Top issue facing associations is inadequate reserve funds

Q. What is the No. 1 issue facing Illinois associations?

A. While there are many common issues facing associations, I would suggest that the top issue is deferred maintenance and inadequate reserves for capital expenditures related to repair and replacement of the common elements, or common areas.

The most typical reason for this problem is assessments or reserve contributions that are too low - particularly in the face of information that would assist the board in establishing a more accurate budget. I appreciate that boards like to keep assessments "low." However, the long-term impact of this "philosophy" can be an adverse impact on property values in the association if it results in a lack of required maintenance.

Q. The notices of violation issued by our association provide that the owner can request a hearing within 10 days of the date of the notice. However, the association's rules state that the notice of violation must include the date, time, and location for the hearing. What controls?

A. The association's rules control this. The form of notice of violation the association uses needs to be changed to be consistent with the rules. If the board would prefer that an owner needs to request a hearing, rather than including a set date in the notice of violation, the rules are going to have to be revised.

In my experience, it is not uncommon for the contents of an association's notice of violation to deviate from what is set forth in an association's rules on hearing procedural issues. The forms used by associations for these purposes should be reviewed to make sure they are consistent with the rules, or the rules need to be changed.

Q. The declaration for our common interest community association incudes a very detailed description of the association's maintenance responsibility for the lots owned by the individual owners in the association. It does not include any sort of landscaping on these lots. However, over the years, in order to maintain a uniform appearance, the association has performed mowing and weed control of the individually owned lots. Owners unanimously appreciate this service.

Newer members of the board have questioned the association's authority here. Can the association take on a greater responsibility for maintenance of the individual lots than set forth in the declaration?

A. In general, the association is going to have to limit the scope of maintenance that it performs on the individually owned lots to what is set forth in the association's declaration. The board would likely lack authority to make expenditures for this work, and the board's actions would be beyond the scope of its authority. That could expose the board to a claim for breach of fiduciary duty, and call into question whether insurance would cover the association and board if some suit is filed regarding this undertaking.

Because the owners approve of the association providing this service, the association should amend the declaration to expressly provide that it will be provided by the association at the expense of the association.

Q. I am on the board of a homeowners association that is a not-for-profit corporation. Our board meetings are very contentious, and board members do not get along with one another. Two board members were arguing at a recent meeting, and one said something like "I have had it with you, I resign." This board member then stormed out of the meeting. Was the verbal resignation by this board member valid?

A. A verbal resignation from a board is not effective. This issue is governed by Section 108.10(g) of the Illinois Not For Profit Corporation Act. A director may resign at any time by written notice delivered to the board, or to the president or secretary. The written resignation is effective when delivered, unless the notice specifies a future effective date, and would not be effective retroactively to the date of the verbal pronouncement. The board member in question should be requested to submit a written resignation.

• 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.