What’s the difference between removing an officer and a board member on an association?
Q. The declaration for our association discusses removal of officers and removal of board members. There are different procedures for both. Isn’t an officer a board member? What is the difference between removing an officer and removing a board member?
A. This issue comes up often as the procedural distinction can be unclear due to poorly worded governing documents. Board members are volunteer unit owners who are elected by the unit owners. The board then selects from among the board members to fill the various “officer” positions such as president, secretary, treasurer, and vice president (if your documents provide for a vice president).
The typical language in a declaration permits an officer to be removed by a majority vote of the board at a board meeting. If one is removed as an officer of the board, that person would continue on as a board member. Another board member would be appointed by the board members to serve in that vacant officer position.
On the other hand, the removal of a board member from the board typically must be approved by two-thirds (or more) of all of the unit owners in the association, at a meeting of the unit owners. An association’s governing documents may permit removal with or without cause. If a person is removed as a board member, they would be off the board entirely, creating a vacancy on the board. That vacancy could be filled by the board; however, in a condominium there is also a procedure for the vacancy on the board to be filled by the owners.
Q. I anticipate looking for a condominium unit to purchase in the near future. I have heard stories about some condominium associations not being properly administered, unknown special assessments or insufficient reserve funds. What can I do to learn about the association before I purchase a condominium and if it seems to be functioning appropriately?
A. The administration and financial condition of a condominium association is a major factor that prospective purchasers and mortgage lenders carefully consider. Under the Illinois Condominium Property Act, the purchaser of a condominium unit is entitled to receive certain documents and information about the condominium association. Under this law, the purchaser must make the request for this information to the seller. The seller can then request or authorize the release of this information to the purchaser. This includes a copy of the governing documents and any rules and regulations; a statement of any liens, including a statement of the financial account of the unit setting forth the amounts of unpaid assessments and other charges due and owing; a statement of any capital expenditures anticipated by the unit owner’s association within the current or succeeding two fiscal years; a statement of the status and amount of any reserve for replacement fund and any portion of such fund earmarked for any specified project by the board; a copy of the statement of financial condition of the unit owner’s association for the last fiscal year for which such statement is available; a statement of the status of any pending suits or judgments in which the unit owner’s association is a party, and a statement setting forth what insurance coverage is provided for all unit owners by the unit owner’s association.
Your purchase contract should require these disclosures and should provide that the transaction is contingent on your receipt, review, and approval of the documents and information. The disclosures should be reviewed with your real estate attorney. You should also try to obtain copies of the minutes of board meetings for the past 12 months, as this will provide meaningful insight into the governance 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.