Board must give owners common account information
Q. I have lived in my condominium for the past 23 years. The board of managers refuses to produce an audited financial statement. What can I do get this?
A. Whether or not the board is required to provide an audited financial statement, or to have one prepared, will depend on whether that is required by the association's declaration. So you need to peruse that document to look for that specific requirement.
That said, Section 18(a)(7) of the Illinois Condominium Property Act provides that the board of managers must annually supply to all unit owners an itemized accounting of 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, and payment of real estate taxes. The annual accounting must also include a tabulation of the amounts collected pursuant to the budget or assessment, and showing the net excess or deficit of income over expenditures plus reserves.
Section 19(a)(9) of the act requires the board to maintain various books and records of account for examination and copying by owners. This includes the books and records of account for the association's current and 10 immediately preceding fiscal years, including but not limited to itemized and detailed records of all receipts and expenditures. This would include "audited" financial statements if required to be prepared, or if otherwise prepared.
An owner must make a written request to examine and copy these books and records, and the request must state a "proper purpose." Properly requested books and records must be made available to an owner within 30 day of the written request. An owner who is successful in a legal action to compel examination of such books and records is entitled to recover his or her attorney's fees from the association.
Q. The declaration for our 15 single-family home homeowners association states it was formed under a trust agreement. The document lists each home by unit number, and each unit is depicted on the plat of survey attached to the declaration. However, nowhere does the declaration describe the association as a planned unit development or a condominium. The individual homeowners are mentioned as unit owners throughout the document. What statute governs this association (i.e. the Common Interest Community Association Act, the Illinois Condominium Property Act or something else)?
A. In order for property in Illinois to be governed by the Condominium Property Act, the declaration must include specific language stating that the property is submitted to the provisions of the Condominium Property Act. Absent that language, the association would not be a condominium.
An association comprised of single-family homes could be a common interest community association. A common interest community means real estate other than a condominium or cooperative with respect to which any person by virtue of his or her ownership of a partial interest or a unit therein is obligated to pay for the maintenance, improvement, insurance premiums or real estate taxes of common areas described in a declaration, all of which is administered by an association. However, the inquiry doesn't end there.
A common interest community association organized under the General Not-for-Profit Corporation Act of 1986 and having either ten units or less, or annual budgeted assessments of $100,000 or less, is exempt from the Common Interest Community Association Act. That said, a common interest community association that does not meet this threshold could still be governed by this law if the association affirmatively elects to be covered by the act by a majority of its directors or members.
• 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.