Q. I am a unit owner in a condominium association. Our board of directors retained a new property management company to manage the association. The management company has been making many changes such as adding fees for paying assessments, discontinuing the community board and no longer communicating regularly with the unit owners. I am dissatisfied with the management company’s performance. Any suggestions on how to handle this with the board and/or management company?
A. Pursuant to Section 18.4 of the Condominium Act, condominium boards have the authority to retain a management company to manage the affairs of the association. Accordingly, there is almost always a written management agreement that sets the scope of services the management company will provide to the association and the business terms of the relationship.
Unit owners are entitled to inspect and request a copy of the management agreement pursuant to section 19 of the Condominium Act to review what the board agreed to in terms of fees and policies. Be mindful that managing agents take direction from the board, so any change in policies is more likely attributed to a decision of the board rather than the managing agent. Also, unit owners are entitled to attend open board meetings and should do so to give input to the board during the open forum portion of the board meeting to voice their concerns.
Q. I am a unit owner in a low-rise Chicago condominium association. Over the years, we have had many new unit owners move into the association that use the common areas in violation of the rules by doing things like allowing children to play in the driveway and piling extensive amounts of personal property in carports and onto balconies. Recent boards have chosen to not enforce the rules because board members are part of the group of owners who regularly violate the rules. What can unit owners do regarding this situation?
A. The first step should be for the group of concerned unit owners to write the board and management outlining their issues and demanding enforcement of the governing documents. Board members have a fiduciary duty to enforce the governing documents.
If that fails to accomplish a positive result, depending on the relative voting power between those unit owners who follow the rules and those owners who do not follow the rules, maybe the unit ownership can galvanize to elect directors at the next annual meeting that share of vision of enforcing the governing documents, or submit a petition signed by 20% of the unit owners to hold a unit owner meeting to remove problematic directors from the board, which requires two-thirds unit owner approval in most governing documents. As a last resort, unit owners could file a declaratory lawsuit against the association and individual board members seeking a court order to force the board of directors to enforce governing documents.
Q. The board of directors of our condominium meets at regularly scheduled quarterly board meetings every three months. Practically speaking, expenditures many times need to be approved between board meetings. I believe board members are emailing each other for an informal vote outside of a board meeting and then at the next board meeting, ratifying decisions made outside of the board meeting. Is this proper?
A. Pursuant to Illinois case law via the case captioned Palm v. 2800 Lake Shore Drive Condominium Association, board members may not conduct email voting/canvassing outside of a properly called board meeting. All board discussions and decisions must occur at an open board meeting unless a statutory exception applies.
Therefore, ratification of a board decision made improperly outside of a properly noticed board meeting is not proper. Prospectively, the board can address their practical problem by either delegating decision-making authority to a single board member to make decisions up to a certain dollar amount in between regularly scheduled board meetings, or notice a board meeting on at least 48 hours’ notice when needed. Remember, board meetings can be held via telephone conference or video conference, so they can occur at the convenience of the board members if properly noticed.
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