Is it legal for the board to levy "automatic" fines?

At the direction of the board, Management issued a "Proposed Fining Schedule" on January 14, 2019.

The schedule includes an "Automatic Fine", which means the owner is not provided with the opportunity to a hearing before the levying of the fine. This would seem to be in violation of Illinois Law. Specifically, the Illinois Condominium Act stipulates that the board may impose charges "after notice and an opportunity to be heard , to levy reasonable fines for the violation of declaration, by-laws and rules and regulations of the association."

The proposed fining schedule states (emphasis is the association's):

"All variances to the Rules and Regulations begin with a Courtesy Notice - which carries no fine. Fines are assessed every 14 days thereafter for non-compliance. The exception to this is the yearly census collection. Failure to submit any of the requested census documents by the established due date will receive an automatic $50 fine. Failure to return the requested documents within 14 days of this fine will result in the matter being sent to the Association attorney for collection.  Lastly, any Owner who is sent to the Attorney will be responsible for the associated legal costs."

According to the Illinois Condominium Act:

(765 ILCS 605/18.4) (from Ch. 30, par. 318.4) 
    Sec. 18.4. Powers and duties of board of managers. The board of managers shall exercise for the association all powers, duties and authority vested in the association by law or the condominium instruments except for such powers, duties and authority reserved by law to the members of the association. The powers and duties of the board of managers shall include, but shall not be limited to, the following: 

(l) To impose charges for late payment of a unit

owner's proportionate share of the common expenses, or any other expenses lawfully agreed upon, and after notice and an opportunity to be heard, to levy reasonable fines for violation of the declaration, by-laws, and rules and regulations of the association.

I've sent an email to management about this and asked for a clarification. I also asked if the attorney had been consulted before the board made this decision. If so, I asked for a copy of the attorney's determination.

State of the city address, 2019

The Mayor presents the state of the city address.   I'm pleased that all of the work done by our association over the past 10 years has allowed us to keep pace with the growth of the city.

Special thanks to Sean, Claudia and Judy.


Click to open the video:

City of Wheaton - State of the City Address - 2019

Board members need to prepare and be attentive

In order for Homeowner's Associations to succeed, owners must be responsibly involved and boards must be competent and willing to fulfill their duties as fiduciaries.

One of the aspects of being a board member is to be prepared for meetings. At BLMH that required careful reading of a monthly packet provided by management. That packet may be 100 or more pages in length.  It also requires that all board members be attentive at meetings and it may also require that they take notes and use critical thinking skills.

However, I can say as a former HOA board member and president that one cannot make board members do what they refuse to do. I learned this the hard way over a period of years and the lessons learned and the intransigence of some board members was instrumental in my decision to depart from the board in September 2018.  The issues were far reaching and had I stayed in 2019 there would have been open warfare.  That would not have been good for the Association.

An example of a failure to be prepared

During the January 2019 HOA meeting the board reviewed the letter from the city pertaining to transitioning control and responsibility for our water mains to the city.

This letter was included in a packet provided by management to the board about six months ago. That was specifically at my request, as president. During the meeting I gave a brief explanation and also gave the board an opportunity to study the letter, deferring deeper discussion to a later meeting. The letter was subsequently discussed by the board at a later meeting, but was tabled due to lack of interest and enthusiasm by some board members.

I provided a brief explanation of the letter in the August-September 2018 Newsletter to residents, owners and of course, to the board.  I pointed out that certain decisions would have to be made by the board of 2019. I also acknowledged that I was departing the board and would not be one of those  making the decisions.

During the Annual meeting in September I provided a summary of the state of the association to owners and to the board. That address included the water main issue and numerous visuals I prepared on my PC and projected on a screen (I provided the technology).  Several owners asked questions about the water mains and this project, which I answered.

Yet, when the board decided in January, 2019 to discuss this,  it was reported by an owner that one board member complained that he/she did not  understand where this letter came from, etc.  That board member had been in attendance for all of the presentations listed above.

