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When units are owned by trusts, corporations and partnerships.

Q. Only owners are permitted to serve on the board of our association. Each year, the association has owners complete a census form identifying the owners of the unit. However, our association runs into the same problem in many of our elections to the board. That is, we elect people who we later find out are not an owner. Do you have any suggestion as to what we can do to prevent this?

A. When candidates come forward to run for the board, all associations should confirm that the candidate is an owner. Many associations perform tract searches to identify the owner. If the tract search reveals that a unit is held in trust, or by some other entity, the board will need to obtain additional information.

If the unit is owed by a trust, for example, the board should require the candidate to produce a copy of the trust agreement. If the trust agreement reveals the candidate is a beneficiary of the trust, they are an owner and eligible to serve on the board. One of the reasons title is held in a trust is to keep the "real" owner off the public record. As such, the trust is not going to identify the beneficiary to the board based solely on a letter from the board.

If a unit is owed by a corporation, limited liability company or a partnership, the board needs to review the declaration to see who may be elected to the board from such an entity. Appropriate documentation will then need to be requested from and submitted by the owner of record to support the candidate's eligibility to run for and serve on the board.

As an aside, the association should not rely on census forms completed by "owners" as its record of owners of the units. Owners frequently provide incorrect information; not intentionally, but through a lack of understanding. Information from the public record, like a deed, or information in a tract search, should be maintained by the association.

Q. We are a very small condominium association, and there just are not a lot of decisions the board needs to make during the year. Are there a minimum number of times the board must meet under the law?

A. The board of a condominium must meet at least four times a year. This requirement also applies to common interest community associations. Associations that meet only four times a year typically hold the meetings quarterly. Many association boards meet more frequently; some actually meet on a monthly basis.

The actual number of meetings held each year, over and above the required minimum, depends on the business that needs to be conducted and when.

Q. A unit in our condominium association was sold in a foreclosure sale. At the time of the sale, there was a considerable assessment balance. However, the association never initiated a collection action against the former owner. Can the association still collect the balance from someone new?

A. Because the association did not initiate a collection action against the former owner, the association cannot recover assessments from the purchaser at the judicial sale (under the "six-month rule"). The six-month rule is described in section 9(g)(4) of the Illinois Condominium Property Act.

The foreclosure extinguished the association's lien against the unit. As long as the assessment obligation of the owner was not discharged in a bankruptcy, the association can still pursue a breach of contract action against the former owner to collect the unpaid assessments that accrued through the date of the foreclosure sale.

* 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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Title Annotation:Real Estate
Publication:Daily Herald (Arlington Heights, IL)
Date:Apr 6, 2019
Words:642
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