Condo boards not required to provide year-to-date financials with annual budget
Q. In years past, the board of our condominium association has not provided a year-to-date financial report showing the expenses for the current year when they send out the proposed budget for the following year. Please let me know if this is legal.
A. The board is not required to provide a year-to-date report of expenses in connection with the budget adoption process. However, the board is required to annually supply to all unit owners an itemized accounting of the common expenses for the preceding year. So, the accounting would be provided after the current fiscal year. The accounting must show common expenses actually incurred or paid, together with an indication of which portions were for reserves, capital expenditures or repairs, or payment of real estate taxes (if any). The accounting must also include a tabulation of the amounts collected pursuant to the budget and show the net surplus or shortfall of income over expenditures plus reserves.
Q. The outdoor light fixtures for our garages and door entrances of our townhouse association are very old. They need to be replaced, and this is a homeowner expense. The association board members approved a different and updated style of light for one unit. After the fixture was installed, the board decided that it did not like the look. The board has prohibited other owners from installing a light fixture different from the original lights. So while the board did approve a different fixture for one homeowner, it refuses to do so for other homeowners. Is this legal? And is there recourse for other homeowners who also wish to install a light fixture style of their choosing?
A. It sounds like the board recognized that it made a mistake in judgment when it approved the alternative to the original light fixture. The board could correct that mistake and reestablish the original specification for exterior light fixtures. Recourse, however, is through your association election process. If the owners don’t approve of the decisions of the board, the most efficient solution would be to vote for candidates who have similar views on issues. However, it is important to consider that board candidates are elected based on all of their qualifications and experience, and not because they share an opinion on one particular issue.
Q. A board member of our condominium sold their unit during the first year of their 2-year term. This created a vacancy on the board. The declaration states that the board can fill the vacancy, and that the person appointed to fill the vacancy serves for the balance of the unexpired term of the director who he/she succeeds. One of the owners claims that the person appointed by the board in this situation only serves until the next annual meeting of the board. How long does the person appointed by the board to fill that vacancy actually serve for that term?
A. Section 18(a)(13) of the Illinois Condominium Property Act addresses the filling of vacancies on the board. It authorizes the remaining members of the board to fill the vacancy on the board by two-thirds vote of the remaining board members, at a board meeting. The person appointed to fill the vacancy by the board in this manner serves on the board until the next annual meeting of unit owners. Board vacancies can also be filled by a special election and, in that case, the winner of the special election serves the entire remaining term of the vacant position. The Illinois Common Interest Community Association Act includes the same language regarding the filling of vacancies on the board.
• Matthew Moodhe 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.