Owners can vote to reject unusually high assessment
Q: The board of our condominium intends to levy a large special assessment to pay for a questionable roof repair. I say questionable, because many owners contend the roof actually needs to be replaced rather than patched, and the board has not retained an expert to inspect the roof and to make recommendations. Is an owner vote required for a special assessment?
A: Owner approval is not generally required for a special assessment. However, if a special assessment exceeds a certain percentage of the year-over-year regular and special assessments, 20% of the owners can request a vote of the owners on the special assessment. However, unless a majority of all owners in the association vote to reject the special assessment, it is deemed ratified.
Before the board proceeds with this project, it would be well advised to retain an appropriate roof consultant here. The consultant would inspect the roof, advise of its condition and make recommendations whether repairs or replacement are in order.
Q: The board of our condominium was served with notice of a subcontractor's lien filed against the individual units and common elements. This subcontractor performed parking lot asphalt work under a contract between the association and a general contractor. Should this have been served on individual owners?
A: Under the Illinois Condominium Property Act, the board of property containing more than eight units has the power and duty to accept notice of service involving the Mechanics Lien Act on behalf of each respective member of the association (individual owners) with respect to improvements performed pursuant to any contract entered into by the board.
The board is also required to distribute the notice to the unit owners within seven days of the acceptance of the service by the board. The service is deemed effective as if each individual unit owner had been served individually with notice by the lien claimant.
Q: Our condominium annual meeting was scheduled for last evening to elect three of the five board members. A quorum of the owners was not present. Do we only have two board members now?
A: The association is still served by five board members. Under the Illinois General Not for Profit Corporation Act, each director holds office for the term for which he is elected and until his successor shall have been elected and qualified. As such, the board members whose terms were up at the annual meeting would continue to serve on the board.
Q: The declaration for our condominium requires owner approval before the board can pledge assessments as collateral for a loan. Is this typical?
A. Many condominium declarations are drafted to require owner approval to pledge association assets as collateral for a loan. However, two sections of the Illinois Condominium Property Act were amended some time ago to permit the board to pledge assets of the association without owner approval. This includes assets like assessment income and bank accounts. The authority in the Act would supersede the language in the declaration on this issue.
Q: What is a master association?
A: A master association is different from either a condominium association or a common interest community association.
If the condominium declaration, or other duly recorded covenants provide that any powers of the condominium association are to be exercised by or may be delegated to a nonprofit corporation or unincorporated association that exercises those or other powers on behalf of one or more condominiums, or for the benefit of the unit owners of one or more condominiums, such corporation or association is a master association. This is set out in section 18.5 of the Illinois 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.