Tax bill more than assessed valuation
Q. I read your column concerning real estate tax appeals on condominium units. My mother-in-law's association went through this process last year. The assessed value of the units did get reduced; however, her real estate tax bill went up by more than $300. Why did her tax bill go up?
A. Note that, in general, a tax bill for a unit in the association would have gone up even more had the appeal of the assessed valuation not been successful! However, the assessed valuation of a unit is only one factor in the overall tax bill.
There are three numbers that are utilized to calculate the actual tax bill: assessed value of the property, the multiplier and the tax rate.
Even if the assessed value decreased, the tax bill may still rise due to an increase in the tax rate or multiplier (or both). The tax rate is determined by the combined requests for revenue made by various taxing bodies, such as school districts, towns, libraries and others. The multiplier is a tool used to better equalize assessed valuations.
In the case of a senior who has all the exemptions, including a freeze on property value assessment, a tax rate increase would be the likeliest cause of a higher tax bill. This would be the case because the tax rate is unaffected by the freeze - or exemption - whereas the assessed value and multiplier are "frozen."
Q. I understand the Illinois Condominium Property Act requires the board to adopt an annual budget that provides for reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements. Can this reserve requirement be waived?
A. Your statement as to the reserve requirement under the Condominium Property Act is correct. The act also provides that an association that does not have a reserve requirement in its condominium instruments (declaration and bylaws) may elect to waive in whole or in part the reserve requirements of this law. This requires a vote of owners with approval from two-thirds of the total votes of the association. Again, if the association's declaration requires the board to establish a reserve, the requirement could not be waived by an owner vote.
In the event that an association does elect to waive all or part of the reserve requirement mandated in the condominium act, that fact must be disclosed by the association in the financial statements of the association. That disclosure must be highlighted, in bold print, in the response to any request of a prospective purchaser of a unit for the information prescribed under Section 22.1 of the Act.
Moreover, no member of the board of managers or the managing agent of the association is liable, and no cause of action may be brought for damages against these parties, for the lack or inadequacy of reserve funds in the association budget if an appropriate election has been made not to fund the reserve. The lack of funding of a reserve fund may nonetheless have a negative impact on the ability of owners and prospective owners to obtain financing for their units. I can't imagine too many scenarios where waiving the reserve requirement is a good business decision.
Note that any condominium association that has properly elected to waive the reserve requirement may later vote to reinstate the reserve requirement with a vote of owners with two-thirds of the total votes of the association.
Q. Can a unit owner videotape a board meeting?
A. "Yes," if you live in a condominium or master association. The Illinois Condominium Property Act provides that any unit owner may record the proceedings at board meetings, or portions thereof required to be open to owners, by tape, film or other means. However, the board may prescribe reasonable rules and regulations to govern the right to make such recordings.
The taping of meetings can be disruptive and create safety issues. A board should address these issues by establishing rules that will ensure the least amount of disruption of a board meeting and without impairing unit owner rights.
• 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.