Bendoff: Why a board attorney can't answer unit owners' questions
By David Bendoff
Q. The association's attorney attended a board meeting that was open to the owners. One of the purposes of the meeting was to adopt a special assessment. Owners raised questions and asked the association's attorney to respond to many of the questions. The attorney would not respond to the owner's questions. Owners are members of the association, and assessments pay the legal fees. Shouldn't the attorney have answered the questions of the unit owners?
A. The attorney represents the association through its board of directors. The attorney does not represent the unit owners. The interests of the association and the interests of the unit owners can be adverse to one another. Responding to questions from owners by the association's attorney could result in a breach of the attorney-client privilege between the association and the attorney and can be a conflict of interest. If owners have legal questions about the special assessment, the owners should consult with their own attorney.
Q. An owner in our association gave a proxy to another owner to vote on their behalf at the annual meeting. The owner who gave the proxy showed up at the annual meeting and asked for a ballot. The board refused to give the owner a ballot, stating that a ballot was already given to the owner's proxy holder. Was this correct?
A. This was not handled correctly. The owner who had issued a proxy could withdraw that proxy and vote in person at the annual meeting. When an association distributes ballots at the annual meeting, ballots should first be issued to owners who appear in person, and then to holders of proxies. Obviously, only one ballot would be issued per unit. This procedure will avoid the situation you describe.
Q. There was a fire at our condominium association. It resulted in extensive damage to a unit; thankfully, no one was hurt. It appears that the owner's insurance covers a portion of the damage that is also covered by the association's insurance. Whose insurance would cover the damage when there is such overlapping insurance?
A. This is addressed in Section 12(f) of the Illinois Condominium Property Act. If at the time of a loss under the association's policy there is other insurance in the name of a unit owner covering the same property covered by the association's policy, the association's policy is primary insurance. This means that the association's insurance would cover the loss, and the owner's insurance would cover any damage amount that is in excess of the association's policy.
Q. A unit in our condominium association was purchased at a tax sale, and the purchaser received a tax deed to the unit. The tax purchaser says that he is not subject to the leasing restriction in the condominium declaration. He says he intends on leasing the unit. Is the tax purchaser correct on this?
A. The tax purchaser is not correct, and this is not an uncommon misunderstanding of the law.
The Illinois Condominium Property Act provides that "(i)n the event any person shall acquire or be entitled to the issuance of a tax deed conveying the interest of any unit owner, the interest so acquired shall be subject to all the provisions of this Act and to the terms, provisions, covenants, conditions and limitations contained in the declaration, the plat, the bylaws or any deed affecting such interest then in force."
As such, the tax purchaser is subject to the lease restriction in the declaration, and to the remedies available to the board if the unit is leased in violation of such a restriction.
• 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.