How much can a board increase assessments?

Q: The year 2020 assessment notices were distributed to the owners of our association in December. The annual assessment for my unit increased about 11%. By how much can the board increase assessments year over year?

A: The board of directors of a condominium or common interest community association can increase assessments year over year by any amount. However, owners do have recourse if an adopted budget would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and separate assessments payable during the preceding fiscal year.

However, the recourse must be exercised in a timely manner.

To do so, unit owners in either a condominium or a common interest community association, with 20% of the votes of the association, can deliver a written petition to the board requesting a meeting of the owners to vote on the budget. In a condominium. the petition must be delivered to the board within 21 days of the date the board adopted the budget; in a common interest community association, the petition must be delivered within 14 days of the date the board adopted the budget.

The receipt of a timely petition would require the board of directors to call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the budget. However, unless a majority of the total votes of the unit owners are cast at the meeting to reject the budget, it is ratified. So, while doable, it's intentionally not easy to reject a budget that is adopted by the board.

Q: The board of our condominium association conducts an accounting review every year. Does the association have to do an actual audit?

A: The Condominium Property Act does not require an annual audit. The act does require the board of managers to provide an annual accounting to all unit owners. An annual accounting is an itemized accounting of the common expenses for the preceding year actually incurred or paid, together with an indication of which portions were for reserves, capital expenditures or repairs, and payment of real estate taxes, and with a tabulation of the amounts collected pursuant to the budget or assessment, and showing the net excess or deficit of income over expenditures plus reserves.

The declaration for some associations does require an annual audit and not just an accounting. In the absence of the requirement for an audit in the association's declarations, the board should consult with its accountant as to the need for and frequency of an audit.

Q: The board members of our condominium have done a great job in the last two years to address previously neglected common elements of the buildings. The association has a swimming pool that is over 40 years old and needs major repairs, estimated to cost tens of thousands of dollars. Spending this amount wouldn't make the pool new, but would make the pool functional. The cost to keep the pool running every summer is also very expensive. The board has been discussing tearing out the pool out and replacing it with landscaping. My question is whether the board can make this decision without unit owner approval?

A: This is an issue that comes up from time to time, as boards struggle to pay the costs of maintaining the property. In my view, the decision to remove a common element amenity, like a swimming pool, cannot be made unilaterally by the board and requires owner approval.

Section 18.4(a) of the Condominium Property Act provides that the board of managers of a condominium is responsible for the maintenance, repair, replacement and improvement of the common elements. It doesn't say anything about "eliminating" a common element. This would include the common element swimming pool.

In general, in my view, a board cannot make the unilateral decision to permanently eliminate a common element amenity. While there may be circumstances under which the board could close the swimming pool on a temporary basis, owner approval would generally be required to do so on a permanent basis.

The board should consult with counsel to address what level of owner approval would be necessary to eliminate a common element amenity.

• 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.