Q. A trend is growing in our single-family homeowners association. Owners mark various holidays throughout the year by displaying inflatable decorations, each one larger than the next and many with noisy motors that keep them inflated for weeks before a holiday. Can the board limit this in any way?
A. Check the association's declaration for the scope of its rule-making authority. If the authority extends to the individual lots, the board could establish reasonable restrictions on time, place and manner for holiday displays. Many associations limit the display of decorations to a certain number of days before and after a holiday, and as to where the decorations can be displayed. Such authority could seemingly restrict the hours in which the noisy motorized inflaters could operate.
Q. I live in an condominium association that is one of several also governed by a master association. Each year, the master association assesses each condominium association an amount equal to the condominium association's share of the master association budget. Each condominium association includes this expense in its own budget, and pays the master association. As a result, unit owners pay a share of the master association budget based on their percentage of ownership in the condominium and not equal shares. Is this a standard practice? Could this be changed so that the master association assessment is actually paid in an equal amount by all unit owners?
A. This issue is not governed by statute or case law. The manner in which the master association assessment is allocated is a matter of the language in the governing documents of the associations.
In general, there are three basic ways (although I have seen more) in which this is addressed in governing documents. The first is like yours. That is, the master association assesses the underlying condominium association, and the expense is included in the budget of the underlying association like any other expense. As such, each owner would pay their share of the amount of the master association expenses allocated to the condominium association based on the owner's percentage of ownership in the condominium. In this scenario, the underlying condominium association can be responsible for the master association expense whether or not it actually collects from the unit owner!
Alternatively, some governing documents are drafted where the master association assesses each unit owner in the underlying association directly. The assessment is equal for all owners, and the underlying condominium association does not have any role in the master association assessment process. This may be more equitable, but, unless clearly described in the governing documents, can lead to a "battle" between the condominium association and the master association when an owner is delinquent to both associations.
The third is kind of a hybrid between the first two, and there are variations of this as well. Often, the underlying condominium association merely acts as a conduit, or agent, for the master association in collecting the unit owner's share of the master association assessment. The underlying association would not be responsible for master association assessments unless actually paid by the unit owner.
Hopefully, the governing documents for the master association and the underlying condominiums are consistent on this issue. However, that is not always the case and can lead to confusion, argument and litigation. The method by which master association expenses are assessed and collected can be changed. This would require an amendment to both the governing document for the master association and for all of the underlying condominium associations. That is not a simple undertaking, and requires a high degree of cooperation between multiple associations.
• 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.