Condo owners are allowed to examine association contracts
By David M. Bendoff
Q: The management company for our condominium is charging the association for additional work it says is not covered in the contract between the board and the management company. Some of those items are annual report filing, collection notices, coupon replacement orders, statements and violation notices.
I asked the management company for a copy of the contract between the association and the management company. I was told that because my name is not on the contract they could not give me a copy. I want to see what exactly is in the contact and why we are being charged hundreds of dollars for additional services each month. I am not a board member. Should I be able to get a copy of this contract, and other contracts as well?
A: A unit owner in a condominium is entitled to examine and copy the current management agreement for the association.
Section 19(a)(6) of the Illinois Condominium Property Act states that "(t)he board of managers of every association shall keep and maintain the following records, or true and complete copies of these records, at the association's principal office: … all contracts, leases and other agreements then in effect to which the association is a party or under which the association or the unit owners have obligations or liabilities." Subsection (b) goes on to provide that any member of an association shall have the right to inspect, examine and make copies of the records described in Section 19, in person or by agent, at any reasonable time or times, at the association's principal office."
In order to exercise this right, a member must submit a written request to the association's board of managers or its authorized agent, stating with particularity the records sought to be examined. "Failure of an association's board of managers to make available all records so requested within 10 business days of receipt of the member's written request shall be deemed a denial," the law further states.
Note that if an owner is successful in a lawsuit to compel release of properly requested books and records, the owner is entitle to seek recovery of their attorney's fees incurred in the suit.
Q: I was looking through the declaration of condominium for our association. What is a "limited common element," and why is that significant?
A: A "limited common element" is a portion of the common elements so designated in the declaration of condominium as being reserved for the use of a certain unit or units to the exclusion of other units. Examples of limited common elements are balconies, terraces, patios, perimeter doors of a unit and windows in perimeter walls of a unit. Limited common elements can also include parking spaces or other facilities, such as storage lockers.
Characterizing a portion of the common elements as limited common elements is significant because the owner of the unit assigned the limited common element has the exclusive right to use the particular limited common element. The exclusive right to use the particular limited common element would automatically transfer to the purchaser of the unit to which it is assigned.
This characterization is also significant because the condominium declaration may provide for the assessment by the association, in connection with expenditures for the limited common elements, of only those units to which the limited common elements are assigned. This would mean that the association would perform maintenance, repairs and replacements of the limited common elements and charge the cost to the unit assigned the limited common element. This is one way to address the perceived unfairness of allocating expenses based on a unit's percentage of ownership.
• 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.