Ask for assessment status when purchasing a condominium

Q. I am in the process of buying a unit in a homeowners association. What should I do to make sure the assessments owed by the current owner are paid in full by the closing?

A. You can request the seller to have the association provide you with an assessment status letter, through the date of the closing. Preferably, the assessment status letter shows that all assessments are paid in full through the closing date.

However, if the assessment status letter shows there are assessments due, seller’s proceeds at closing should be used to pay off that balance and a check cut to the association at closing. This should be a routine matter if the closing takes place with a title company.

Q. The board of our condominium association recently distributed a document referred to as an accounting for 2012. Is the board required to provide “audited” financial statements to the owners?

A. The Condominium Property Act does not require “audited” financial statements. Rather, the board must annually supply to all unit owners an itemized accounting. The accounting must describe the common expenses for the preceding year actually incurred or paid, together with an indication of which portions were for reserves, capital expenditures or repairs or payment of real estate taxes and with a tabulation of the amounts collected pursuant to the budget or assessment. The accounting must also show the net excess or deficit of income over expenditures plus reserves.

Note, however, that the declaration may require “audited” financial statements each year. So, you need to peruse the declaration for your association to see if it imposes the audit requirement.

Q. My condominium unit came with two “limited common element” parking spaces. Can I sell one of the parking spaces to another owner in the condominium?

A. Owners can transfer limited common elements, like a parking space, between themselves, unless prohibited by the declaration. The transfer has to be accomplished by a recorded amendment to the declaration. The amendment procedure is simpler than the amendment procedure for the typical change to the declaration, and only requires the signatures of the owners involved in the transaction. Since it is a document that affects the public record and the association’s records, the board should require that the amendment be prepared by the association’s counsel.

Q. The board of our association is considering publishing a list of the delinquent unit owners. Is this a good idea?

A. No. Publishing the names of delinquent owners creates potential exposure to liability, particularly if information is not accurate. It’s also not a very effective collection technique. The association is better served by establishing an aggressive collections policy and retaining a good association collection attorney who will also proceed aggressively with collections.

Q. What is the quorum for a common interest community association membership meeting?

A. Twenty percent of the membership constitutes a quorum, unless the association’s declaration provides for a lesser amount.

Q. Is there a minimum number of times the board of our association must meet?

A. The requirements for a condominium and a common interest community association are the same. The board must meet at least four times a year. Many association boards meet more frequently, often monthly. The actual number of meetings held each year, over an above the required minimum, should depend on the business that needs to be conducted.

There are a lot of associations that schedule monthly board meetings, whether or not there are any issues pending that need to be decided. That’s not necessarily the most efficient use of a board member’s time.

Q. The residents of our large association represent a very significant percentage of the population of our village. However, the village seems to ignore our complaints about services. I did some checking, and very few of our residents are registered to vote. Do you have any suggestions as to how we can get the attention of the village?

A. You can safely assume the elected officials of your village are aware of the voting patterns in your community, and of the apathy among residents of your association. It usually doesn’t take too many votes in local elections to affect outcomes. I suggest that the board organize a voter-registration drive.

This can be initiated through a call to the village clerk, or another elected official who would like to have the support of the residents of your community. Combined with actual participation by residents in elections by voting, the association should get the attention of the village and more favorable responses to the concerns of residents.

Ÿ David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.