Condo owners must state a purpose to examine association financial records
Q. I live in a condominium located in the city of Chicago. Last week, I made a request to examine certain financial books and records of the association. The board denied my request stating that I failed to state a "proper purpose" for wanting to examine the documents. That's no one's business, is it?
A. Actually, it is.
Section 13-72-080 of the Chicago Condominium Ordinance, with respect to the books and records that must be made available to owners for inspection, now states:
"No person shall fail to allow unit owners to inspect the books and records of account for the condominium association's current and 10 immediately preceding fiscal years, including but not limited to itemized and detailed records of all receipts and expenditures, within 30 business days of the time written request for examination of the records is received."
The Chicago Condominium Ordinance does not expressly require a unit owner to state a "proper purpose" to inspect books and records. However, the Illinois appellate court addressed the issue in the recent case of Oviedo v. 1270 S. Blue Island Condominium Association, decided Aug. 27. The appellate court held it would be unreasonable to conclude that the drafters of the Chicago Condominium Ordinance intended for unit owners to be able to request inspection of the financial records for any reason, including for purposes of harassment or retaliation. The court concluded that the requirements in both the Condominium Property Act and the Not-for-Profit Corporation Act that requests be made for a "proper purpose" is not superseded by the municipal code, which is silent on this issue, but rather fills a gap in the ordinance.
Consequently, a unit owner making a request under the Chicago Condominium Ordinance must state a "proper purpose" to inspect the books and records.
The appellate court has previously held that a proper purpose has been established where a unit owner asserts a good faith fear of mismanagement of financial matters by the association. Moreover, a proper purpose is shown when an owner has an honest motive, is acting in good faith, and is not proceeding for vexatious or speculative reasons. A mere statement alleging a facially proper purpose is not sufficient, and the facts and circumstances of the request must also be considered.
Q. I live in an Illinois condominium association. Each of the units is served by either a limited common element wooden deck or limited common element concrete patio. Our association has been paying the cost to stain and seal the wood decks out of the general operating fund. Since decks are a limited common element, would it be legal to charge the cost of staining and sealing decks only to unit owners with decks?
A. The answer to this question depends on the specific language of your association's governing documents. The Condominium Property Act provides that the declaration or bylaws of the association may provide for the assessment, in connection with expenditures for the limited common elements, of only those units to which the limited common elements are assigned. If your condominium association's declaration or bylaws include this language, the association could perform the work and charge the cost of staining and sealing the limited common element decks to the owners of units served by a deck. If the language is not present in the governing documents, the association could consider an amendment to include it.
• 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.