Association needs to have one voice dealing with contractors
Q: A couple of contractors for the association have indicated they will no longer bid for future work with the association. The stated reason is they have received contradictory comments and instructions from various board members. What can we do to avoid this conflict in the future?
A: The board of the association should adopt a policy regarding communications with third parties. The policy should indicate which board member is to communicate with third parties, and that no other board member is to engage in such communications without the prior consent of the board.
Some contractors include language in their contracts that states clearly that the board president and property manager are the liaison between the board and the contractor, and they won't accept instructions from anyone else.
Q: We are a common interest community association. The declaration of covenants permits the association to charge back attorney's fees in collection cases. However, it does not cover charging back attorney's fees incurred when an owner is in violation of the declaration or rules. Does the Common Interest Community Association Act permit us to charge back such attorney's fees?
A: Unlike the Illinois Condominium Property Act, the Illinois Common Interest Community Association Act does not include a provision authorizing the association to charge back attorney's fees incurred when an owner is in default of the declaration or rules.
The association can consider amending its declaration to include such an attorney's fee recovery provision. It may also be useful to reach out to your state representatives to request an amendment to the Illinois Common Interest Community Association Act to include the same attorney's fee recovery provision as found in the Condominium Property Act.
Q: We are an association with a five-member board. The bylaws indicate that a majority of board members is needed for a quorum to conduct meetings. The bylaws go on to state that the act of a majority of the board when a quorum is present constitutes an act of the board. Nonetheless, the board has developed a practice where matters require approval of four of the five board members. Is this appropriate?
A: It is not appropriate, and matters will not generally require the approval of four of all five board members. Unless and until the bylaws are amended, the act of a majority of the board when a quorum is present constitutes the act of the board. Given the language of your bylaws, when only three board members are present there is a quorum, and the approval of two of the three board members would be required to carry a vote.
Q: Our condominium association has several large capital replacement projects over the next five years. The board is suggesting funding these projects through increases in regular assessments of about 10% more than our current assessment level over that time period. A group of owners made clear they do not want increased regular assessments, and they would prefer a special assessment for this work. A previous board treasurer contended that increases to monthly regular assessments is actually cheaper in the long run than using special assessments. What are your thoughts on this?
A: An initial question that comes to mind is why the association reserves are not adequate to fund all or a substantial portion of these projects. Nonetheless, whether to fund these projects through an increase in regular assessments for the next five years, or through a special assessment over that same period, is going to be a business decision of the board.
One approach over the other may create a more favorable perception among owners and prospective purchasers, and the board can certainly consider that in making its decision.
• 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.