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posted: 7/19/2014 12:01 AM

Maintain safeguards with association accounts

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Q. The treasurer of our self-managed association pays all association bills and performs the reconciliation of the association's checking account. Is this a good idea?

A. Not really. Every association should maintain financial checks and balances. One of the ways to do this is to have bank accounts reconciled by a person different from the one who pays the bills/writes the checks. There are other safeguards that an association can implement to protect financial assets. The board should examine invoices and supporting documentation before signing checks, or review a monthly summary. Writing checks to cash should be prohibited.

Q. I live in a condominium association. Can the association, as an entity, hire an attorney to challenge the county's assessed valuation of the individual units? If yes, how are the legal fees paid?

A. Section 10(c) of the Condominium Property Act provides that the board of managers of a condominium, acting on behalf of all unit owners and without owner approval, has the power to seek relief from the assessment or levy of real estate taxes for all of the individual units. This generally requires the approval of two-thirds of the board.

Typically, law firms that handle these types of tax-appeal cases do so on a contingent fee basis. The contingent fee is a percentage of the anticipated real estate tax savings. Therefore, if there is no real estate tax savings in the case of an unsuccessful appeal, there are no attorney's fees! Note, too, that the board can charge and collect from the owners all expenses incurred, like the attorney's fees, as a common expense.

Appealing the assessed valuation of the individual units in an association by the board can yield significant tax savings to the unit owners, particularly given the continuing effect of the real estate bubble on housing prices. All associations should look into this with their legal counsel.

Q. Can a common interest community association appeal unit owners' individual unit taxes without giving homeowners an opportunity to opt out?

A. In general, a common interest community association needs to have the owner(s) "opt in" to participating in an appeal of the assessed valuation of their units.

Q. The Illinois Condominium Property Act addresses the topic of the required notice for board meetings, but does so only in Section 18.5, thus applying to master associations. There are no specific guidelines for condominium association meetings. Although one may choose to use the 18.5 rule as a guideline for a condominium association, are these actually requirements by law? If not, are there any that are required by law?

A. I need to correct you. Correctly, Section 18.5 of the Illinois Condominium Property Act only applies to master associations. However, the Condominium Property Act, Section 18(b)(6), does address the required notice of owners' meetings in a condominium.

It provides that written notice of any membership meeting shall be mailed or delivered to members, giving them no less than 10 and no more than 30 days' notice of the time, place and purpose of such meeting;

Additionally, Section 18(a)(9) refers to the required notice of condominium board meetings. That section provides that notice of board meetings shall be mailed or delivered at least 48 hours prior thereto, unless a written waiver of such notice is signed by the person or persons entitled to such notice pursuant to the declaration, or bylaws, before the meeting is convened. Also, copies of notices of board meetings must be posted in entranceways, elevators or other conspicuous places in the condominium at least 48 hours prior to the meeting of board managers. Where there is no common entranceway for seven or more units, the board of managers may designate one or more locations in the proximity of these units to post the notices of meetings.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at 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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