Project may begin when approved by board
Q. The board of our association approved a very significant roof project at a board meeting, and the project is to begin in just a few weeks. However, the board meets quarterly, so the minutes of the meeting where this project was authorized will not be approved for several months. Can the board of our association proceed with this project before it approves the minutes of the meeting where this action was taken?
A. The minutes of a meeting memorialize the actions approved by the board. Minutes should be prepared, and approved at a meeting, as soon as practical. However, the approval of the minutes is not a condition precedent to the board proceeding with actions authorized at a board meeting. As long as the project was approved by the board at a duly held board meeting, the project may proceed with the roof project, despite the fact that minutes of the meeting where the project was authorized have not yet been approved.
Q. Thank you for your very informative columns. As a novice investor, I look forward to reading them in the Daily Herald each week. I'm a little confused about your Sept. 2 column regarding Section 9(g)(3) of the Illinois Condominium Property Act. You wrote about extinguishing condominium assessments that were due prior to a judicial sale. My question is if the association dues going forward are paid starting at the beginning of the month following the judicial (sheriff) sale, and are all association assessments and fees prior to the sale extinguished? Does the judicial sale also extinguish amounts that may be due under Section 9(g)(4) that discusses the "six month" rule?
A. The Sept. 2 column discussed the Aug. 8 Illinois appellate court decision in Country Club Estates Condominium Association v. Bayview Loan Services LLC. That case provides that, pursuant to Section 9(g)(3) of the Illinois Condominium Property Act, the judicial sale of a condominium unit in a foreclosure does extinguish a condominium association's lien for pre-foreclosure sale assessments, if a buyer of a unit at the judicial sale in a foreclosure makes "prompt" payment of post-sale assessments.
However, the judicial sale does extinguish the obligation to pay sums due under the "six month" rule under section 9(g)(4) of the Illinois Condominium Property Act. That section does permit an association to collect up to six months of certain unpaid assessments from the new owner after the judicial sale in a foreclosure. More specifically, the successful purchaser at the judicial sale in the foreclosure (if it is a third party other than the lender) or the person who buys the unit from the lender after the judicial sale, will be responsible for up to six months of "common expenses" (that includes regular assessments, special assessments, late charges and attorney's fees, for example) that were due and remain unpaid from the foreclosed owner at the time the association initiates a collection action against the foreclosed owner. Importantly, it's not the six months prior to the judicial sale in the foreclosure, as many incorrectly understand.
In order to trigger the obligation under the "six month" rule, the association must have initiated a collection action against the foreclosed owner. As the result of trial court experience, a collection action is deemed initiated by the filing of a complaint in forcible entry and detainer, and not merely the issuance of the 30-day notice letter required under the Code of Civil Procedure. If the association has not initiated such an action, it is not legally entitled to collect the up to six months of assessments amount described in Section 9(g)(4) of the Condominium Property Act.
• 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.