Association's bylaws often are imbedded within its declaration
Q: I am a new board member for my condominium and realized we do not have a separate document called "bylaws." We only have a document called declaration of condominium. Is that going to be a problem?
A: The Condominium Property Act provides the bylaws may either be embodied in the declaration, or in a separate exhibit appended to and recorded with the declaration. Often, the bylaws are embedded in the declaration. That can create confusion. To reduce confusion, sometimes, the declaration will specifically include a provision that states what articles are deemed to be the bylaws. I would suggest taking another look at the declaration to see if the bylaws are embed in that document, as they apparently are not a separate exhibit.
Q: The mortgage lender for one of the candidates for our condominium association's board filed a mortgage foreclosure against this candidate's unit. Is this owner eligible to be voted to and to serve on the association's board of directors?
A: Ownership of a unit is the relevant criteria here for serving on the board of an Illinois condominium association. The filing of a foreclosure action by a lender does not itself affect the ownership of the owner's unit. Unless and until a unit is sold at a judicial sale at the conclusion of a foreclosure, the owner of the unit that is subject to the mortgage foreclosure would be eligible to serve on the association's board. As a practical matter, owners have to decide if they want to elect someone to the board who is involved in a foreclosure.
Q: The declaration for our association provides that our fiscal year is the same as the calendar year, and that the annual budget and new assessment commences Jan. 1 of each year. For convenience, the association's accountant "changed" the association's fiscal year so it starts on June 1. Was that proper?
A: The association's fiscal year is as set forth in the declaration; not as may be changed for convenience. The association would have to amend the governing documents to change the fiscal year.
Q: One of the unit owners in our condominium wants to review the association's bank statements. Is the board required to provide these records to an owner?
A: Owners are entitled to examine the books and records for the association's current and 10 immediately preceding fiscal years, including, but not limited to, itemized and detailed records of all receipts, expenditures and accounts. However, the association can charge the owner for the costs to retrieve and to copy the records.
Q: Our association is in a dispute and filed suit against the developer of our condominium. The developer claims the association does not have this authority, and that each and every unit owner in the association must be a party to the suit. That seems really burdensome. Is it correct?
A: The developer is not correct here. The Illinois Condominium Property Act provides, and it is well settled, that the board has "standing and capacity to act in a representative capacity in relation to matters involving the common elements or more than one unit, on behalf of the unit owners, as their interests may appear."
Q: My condominium assessments are twice as much as the assessments my friend pays for his unit in the association. How can this be?
A: Assessments are allocated among the unit owners based on each unit's percentage of ownership in the common elements. The percentages of ownership for the units is set forth in the condominium declaration. The unit owner who pays twice the assessment than another unit owner would have twice the percentage of ownership in the common elements as the other unit.
• 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.