Q. The board of our condominium association recently approved both a large expenditure and a loan with a bank to pay for it. The repayment period of the loan is five years. Does the board's approval of the loan automatically impose a special assessment on the owners for the amount of the loan?
A. The board's approval of an expenditure and of a loan to pay for the expenditure does not by itself establish any sort of an assessment to repay the loan. In general, the board is either going to have to levy a multiyear special assessment, or establish a line item in the annual budget for the term of the loan (that presumably will increase the amount of the assessments), to fund the repayment of the loan.
The approach to be followed will typically be determined by what is required by the particular lender. Many lenders will require the board to levy a multiyear special assessment as a condition of closing the loan and disbursing the money. This provides greater assurance to the lender that the repayment of the loan will be funded.
Q. A CPA firm oversees the annual meeting and tabulates the votes for our association. The proxy issued by the association leaves a blank line for the owner to designate a proxy holder. However, the proxy form designates the same CPA firm as the secondary proxy holder. Is this typical?
A. This is not typical. The secondary proxy holder designation would be triggered if the primary proxy holder does not attend the annual meeting, or if the owner does not designate a primary proxy holder. This would put the CPA firm in the position of casting votes at the annual meeting it is overseeing.
One of the reasons that associations retain a third party, such as an accounting firm, to tabulate the vote at the annual meeting is because such an entity is supposed to be objective and impartial. For that reason, particularly if a proxy gives the proxy holder any discretion in casting votes, I would not suggest that the entity overseeing the election and tabulating the votes also be named as the secondary proxy actively casting votes on behalf of owners. The task of tabulating votes is probably best left to someone who is not also casting votes at the meeting.
Q. The board of our condominium association generally meets no more than the required four times per year. If an owner is not in attendance at a board meeting, they won't know the details of what took place until the minutes of that meeting are approved by the board several months later. Do owners have the "right" to contact a board member to receive an oral report of the meeting the owner did not attend before the minutes of that meeting are approved?
A. Simply stated, no. Owners may attend open portions of board meetings, may tape the open portions of board meetings, and are entitled to examine and copy minutes of board meetings. However, board members have no legal obligation to provide any sort of oral report to owners who are not in attendance at a board meeting.
If an owner is not able to attend a board meeting in person, the owner may want to ask another owner, who will attend the meeting, to video or audio tape it for them. However, the owner should consult the association's rules to determine if there are any rules in place concerning the taping of board meetings, which would need to be followed.
• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. 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.