ChicagoCondoResource

Ensuring (and insuring) your association's funds against theft

Details: Written by Lauren Peddinghaus; Category: What We're Thinking About Lately...; Published: 22 February 2011

Theft happens. Both board members and property management companies have been found guilty of stealing condominium association funds. There are several ways to ensure the safety of your funds:

Financial activity should be transparent between the management company and the board (and preferably all owners). Management should never have exclusive access to association funds.
Board members should be reviewing financial activity on a regular basis and addressing any red flags immediately. Ultimately, it is the board that is responsible for the association's funds.
Obtain proper "employee dishonesty" coverage and add your management company (if you have one) as an additional insured. Your basic policy might include a limited amount of coverage. Add additional coverage if your total funds (amounts held in all bank accounts ) exceed the covered amount. The premiums are generally quite low for this added coverage.
Keep your bank account access up to date. When new board members are elected, the old board members should remove themselves as signers from the account and make sure that the new members are added.

Easy access and little oversight make condo association funds particularly vulnerable to theft. Taking these steps can minimize potential losses.

A definition of "fiduciary duty" and who is responsible

Details: Written by Lauren Peddinghaus; Category: What We're Thinking About Lately...; Published: 17 February 2011

HausFS often encounters smaller associations who, rather than rely on their elected board, make most of their decisions by an owner vote. While this would seem the neighborly and democratic way to run a small building, it can create liability problems for board members.

The elected board owes a "fiduciary duty" to the association. This means that they must put the interests of the entire association above their own personal interests. Holding off on repairing a roof might save everyone money, but it would not be in the best interests of the association to delay required maintenance. It's the board's responsibility to make difficult decisions that, while they may not be popular with the owners, must be made to preserve the integrity of everyone's investment.

Individual owners do not owe a fiduciary duty to the association. Therefore, they are free to vote in a way that protects their own self-interest rather than the interest of the association on the whole. Owners generally outnumber board members. However, it is ultimately the board that is responsible for the decisions made and any legal consequences (not to mention most of the effort that is required to follow through on a vote) . It is in the board's best interests to handle the decision making and reserve all owner votes for the limited number of issues that legally require a vote of all owners.

Looking to resolve a dispute? Try the Center for Conflict Resolution...

Details: Written by Lauren Peddinghaus; Category: What We're Thinking About Lately...; Published: 04 February 2011

Mediation (or alternative dispute resolution) could help you to resolve a problem with your board or neighbors. Benefits include saving money on legal fees and court costs and a less adversarial approach to problem solving.

Many condo declarations now include a mandatory arbitration clause that can help associations to avoid addressing conflict through the courts.

The Center for Conflict Resolution offers free mediation services. See their website for more information!

Cook County 2010 1st installment tax bills to be mailed. One time change in due date.

Details: Written by Lauren Peddinghaus; Category: What We're Thinking About Lately...; Published: 27 January 2011

The Cook County Treasurer will soon release 1st installment 2010 property tax bills with an extended due date of April 1, 2011.

The extended due date is a one time change due to recent legislation passed by the Illinois Legislature and by law will revert back to the March 1 due date for subsequent years.

The 1st installment tax bill is an estimated tax bill. The amount due will be 55% of the prior year's total tax. Any change in the 2010 tax bill (due to changes in exemptions, assessment value, tax rate or equalization factor) will be reflected on the 2nd installment bill issued in the fall.

Courtesy of Elliott & Associates Attorneys, P.C.