Q. We own a commercial condominium unit in a northern suburb of Chicago. There are 65 units in the building on five floors. The first floor has a lobby area and 13 commercial units. Each of the other floors has residential units with hallways. Why do the commercial units have to participate in extremely costly decorations of residential hallways, including the installation of new carpeting at a cost of about $100,000 per floor? The commercial units obtain no benefit from new residential carpeting and get no comparable allowance.
We are fully aware that a “condominium” by definition is a building owned in common with all the unit owners who share expenses, but this does not seem unfair, especially when the expenses are quite extreme. Is there any remedy?
A. In a mixed-use building, the obligations of a commercial owner are dictated by the declaration. If the commercial property is a condo unit, the owner must pay a share of the common expenses equal to the percentage of ownership assigned to the unit. If the commercial property is a separate property within a residential building, the commercial owner will pay a portion of certain expenses. Costs for exterior wall maintenance, insurance and utilities are typical common-area charges shared by residential and commercial properties.
Review the declaration to determine the arrangement you agreed to accept when you purchased the unit. If the charges are not consistent with the declaration, you have a valid claim for a reduction. Otherwise, keep in mind that a residential owner may have to bear a share of expenses for areas occupied exclusively by commercial units.
Q. Members of our association recently received a proposal for an amendment to the declaration and bylaws. Our document calls for 67 percent approval of the members for any amendment, together with the written approval of mortgagees holding at least 51 percent of the outstanding mortgages.
Instead of written approval, however, our board has chosen to use the “negative response letter” in which the mortgage holders need to respond only if they vote against the amendment. Silence will be deemed an affirmative vote. Can the negative response be allowed instead of written approval?
A. The “negative response” assumption is valid only if specifically authorized by the declaration and bylaws. Absent this, the board must obtain the written approval of the required number of mortgage holders.
Q. At our last annual condo meeting, the ballots and proxies were prepared on one form. Unit numbers and percentages of ownership were written on the proxy/ballot form by the board and distributed to the owners before the annual meeting. The board did not supply a different form for use at the annual meeting. Therefore, the ballots were not secret. Several owners were upset that the ballots were not anonymous.
After the election, a board member who was re-elected decided he wanted to review the ballots. The vote totals were not close and no one contested the vote count. When asked why, the board member said he wanted to see how “popular” he was and which owners in the building did not vote for him. I find this to be totally inappropriate in the form of intimidation. What is your take on this?
A. Someone has too much time on their hands.
The distinction between a ballot and proxy is significant. Votes are cast by a ballot. A proxy is an authorization by the owner to permit another person to vote in his or her place.
Condo elections are not secret unless the board adopts a secret-ballot process. Owners can inspect election documents for one year from the date of the vote upon a written request with a proper purpose. A proper purpose to review election documents is to verify the accuracy of the vote count, not to question owners on their voting choice for an uncompensated, volunteer position.
Association basics
The Community Associations Institute, Illinois Chapter, will hold a free educational program Sept. 29 organized by its Committee for Community Development and the Lakeview Community Development Corp. The program will provide information for board members, volunteers and owners on the basics of association living, budgets, reserves and income taxes, electing a board and cultivating community involvement. Call 847-304-5963 or e-mail your registration request to vpulgic@communityadvantage.com.
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law and is chairman of the legislative committee of the Illinois chapter of the Community Associations Institute. Write to him c/o Condominiums, Real Estate, 4th Floor, Chicago Tribune, 435 N. Michigan Ave., Chicago IL 60611. You may e-mail questions to realestate@tribune.com. Answers will be supplied only through the paper.