So what happened?

One issue is most board members did not keep notes of the meetings; when the meeting is over, it is up to individual memory to keep track of "to-do's", issues, etc. Furthermore, for some time, there have been two concurrent meetings going on. This was not intentional by the board. However, a faction led by a previous president decided to ignore the current president and would conduct side bar conversations. This occurred intermittently during meetings from 2013 to September 2018. That group refused to alter their behavior.  This occurred again during the annual meeting. While I was giving my presentation several board members were facing away from me and the screen. Two were engaged in a conversation distinct from the presentation. This was captured on video.  As a consequence they did not get the benefit of my explanation about the issues facing the board in making a decision about the water mains.

I would suggest that a lack of preparation and inattentiveness is why some board members don't understand critical issues and even some of the forms provided in the management packet. There have been numerous explanations to the board during the my eight years of service. But some board members were more interested in running their personal agendas.

Those agendas showed up in many ways, from lack of attention to belligerence and even issues pertaining to rules enforcement.

I had very good reasons for departing the board, some far more consequential and serious than the water main project.

"This will be a long, drown [sic] out process"

The president's message in the January 2019 newsletter stated this about the negotiation with the city about our water mains:

         "It appears that this will be a long, drown [sic] out process."

It is my understanding the board approved moving forward with a letter to the city and directed management to proceed. This was during the January 10 meeting. The vote was 6 in favor, one against.

Will this be a long process? In fact, no one really knows how difficult this will be. I was the only board member involved in this process from 2013 and well into 2018. Why so many years? First, I had to get the board to agree this was worth doing. In fact, do date it has cost the association nothing, because I am the one who put in the hours to formulate a viable plan, met with the City engineers, discussed with the mayor and city council and so on.

As I have stated previously, the board member who is the current president took the position repeatedly that this was impossible; "It will never happen." The "locksteppers" echoed her refrain. Fortunately, the president in 2013 was in favor of proceeding so as to see what could develop. "Nothing ventured, nothing gained." So I was able to convinced the board to let me proceed because the association had nothing to lose, and it was my position we had a lot to gain. I was going to do all of the work for gratis (nothing unusual there!). In fact, all correspondence with the city was on my letterhead and did not reference the board.  So if things became difficult or contentious the board could blame me as an owner and avoid any Association involvement.

In fact, I'm the only one who has any idea of just how difficult this may be because I'm the only board member who was involved in the process.

Why did it take so long (2013 to 2018)?  First, I had to shift this association from the band-aid approach that was used for water mains for the years previously. I was aware that no city would take over a water main system which was in disrepair or failing. So I had to convince the board to spend funds when making certain water main repairs to replace large sections. This is common sense when working under streets or driveways. However, you would be surprised by how resistant the old-timers were to this. We were fortunate to have a younger, qualified president in 2013. In fact, he has a CPA.  As much as he didn't want to spend the money, he agreed that replacement was the way to go.

So we began in 2013 and since then we have replaced hundreds of feet of water mains, several fire hydrants and B-valves. The city monitors this work and requires permits. So they are fully aware of our efforts. Which is why in 2018 the City Manager sent me a letter which indicated the city was willing to proceed "based upon the history of maintenance" of the water mains.

I cannot overstate the hundreds of hours I spent on this initiative. I made it a point to be present for every water main replacement and discussed all related decisions on site with management, maintenance and the plumber.  Decisions were made on a long term basis, not as short term, stop-gap measures favored by previous boards. In other words, where prudent a band-aid approach was not used. Instead a replacement approach was used.

To move this forward I made certain that all were fully informed. Because I was president, architectural (projects) director and a motive force in the association newsletter I made a special insert for the August-September newsletter which was issued to all residents and owners. I also made a brief presentation to the few owners who attended the annual meeting. I didn't ask anyone's permission. I had enough of the do little, stonewalling bullshit of entrenched board members. ("No one reads the newsletter" to quote the current president).

