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Chicago Tribune
a day ago
- Business
- Chicago Tribune
Condo Adviser: Statutes differ based on the form of community association
Q. I live in a townhouse association and read your Condo Adviser column regularly. I wonder why you are called the Condo Adviser versus a Townhouse Adviser. Are applicable statutes different for condominiums versus townhouses? A. There are definitely different applicable statutes, depending on the form of community association. The Condominium Act applies only to real estate submitted to the Condominium Act. The most common type of condominium building structure is a multiunit residential building, but a townhouse community or even a single-family home community could be submitted to the provisions of the Condominium Act, which would then make that association a condominium association. The most common other statute for community associations is the Common Interest Community Association Act. The statute applies to common interest community associations other than condominium or residential cooperatives that have more than 10 units or an annual budget more than $100,000. This statute applies to most townhouse associations, except those that are deemed a townhome condominium association. Lastly, master associations are governed by section 18.5 of the Condominium Act, even though the remainder of the Condominium Act does not apply to master associations. Q. I am a unit owner in a mid-rise condominium building. Our board does conduct regular open board meetings, which is appreciated. However, no minutes are kept of the board meetings and thus, copies of board meeting minutes are not available to unit owners. Is this legal? A. Under Illinois law, condominium boards are required to keep minutes of board meetings and unit owner meetings. In fact, section 19(a)(4) of the Condominium Act requires the board of directors to make available minutes for unit owner meetings and board meetings for the previous seven years. The board should be reminded of its legal requirement to keep board meeting minutes and do so prospectively. Q. I am a unit owner in a condominium association. Recently, the unit owners were notified that the association has not paid its water bill for months and has a significant outstanding balance plus a significant amount of interest/penalties. The condominium board has not been forthcoming about this. How can we determine if the water bill has been paid? A. Unit owners have a few avenues to obtain information about the payment of association common expenses, specifically the water bill. Per Section 19(a)(9) of the Condominium Act, unit owners are entitled to inspect the books and records of the association for the current and previous 10 fiscal years. A unit owner should request the inspection in writing and may search for water bill payments, or any other payments to vendors for that matter. Alternatively, for a Chicago water bill, a unit owner may obtain a copy of the city of Chicago water bill and full payment certificate from the Chicago Department of Finance, which can be obtained online.
Chicago Tribune
11-05-2025
- Chicago Tribune
Condo Adviser: Community associations must enforce rules and regulations uniformly
Q. I live in a residential development governed by a homeowners association. I have been cited by the association for allegedly parking a prohibited vehicle in my driveway per the association's rules and regulations. Setting aside whether the vehicle in question is in fact prohibited, there are several other similar vehicles regularly parked on my neighbor's driveways, and it is my understanding that none have been cited for a rules violation. Is it against the law for the association to selectively enforce rules and regulations? A. Applicable case law in Illinois holds that rules and regulations must be reasonable and that board members have a fiduciary obligation to enforce the association's governing documents. The case law also stands for the proposition that uniform enforcement of the rules and regulations and governing documents is required. When a community association selectively enforces rules and regulations against some units, but not other units, an owner can argue in an enforcement lawsuit that the association waived its ability to enforce a particular rule or regulation against any unit. Said another way, failing to uniformly enforce the rules and regulations will likely result in a court prohibiting the association from enforcing a particular rule or regulation against all units. Q. I live in a condominium association with a fitness center with key fob access. The association has decided to switch the system to access to the fitness center from a key fob to a smart phone app, and stated that unit owners who prefer to keep a key fob to the fitness center would be required to pay a $250 deposit for a new key fob, notwithstanding the app does not require a deposit. This does not seem fair. Can the association set a deposit fee for a key fob but not charge a deposit for use of an app? A. Section 18.4 of the Condominium Act grants the board of directors broad authority to administer the association and the common elements and adopt rules and regulations relating to the administration of the common elements. Pursuant to that broad authority, the board can set requirements for a deposit for common area keys or key fobs. In fact, deposits for key fobs are common in community associations. Q. I live in a high-rise condominium in Chicago. Our operating expenses for the past year exceeded our budget. There is a section in our condominium bylaws that addresses an operating shortfall saying it needs to be charged to the unit ownership. However, our board of directors chose not to follow this requirement and instead transferred money out of the reserve fund to cover operating funds. Is this allowed? A. It is common for condominium bylaws to address how to handle an operating surplus or an operating deficit. If the bylaws are very specific and state that an operating deficit shall be addressed by assessing the deficit to the unit owners through the next year's budget or by special assessment, then the bylaws must be followed. However, many times, certain expenditures that may have been charged to the operating fund actually qualify as a valid reserve expense item depending on the nature of expenditure. Thus, if certain expenditures can be classified as a valid reserve expense, which were the cause of the operating deficit, then use of reserve funds may be proper. The nature of the expenditures should be closely reviewed to determine whether the use of reserve funds was appropriate.
