Reserve study should include inspections
Q: You recently commented on the need for associations to have periodic building inspections by a structural engineer. Is there anything else boards should consider in order to reduce the likelihood of potentially catastrophic failure of other components of a building?
A: Hopefully, catastrophic building structural failure is a remote possibility. Nonetheless, it would be prudent for a board to meet with a structural engineer to develop an inspection timeline for building inspections.
However, there are other components of a building, the failure of which can have an adverse impact on the building and the residents. In that regard, it would also be prudent for associations to obtain an independent professional reserve study, and to periodically update the reserve study per the recommendations of the entity providing the reserve study. A reserve study is generally performed by an engineer. The engineer inspects the common elements and building mechanicals and estimates when it will be necessary to replace these common elements and building mechanicals, and at what cost.
Boards should take the reserve study into account to determine contributions to the reserve fund. Moreover, the board needs to actually perform maintenance, repair and replacements of the common elements as necessary from time to time.
I have seen countless candidates for association boards run on a pledge of no assessment increases. This is often implemented at the expense of contributions to the reserve account, and deferring necessary maintenance, repair and replacements. That is just plain irresponsible and can result in failures of critical building components. Further, delays in implementing work can also lead to increased costs.
Q: There is a group of very poorly maintained condominium buildings across the street from where I live. Gutters are hanging off the buildings, there are some broken windows, blue tarp on a part of the roof, the parking lot is full of pot holes, and landscaping is overgrown. What can be done about this?
A: You paint a vivid picture of the condition of the neighboring property. Section 14.5 of the Illinois Condominium Property Act governs distressed condominium property.
Distressed condominium property means a parcel containing condominium units that are operated in a manner or have conditions which may constitute a danger, blight or nuisance to the surrounding community or to the general public, including but not limited to certain described conditions.
A proceeding can be commenced by a municipality to address the situation. If a court finds that the property is a distressed condominium property, the court may order the appointment of a receiver for the property with the powers to address the issues and to operate the property in lieu of the board. The court can also remove the property from the Condominium Property Act.
You should bring this matter to the attention of the local municipality.
Q: Under what circumstances can the board of my condominium levy a special assessment for repairs to the common elements without being subject to a potential vote of the unit owners?
A: Section 18.4(a) (8) of the Illinois Condominium Property Act provides that separate assessments for expenditures relating to emergencies or mandated by law may be adopted by the board of managers without being subject to unit owner approval, or the procedure whereby owners can request a vote if a special assessment exceeds a certain threshold.
The "emergency" exception would be applicable to raise funds if there is an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners. This conclusion is typically supported by the written opinion of an engineer or other expert.
The "mandated by law" exception would be applicable, for example, if the association receives a notice of building code violation and the association needs to raise funds to pay for necessary repairs to correct 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.