When it comes to best practices for any Board member or Association leader, it is important to remember COMMUNITY.

C- Communication. Boards should be communicative and transparent with association residents.

O- Organization. The Board should ensure that all Association records comply with Illinois law.

M- Mindfulness. As elected, volunteer officials, the Board should keep in mind their responsibilities, but also, their limitations.

M- Money. The Board should stick to a budget and set aside reserve funds.

U- Updates. To avoid legal trouble, Associations should abide by any changes to laws governing condominium and homeowner associations.

N - Needs. An attorney should review vendor contracts to ensure legal protection.

I - Involvement. To be most effective, the Board should include everyone and assign responsibilities.

T- Thorough. The Board should have a complete understanding of the Association’s governing documents.

Y- You’ve got this. The Board should be unified to instill confidence.

To learn more, view the full article by Kovitz Shifrin Nesbit attorney Ryan Shpritz here.

It's not unusual for condominium associations to struggle from a lack of involvement from owners and an inability to locate enough volunteers to fill the required number of board seats. This is particularly true in small associations, where the burden is often shouldered by one or two individuals who are willing to take responsibility. Sometimes, however, the opposite situation exists and there are more volunteers who want to participate than open board seats. This can create different challenges for the association.

Your Bylaws will dictate how many board members should be elected to your board. If your association is operating with five board members when the Bylaws state three, however, you are not in compliance with your governing documents, which exist to minimize conflict within the association.

Board seats are often limited in smaller buildings because it can be difficult to gather a quorum (majority of the board) in a meeting in order to conduct business. When you are operating with only three board members - the minimum required by IL condo law - only two board members must meet in order to vote on association business. This leads to quicker, more efficient board decisions. The more board members you have, the more individuals you'll need to coordinate and organize to make decisions. 

Boards are also most effective when there is an uneven number. Even numbers introduce the opportunity for a stalemate when voting. And piling on the board members can lead to burnout, leaving few options for replacing board members should any of them decide to leave the board. Spreading the responsibility among owners over time is a better approach than having them all participate at once.

It might seem to be generous to allow more members to participate on the board then required, but sometimes there really can be too many cooks in the kitchen. When the number of volunteers exceeds the number of board seats, conduct a proper election to fill the required number of seats - no more, and no less.

If you have a complaint that you would like your community association to resolve, here are some tips on how to handle the situation effectively. Your temper may be flaring, but try to keep these things in mind before speaking to the board or management. 

  1. Remember what you signed up for. You are living in a community, which means there will be a prescribed set of rules that must be followed and everyone must compromise.
  2. Educate yourself. Before approaching the board, make sure to review your association’s governing documents that list the board’s responsibilities. Knowing what the board handles will help you determine who to speak to about your complaint.
  3. Keep your cool. Instead of yelling or sending angry emails, approach the board or management in an understanding and friendly way. Treating them with kindness will make the entire process more efficient.
  4. Propose a solution. If you have a problem to bring up, also try to bring a possible solution to the table. You can even volunteer to help in implementing that solution. Show that you have a vested interest in the change.

To learn more, click here.

Handling a foreclosure in your condominium association can be confusing, and the process can drag on. If you are not collecting assessments from the condo owner while the foreclosure plays out, you should first understand what you need to do to protect any delinquent amounts and when you can expect to be paid post-foreclosure.

A foreclosure concludes with the judicial sale, when the property is auctioned. At this point, the property may be purchased by a third party or revert to the bank. Whichever entity takes ownership, they will be responsible for paying assessments as of the 1st of the month following the judicial sale date.

The lien on the unit is not extinguished until the bank or third party begins paying assessments. If the assessments are not paid promptly following the confirmation of the judicial sale (usually 1-2 months after the judicial sale date), the association may have a right to collect all of the assessments unpaid by the prior owner.

The association will recover delinquent amounts from the prior owner per statute from the third party or from the purchaser of the unit when the bank re-sells the property.

 

When a condo owner goes into foreclosure, it is imperative that board review the owner's account for delinquencies and take the proper action to preserve any unpaid balances owed to the association.

If an owner has not been paying assessments throughout the foreclosure and the association does not take any legal action during that time, the lien against the unit for unpaid amounts will be extinguished by the foreclosure action and the association will not have any recourse to collect against the owner. 

Thanks to Section 9(g)(4) of the Illinois Condominium Property Act, however, an association has the right to collect 6 months of assessments unpaid by the owner if they have taken legal collection action. In June 2018, in Sylvia, LLC v. Baldwin Court Condominium Association, the Court clarified that filing a lien against the unit is sufficient to satisfy the legal action required by Section 9(g)(4) and preserve the right of the association to collect 6 months of unpaid assessments.

The unpaid assessments are paid either by a third party who purchases the unit at the judicial sale or by the purchaser who purchases the unit from the bank following the foreclosure.

There are other collection options that allow the association to collect all of the amounts due from the delinquent owner even if the unit is foreclosed. The route your association should take depends on a number of factors. If you need help with collection issues, contact Haus Financial Services for more information.

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