Condo board should act on abandoned unit
Q. One of our owners abandoned his unit three years ago. The board felt it would just be a matter of time before the owner's mortgage company would foreclose, but so far nothing has happened, and the real estate taxes are being paid by the mortgage company. The association is losing assessments and the property is slowly becoming an eyesore in our community.
Because the unit is severely damaged, and the significant cost to make repairs, the association has decided not to initiate a forcible entry and detainer to seek possession of the unit in order to rent it out. Can the association force the mortgage company to address this property?
A. Illinois, unlike some other states, does not have a process that an association can use to force a lender to initiate a foreclosure against a unit owner. The association should consider filing an action to have a receiver appointed to manage the unit, repair the unit, and to pay assessments. The board should also rethink its decision about proceeding with the eviction action. You may not be aware, but the association can recover its reasonable expenses necessary to prepare the unit for rental once it obtains an order of possession. The board could also file a breach of contract action against the unit owner (assuming he can be located). But the board should not stand idly by without taking some action to collect the unpaid assessments.
Q. I am an independent insurance agent. From time to time, I will come across a prospect for property insurance who lives in a townhouse association that has bylaws that require the association be named as an additional insured on the owner's insurance policy. When the townhouse unit policy is written to cover the (interior and) exterior of the townhouse (HO-3 form), many insurers refuse to allow additional insured status to the association, claiming the association has no insurable interest in the unit. Are bylaws requiring additional insured status compliant with state law? If so, what is the association's insurable interest?
A. The issue is governed by an association's governing documents, and not the state statutes that govern common interest community associations. Many common interest community association governing documents provide that the association is responsible for the maintenance, repair and replacement of a significant portion of the individually owned townhouse units. These same documents require the individual owner to procure property insurance, protecting against casualty losses. Therefore, since the association is the party responsible for reconstructing the unit, and would suffer financial harm if the association has to fund the replacement cost itself after a casualty loss, it makes absolute sense that the association be an additional insured on the individual townhouse unit owner's policy. There are insurance carriers in the market place that will include an association as an additional insured on a townhouse owners' property insurance policy.
Q. The man in the condominium unit above mine never takes his dog out for a walk and just lets his dog relive itself on the balcony - this is directly over my patio and there are "Pee-cicles" all winter. Any excrement that doesn't fall through the balcony, onto the patio below, gets thrown out into the common area. The association can't seem to get him to stop. Is there anything else that can be done?
A. The association has a variety of remedies available to address this situation. If the association does not have a specific rule on this issue, the typical declaration includes a provision prohibiting an owner from engaging in conduct that is a nuisance or an annoyance. The board can levy a fine, after providing the owner with written notice of a violation of the governing documents and after providing an opportunity for a hearing. If that does not persuade the owner to address the problem, the association can file a suit against the owner. The suit would seek a court order prohibiting the owner from engaging in this conduct. Failure to comply with such an order could result in sanctions for contempt of court. The association should be able to recover its attorney's fees from this owner if successful.
• 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.