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Article posted: 4/6/2013 4:17 AM

Long-term contracts made by developer may be cancelled

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By David M. Bendoff

Q. The developer of our condominium recently turned control of the association over to the owners. The board has been reviewing contracts entered into by the developer-controlled board. Some of these contracts are for a term of five years or more, and the board contends it can get better pricing for the same services through other vendors. Is there a procedure to cancel any of these contracts entered into by the developer board?

A. There may be an ability to terminate certain contracts. Any contract, lease or other agreement made prior to the date of election of the first unit-owner board by or on behalf of the association that extends for a period of more than two years from the date of the election, is subject to cancellation.

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Such contracts can be canceled by a majority vote of unit owners other than the developer, cast at a special meeting of members called for that purpose. The vote of the owners must occur during the 180-day period beginning on the date of the election of the first unit-owner board.

So, there is a relatively small window of opportunity to cancel long-term contracts entered into by the developer-controlled board. The cancellation is effective 30 days after mailing notice by certified mail, return receipt requested, to the last known address of the other parties to the contract.

Q. A group of owners in our association is planning to call a meeting of the association to vote to remove a member of the board. The group wants the vote of the owners to also include a motion to bar the board member from ever serving on the board again. Is such a vote, to permanently bar a person from the board, permitted?

A. Owners can call a meeting of the owners, and the association must thereafter issue notice of a meeting, for the purpose of voting to remove a specific identified person from the board. However, there is no vote that can be conducted to bar a person from running for or serving on the board forever.

A person removed from the board would be eligible to run for and serve on the board at another annual meeting. However, it may be difficult, politically, for a person removed from the board to be elected again, at least in the near term.

Q. With the pool season just around the corner, a disabled new owner in our association has advised the board that the association is required to install a lift for the association's pool, at association expense. Is the owner correct?

A. No. The relevant laws do not require the association to install a lift into the pool at association expense. However, the Fair Housing Act requires associations to permit a resident with a disability to make reasonable modifications to the common elements at the owner's expense. So, if the owner is disabled, and if the lift is a reasonable modification, the board would be required to permit the owner to install the lift for the pool at the owner's expense.

Q. The annual meeting for our association took place in October. An announcement was made at the annual meeting, and in our newsletter, as to the results of the board member election. I requested a copy of the minutes of the annual meeting, and was told by the board that they have not been prepared or approved yet. When is the board required to make the minutes of the annual meeting available to the owners?

A. Minutes of the annual meeting are approved by the unit owners at the next meeting of the owners. This typically occurs at the next annual meeting, as this is frequently the only meeting of the owners. The proposed minutes, clearly marked as a draft and not approved, of the annual meeting should be included with the notice of the next meeting of the owners. This permits them to be reviewed by the owners in advance of the meeting. A motion should be made and seconded to adopt the 2012 annual meeting minutes at the next meeting of the owners, and a vote to approve the minutes made after discussion and any proposed changes. Once the 2012 annual meeting minutes are so approved, they should be made available for inspection and copying by owners.

• 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.

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