Q: I am the board president of a small, self-managed condominium association. We recently had a common element pipe burst causing significant damage inside a residential unit. What is the association responsible for repairing and replacing versus the unit owner’s responsibility to repair and replace?
A: Pursuant to section 12 of the Condominium Act, condominium associations are required to purchase property insurance as well as general liability insurance. For a casualty loss due to a burst water pipe, the association is responsible for repairing and replacing up to the bare walls, floors and ceilings of the unit, which means the drywall plus a primer coat of paint. Pursuant to condominium declarations, unit owners are responsible for decorating within their unit and insuring the contents of their unit for a casualty loss including betterments and improvements and wall, floor and ceiling coverings such as hardwood floors, painting or wallpaper.
Q: I live in a condominium association where the board of directors only holds four board meetings per year and does not meet with notice to the unit owners any other times to vote on association contracts or discuss board business. My concern is the board members are secretly discussing and conducting board business throughout the year in between board meetings, either in person, telephonically or over email, without providing notice to the unit owners. A board member even casually acknowledged the board discusses issues as needed in between board meetings when explaining how the board administers the property meeting so infrequently. Any insights you can provide?
A: Section 18(a)(10) of the Condominium Act states that condominium associations shall meet a minimum of four times yearly. Thus, a condominium board meeting four times yearly is meeting the minimum standard.
However, boards must still comply with other applicable laws, such as the Illinois case of Palm v 2800 Lake Shore Drive Condominium Association Illinois case (Palm II), which prohibits a condominium board (i) from emailing each other to discuss board business, (ii) from meeting to discuss association business without notice to the unit owners or (iii) from conducting email votes in-between board meetings. To avoid a Palm II violation, boards commonly delegate decision-making authority to a single board member or a managing agent so contracts and expenditures that arise between board meetings can be properly handled.
Therefore, a condominium board only meeting four times per year should have procedures in place to properly handle business that arises in between board meetings that is consistent with the law, or the board members could be unintentionally breaching their fiduciary duties by not complying with applicable law.
Q: I am a shareholder in a residential cooperative and was wondering if the requirements of the Common Interest Community Association Act (CICAA) apply to residential cooperatives. If not, what statutes govern a residential cooperative?
A: Residential cooperatives and condominium associations are not governed by CICAA. In fact, Section 1-5(j) of CICAA expressly defines a common interest community as real estate other than a condominium or cooperative.
Residential cooperatives are governed by the Business Corporation Act of Illinois, applicable corporate law and the proprietary lease of the cooperative.
Got a question for the Condo Adviser? Email ctc-realestate@chicagotribune.com.
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