Q. I am a unit owner in a Chicago condominium association where two board members were reelected during a board meeting. Our association’s governing documents require annual elections to be held at a meeting of the unit owners. Minutes of the last board meeting reflect the purported reelection. Are the board members’ reelections valid?
A. Annual meetings to elect board directors cannot be held at a board meeting. The election of directors must occur at a unit owner meeting with proper notice. Therefore, the purported election of the two directors at a board meeting is invalid. Notice of an annual meeting must be sent to all unit owners with no less than 10 days’ and no more than 30 days’ notice to hold a proper annual meeting.
Q. A longtime owner lives in a unit much larger than others, but that unit’s monthly assessments are only slightly more than smaller units. Many owners in the association want to increase the unit percentage of the large unit so as to see a more equitable allocation of assessments. How can the association reset unit percentages, which is the basis of how assessments are charged?
A. Section 4(e) of the Condominium Act states that the unit percentages shall be computed by taking as a basis the value of each unit in relation to the value of the property as a whole when the unit percentages were initially set by the developer. The size of a unit is not the determining factor even though square footage does play a part in the value of the unit. Section 4(e) also states that unit percentages shall remain constant as set forth in the declaration unless changed by agreement of all unit owners.
To revise the unit percentages, 100% of the unit owners must agree to a declaration amendment. As a practical matter, the owner being targeted to pay higher monthly assessments will likely oppose paying more, thus derailing the initiative to revise its unit percentage.
Q. My townhome association’s bank accounts contain over $135,000 in value. Is a townhome association with assets of over $100,000 required to be audited by the state of Illinois?
A. There is no requirement for a common interest community association such as a townhome association, or even a condominium association, to be audited by the state of Illinois if the association possesses assets over $100,000.
The only reference in the Common Interest Community Association Act, or CICAA, to $100,000 relates to the exemption standard for small common interest communities from applicability of CICAA. Section 1-75 CICAA states that a common interest community association having either 10 units or fewer, or an annual budget of $100,000 or less, shall be exempt from CICAA.
Got a question for the Condo Adviser? Email ctc-realestate@chicagotribune.com.
