As we count our blessings on Thanksgiving, Chicago Condo Resource and Haus Financial Services would like to extend a huge THANK YOU to all of the condo board members who donate their valuable time working to support their associations.

Living in a condo building is challenging, and serving on the board is often a thankless job. Board members are unpaid volunteers who dedicate time and energy to fulfill the numerous responsibilities that come with condo ownership. The neighbors they support are often unaware of just how much time and energy that takes.

If you are a condo board member, thank you for all that you do.

If you are an owner, take time this week to extend your appreciation to your board. They deserve it.

Generosity and gratitude go a long way toward making condo living successful. Happy Thanksgiving!

Under the IL Condo Act, all condominium associations are governed by a board or directors consisting of, at minimum, 3 owners serving in the roles of President, Secretary and Treasurer. All condo associations are also required to hold an annual meeting of the owners where one or more of these roles may open for election.

Board members have the right to make decisions on behalf of the association, but they also have the responsibility to act in the best interests of the entire association. This is known as "fiduciary duty" and requires that board members put aside their own personal interests to do what is right for the association. Failure to uphold your responsibility as a board member can lead to individual legal liability.

Because the board carries such great power and responsibility, your association may want to consider adopting a board Code of Ethics. If conflicts arise, having a Code of Ethics in place can reduce the chance of a possible problem. A Code of Ethics can help guide board members to maintain high ethical standards and serve their community responsibly.

An appropriate Code of Ethics includes the following:

  • Strive at all times to serve the best interests of the association as a whole regardless of their personal interests.
  • Use sound judgment to make the best possible business decisions for the association, taking into consideration all available information, circumstances and resources.
  • Act within the boundaries of their authority as defined by law and the governing documents of the association

Board members can find a SAMPLE Code of Ethics document here.

Read more about a Code of Ethics for board members here.

 

 

Time for our annual budget reminders!

Here are a few important things to know about Board responsibilities and Budgeting:

  1. The Board is required to prepare an annual budget for the association each year.
  2. A copy of the proposed budget must be delivered to owners at least 25 days before the Board votes at a meeting to approve it.
  3. Notice of the Board meeting to approve the budget must be delivered to owners at least 10 days prior to the meeting.
  4. Owners do not vote on the budget, only Board members. However...
  5. If an assessment increase would result in a 15% or more increase over TOTAL income for the prior year (including Special Assessments), then owners have the right to petition for an owner vote on the budget.

Please see more about Budgets from these helpful CCR articles:

Condo Budgeting Tips for Pandemic-Related Issues

Double-check your ownership percentages when preparing budgets ...

How to Avoid Common Board Member Mistakes

The Importance of Reserves Budgeting in Small Condos ...

 

Related Videos for CCR Members:

 

Bankruptcy is the most complicated issue involved in condo and HOA collections.

While a condo or HOA can collect if a homeowner declares bankruptcy, it is imperative to know what they are doing and how to do it. 

In community associations, the registered agent will receive notice that an owner has filed for bankruptcy and action must be taken. If the association does not respond appropriately, they may not be in line to recover any delinquent assessments when the case is discharged by the bankruptcy court.

Check out this article to learn exactly how to handle this perplexing issue.

Reserves take care of the infrastructure and capital aspects of an association. These are repair and replacement needs that happen infrequently and carry large price tags. Associations should be including a contribution to reserves in their annual budget. But how do you know how to calculate that contribution? A Reserve Study can help.

Reserve studies are important to the health and stability of an association, because:

  1. Without a reserve study, an association cannot determine how much money it should have in reserves.
  2. During reserve studies, professionals evaluate the life of all capital investments, allowing associations to understand how much money is needed each year to replace each component.

Reserve studies should be conducted and updated regularly so that your association can plan for large repair needs over time. 

Read more, here.

 

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