Q. We live in a homeowners association community where we are trying to sell our house. We need to provide any buyer with a copy of the declaration, bylaws and rules and regulations. We requested the documents from the management company and were told there was a $200 fee to obtain them. Is a community association obligated to provide these documents free of charge to owners who already pay assessments?
A. Section 1-30 of the Common Interest Community Association Act requires community association boards to provide the declaration, bylaws, articles of incorporation, annual reports and rules and regulations to owners for examination and copying and the board may charge a reasonable fee for the cost of retrieving and copying such records.
While a $200 fee may seem high to some, it is still within the realm of reasonable.
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Alternatives for owners to obtain such documents are to ask their neighbors for a copy of those documents or, in the case of recorded documents, either request the title company that will be used for the sale of the home to retrieve a copy of them or owners are free to go themselves to the Cook County Recorder of Deeds to retrieve copies of recorded documents for a nominal fee.
Q. Our condominium association is about 20 years old, and over the years there have been board members who were not unit owners, such as a wife/husband or partner who lives in the unit. In the last election, a unit owner raised an issue of a board member who allegedly does not have an ownership interest. The board’s response was the unit owner was a trust, and the trust authorized the board member to represent it on the board. Is the board being responsible for not fully investigating this issue?
A. Section 18 of the Condominium Act requires that the board of directors be comprised of unit owners. Nonunit owners may not serve on a condominium board, which means that a board member must have an ownership interest in the unit or be an eligible person to serve on the board for an entity that owns the unit.
When a unit is owned by individuals, the unit owner must be listed on the title to prove an ownership interest. When a unit owner is a corporation, partnership, limited liability company or trust, the provisions of the bylaws will govern who may represent such entities on the board. Most commonly, bylaws state that a corporation, partnership or limited liability company may be represented by a designated officer (or member for a LLC) and bylaws usually require a beneficiary of a trust to be the eligible person to serve as its representative on the board.
Boards should use reasonable diligence to confirm if a board member is a unit owner or is a properly authorized person to represent an entity.
Q. I am the treasurer of a condominium board and am wondering if there are any Condominium Act provisions regarding when expenses should be charged to an operating account versus a reserve account.
A. The Condominium Act requires condominium associations to maintain separate accounts for operating and reserve funds, but there is nothing specific in the statute discussing how a condominium association should use funds in those accounts. If any, such provisions would be contained in each individual association’s bylaws.
An operating account is commonly used to hold funds for the day-to-day administration of the property and funded with money collected pursuant to an adopted budget. Thus, budgeted items would be paid out of the operating account.
A reserve account commonly holds funds for future capital expenditures, deferred maintenance and unexpected contingencies. Thus, reserve funds are commonly used to pay for expenditures relating to the planned projects for the maintenance, repair or replacements of the common elements, or unexpected contingencies.