Council to weigh in on host of home association issues

As some of the readers of this column may be aware, in early 2008 I was appointed by the Illinois legislature as chairman of the Condominium Advisory Council, consisting of two other laypeople (Shelli Lulkin and George Panagakis) and four legislators (Reps. Harry Osterman and Angelo "Skip" Saviano, and Sens. Pam Althoff and Mattie Hunter). Our engagement is to advise the legislature as to necessary changes and new laws needed to improve the quality of life of residents of condominium and homeowners associations.

Aside from our own agendas based upon personal and professional experience, as well as client and constituent interaction, we are also soliciting public input through a series of public hearings. However, not everyone can attend a hearing, but any interested citizen can contact one of the council members to voice their opinion and make suggestions.

Thus far two hearings have been convened, in Naperville and Chicago, with others set for Orland Park on Sept. 18 and Gurnee on Sept. 23.

Many people who have read about the council have already articulated their views via letter and e-mail. Here are some of the issues that emerge repeatedly:

Reserves

Board members are feeling enormous pressure to maintain older properties and are scrambling to find bank loans or imposing special assessments to get the work funded. This creates financial hardship for many people, particularly in light of the precarious nature of today's economy. Someone trying to avoid foreclosure and get out from under a subprime mortgage can ill-afford to come up with another several thousand dollars because of failing roofs.

Had the early boards initiated a reserve study and properly funded the reserve accounts, these properties would be in much better shape. What to do?

For years there has been a debate over whether reserve funding should be mandatory and that some formula or percentage should be imposed. This is always at odds with the philosophy of those boards that want to hire only the lowest bidder, and keep assessments low.

Statutory mandates

There are many requirements in the statutes and the various declarations and bylaws, but there are no enforcement mechanisms. There are provisions of the condominium act the allow individuals or associations to collect attorneys fees (e.g. failure to disclose records, etc.) but this always necessitates the hiring of an attorney and the filing of a lawsuit. Should the state through the attorney general's office enforce the act when it is violated? Should local government be involved in enforcing state statutes if they were adopted at the local level. Should developers be subject to some type of state enforcement for shoddy construction other than only the current system of private enforcement?

Board authority

Do boards have too much authority or not enough? What can be done when the board is a bunch of dictators ignoring owners needs? What can be done about a demagogue owner who disrupts every meeting and harasses the directors? Is there enough of a balance?

Property manager regulation

There is currently no licensing requirement or regulatory authority overseeing property managers in Illinois. The debate on this topic has been ongoing for more than 20 years. With an epidemic in the last few years of financial impropriety, is it time to resolve this dispute? Even if managers are licensed or regulated, what about self-managed associations?

Small associations

Should small associations be subject to the same legal requirements as the larger properties, (e.g. annual meetings, three directors, 30 days advance notice of proposed budgets, etc.)?

Wisconsin has a special section in its statutes dealing with small associations.

Collection of delinquencies

Should an association have to wait 60 to 180 days to obtain possession when it files for an eviction when a landlord usually only waits five to 14 days?

Nonresident owners

There was recently a bill to restrict associations from amending their covenants to eliminate rentals (HB 5109). Although it remained in committee as the legislature adjourned for the summer, it will be advanced again in the near future.

Is this a right of the owners or is it discriminatory? The council will probably be taking a position on this issue.

Accountability for defective construction

Should local government have any accountability of building defects when municipal employees overlook apparent problems and issue permits, notwithstanding? Should there be mandatory escrows to withhold a portion of sales proceeds to pay for repairs when the developer refuses?

Homeowners associations

Condominiums have a statute, but there are no guidelines for townhouse or homeowners associations. Should there be an equivalent statute or should the condominium act become the common interest community act to cover all types of associations?

Clearly, there are many other issues that will be raised over the next month. The council will be deliberating during the month of October after all the input is digested and make its report to the legislature on or before the first week of November (national and state elections notwithstanding).

I encourage you to attend a hearing. However, if this is not possible, we would appreciate any input or constructive suggestions. Everything submitted will be given consideration before a final report issued. If you wish to contribute your ideas, e-mail me at jshifrin@ksnlaw.com or any of the other council members.

• Condo talk appears alternate Saturdays in New Homes. Jordan Shifrin is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at jshifrin@ksnlaw.com. This column is not a substitute for consultation with legal counsel. Past columns can be read at www.ksnlaw.net.