that the first board is appointed by the developer. The bylaws also provide for meetings of directors and lists their duties to the association and the owners. There is no distinction between the duties of developer board members and directors whom the owners elect.
Your developer has not read the declaration or chooses to ignore the document he prepared. He is also under the mistaken impression that the statute does not apply to him. I am not aware of any exceptions in Section 18.5 for particular developers.
The turnover of the board of directors to owner control takes place within 60 days after 75 percent of the units are sold. Monitor the sales and remind the developer of the turnover date. In the meantime, the developer board has a fiduciary duty and is responsible for any increased costs the association may incur from the lack of maintenance during developer control.
Q. I am the president of our small condominium association. I will be completing my second term this year, as will the secretary. We anticipate a problem in that most owners don’t have any interest in taking part in the business of the association. What happens if no one steps up to run for the board of directors at the annual meeting?
A. If no owners choose to run for the board, as the current president, call a meeting of the association, and with 75 percent approval, the owners can sell the building to a landlord. If no one is interested in contributing to the welfare of the association, there is no point in continuing its current existence.
Certainly, owners will not miss their property appreciation or real estate tax deductions.
Q. I am a board member of a north suburban condominium association. We are managed by a professional management company. Besides a list of assessment arrearages, what other information should a board member not share with a homeowner?
Also, what do we do when the management company refuses to provide copies of invoices for roofing work? A unit owner had water damage and their insurance company will not pay for the repairs until they have proof that the problem was fixed. The management company is refusing to provide this information, and has told the owner that he needs to “trust them” that the work was performed.
A. The board is not required to provide owners with sales and lease information, documents relating to the hiring or performance of association employees, and threatened or pending legal actions against the association.
Expenditures for common element repairs are available to unit owners under Section 19 of the Condominium Act. The board of directors is responsible for delivery of information required by law and faces serious legal consequences if it refuses to do so. The directors should override the decision of the agent. Remember, under the management contract, the agent takes direction from the board.
– The Association of Condominium Townhome and Homeowner Associations will hold a seminar at 6:30 p.m. Monday, Jan. 13, on “Best Practices For Associations”. The subjects of the meeting, at 899 S. Plymouth Ct., Chicago, will include elections, insurance, homeowner landscaping issues and association meetings. For more information call 312-987-1906.
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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. You may e-mail questions to realestate@tribune.com. Sorry, he can’t make personal replies.