Yahoo
27-04-2025
- General
- Yahoo
Owner balks at days without water as condo demands to replace aging, but unbroken pipes
Live in a home governed by a condominium, co-op or homeowner's association? Have questions about what they can and cannot do? Ryan Poliakoff, an attorney and author based in Boca Raton, has answers. Question: I am a condo owner. Our board of directors is adamant about doing some work in my unit, even though it is not necessary. They want to replace my copper piping that they say, "has the potential to leak — it could be six months from now or three to five years, who knows, from now but we need to replace them.' The pipes are not currently leaking, and they do not show damage of any kind. The work they claim is needed could render my apartment useless for at least a week, and my wife and I will not be able to use the toilet, the vanity and the shower. My question is: can I refuse to let them enter my apartment unit to make "repairs" that are not needed? Signed, A.Y. Dear A.Y., I am going to assume that, as would by typical, your association has the primary responsibility to maintain, repair and replace the common plumbing in the building. It is not particularly uncommon for plumbing to deteriorate over time, sometimes more quickly, sometimes less. But water leaks can be extraordinarily expensive casualty events. Probably the biggest issue I see in my client condominiums is leaking or failing pipes causing tremendous losses. So, your board is being proactive. I suspect they have solicited the opinion of an engineer or plumbing professional that your pipes are either defective or nearing the end of their useful life, and that it would be best to replace them. The Condominium Act grants the association the irrevocable right to enter your unit when necessary to maintain the common elements or other property that is the association's responsibility, or to protect other units. They would be doing both here. So, legally, you do not have the right to prevent them from accessing your unit simply because you don't think the repairs are necessary, and because they would be an inconvenience. There are lots of inconveniences in a condominium — that's part of living with dozens of others in the same property. If you refuse, the association can either enter forcibly (though I never recommend that for safety reasons), or instead get a court order requiring you to allow access — in which case you'll end up paying the association's attorney fees and costs. Don't let it get to that point. One thing that you should investigate, however, is whether your declaration of condominium requires the association to be responsible for 'incidental damage' caused by their repairs. If so, and if your unit is unusable while the work is being performed, they may be obligated to pay for a hotel during that time. Question: I live in a gated community governed by an HOA. After spending over $12,000 to have new, board-approved landscape renovations installed, the sprinklers on my property and three other adjacent homes have stopped working. This has been going on for seven weeks. The system is monitored by a software irrigation company and the homeowners pay for this in our HOA dues. The HOA claims there is no one available at this company to come and fix the problem. I have been hand watering since the problem started. Do I need to hire an attorney? Signed, B.A. Dear B.A., I am going to assume from your question that the association has a specific responsibility in the declaration of covenants to maintain the irrigation system throughout the community, including within the lots, and not just a monitoring responsibility. If that's the case, I don't think it's enough for the association to simply say 'no one is available to repair it, sorry.' Obviously, the Association can't be responsible for the simple fact that something breaks, but it does have an obligation to make a reasonable effort to get it repaired. The question will be, has the board acted in the manner that a reasonably prudent board in the same position would have acted? If your board is just throwing its hands up and refusing to call in another vendor to make the repair, I would strongly question why that's the case. Now, perhaps they have a contract where they pay a flat rate for repairs, and so they want to wait for the vendor to respond — that would at least provide some excuse for their inaction. But overall and given both the amount of money that you've spent, as well as the fact that your board seems so disinterested in repairing the irrigation issue, I do think you would be best off hiring an attorney. Ultimately, if the board completely abrogates its responsibilities, it could find itself responsible for replacing your landscaping — they're lucky you're making the effort to keep it alive! Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of "New Neighborhoods — The Consumer's Guide to Condominium, Co-Op and HOA Living." Email your questions to condocolumn@ Please be sure to include your location. This article originally appeared on Palm Beach Post: Condo wants to replace my pipes before they break - can I refuse?