I made the special report in the newsletter because I had announced I was not running for the board, and because I had a concern the 2019 board would drop this out and walk away from the work. They have proved themselves to be "penny wise and pound foolish" as well as lazy for many years, choosing pet projects and avoiding many tasks.

Here is what was given, in writing to the residents and owners as part of my final President's Message:

"Do you want your fees to remain stable? It must be decided Who will maintain the water mains.  There are some really significant things going on. For example, after 5 years of effort and discussions with the city of Wheaton there is a real possibility of turning over our water mains to the city, who would then maintain them. The city is waiting for a response from our association. Board member positions about this have ranged from “wonderful” to “ambivalent”. Nevertheless there has been substantial progress on this “impossible” project. A change in our approach to water main maintenance has facilitated this and we now have about 500 feet of new water main. The city will not take over infrastructure in disrepair. If your board fails to pursue this with adequate resources and vigor, then this will never happen. Over time failure to transfer to the city is a guarantee to cost each owner at least $4,500 via fees.  If this initiative fails then owner fees will need to be adjusted. You need to let the newly elected board know what priorities they should establish and follow. The last 8 years have proven that fees can be stable while maintaining and improving the association. Come to the annual meeting!"

Looking ahead, I did discuss the potential downsides of the transfer to the city with management. However, that's the purpose of negotiating. It will mean giving up some control, but it will save out owners $millions over the years. So what will we be giving up? That's to be discussed with the city. Asking the right questions will be critical. But that's what boards are supposed to do. Will it be perfect? Of course not. But will the board be willing to compromise $millions, or will they prefer to raise fees?  That should not be a difficult choice. But we've had control freaks as boards in the past who raised fees annually by 7% so as to fund a special project. That former president is the current president. So, choosing higher fees is a real possibility.

"We will no longer film the meetings"

Screen Shot - My Board video Nov 9, 2017
 That's my PC - I was adjusting the camera.

I received the January 2019 newsletter. This is the first issued by the association since the one published for August-September 2018, when I was on the board.

The President's Message in the newsletter included this statement:

                               "We will no longer film the meetings."

The Illinois condominium property act allows such recording as follows:

 (765 ILCS 605/18) (from Ch. 30, par. 318) 

(C) that any unit owner may record the proceedings at

meetings of the board of managers or portions thereof required to be open by this Act by tape, film or other means, and that the board may prescribe reasonable rules and regulations to govern the right to make such recordings;

In fact, one or more owners were doing the recording. The newsletter implies that this was a board function. It never was. I and any other owners who filmed the meetings did so using our personal technology.  There has never been a board "approval" of such recording, nor is it necessary.  It is no secret that some board members disliked the recording of the meetings.  

I began recording the meetings in 2007 or 2008 and I recorded most meetings that I attended from then until the annual meeting of September 2018. I began recording as an owner and I continued as an owner function, even after I became a board member. There were objections by owners and by various board members throughout that period.

I had two interests. One was to tone down the rancor in the meetings. The other was to hold the boards accountable.

I began recording when the meetings were quite contentious and at times uncivil. It is amazing how people will modify their behavior when they know their every word will be a part of a recording. I took steps to minimize those captured within the field of the video, focusing on the board.

Recording brought objections from several board members. Some boards don't want to be held accountable. I am convinced that some of our boards ducked by discussing issues in closed (executive) session instead of open session with owners present.

As a board member I continued to video the meetings. I consider these videos to be my personal property. I provided the technology and the digital storage. It was my initiative and I asked for no permission. When boards attempted to prevent me I quoted the Illinois condominium act.

I'm not surprised the current board president made the statement that meetings will no longer be recorded. She disliked my recording of the meeting and said so. Some interesting things occurred and were captured.  I think I've got a recording of her giving me a verbal "F@ck You" when I was president and she was rules director.   

I suspect that's why one of the first actions of the new board was to attempt to gag me and prevent distribution of the videos.

(c) 2019 N. Retzke