Lauren Peddinghaus of Haus Financial Services, LLC was recently interviewed for Alison Bowen's story in the Chicago Tribune about living with babies in apartments and condos in Chicago. The full article appears online and on the front page of the Sunday, April 23rd Real Estate section.
If you are a parent in a condo or the neighbor of a family with a baby, this story will resonate with you! How does your condo association handle issues like noise and strollers?
Read the full article here.
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Many smaller condominium associations operate fairly casually and do not adhere strictly to their governing documents or the IL Condo Act. They also ignore Best Practices for operating the association like a business. This can become a problem when the association needs to pursue legal remedies for unpaid assessments. Specifically, failing to properly elect a board to act on behalf of the owners can stop a lawsuit to recover unpaid assessments.
In the case of 4934 Forrestville Condominium Association v. McKinley, the First District Appellate Court held that a unit owner’s claim that a Board was not validly constituted could go forward and potentially defeat the Association's claim.
The owner sought to dismiss the lawsuit on the grounds that the board did not consist of three unit owners, that the two board members pursuing the lawsuit owned a single property, that annual elections had not been held, and that the association's incorporation was not in Good Standing with the Secretary of State. The motion to dismiss was originally denied. The Appellate Court reversed this decision, requiring the association to provide a response to the claim.
Associations can avoid such complications in court by doing the following:
To read more about the case, click here.
When it comes to elections, one of two voting methods will likely be specified in your condo association’s Bylaws.
In cumulative voting, owners have a right to vote their entire ownership percentage to a single candidate or to divide their ownership among one or more candidates. This gives owners with a lower ownership percentage a better chance at electing at least one of their preferred candidates because they can cast their entire vote for one candidate.
In non-cumulative voting, owners cast their entire ownership percentage to each of their preferred candidates, up to the number of open positions.
For example, consider two owners, one with 15% ownership and one with 18% ownership. In cumulative voting, the owner with 15% ownership can allocate the entire 15% to one candidate, giving them at least a shot at electing one of their preferred candidates. The owner with 18% ownership would need to allocate more than 15% to a single candidate in order to defeat the other owners vote, leaving them a smaller percentage to allocate to other candidates and decreasing the likelihood that they will be able to control all three of the open positions.
In non-cumulative voting, owners cast their entire ownership percentage to their preferred candidates in equal amounts, up to the number of open positions. An owner with 15% ownership, therefore, would give 15% to each of three candidates, assuming that there are three open board positions to vote on. The owner with 18% ownership would give 18% to each of their three preferred candidates, easily defeating the other owner’s votes for the entire board and thus controlling the board.
Review your Bylaws to determine how your association votes. Condo owners need to consider the math involved in voting and strategize with other owners if they want to have the best chance at electing their preferred candidate(s). You can find another simple explanation of cumulative vs. non cumulative voting and a handy calculator here.