Owners must approve compensation of board members

Q. The members of the board of our condominium are not paid. However, the board members receive a discount on their assessments. Is this permitted?

A. The amount of the assessment discount board members receive is the legal equivalent of compensation. The declaration for most associations will provide 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 would have to be submitted to the ownership for approval 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, and paper and ink for their printer used for association business, or gas to attend meetings.

Q. I am hoping you could answer a question for me. I have lived in a homeowners association for more than a decade. Every year our annual meeting is held in November, right before Thanksgiving.

As of yet there has been no announcement of the annual meeting, nor have they (the board of managers) put forth a budget for review. Is there a time frame in which the annual meeting has to be done?

A. When the association's annual meeting is to be held will generally be dictated by the language in the association's declaration, or bylaws. Sometimes the date is merely stated as the anniversary of the initial meeting of the owners. Other documents identify a specific date, such as the "second Tuesday of November." Still others will identify a specific date, and add something like "or such other reasonable date that is not more than 30 days before or after such date."

That said, the Illinois General Not for Profit Corporation Act, Section 107.05(b), describes what happens if the annual meeting is not held at the designated time.

If an annual meeting has not been held within the earlier of six months after the end of the corporation's fiscal year or 15 months after its last annual meeting, then any member of the association may apply to the circuit court for an order directing that the meeting be held and fixing the time and place of the meeting. This application to the court can be made provided the owner has made a request in writing directed to the president requesting an annual meeting and if a notice of meeting is not delivered to members entitled to vote within 60 days of such owner's request.

The bottom line, though, is that the association should hold the annual meeting in at the time designated in the bylaws, or amend the bylaws to change the date of the meeting.

Q. A unit in our condominium association is leased to a person who repeatedly ignores and violates our rules. The board has levied fines that the owner pays, and the problems continue. The unit owner has ignored the board's requests to deal with the tenant. The tenant is making life miserable for the other residents. What else can the board do?

A. The board has several tools at its disposal. The board can terminate the lease between the owner and the tenant. This is permitted for any violation by the tenant of the association's declaration, bylaws or rules by the tenant. The association must issue a 10-day notice terminating the lease. The notice must meet very specific requirements, so it's prudent to consult an attorney.

If the tenant fails or refuses to vacate the unit within 10 days, the board can file a forcible entry and detainer (eviction) lawsuit against the tenant. The board can request the court to require the owner to reimburse the association for the attorney's fees it incurs. Note that this remedy should be reserved for serious or repeated violations, as a court might not be inclined to order the eviction of a tenant for what the court perceives as a relatively minor infraction. That is, remedies should be in proportion to the violation.

• 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.