Board can set up fund for miscellaneous purchases

 
Posted10/16/2021 7:00 AM

Q: My condo board has a question for your column. With meetings every other month, my board recently experienced a conundrum. We diligently work toward taking all actions in open board meetings. We approved a purchase for our workout room. Pricing increased following the meeting, and the amount approved by the board was less than the actual cost. To follow the letter of the law, we would have to wait two months to act.

It seems the Illinois Condominium Property Act would not be intended to hamper boards from making minor decisions regarding property improvements/enhancements between meetings. Examples we thought of were simple things like an umbrella stand, small bookcase for a lending library, small decorative items.

 

Are condominium boards permitted to put small amounts into their budgets for items like these, make the purchase, and then report on the purchase at the next board meeting? Would this be permissible under the Illinois Condominium Property Act?

A: The board can absolutely have a line item in its budget for these miscellaneous-type expenditures. However, including items in a budget is not the same as approving the actual expenditure. The approval of the actual expenditure, even if for a budgeted item, needs to take place at an open board meeting.

However, as an alternative, the board can adopt a resolution at a board meeting that delegates authority to a board member to make such expenditures, say, at a cost not to exceed $500, without having to approve each expenditure at a board meeting. The board's resolution should require the board member to report on the expenditure at the next board meeting.

Q: Our condominium has a recorded declaration, but I do not see any recorded bylaws, or an exhibit in the Declaration identified as bylaws. Is this an issue?

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A: The administration of every condominium is governed by bylaws. Section 17 of the Illinois Condominium Property Act provides that the bylaws may either be embodied in the declaration or in a separate instrument that is attached to and recorded with the declaration. In your situation, the provisions of what might generally be in a separate bylaws exhibit to the declaration may actually be embedded in the body of the declaration.

Q: Can we amend the bylaws for our condominium to provide for three-year board terms?

A: No, a three-year board term would not be permitted for a condominium. The Illinois Condominium Property Act provides that no member of the board or officer shall be elected for a term of more than two years. However, officers and board members may succeed themselves. Note that the Illinois Common Interest Community Association Act provides that no member of the board or officer shall be elected for a term of more than four years, and officers and board members may succeed themselves.

Q: How can the owners in our condominium association call a special a meeting of the owners?

A: Special meetings of the members can be called by the president, board of managers or by 20% of unit owners. The owners can present a call for a meeting to the board, signed by the necessary number of owners. The call for a meeting needs to describe the purpose of the meeting.

Q: The declaration for our condominium is from the late 1970s. I understand there have been many changes to the Illinois Condominium Property Act since then. Can the association amend its declaration and bylaws to conform to these amendments?

A: Yes. The Illinois Condominium Property Act provides that the board of directors, without owner approval, can amend the association's condominium instruments to bring them into compliance with the act.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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