Today I received an inquiry from a condo owner who was concerned about new Rules & Regulations that his association had proposed.   What struck a nerve for me was a comment he made about "reducing residents' ability to live as they wish without interference."  The fact is, when you are living in a community such as a condominium association, no individual can "live as they wish."  Each owner is a member of a whole that requires rules and structure to ensure that everyone can live peaceably without infringing unnecessarily on anyone else's right to the same.  

I often recommend that condo owners review and adopt CAI's "Rights & Responsibilities for Better Communities."  It's a great reminder that when you are living in a condominium community, the needs of the whole must be balanced with the needs of each individual.  We cannot each "live as we wish" when we are each living as a part of a whole.

We often receive money orders from owners as payment for their monthly assessments.  Occasionally, we receive cash.  The problem with these forms of payment is that there is no concrete record (such as a check that has cleared the bank) that the owner has made the payment.

In the event that the association has not been keeping accurate records, the burden of proof for payment of assessments will fall to the owner.  We've reviewed association books that have been neglected or handled incompletely (or even criminally) by a Board member and the only way to get an accurate picture of the association's financial situation is to return to the source documents.  When owners can provide clear proof of payments they have made, the records can be properly reconstructed.

If you pay your assessment by money order or cash, make a point of retaining a copy or getting a receipt so that you can provide proof of payment in the future if necessary.  

Most condominium associations are required to hold an annual meeting to conduct Board elections.  Your annual meeting should be held about the same time each year.  If you haven't had elections in the past 12 months, it's time to get caught up!

A few items to note:

  • 10 days' notice is required for annual meetings and elections
  • Unit owners typically vote by ownership percentage unless your governing documents state otherwise
  • Board members are elected at large and posts (President, Secretary, Treasurer) are then determined amongst the Board.  You do not elect your officers directly to their posts.
  • Your governing documents may indicate that some Board members serve for a longer period of time in order to preserve some continuity from one year to the next.
For more on conducting Board elections,  see "The Board & Board Elections."

My husband and I came home one night recently to find that lights were out on the back stairwell landings.  As it turned out, the bulbs weren't just in need of replacement, they had been unscrewed.  And a strange man was lurking around the back of our property who didn't belong to our building or the building just west of us that shares our driveway.  Later, I found out that my retired neighbor on the 1st floor was in her house when she heard someone at the back and the light suddenly went out.

This was a very unsettling incident, and it put me on high security alert in our building.  I notified all of the neighbors and reminded them that we need to make sure doors are closed and locked, and call police if we encounter anyone on the property who doesn't belong.

A recent robbery in a client building and gang graffiti on the wall of another client are further reminders that owners need to do as much as possible to secure their buildings and be vigilant about strangers on the property.

If you'd like to know more about how you can make your building more secure and deter break-ins, contact your local Alderman's office.  They can put you in touch with an off-duty policeman who will come to your building to conduct a walk around, provide security tips and educate owners on building security.   

Board members often spend a lot of time and effort on behalf of their association, so it's natural to assume that they should receive something in exchange.  Offering pay or a discount on assessments may also seem like a good way to encourage owners to serve on the Board.  However, compensating Board members could in fact be prohibited by your Declaration and By-Laws and opens up a host of other factors to consider.

Owners should first consult their governing documents to determine if they allow for the compensation of Board members.  Most Declarations specifically state that Board members are to serve without compensation so it's more likely than not that your Board members are required to serve on a volunteer basis.

If your governing documents allow for the compensation of Board members, your association may be required to obtain Workers Compensation insurance in addition to other required insurance policies.  If a compensated Board member is injured while carrying out their Board functions, the claim may not be covered by the association's general liability policy.  This leaves the association open to liability in the case of an injury.

Further, any compensation paid to a Board member in excess of $599 annually must be reported to the IRS as taxable income.  A 1099 should be provided to the Board member and filed with the IRS.  For smaller buildings, this means additional accounting expenses to properly report the compensation.

It's important to note that offering compensation for Board members could prompt owners to serve for the wrong reasons or to regularly grant themselves "raises" that are not in the best interests of the association.  Overall, maintaining a volunteer basis for your Board members is the safest way to go. 

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