Q. I am the president of a town-home association. Our board has been trying to determine whether we are subject to state laws and the Condominium Property Act.
According to our bylaws, each of the 12 households in our association has one vote, along with one seat on the board. Is this legal? Because only five to six households attend association meetings, we have trouble passing key votes because we lack a quorum. Can we change the bylaws to allow us to get around this stalemate?
At several past meetings, we have attempted to increase our monthly assessments. Some members, even when presented with financial information showing our rapidly increasing costs, have refused to vote for this. How can we get the assessments passed?
One particular household is seriously in arrears on assessments. Our bylaws state that we can foreclose, and I know the Condominium Property Act permits foreclosure. Does the law that governs town-home associations allow for the same remedy?
A. Town-home associations often have this identity crisis in attempting to determine the source of their authority. Your association is subject to the provisions of the declaration and bylaws and, if incorporated, the Illinois Not-for-Profit Corporation Act. Town-home associations may also be subject to Section 18.5 of the Condominium Property Act if the development was formed in 1982 or later.
The current format for decision making is legal but not workable. This town hall format, in which all owners serve as board members, is not efficient. The structure depends on a significant participation by owners and is contrary to the general operation of an association or corporation. There should be three directors for your association, and the only way to achieve this is for the owners to amend the bylaws to reduce the number of board members. Owners can do this or have continual voting stalemates until serious neglect of your association requires substantially larger assessments.
To deal with delinquent owners, the foreclosure remedy will result in the forced judicial sale of the town home. A less expensive alternative for the board is to file a suit for monetary damages in the amount of the assessments owed to the association.
Q. A condominium unit is owned in trust by one spouse in our development for estate-planning purposes. The other spouse wishes to serve on the board. Illinois law prohibits non-owners from serving on condo boards.
Is there a procedure or document that will permit this “non-owner’s spouse” to serve on the board?
A. This issue is becoming more common as individuals develop sophisticated estate plans. The other spouse may become eligible to serve on the board if he or she becomes a co-trustee of the trust, which holds title to the unit. Or the board can adopt a rule that defines, more specifically, individuals who are considered to be owners for purposes of voting and serving on the board when a unit is held in a living trust. The board may formulate a rule that states trustees and beneficiaries are deemed owners for purposes of becoming the official representative of a unit.
Until the board adopts such a rule or amends the declaration, a trust amendment is the only way to make the spouse eligible for this high-paying position.
Q. I am a new board member of a large town-home condominium association in the suburbs. When these town homes were built 10 to 12 years ago, the city granted concessions to build units closer to the street. The “deal” provided more units for the builder and a larger tax base for the city. This win-win situation for the city and the builder is a lose-lose deal for the owners. We still pay taxes for street maintenance, but pay again in our dues to plow, salt and repair our streets. What else can we do besides requesting the city to take over our streets?
A. The double taxation problem is a national issue. Associations throughout the country have raised objections to municipalities that require members to pay taxes, although members pay assessments for the same services given to others by the municipality.
The most glaring illustration of this problem is in refuse removal. Associations often hire private scavenger services to do what municipal residents get for their taxes.
There are two alternatives. Persuade the city to dedicate your streets or seek what other municipalities have granted, namely, a partial credit to association members for the double tax fee.
The builder should have included the street dedication as part of the agreement for the zoning set-back.
Q. I am an owner in a condo development that has about 100 units. Our bylaws prohibit pets. A petition is being circulated to allow pets. We have learned that a number of board members are harboring pets, and they are aware that residents have been keeping small pets.
What penalty can be invoked for disregarding bylaws? Can we petition to place the prohibition of pets in our condo declaration?
A. The existing pet prohibition is part of your declaration because the bylaws are generally an exhibit to the declaration. Board members have a fiduciary obligation to enforce the association rules and should be the prime example of compliance. The directors have two choices: enforce the regulation or propose an amendment to the document that may recognize the preference of owners to keep small animals.
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Write to Mark Pearlstein at realestate@tribune.com. Sorry, he can’t make personal replies.
