Top 10 Errors Made by Association Boards

Details

Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 22 November 2010

A client forwarded this great article on common mistakes made by association Boards.  I'm sharing it here.

The article was originally published in the November/December issue of Common Ground, CAI's magazine focusing on issues affecting condominium, co-op, and homeowner's associations.  Become a member of CAI and receive the magazine in its entirety, as well as access to additional resources for your association.  See the CAI website for details.

Property tax bills mailed

Details

Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 12 November 2010

Cook County recently mailed the 2009-second installment tax bills.  These bills will be due and payable on December 13, 2010.

You may recall the 2009 1^st installment bill was payable on March 1, 2010 and was an estimated bill (55% of last year's bill).  The balance due for 2009 is reflected on the 2^nd installment bill recently mailed.
 
If the 2009 bill is higher than 2008, it may be the result of:

• a record 13.4% increase in the Cook County equalizer;
  
• an increase in the local tax rate;
• a decrease in the homeowner exemption because the 7% assessment cap is being phased down by State statue and/or;
• an increase in the assessment (Chicago was re-assessed for the 2009 tax year).

The computation of the 2009 taxes will appear on the right-hand side of the second installment tax bill.  Unit Owners should be sure to verify they have obtained all exemptions they are entitled to.  If they have not received all exemptions they are entitled to, they will need to contact the Cook County Assessor's Office to correct this.

Double-check your ownership percentages when preparing budgets

Details

Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 03 November 2010

I've been preparing budgets for a number of new clients lately, and I'm often finding that assessments have been charged in the past do not correspond accurately to the ownership percentages recorded in the association's Declaration.

When I purchased my first condo and prepared my first budget as Treasurer for the building, I noticed that some owners' assessments increased while others decreased.  The only reason for this to happen is if the original assessments have not been calculated based on ownership percentage, as they should be.  If the total budget increases 10%, each owner's assessments should increase 10%.  It's simply math.

Every time a budget is prepared, the ownership percentages should be checked against the Declaration to ensure that owners are being charged correctly, particularly if you are a new Treasurer.   This will ensure that every owner pays in their proper share. 

Acceleration Clause Speeds Up Payment from Delinquent Owners

Details

Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 27 October 2010

If your Declaration or By-Laws contain an "acceleration clause", you may be able to charge future assessments to owners who are in collections.

The standard language of an acceleration clause states that an association may accelerate the maturity date of assessments due for the remainder of the calendar or fiscal year and apply them to a delinquent owner's account.  If you are pursuing legal collection action against a delinquent owner, an acceleration clause allows you to charge the owner's account now for assessments that will be due in future months, and possibly obtain a judgment for those amounts.  This can save the association additional legal fees when assessments continue to go unpaid through the remainder of the year.

Consult your governing documents to determine if this remedy is available to your association.