Financial delegation must be approved by a board vote
Q. I am on the board of directors of a small common-interest community consisting of less than 20 townhouses. We do not currently have a treasurer so several of the board members are fulfilling that role at the moment. The president directed a non-board member to transfer funds from the operating account to the reserve account without discussion or approval from the three other board members. Is this allowed? Is a non-board unit-owner allowed to have access to and authorization to transfer money from accounts?
A. The decision to transfer funds from the operating account to the reserve account is generally a decision to be made by the board at a board meeting; not by a single board member unilaterally. That said, if the board previously authorized the board president to do so, the board president could make the transfers under such grant of authority.
A non-board member can be authorized to make transfers and deal with association funds; however, this would require approval by the board. This is commonplace if an association is professionally managed. However, it would be rather unusual to give such authority to a person who is not on the board or who is not the professional property manager.
Q. Our town home association board of directors has advised owners that changes in Illinois law now mandate electronic voting and elimination of proxies for association elections. They are telling us that we must therefore amend our declaration and bylaws accordingly. I examined the pertinent sections of the Illinois Common Interest Community Association Act, and this does not appear to be the case. Is the board misleading us?
A. I don’t know if the board is misleading you. It may just be misinformed. Voting in an Illinois common interest community association is governed by Section 1-25(h-5) of the Illinois Common Interest Community Association Act. That section provides that “(a) member may vote:
• by proxy executed in writing by the member or by his or her duly authorized attorney in fact, provided, however, that the proxy bears the date of execution. Unless the community instruments or the written proxy itself provide otherwise, proxies will not be valid for more than 11 months after the date of its execution; or
• by submitting an association-issued ballot in person at the election meeting; or
• by submitting an association-issued ballot to the association or its designated agent by mail or other means of delivery specified in the declaration or bylaws; or
• by any electronic or acceptable technological means.”
Do note that under Section 1-25(i) of the Act, the association may, upon adoption of the appropriate rules by the board, conduct elections by electronic or acceptable technological means. If that is done, members would not vote by proxy in board elections.
However, the Act does not mandate electronic voting and elimination of proxies for association elections.
Q. Can the board of our condominium association contract for cable television and internet service on a bulk basis? Is this service charged to each unit as a flat fee?
A. Section 14.3 of the Condominium Property Act addresses this issue. The board is authorized to obtain, if available and determined by the board to be in the best interests of the association, cable television or bulk high speed internet service for all of the units of the condominium on a bulk identical service and equal cost per unit basis. The board can assess and recover the expense as a common expense.
If the board chooses, the board can assess each and every unit on the same equal cost per unit basis for these services, rather than based on each unit’s percentage of ownership in the common elements.
• 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.