Rules should be followed as written
Q. The board of our association adopted extensive amended rules when I was on the board several years ago. We have a new president who feels the rules do not have to be followed exactly as written, and they are merely "guidelines" and are flexible. Is that accurate?
A. By the very definition, rules are a set of explicit standards governing conduct. They provide for what is or for what is not permitted. So no, rules established by the board are not merely suggestions or "guidelines." The rules need to be enforced by the board, as written. Failure to enforce the rules as written creates exposure to a breach of fiduciary duty claim, or can fuel potential defenses of an owner in an action to enforce the rules. If the board does not agree with the current rules or particular rules, the board needs to amend or eliminate the rules in question.
Q. I'm a unit owner in a medium-size condominium building that seems to have a lot of unnecessary, expensive maintenance work done. My question is what is a reasonable percent of a maintenance, or other, contract, arranged by our management company, that can be charged as a "management" or "administrative" fee by the management company?
A. I can't say as a matter of law what constitutes a "reasonable" fee in these situations. It's not uncommon for a managing agent to receive additional fees for overseeing certain projects. However, the management agreement between the association and the property manager should describe what such fees are payable to the managing agent and under what circumstances. Like other business terms, such fees should be negotiable and agreed upon by the association before entering into the management agreement.
Q. The parking spaces in our condominium are limited common elements. Two unit owners want to "swap" spaces, and another unit owner wants to sell his space to another unit owner. Can this be done?
A. Yes. In general, an owner can transfer a limited common element parking space to another unit. This has to be done in a very specific way, though, to be effective. The transfer of the limited common element requires the recording of an amendment to the association's declaration. However, an amendment of this type only requires approval of the owners involved in the transaction, and does not require the vote or approval of owners in the association generally required for other types of amendments to the declaration. The association's legal counsel should be involved in the preparation of such an amendment. However, the legal fees incurred by the association should be reimbursed to the association by the owners involved in the transaction.
Q. What are the roles of the officers of our condominium association?
A. Both the Illinois Condominium Property Act and the Common Interest Community Association Act describe the role of the president, secretary and treasurer of the board. The president presides over the meetings of the board of managers and of the unit owners. The secretary keeps the minutes of all meetings of the board of managers and of the unit owners, and also, in general, performs the duties incident to the office of secretary. This would include issuing notices of meetings. The treasurer keeps the financial records and books of account. Certain of these administrative roles may be delegated to a managing agent; however, merely setting forth such responsibilities in the management agreement would not be an adequate delegation. The delegation to a managing agent needs to be set forth in a resolution adopted by the board at a board meeting.
• 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.