Can old association fitness equipment be donated to charity?
Q: The board of our condominium association recently replaced the exercise equipment in our association's fitness center. The old equipment was donated to a charitable organization. That old equipment had significant value and many owners contend the equipment should have been sold to a third party rather than donated. The association's declaration of condominium provides that the association may receive gifts; however, there does not appear to be any language governing the donation of association property. Does a condominium board have the unilateral authority to donate association equipment of this sort?
A: Section 103.10(m) of the Illinois General Not-for-Profit Corporation Act, applicable to all condominium associations, provides that each corporation has the power "to make donations in furtherance of any of its purposes." I am not clear as to what corporate purpose was served by the donation in question here.
Q: The board of our condominium association had discussed the possible purchase of some trees in the fall. Then, without any express authority from the board of our association, one of the board members signed a contract for installation of several trees at our association because, in his own words, he "negotiated a great price." The board member signed the contract with his name, and then added "as Secretary for the ABC Condominium." Is the association bound by this contract? Does this board member who acted without authority have any liability?
A: The board member here had what is known as "apparent authority." As between the association and the landscaper, there is a binding contract. However, this board member has liability for the cost of the trees. That is, Section 103.20 of the Illinois General Not-for-Profit Corporation Act, applicable to all condominium associations, provides that "All persons who assume to exercise corporate powers without authority to so do shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof."
Q: The rules for our association are specific regarding the type of roof that must be installed on the single-family homes in our association. Several years ago, the board of our association approved the plans for a new home that included a roof material that was not of the type described in the governing documents. Those people are no longer on the board. Another owner, citing the roof in question, now wants to replace the roof of his home with another material that is not described in the governing documents. Is the board bound by the prior decision of the board to allow a nonconforming roofing material?
A: My view is those now former board members breached their fiduciary duty by approving the plans for a new home that included roof material that was not of the type described in the governing documents. That one-time mistake should not be deemed a waiver of the roof specifications described in the governing documents for the association. Roofs on new homes, or replacement roofs, should be required to conform to the specifications set forth in the governing documents.
Q: Our association will be electing two board members at our upcoming annual homeowners meeting. It looks like we will have four candidates for the two open board seats. Is there a minimum number of votes a candidate needs to receive in order to be elected to the board?
A: Board members are elected by what is called "plurality" voting. That is, the candidate(s) receiving the most votes for the open seat(s) are elected, as long as a quorum is present at the annual meeting. Conceivably, a candidate could be elected who receives one vote.
• 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.