In reviewing several clients' Declarations recently, I'm finding that some governing documents allow the association to apply both late fees to late payments and interest charges to unpaid balances.

HausFS was previously of the opinion that any interest charges indicated in the governing documents (usually shown as a percentage that could be applied to an outstanding balance) were the stipulated "late fees" allowed.  Closer reading makes me believe that if the appropriate language is present in the governing documents, a board can apply a late fee if an assessment is not paid by the established due date and can ALSO apply finance charges if a balance is carried. This is similar to how credit card accounts work.

Many owners accumulate significant balances and boards become frustrated when they can only apply a monthly late fee.  If interest charges are allowed, owners pay a penalty for carrying a balance for prior unpaid assessments even if they have been paying current assessments on time.  

Bed bugs are becoming a bigger and bigger problem in Chicago.  Our clients have been experiencing bed bug problems recently. It's very easy for a bed bug problem in one unit to spread to neighboring units.  Associations should encourage owners to report bed bugs before they have a chance to spread.  The board may need to take steps to treat the entire building once bed bugs have been reported.

Here are some links to information about detecting and treating for bed bugs (courtesy of Ann Hinterman, through Alderman Joe Moore's office):

A Chicago city ordinance that previously imposed a 3 business-day deadline for allowing unit owners to inspect an association's financial books and records was amended in September 2010 to 10 business days.

The ordinance is largely unknown and hasn't been tested extensively in court, but owners have prevailed under the 3-day deadline.  

The ordinance applies specifically to "financial books and records."  The IL Condo Act allows 30 days for other types of documents.

HausFS has been working with many clients in obtaining FHA Certification in order to facilitate unit sales.  Sales often fall through because the buyer requires an FHA insured loan, and the association is not yet certified or cannot be approved for certification for a number of reasons.

  • Delinquencies are a huge problem for FHA Certification.  Associations with more than 15% of units that show assessments delinquent for 30 days or more will not qualify for FHA Certification.  That means a 10-unit building cannot have more than a single delinquent unit.  
  • Lack of reserves planning is also a potential problem.  Your annual budget must show at least 10% allocated to reserves.
  • Special assessments can prevent FHA Certification as well.  If your association has issued a special assessment to obtain needed funds for a major capital repair project, you may not be able to obtain FHA Certification.
HausFS can help your association get on track for FHA Certification.  This email address is being protected from spambots. You need JavaScript enabled to view it. today for more information!

As of January 1st, 2011, recording requirements for corporation documents filed with the Secretary of State have changed.  Articles of Incorporation and Change of Registered Agent forms filed by condominium associations no longer need to be recorded with the Cook County Recorder of Deeds.

Filing fees were previously about $40 for both Articles and Change of Registered Agent forms.  Incorporation fees are $50 and Change of Registered Agent fees are $5 (additional fees apply for expedited online filing).  This saves associations both time and money!

Just another incentive to incorporate.  Incorporated associations should also check the Registered Agent on file and update if necessary.

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