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, January 22, 2019

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


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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.

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