HausFS often encounters smaller associations who, rather than rely on their elected board, make most of their decisions by an owner vote.  While this would seem the neighborly and democratic way to run a small building, it can create liability problems for board members.

The elected board owes a "fiduciary duty" to the association.  This means that they must put the interests of the entire association above their own personal interests.  Holding off on repairing a roof might save everyone money, but it would not be in the best interests of the association to delay required maintenance.  It's the board's responsibility to make difficult decisions that, while they may not be popular with the owners, must be made to preserve the integrity of everyone's investment.

Individual owners do not owe a fiduciary duty to the association.  Therefore, they are free to vote in a way that protects their own self-interest rather than the interest of the association on the whole. Owners generally outnumber board members.  However, it is ultimately the board that is responsible for the decisions made and any legal consequences (not to mention most of the effort that is required to follow through on a vote) .  It is in the board's best interests to handle the decision making and reserve all owner votes for the limited number of issues that legally require a vote of all owners.

Mediation (or alternative dispute resolution) could help you to resolve a problem with your board or neighbors. Benefits include saving money on legal fees and court costs and a less adversarial approach to problem solving.

Many condo declarations now include a mandatory arbitration clause that can help associations to avoid addressing conflict through the courts.

The Center for Conflict Resolution offers free mediation services.  See their website for more information!

The Cook County Treasurer will soon release 1st installment 2010 property tax bills with an extended due date of April 1, 2011. 

The extended due date is a one time change due to recent legislation passed by the Illinois Legislature and by law will revert back to the March 1 due date for subsequent years.

The 1st installment tax bill is an estimated tax bill.  The amount due will be 55% of the prior year's total tax.  Any change in the 2010 tax bill (due to changes in exemptions, assessment value,  tax rate or equalization factor) will be reflected on the 2nd installment bill issued in the fall.

Courtesy of Elliott & Associates Attorneys, P.C.

Smaller buildings, in an effort to keep expenses down, often choose to assign building "chores" to owners rather than pay an outside service to handle the tasks.  Cleaning, lawn maintenance and snow removal generally end up on this list.

There are several reasons why HausFS recommends that associations hire an outside service to handle these maintenance items:

  1. It can be difficult to get all owners to participate, which means that certain owners may find themselves picking up the slack for their neighbors.  When the work is outsourced, everyone contributes through payment of assessments. 
  2. Entrusting physical labor to owners can result in injuries and insurance claims against the association.  Hire contractors who can provide proof of insurance for their business and you'll eliminate liability issues for your association.
  3. The Board has a fiduciary duty to provide for the maintenance of the building.  Individual owners do not. Attempting to assign chores and enforce compliance through fines could be construed as a breach of fiduciary duty.  Board members need to consider the well-being of the entire association, not just their own pocketbooks.

The last thing many owners want to do after a hard day's work and handling their own personal chores is to clean up after their neighbors.  Outsourcing maintenance for your building makes life a little easier for everyone.

The city offers a special program in which property owners share half the cost of sidewalk replacement.  Owners pay $3/square foot for sidewalk replacement.  This is well below amounts typically charged by contractors.

I recently signed up for the program for our 4-unit building through our Alderman's office.  Once signed up, a contractor is sent to measure the sidewalk to be replaced and an invoice is sent to the building.  Payment must be made within 60 days or the property will be dropped from the list.  The program is offered annually on a first-come, first-served basis and generally fills up quickly.  If you are dropped from the list, you will need to reapply in the following year.

For more information and to apply, see the city's of Chicago's website or contact your Alderman's office.

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