As 2015 begins, many stop and pause to think on the year that passed and consider the year to come. As a condo association, this can also be a great time to reflect on what needs to be done to ensure that 2015 is smooth in terms of operations, finances and policies. For most, being on the board of a condo association is a part-time responsibility and not always an easy one. Even if the operations are outsourced to a management firm, board members spend hours in meetings and preparing for those meetings. That is why going into 2015, a condo association should have a team of players in their corner to help them navigate tricky situations.
The liability for running an association is not lessening, and board members need to remain diligent on their documentation and processes to avoid that liability coming back onto them. That is why we recommend that each association maintains a relationship with at least the following three people. These people are the most likely to be called on when a problem arises and the hardest people to search for in a time crunch.
Lawyer – Having a lawyer retained to handle the legal issues of a condo association can be pivotal to a healthy condominium complex. 2014 has brought some new and serious developments in the law, as well. We are seeing lawsuits by tenants increase over the years. Many of these stem from the board making changes to the by-laws or financial difficulty an association may face. A lawyer to walk the board through these can help prevent difficult matters. There are also a few key developments that boards should be aware of. For starters, Illinois was the last state to allow concealed carry of firearms. However, many condo developments want to restrict where they may be carried on premise. There are also restriction built into the law when dealing with alcohol or events that the association may host. These should be discussed with legal counsel. Also, medical marijuana is making its slow debut across the country and buildings previously declared as “smoke free” may have to relax its rules when medicinal smoking is a legally protected act.
Accountant – As previously mentioned, financial difficulties are leading to lawsuits against boards. An independent accountant who places proper scrutiny on the association’s books can help prevent a shortfall or assist in framing the problem properly. They may be able to spot when theft of funds have been occurring as well. Finally, they can give proper oversight to many of the board’s processes by tallying votes or acting as a secretary for meetings. The role of an accountant specialized in condo associations is expanding.
Insurance Broker – Insurance is often taken for granted and renewed year over year without much thought. The process of submitting the necessary information to obtain a quote has also been daunting for many boards. However, the last three years has brought a lot of changes to the insurance market for condo associations. We have seen prices increase and new laws passed that impact the coverage an association needs. The underwriting process has also been streamlined for all but the largest condo buildings – making the quote process much easier. The revised Illinois Condo act also takes effect in 2015 – changing slightly the requirements a board must take into consideration. Finally, with the emerging topics previously discussed, a board should seek an experienced insurance broker to perform an assessment on whether their coverage is adequate given the new legal environment. It is important for associations to consider whether they are adequately protected for financial loss and lawsuits against the board.
If you do not have one of these relationships noted above, 2015 is a great year to make those connections. If you are looking for a review of the insurance policies your condo association now carries, be sure to reach out to us for a complimentary review.