Process to fill a pending board vacancy can begin

Q. You recently wrote about board member resignations. I have a related question. A board member of our association issued a written resignation. However, the resignation stated that it would be effective at a later date than was stated in the resignation. Even though the actual resignation does not take place until the future, can the board take steps now to appoint a person to fill the vacancy that will be created?

A. Yes. The pending vacancy can be filled by the board before the effective date of the board member's resignation. However, the successor to the board member who is resigning would not take office until the effective date of the resignation. Taking steps to fill the vacancy in advance of the effective date of the resignation should make for a smoother transition, and avoid gaps in leadership that can arise if there are unfilled positions on the board.

Q. The attorney for our association prepared a rider to a contract, and one of the provisions of the rider states something about the contractor waiving its rights under the Contractor Prompt Payment Act. What is the Contractor Prompt Payment Act?

A. Applicable to associations of more than 12 units, the Contractor Prompt Payment Act describes and mandates very specific time frames and procedures for making payment to a construction contractor. Importantly, it also sets out a deadline for disputing an invoice. As such, it can be a land mine for associations. Here's an abbreviated summary of its provisions:

An association is required to pay the amount that a construction contractor requests in an invoice (known as an application for payment) no more than 15 days after the association approves the contractor's application for payment. Note that the contractor's payment application is considered automatically approved 25 days after the association receives it, unless the association provides the contractor with a written statement of the amount being withheld from the contractor and the reason for withholding payment. That written statement from the association, disputing the invoice, must be provided to the contractor before the end of the 25 days.

If the association does not provide the contractor with written notice of a dispute and the reason for withholding payment of an invoice within 25 days of the association receiving the invoice, the payment application is deemed approved and the association will lose its rights to dispute the invoice. That's harsh, so associations need to handle the review of contractor invoices in a timely manner.

If the association finds that a portion of the work is not in accordance with the contract, the association may withhold payment for the reasonable value of that portion of the work only. Payment must still be made for any portion of the contract for which the work has been performed in accordance with the provisions of the contract.

Q. An owner in our condominium association is delinquent in the payment of his assessments, and his unit is in foreclosure. Is this owner eligible to be voted to and serve on the association's board of directors?

A. Generally, ownership of a unit is the only criteria for serving on a board of a condominium association. The mere filing of a foreclosure action by a lender does not affect ownership of an owner's unit. So, until a unit is sold at a judicial sale at the conclusion of a foreclosure, an owner whose unit is in foreclosure would be eligible to serve on the association's board. It is more of a political issue as to whether the owners want to elect someone to the board who is not paying their assessments or who is involved in a foreclosure.

• 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.