Double-check your ownership percentages when preparing budgets

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I've been preparing budgets for a number of new clients lately, and I'm often finding that assessments have been charged in the past do not correspond accurately to the ownership percentages recorded in the association's Declaration.

When I purchased my first condo and prepared my first budget as Treasurer for the building, I noticed that some owners' assessments increased while others decreased.  The only reason for this to happen is if the original assessments have not been calculated based on ownership percentage, as they should be.  If the total budget increases 10%, each owner's assessments should increase 10%.  It's simply math.

Every time a budget is prepared, the ownership percentages should be checked against the Declaration to ensure that owners are being charged correctly, particularly if you are a new Treasurer.   This will ensure that every owner pays in their proper share. 

Acceleration Clause Speeds Up Payment from Delinquent Owners

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If your Declaration or By-Laws contain an "acceleration clause", you may be able to charge future assessments to owners who are in collections.

The standard language of an acceleration clause states that an association may accelerate the maturity date of assessments due for the remainder of the calendar or fiscal year and apply them to a delinquent owner's account.  If you are pursuing legal collection action against a delinquent owner, an acceleration clause allows you to charge the owner's account now for assessments that will be due in future months, and possibly obtain a judgment for those amounts.  This can save the association additional legal fees when assessments continue to go unpaid through the remainder of the year.

Consult your governing documents to determine if this remedy is available to your association.

How to Change Your Mailing Address for Real Estate Tax Bills

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A client recently discovered that some of the real estate taxes for parking spaces owned by association members had been sold.  As it turns out, the owners never updated the mailing addresses on their tax bills, and the bills were still going to the developer.

All owners should take the necessary steps to update the mailing address on their real estate tax bill to ensure that they receive a bill each year and to confirm that the bill has been paid, even if your mortgage company is paying your taxes through an escrow account.  Address changes must be made both for units and for parking spaces, if your parking space is deeded separately with its own PIN.

To update your mailing address, visit the Cook County Treasurer's website.  You'll need your PIN (you can find it by searching your address on the Cook County Assessor's website).  Select Payment--> Payment Status, enter your PIN and from the Mailing Information section, select "To update your mailing address, click here."  You will need to complete the form, have it notarized, and send it to the Cook County Treasurer.

2011 Budgets

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Budgets for the fiscal year 2011 are due to owners by November 30th.  The annual budget must be approved by the Board at a Board meeting and all owners must receive at least 10 days' notice of the meeting.

If you need help preparing your 2011 budget, please join us at the Resource Center on Wednesday, October 27th for "Budgeting for Small Associations."  We'll discuss the proper way to prepare a budget, allocating for reserves and tips for tracking your progress over the year. 

Registration can be completed online

"Who is Responsible?" A refresher...

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Our "Ask the Expert" column receives regular submissions regarding who is responsible--the association or the unit owner--for various portions of a condominium building.

A primer on the difference between Common Elements and Limited Common Elements can be found in our Maintenance A-Z article "Who is Responsible? Common Elements & Limited Common Elements."  Understanding the fundamentals between common elements and limited common elements is important for every condo owner.  

If you have further questions or your governing documents require clarification (or revision), consultations with the Chicago Condo Resource Center are available to help your association address this issue.  Please feel free to contact us!