How much to fine rule-breakers
Q: The consensus among our board and owners is that the rules of our association fairly reflect important issues and do not go overboard. However, the section on enforcement does not describe the actual fine amounts for violations of the rules. Should the fine amounts be stated?
A: Section 18.4(l) of the Condominium Property Act permits the board to levy reasonable fines, after providing notice of violation and an opportunity for a hearing regarding that violation of rules, declaration or bylaws. There seems to be a couple of schools of thought on whether the rules should describe the actual fine amounts.
Some rules generally describe the amount of the fines, possibly in a range of dollar amounts, and may include a specific amount for a particular violation. Some rules are more open ended and permit the board to determine the amount of the fine on a case-by-case basis.
I am generally a proponent of the former, in that it provides certainty and consistency. Otherwise, there is a potential for inconsistent fines, and claims that the fine levied in a particular situation is arbitrary. If the rules are not going to describe what the specific fine will be, it may be useful to at least include a range of potential fines. The board, based on the facts and circumstances in a particular situation, could then levy a fine within that range of potential fines.
As an aside, I tend to see rules that include very low fine amounts. Fines should be high enough to discourage violations and to impose appropriate discipline when a violation does occur.
Q: The property manager for our association solicits bids for various projects at the direction of the board. Frequently, the proposed agreement submitted by a contractor identifies the individual property manager and the association address but does not identify the association by name. How should this be handled?
A: The agreement should clearly identify the association as the party to the contract, not the individual property manager. Otherwise, the contract could be deemed with the property manager and not the association.
A similar situation plays out when a property manager signs a contract on behalf of an association. Frequently, at direction of the board after a contract is approved by the board, a manager signs his or her name to the contact. The manager should sign the contract "as agent" for the association. Here is an example: "John Smith, as agent for XYZ Condominium Association." Otherwise, the manager could be deemed to be signing contracts personally, and that is certainly not the intention.
Q: The consensus among the board of our association is that our snowplow service this winter has been awful. A unit owner in our condominium association owns a snowplow company and has offered to provide us service next year at a very competitive cost. Can the board enter into a contract for services with a unit owner?
A: Yes, the board can enter into a contract with a unit owner. The decision to enter into a contract with a unit owner can be handled like any other contract. That is, unlike a proposed contract with a board member in a condominium, no notice of intention to enter into the contract needs to be provided to owners.
The potential political ramifications of entering into a contract with a unit owner should be considered by the board. That is, what will other owners think about this, and will the board be comfortable dealing with the owner if problems arise? It may be prudent to try this service for a season and not lock into any long-term arrangement.
• 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.