Investors are buying condo buildings

 
Posted8/6/2022 7:00 AM

Q. I live in a condominium. The association is fielding offers from prospective purchasers to buy the entire condominium property. The offers are for a lump sum for the entire property. How would each owner's portion of the purchase price be determined?

A. The sale of an entire condominium property is addressed in Section 15 of the Illinois Condominium Property Act. The typical purchase contract allocates purchase price among the unit owners based on each unit's percentage of ownership in the common elements.

 

However, any unit owner who did not vote in favor of the sale of the property may avail themselves of a procedure that would entitle such owner to receive from the proceeds of such sale an amount equivalent to the greater of the value of his or her interest as determined by a fair appraisal, less the amount of any unpaid assessments or charges due and owing from such unit owner; or the outstanding balance of any bona fide debt secured by the objecting unit owner's interest which was incurred by such unit owner in connection with the acquisition or refinance of the unit owner's interest, less the amount of any unpaid assessments or charges due and owing from such unit owner.

The value of the interest of a unit owner who did not vote in favor of the sale of the property, and who challenges the proposed allocation of the purchase price as it relates to their unit, may need to be established by an appraiser.

A sale of the entire condominium property does require unit owner approval. As such, the manner in which the allocation of the purchase price will be done is an issue for the ownership to consider in making a decision.

These sales of entire condominium properties continue to have steam in the Chicago area.

Q. A couple of owners in our association leave their empty garbage cans at the curb for many days after the weekly pickup by the local waste hauler. Our town does have an ordinance requiring garbage cans to be removed from the curb and stored the evening of the garbage pickup. Does the association have any remedies?

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A. The typical declaration of covenants for an association includes a provision that prohibits an owner from doing anything that is in violation of law or ordinance. The violation of the municipal ordinance regarding waste containers would constitute a violation of such a covenant. In a situation like this, I would suggest that the board of directors of the association issue a friendly reminder to residents about the ordinance and the requirement to remove the garbage cans by the evening of the waste pick up.

If that does not work, the board could consider levying a fine against these owners for this violation. A fine could only be levied though after the board issues a written notice of violation to the offending owners and provides them with an opportunity for a hearing.

Q. A television production company wants to film a portion of an episode of a popular television show in the lobby of our condominium building. The owners think this would be exciting. Can the association's board approve this?

A. The board of an association can enter into a contract to permit a production company to film in the common elements/area of the association. However, like other contracts, the board should have the agreement between the association and the production company reviewed by counsel. These agreements are generally rather sparse, and do need to be "tweaked" to level the playing field.

• 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.

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