Friday, March 23, 2007

The Balcony: Condo Association or Owners?

"Who's line is it anyway?" is a terrific comedy improvisational television game show that features “players” making up lines and actions depending on one theme. Say you throw out “new home buyers in Chicago” and the players make up a hilarious scene of bumbling through the home buying process. Maybe Al Capone is your Realtor… you get it? Hilarious.

But when it comes to common areas, limited common areas and your condo unit’s repairs and maintenance you don’t want to hear; whose line is it anyway? As an owner, you want to know who has the responsibility, what are the resolutions, who are the players when it comes to issues concerning your condo building.

I recently listed and sold a re-sale condo in Chicago’s Ravenswood neighborhood. When gathering information from the owner about the building and her condo, she disclosed the management company indicated there was a balcony violation and they were taking care of the issue. The violation was stated in the meeting minutes as well.

However, it was not determined what the cost was and how the association and owners were to pay for it. In fact, no one knew clearly how this was “taken care of”. My client, the unit owner, was not directed by the association Board or building management that she was responsible to pay any special assessment, nor had this issue been voted on by the association Board at the last Board meeting.

Unfortunately, no one seemed to take the lead in this case and my client (plus me and our attorney) were sent scrambling to provide the correct information to the potential purchaser of the condo. This delay in information concerning the repairs, and who would be responsible, jeopardized the sale of the condo. We eventually received an estimate of repairs at the eleventh hour, and my client graciously provided a credit for the estimated amount at the closing table.

Why did this have to happen? Several reasons: First, the Board upon learning of the violation from the condo management company did not clearly order the management to take action and give them a deadline for resolution. Secondly, the management company, although a professional and legally bound agent to the association Board, was less than proactive in directing the Board in a resolution to the violation. They are the pros… they should get all over it in the interest of the condo association. Third, the individual unit owners with balconies accepted that the Board and management company took care of the issue. Problem was they assumed this for six months!

To avoid these issues of mismanagement, you have to be involved in your building and know who the players are.

1. The Board is the most important piece. As an owner, if you serve on the Board or not, you must insist on regular Board meetings and attend them when possible.

2. If you have a management company, they must be proactive with advice on running the building effectively. They are the pros and there are good managers out there. Call me for recommendations.

3. The Board must meet in a manner proper to the by-laws and make the tough decisions. Certain decisions are the domain of the elected Board and some will require a certain percentage majority of entire ownership vote.

In the case of my last listing, both the Board and the management should have been more proactive in their efforts to resolve the balcony violations. Secondly, depending on the total cost of the repairs it was up to the Board, and possibly the individual unit owners, to vote on how to pay for the balcony repairs. The balconies are a Limited Common Element. They are covered by the common insurance of the building. Repairs to the balconies do not necessarily solely fall on the individual unit owners that have private rights to the Limited Common Element balconies. The Board and unit owners could vote to subsidize the repairs with reserve funds, assess a special assessment to all unit owners or decide the individual unit owners that have rights to the balconies should pay the full amount.

The Board, management and unit owners can’t point fingers and ask, “whose line is it anyway?” They must resolve this problem in accordance to the by-laws of the condo association. If you don't know who is responsible for what, retain a condo association attorney to advise on such matters.

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