Raising monthly Assesments (illinois)

Robert, first check with your declaration of covenant to see if it has anything to say about maximum fee increases. Here is a typical clause:

B. From and after December 31, 1994, the maximum annual assessments may be increased by more than 10% above the maximum assessments permitted for the previous year by a vote of two-thirds (2/3) of the total votes of the Members who are voting in person or by proxy, at a meeting called for this purpose.

You are right to ask about the Illinois law. There may be a statutory limit that will impact your decision.

You can trust your property manager, but always verify independently the advice you receive.

Hi Robert,

I am in an IL HOA and we have received the same advice (15%) max, but it was a recommendation –keeping below 15% was the guideline used. When we were several years old, we realized we needed to increase annual assessments due to inadequate reserve funds. Since then we have had increases around 10-12% (long story here...moral is to immediately begin funding reserves per reserve study AND don’t listen to a PM – our prior one - who tells you, as a new board, to keep budgets flat so that owners will be happy).

With your question I checked our Declaration and IL Condo Act. Please see pg. 16 from the Act – does this apply?

http://www.ksnlaw.com/resources/index.html

(this pdf version of the Act is easier to read than the format used on the State of IL website)

Copied here:

Sec. 18. CONTENTS OF BYLAWS
(8) (i) that each unit owner shall receive notice, in the same manner as is provided in
this Act for membership meetings, of any meeting of the board of managers concerning the adoption of the proposed annual budget and regular assessments pursuant thereto or to adopt a separate (special) assessment, (ii) that except as provided in subsection (iv) below, if an adopted budget or any separate assessment adopted by the board would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and separate assessments payable during the preceding fiscal year, the board of managers, upon written petition by unit owners with 20 percent of the votes of the association delivered to the board within 14 days of the board action, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the budget or separate assessment; unless a majority of the total votes of the unit owners are cast at the meeting to reject the budget or separate assessment, it is ratified, (iii) that any common expense not set forth in the budget or any increase in assessments over the amount adopted in the budget shall be separately assessed against all unit owners, (iv) that separate assessments for expenditures relating to emergencies or mandated by law may be adopted by the board of managers without being subject to unit owner approval or the provisions of item (ii) above or item (v) below. As used herein, "emergency" means an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners, (v) that assessments for additions and alterations to the common elements or to association-owned property not included in the adopted annual budget, shall be separately assessed and are subject to approval of two-thirds of the total votes of all unit owners, (vi) that the board of managers may adopt separate assessments payable over more than one fiscal year. With respect to multi-year assessments not governed by items (iv) and (v), the entire amount of the multi-year assessment shall be deemed considered and authorized in the first fiscal year in which the assessment is approved;

Does this basically say that the owners can petition a special meeting to vote on a budget which exceeds 15% of the prior year budget?

Our By-Laws reference article 6 of our Declaration, which contains this language. If your developer used the same attorney, then your docs may be similar.

Hope this helps!
Bonnie

Thanks, Kirk!

We can thank our attorney for the wording….or, perhaps the legislators who drafted the IL Condo Act!

Our board is required to provide the owners a 30 day period to comment on the proposed budget before finalizing it (it is mailed out to them); they may also comment/question at the board meeting.

Bonnie