I have heard of a case where an owner sued the condo Board for using Association funds to purchase flowers for the funeral of an owner's spouse--and won. The expense wasn't in the Association budget, nor was it necessary for the repair, operation or maintenance of the building. That $40.00 bouquet cost the Association a lot of time and money. This is why it is important to remember that Association funds belong to everyone, and that they are not to be used by the Board or any owner except as prescribed in the governing documents.
Ideally, no purchases should be made before first being approved by the Board at a Board meeting. The Board should be reviewing its budget and current financials before approving any non-recurring expense to ensure that the funds are available and that the expense is legitimately an Association expense. Expenses should be reviewed for legitimacy and further, small buildings on tight budgets need to keep a close eye on spending. Even small purchases add up over the course of the year and can ultimately throw your Association way off budget.
Approving expenses at a Board meeting also ensures that the expense is recorded in meeting minutes. This establishes a record of the approved expense should any owner wish to contest a purchase. If an expense is approved by the Board anywhere outside of a Board meeting, it should be recorded in the minutes of the next Board meeting.
Sometimes, reading the Board minutes that we review for our clients gives me flashbacks to my college days. I am reminded of the frantic scribbling of notes during a lecture, as I tried to record everything the professor said without really understanding the most important points nor really being able to actively engage in the discussion.
Taking the minutes at a Board meeting is not about trying to record verbatim every comment that is made. As a voting Board member, the secretary needs to be able to participate in the discussion and provide input as well. These simple guidelines will help to make the job of recording minutes easier for your Secretary while at the same time minimizing legal liability for matters that are not meant to be made public.
- Create a meeting agenda and use the same format when recording minutes. Minutes should correspond to each item on the agenda. (See sample agenda.)
- Discussion on items of business does not need to be recorded. The Secretary only needs to record the motion made, the vote, and the resolution. If the Board wishes to add a bit of information to clarify or further support a decision, however, that may also be entered into the minutes. A dissenting Board member may also wish to have a comment entered to clarify why they voted against a motion that was passed by the majority.
- Any discussion regarding owner delinquencies or violations, appointment, employment or dismissal of an employee or legal action by or on behalf of the Association should not be recorded in the minutes. The IL Condo Act requires that these issues be discussed in a closed session and therefore should not be made public in any meeting minutes. However, any matter that requires a vote must be done during the open portion of the meeting and recorded in the minutes.
My husband and I recently purchased a term life insurance policy. We're now insured to $1M (him) and $500K (me) should anything happen to either of us. As a newly married working couple with a substantial mortgage to pay, the policy gives us assurance that if something should happen to either of us, the other would have the funds to pay the mortgage. The policy premium will remain the same for the next 30 years... just in time for us to have paid off the mortgage.
Total cost? $1,230 per year, or a little over $100/month. After 30 years, my husband's annual premium jumps to a whopping $17,910.00 annually. But we won't need life insurance at that point, so the number is irrelevant.
If you're a young couple with a mortgage on your condo and you cannot get by on a single income, a life insurance policy is a good idea. The younger you are when you lock in a policy, the lower the annual premium.
Or "How $561.64 became $1721.64"...
Legal fees and costs can add up quickly. If your Association has to send an account to a collection attorney for delinquencies, all of the fees and costs incurred are charged back to the owner. Two months' of missed assessments could end up costing over $1,000 in fees and costs to recover. If you are having trouble paying your assessments, speak to your Board before they begin collection action. You may be able to work out a payment plan that will save you the cost of collection. If you do receive a 30-day notice (which will already cost you about $300 in fees and costs), take action before the notice expires to minimize additional charges.
Each year, condominium buildings over 4 units that are required to use private waste removal will receive up to $75/unit from the city by filing for the City of Chicago Refuse Rebate.
That's great news for small buildings with limited budgets.
In order to qualify for the Refuse Rebate, your building must have a recycling program in place and the Board must educate its owners on the program. A Recycling Certification Form must be submitted the first year you file to confirm that you have met this requirement.
You can file every sixth months or annually, but you must file by December 31st of each year for your previous year's Rebate.