There is a board election coming up and one of the owners in your association is behind on paying assessments. Can that owner be prevented from voting in the next election and possibly serving on the board?

While it might seem unfair for an owner who is not paying their share to have a voice in association business, even delinquent owners have a right to participate in any ownership vote, including board elections, and to serve on the board. Delinquencies affect voting only when it comes to passing amendments. Even then delinquent owners have a right to vote, but they do not need to be counted toward quorum requirements.  

Board members should be taking steps to remedy owner delinquencies when they occur. If a new board is elected, information about those steps should be communicated by the outgoing board. The new board will then have the fiduciary responsibility to address the delinquency, even if one of those board members is the subject of the action.

Bankruptcy can affect a condo association's ability to collect delinquent amounts from owners. When an owner files for bankruptcy, the association must cease any collection action against the owner until the bankruptcy has either been denied or discharged. The balance that has accumulated up to the date of the bankruptcy filing is protected from legal action.

Depending on the type of bankruptcy, the association may be able to recover all or part of the debt through a bankruptcy payment plan (Chapter 13) or the debt may be discharged and not collectible against the owner (Chapter 7).

But what happens if the owner then forecloses? Per the IL Condo Act the association can collect six months of unpaid assessments plus legal fees from a third party purchaser at judicial sale or upon re-sale from the bank to a new owner, provided it has taken the proper legal steps. Would the owner's balance prior to bankruptcy be included in these collectible amounts? Per condo law attorney James Stevens of Chuhak and Tecson:

"It would depend on the type of bankruptcy. Usually the lien remains against the property in a Chapter 7 but is not enforceable against the owner. The six months amount would remain due post foreclosure if the association takes proper action before the foreclosure concludes. The debt would be paid off during a Chapter 13 so the remaining lien is not particularly an issue so long as the owner completes their plan."

Bankruptcies and foreclosures can throw a wrench in collection efforts. If your association is experiencing delinquencies coupled with bankruptcies and/or foreclosures, Haus Financial Services can help.


The topic of reserves is a big one for small condo buildings. HausFS clients often want to know how much they should have in their reserves. The answer to this question, unfortunately, is not simple.

Reserve funds are monies set aside over time to provide for the eventual repair or replacement of major building components. These are projects that don't happen frequently (such as roof replacement, tuck pointing, hot water heater replacement, etc.) but will have to be addressed during the life of the building. The best way for any condominium association to determine how much they should have saved for these projects is to have a Reserve Study completed by a qualified engineer. A Reserve Study will inventory all of the common elements that must be maintained by the association, predict their useful life, project the date of required replacement or repairs, and estimate the cost of that work. The Reserve Study then uses this data to calculate the annual Reserves Contribution required to properly fund the reserves. A study often covers a 20-30 year span and should be updated every five years or so.

The problem is, most small associations do not go to the trouble of having a Reserve Study completed. In fact, none of our clients do. Cost is a factor, and many condo owners simply aren't planning 20-30 years into the future. But failing to adequately fund reserves can lead to large special assessments that owners may not be prepared to pay.

In lieu of a Reserve Study, small associations may want to opt for an annual inspection. This allows the board to discover what maintenance items should be handled now, what may need to be done in the next few years and what can wait. Having a year or two (or more) to plan for a major expense is always preferable to trying to collect a large amount in one fell swoop. It can also prevent smaller projects from becoming larger (and more expensive) projects. This approach may save you a lot of money and stress in the long run.

In response to the outcry against the recent amendment to Section 19 of the Illinois Condominium Property Act, the Chicago City Council passed an ordinance at the end of March amending Section 13 – 72 – 080 of the Chicago Condominium Ordinance.

The amended Ordinance makes owner information, including names, addresses, email addresses, phone numbers, and weighted vote of all members entitled to vote, available only to board members. The Ordinance allows condo associations to opt-out of the Chicago provision with a 2/3 vote of owners. This means that if 2/3 of condominium owners approve, the association would have to allow access in line with the IL Condominium Association Act, rather than keeping the information private to only board members, as detailed in the Chicago ordinance.

To learn about the IL Condominium Association laws regarding books and record, click here. 

Mayor Emanuel recently updated Chicago residents on legislation he helped to pass in Springfield. The legislation expands certain property tax exemptions as follows:

1. All Chicago homeowners will benefit from an expanded Homeowners’ Exemption which increased the exemption by almost 43%, from $7,000 to 10,000. Working class and middle-class homeowners will be the largest beneficiaries of this exemption.

2. The Senior Citizens Homestead Exemption is increasing 60%, from $5,000 to $8,000

3. The income cap for seniors eligible for the Senior Freeze exemption will increase by almost 20%, from $55,000 to $65,000

To receive these exemptions, you must fill out an application with the Cook County Assessor's Office. You can visit the website here or call (312) 443-7550.  More details are also available here. These benefits will show on the property tax bills you receive this summer.

There are a number of additional exemptions that owners may not know they qualify for. These include:

1. The Homestead Exemption
2. Senior Citizen Exemption
3. Senior Citizen Assessment Freeze Exemption
4. Home Improvement Exemption
5. Returning Veterans Exemption
6. Disabled Veterans Homeowners Exemption
7. Disabled Persons Exemption
8. Long-Time Occupant Exemption 

To learn more about these Cook County Property Tax Exemptions, click here.

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