Q. The board of our condominium association entered into a bulk cable television service for all of the units. Unlike other expenses that are charged to owners based on the unit's percentage of ownership in the common elements, the board charges the same amount per unit for cable television service. Is this proper?
A. The Condominium Property Act permits the board to enter into a bulk cable television service agreement, and to assess each and every unit on the same equal cost per unit basis for cable television service. That is, the association can pass the cable company's flat fee per unit through to the owners; the cable television service fee charged to the association does not get allocated to owners based on the unit's percentage of ownership. This is one of the few expenses that don't get allocated based on percentage of ownership. The board is acting properly here.
Q. I serve on the board of my association, and spend a considerable number of hours a week on association matters. Can board members be paid for their service on the board?
A. The declaration for your association, as is common, provides that board members serve without compensation, unless compensation is approved by two-thirds of the owners in the association. The issue of compensating board members needs to be submitted to the ownership at a meeting of the owners. That said, board members can be reimbursed for their actual out-of-pocket expenses, if any, incurred as a board member, without owner approval. Examples of some of these expenses might be office supplies, or printer ink or paper for a computer used to print association related documents.
Q. As a member of my condominium association, can the management company charge me $50 an hour to provide me with books and records that would show how much money is in the association's reserve account?
A. A unit owner may examine and request copies of books and records of account for the association's current and ten immediately preceding fiscal years. This would include, for example, a bank statement or other document that discloses the balance of the association's reserve account. An owner's request to the association must be in writing and state a proper purpose for wanting to examine the documents.
The actual cost to the association of retrieving and making requested records available for inspection and examination is to be charged by the association to the requesting member. If a member requests copies of records, the actual costs to the association of reproducing the records shall also be charged by the association to the requesting member.
If the association's management agreement with the managing agent provides that the association pays the managing agent $50 an hour to retrieve and make books and records available to owners, the association can charge that cost back to the requesting owner. The fee is questionable otherwise. Unless the association's books and records are stored in an alligator pit, it should not take very long to retrieve the documents requested here.
Q. Our bylaws state that successors to the board elected at the first meeting shall be elected for a term of one year each. Our annual meeting and elections are in November each year. We have always transferred positions on the board to new members immediately after the election in November. This year, several members on the board lost and there are several new board members. The board that was in place before the November election has decided they will not transfer authority to new board members until January. Is this legal?
A. Board members are elected to serve for the term set forth in the association's governing documents (in your case one year), and until the next meeting of members at which directors are elected (in your case November). The term of the new board members elected at the association's November meeting began at the conclusion of that meeting.
The former board members would not have the power to push back the commencement date of the term of the newly elected directors to January, and action taken by the replaced board after the November election may be invalid. The replaced board members would probably not be covered by the association's director's and officer's liability insurance.
If authority of the former board is not relinquished voluntarily, the new board members could file suit to seek an injunction against the replaced board members. The attorney's fees incurred by the newly elected board members would likely have to be paid by the association. There may also be a theory upon which the former board members are responsible to reimburse the association for those attorney's fees.
• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. 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.