Can condo board discontinue unit owner forum at meetings?

Q. Our board of directors just issued a statement saying that it will no longer include a homeowner's forum at the beginning of board meetings. Homeowners can still attend board meetings, but we are not allowed to address the board with comments and questions. Is it legal for the board to do this?

A. While unit owner forums have become a custom and practice at many board meetings, the answer to your question depends on the type of association. A unit owner forum is not required in a condominium or in a master association, so the board of these associations has the discretion whether or not to include an owner’s forum at board meetings. However, the board of a common interest community association must reserve a portion of the board meeting for comments by members of the association. That said, the duration and meeting order for the member comment period is within the sole discretion of the board of the common interest community association.

Whether required by statute or voluntarily included if not required, these forums are intended as a general comment period for unit owners. A specific amount of time could be allocated at the meeting (generally at the beginning or end) for this purpose. The time allocated for the forum should be relative to the length of the meeting, and it should take up a relatively short portion of the meeting. The time limit should be announced at the beginning of the forum so that it does not leave the incorrect impression that an owner is being arbitrarily cut off when time expires. If an owner has anything substantial to address with the board, the owner should contact the board in advance so that the matter could be formally placed on the agenda, if appropriate.

Q. I understand that the Illinois Condominium Property Act requires the board to adopt an annual budget that provides for reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements. Can this reserve requirement be waived?

A. Your statement as to the reserve requirement under the Condominium Property Act is correct. The act also provides that an association that does not have a reserve requirement in its condominium instruments may elect to waive in whole or in part the reserve requirements of this act. This requires a vote of owners with two-thirds of the total votes of the association. Again, if the association’s declaration requires the board to establish a reserve, the requirement could not be waived by an owner vote.

In the event that an association does elect to waive all or part of the reserve requirement of the act, that fact must be disclosed by the association in the financial statements of the association. That disclosure must be highlighted, in bold print, in the response to any request of a prospective purchaser of a unit for the information prescribed under Section 22.1 of the act.

Moreover, no member of the board of managers or the managing agent of the association is liable, and no cause of action may be brought for damages against these parties, for the lack or inadequacy of reserve funds in the association budget if an appropriate election has been made not to fund the reserve. The lack of funding of a reserve fund may nonetheless have a negative impact on the ability of owners and prospective owners to obtain financing for their units. I can’t imagine too many scenarios where waiving the reserve requirement is a good business decision.

Note that any condominium association that has properly elected to waive the reserve requirement may later vote to reinstate the reserve requirement with a vote of owners with two-thirds of the total votes of the association.

• 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.