Chicago Tribune
13-04-2025
- Business
- Chicago Tribune
Condo Adviser: Community associations are not required to comply with the Corporate Transparency Act
Q. I am confused about the current status of whether the Corporate Transparency Act (CTA) applies to community associations given recent reported developments. Has the government issued a final ruling to give clarity on the back-and-forth issue of applicable ability to community associations? A. The CTA saga has finally come to a close relating to community associations. It is now clear that community associations are not required to comply with the CTA. On March 21, 2025, the Treasury Department/FinCEN released a final rule that eliminates the beneficial ownership information (BOI) reporting requirement for domestic companies and U.S. persons, which means community associations are exempt from BOI reporting. If a community association has already filed a BOI report with FinCEN, it is still exempt from the requirement to update or correct any future beneficial ownership information. Further, U.S. citizens and residents are also now exempt from BOI reporting requirements even if they would otherwise be deemed to be beneficial owners of foreign reporting companies. Note that based on this latest evolution of FinCEN's regulations implementing the CTA, non-U.S. entities registered to do business in any U.S. jurisdiction remain subject to the CTA BOI reporting requirements. Q. I am a unit owner in a four-unit, self-managed condominium association. I am trying to sell my unit, but the board of directors refuses to provide the required 22.1 disclosure or issue a paid-assessment letter. What recourse do I have? A. Section 22.1 of the Condominium Act requires a condominium board to make available for inspection to a prospective purchaser, upon demand, certain disclosures enumerated in that section, which include a statement of the assessment account and a variety of other financial and non-financial disclosures. If a board refuses to comply with its obligations under the Condominium Act or the governing documents, such board members would be in breach of their fiduciary obligations and subject to a declaratory lawsuit forcing the board to comply with the Condominium Act and governing documents as well as a breach-of-fiduciary-duty lawsuit for damages. Hopefully a stern letter from a lawyer representing the unit owner in the planned sale results in compliance without the need for litigation. Q. I am a unit owner in a large condominium association with a board of directors that has increasingly been not complying with certain provisions in our declaration and bylaws and applicable law. For example, the board is not holding the annual meeting on the date required in the bylaws, not sending out a fiscal report to unit owners as required by the Condominium Act and not properly complying with the notice requirements for board meetings contained in the Condominium Act. What rights do the unit owners have when a condominium board is not complying with its governing documents and applicable law? A. For certain issues, the Condominium Act itself contains rights for unit owners. For example, if a unit owner meeting is not called in the time period required in the bylaws, 20% of the unit owners can submit a petition and call a unit owner meeting, such as an annual election, themselves. Also, if an annual budget increases by more than 15% of the previous year's budget, unit owners may initiate a series of procedures to reject the budget. Lastly, unit owners have the right to inspect certain association documents, which are listed in section 19 of the Condominium Act. For other situations where the board of directors is routinely not complying with formalities required in the Condominium Act or its governing documents, unit owners have the right to sue to obtain a court order to force compliance and/or file a breach-of-fiduciary-duty lawsuit against the board members individually for damages. Arguably more cost-effective, the unit owners can initiate a unit owner meeting to vote to remove a director(s) from the board. The requisite unit owner approval to remove a director is two-thirds of the total unit ownership, which can be a difficult threshold to achieve, but it is possible.
Chicago Tribune
16-03-2025
- Business
- Chicago Tribune
Condo Adviser: Corporate Transparency Act is on hold for community associations
Q. I have been trying to keep up with the different court rulings and government issuances relating to the Corporate Transparency Act (CTA) and whether it is currently in effect or not for community associations. The courts and government have given me whiplash on this issue the last few months. Is CTA compliance required for community associations or not? A. The CTA is on hold again, but this time it might be permanent for U.S. citizens and domestic reporting companies. A very recent Treasury Department announcement has suspended enforcement of the CTA and most importantly, signals the end of the CTA and its mandatory reporting requirements for condominium and community associations and co-ops. On March 2, the Treasury Department announced that it will (i) 'not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners'; and (ii) issue a 'proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.' The proposed rule narrowing the scope of the CTA to foreign reporting companies only has not yet been proposed or adopted but is expected to be released in late March. As such, the CTA is currently on hold for community associations (again), but with an expectation that U.S. citizens and domestic reporting companies—including condominium and community associations and co-ops—will be exempted from the CTA in the near future. Q. I am an investor unit owner in a condominium association. The association's management company has requested a copy of my tenant's lease, but I do not want them knowing my business. Am I legally required to give a copy of the unit lease to the association? A. Section 18(n) of the Condominium Act requires a unit owner leasing their unit to deliver a copy of an executed written lease to the association, or if the lease is oral, a memorandum of the oral lease, not later than the date of occupancy or 10 days after the lease is signed, whichever occurs first. Failure to do so is a breach of the Condominium Act and therefore, subjects to the unit owner to fines for the breach and/or the tenant to an eviction proceeding. Related to the leasing of condominium units, if a tenant is ever found by the condominium board to have violated the association's governing documents, pursuant to sections 9.2 and 18(n) of the Condominium Act, the unit owner may be levied a fine due to the tenant's conduct and/or the association may proceed directly against a tenant for eviction due to the breach by the tenant of the association's governing documents. Q. I live in a small, self-managed three-unit condominium association. Under Illinois law, is there a maximum amount a condominium board is allowed to increase condominium assessments per year, and unrelated, if I believe unit percentages allocated to each unit are not fair, can the board simply revise them? A. Under the Condominium Act, there is no maximum amount that a condominium board is restricted from increasing its annual budget, and thus assessments allocated to each unit. However, pursuant to section 18(a)(8) of the Condominium Act, if the sum of all regular assessments and special assessments payable in the current fiscal year exceeds 115% of the regular assessments and special assessments from the previous year, the unit owners may initiate a series of steps to reject the budget increase, which ultimately requires a majority approval of the total votes of the unit owners to reject the proposed budget at a properly called unit owner meeting. It must be noted there is an exception to the rejection rights. If the increase relates to an emergency which is defined in section 18(a)(8) as the immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners, the unit owners do not have the right to reject the proposed increase even if the assessments increase significantly more than 115% of the previous year's assessments. As far as revising unit percentages already set forth in the declaration, section 4(e) of the Condominium Act requires 100% unit owner approval to amend unit percentages.
