Updated Surplus Numbers

Updated Surplus Numbers
Updated Surplus Numbers: Actual surplus 2018 per audit was $85,163.
Boards 2011-2018 implemented policies and procedures with specific goals:
stabilize owner fees, achieve maintenance objectives and achieve annual budget surpluses.
Any surplus was retained by the association.
The board elected in fall 2018 decided to increase owner fees, even in view of a large potential surplus

Average fees prior to 2019

Average fees prior to 2019
Average fees per owner prior to 2019:
RED indicates the consequences had boards continued the fee policies prior to 2010,
BLUE indicates actual fees. These moderated when better policies and financial controls were put in place by boards

Better budgeting could have resulted in lower fees

Better budgeting could have resulted in lower fees
Better budgeting could have resulted in lower fees:
RED line = actual fees enacted by boards,
BLUE line = alternate, fees, ultimately lower with same association income lower had
boards used better financial controls and focused on long term fee stability

Tuesday, May 13, 2014

How the Illinois Association of REALTORS and your Illinois Senate are conspiring to increase your fees - SB2664


Bookmark and Share


Update January 2015
This Bill was vetoed by governor Quinn. However, it was possible to amend it and then reintroduce it in the 2014 legislative session. That did not happen and so this particular bill is dead. HOWEVER, it is possible this will be reintroduced as a new bill in 2015. So condominium boards, owners and management need to remain vigilant.

Original Post, May 13, 2014
There is a bill passing through the Illinois General Assembly which is vigorously supported by the Illinois Association of Realtors and which will raise the fees of condominium owners. A link to the text of this bill is included in this post.

The bill, sponsored by Democrats Hastings and Yingling in the General Assembly will force other owners in Condominium Associations to pay higher fees so dead beat owners and banks can sell distressed properties while purchasers can avoid paying fees accrued in past due accounts. It will result in higher condominium fees.

This number of this bill is SB2664.

It has the primary purpose of limiting the ability of the owners in condominium associations from collecting past due fees. In other words, these past due accounts will become noncollectable under law. These noncollectable amounts will pass to the other owners in the condominium association who will pay higher fees to make up for these dead beat accounts.

The Illinois Association or REALTORS (r) is overjoyed!

I quote the National Association of REALTORS website, which is thrilled to pass these past due fees to other owners so your friendly, neighborhood REALTOR(r) can make a sale:

"Senate Bill 2664 stops the current practice in which purchasers of distressed condominium units are stunned to discover at closing that they owe back assessments to the association—sometimes in sizable sums. These back assessments may also be loaded up with special assessments and attorney’s fees incurred and unpaid by the previous owner. Senate Bill 2664 protects innocent owners from being put in this position and eliminates the ambiguity that is causing sales of distressed units to be impeded or delayed, often resulting in litigation or a threat of litigation."

No mention of you or I or any of the other owners who have to cover the unpaid fees of these dead beat owners. Apparently the "victim" here is the poor, hapless REALTOR(r) who can't make a sale because the potential buyer isn't willing to cover these debts. How to solve this? No problem, we'll simply change the Illinois Condominium Act and pass these costs on to the other owners. Of course these other owners have empowered their management and boards to aggressively and properly collect these past due fees which are a legitimate obligation. I don't think most owners want to pay their neighbor's fees for them. But the Realtors(r) think a change to the Illinois Condominium Act which takes these costs and places them upon the owners who do pay their monthly fees is a good solution. This is all  to get a quick sale. I also think most condominium owners would agree it's preferred to have all owners pay their fees and obligations rather than walk and pass the bills to the other owners. But that apparently interferes with sales which in turn reduces annual commissions for the Realtors (r). 

The Realtor's and the Democrats have decided that it's better to stick the "innocent" owners who pay their fees with these costs which include the unpaid fees of the deadbeats. Yes, someone else will have to pay to keep the association maintained, pay for that new roof, keep the lights on, the streets plowed, the water running, etc. etc. Of course, even should this terrible bill be passed by the Illinois legislature, all of the remaining owners will share in these higher fees and that includes the new buyers. 

And some of our owners ask "Why are my fees so high" and "Where does the money go?" 

Do you want to pay the legal costs and fees of dead beat owners so a Realtor(r) can ring up more sales? If not, then do the following:


CONTACT YOUR REPRESENTATIVE AND SAY "NO" TO THIS TRANSFER OF WEALTH FROM CONDOMINIUM ASSOCIATIONS TO REALTORS(r).


Here is my suggestion:

If Realtors(r) really want to remove an impediment to a sale, they should back a bill in which a portion of their fees goes toward paying these past due accounts. they would then be helping the truly "innocent" owners who are being financially screwed by these dead beats. 

How is that? The other owners pay higher fees to make up for the fees which cannot be collected from the dead beats under current Illinois statute. This bill would easily raise condominium fees by one or more percent per year. It would also make it far easier for potential buyers to make really stupid decisions. Can the buyer afford the cost of the loan, fees and future fee increases, real estate taxes as well as the cost of updating and maintaining HVAC systems, etc.? These details escape the majority of Realtors(r) with whom I have had a conversation. It is all about the sale and extracting the highest possible fees. Let the other owners hold the bag!


Think about that!


Clicking will open a  New Window> Text of Illinois SB2664


1 comment:

  1. When is bill going to pass? How long will the debate take?? how close are they?

    ReplyDelete

Please leave a comment!

Note: Only a member of this blog may post a comment.