Two board factions causing chaos for management company

By David Bendoff

Q. The board of directors of our association is comprised of two factions. Each faction has a different agenda for the association. As a result, the association's management company is caught in the middle, and the manager often receives conflicting directions depending on what board member is communicating with management. This leads to frustration by management and miscommunication. What can be done to address this problem?

A. As an initial matter, the board needs to appoint a single board member to be the liaison between the board and the managing agent. This would typically be the president. The managing agent has a right to rely on the directions from this board member. If it turns out that the communication from this board member does not reflect the consensus of the board, then the board needs to appoint a different liaison. However, it is unreasonable to expect the managing agent to routinely deal with multiple board members or to attempt to interpret inconsistent directions from various board members.

Q. The insurance carrier for our condominium association issued a check to the association to cover water damage that includes payment for drywall to the primer coat in a particular unit. Should the association simply give the owner a check for what the association received from the insurance carrier for the drywall to primer coat work and allow the owner to do that work, or should the association pay contractor invoices as they are received?

A. I have seen a couple of unfortunate situations where an owner was given insurance proceed from the association, and then did not use the proceeds to make repairs. The better approach is to have the association pay the invoices for the work covered by association insurance proceeds as they come in, up to the amount of the total applicable insurance proceeds.

Q. A board member for our association is seriously delinquent in the payment of his assessments. The board has been reluctant to take any action to collect these unpaid sums from the board member because this board member does so much for the association., and due to the potential embarrassment it will cause this board member. What sort of legal issue does this create?

A. Initially, failure of a board member to pay their assessments on a timely basis can be considered a breach of fiduciary duty by that board member. The board needs to act consistently with respect to the collection of assessments from all members of the association, including a board member. Otherwise, the board members who fail to act are in violation of their fiduciary duty.

Q. A real estate agent who has sold many homes in our subdivision recently contacted the board of directors of our association to ask about the status of certain repairs to damaged common area. She did not identify any particular pending transaction, and simply seemed to want the information generally. Is the association under any obligation to provide this information to this person?

A. The association is not under any legal obligation to provide this sort of information to a third party under these circumstances. However, if the requested information is not confidential, keeping the local active real estate agent community informed on association projects of this sort can assist in the sale of homes in your community. That would be good for the owners in the association.

Q. Are board meetings required to be held at any particular time of the day?

A. There is no statutory requirement as to when during the day that a board must hold its meetings. Board meetings should be held at times most convenient for the members of the board. Traditionally, board meetings seem to be held in the evening, after normal business hours. This is because most board members have a "day job," and are not available to travel to a board meeting during the day.

However, given the increased use of telephone conference calls or other acceptable technological means like video conferences to conduct board meetings, there has been an increase in the frequency of daytime board meetings.

• 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.