Owner meeting to discuss proposed budget not required

Q. For years, my association held a separate meeting of the owners to discuss the next year’s proposed budget before the board actually voted on the budget.

Last year, for some unknown reason, the board did not do this. The board only called a meeting to adopt the budget and didn’t have a preliminary owner meeting to discuss it. Was the board required to hold a separate meeting of the owners to discuss the proposed budget?

A. No. Whether a condominium or a common interest community association, the board does not need to call a separate meeting of the owners to discuss the proposed annual budget prior to formal adoption.

But, the board does need to adopt the annual budget at an open board meeting using the following procedures: A copy of the proposed budget needs to be mailed or personally delivered to owners prior to the board adoption (at least 25 days for condos and 30 days for most other associations subject to CICAA).

Also, written notice of the date, time, place and purpose of the board meeting must be mailed or personally delivered to the owners no less than 10 and no more than 30 days prior to the open board meeting at which the board will discuss and vote on the budget.

To avoid the need for two separate mailings (one for the proposed budget and another for the meeting notice), Illinois condominium associations should mail or personally deliver both the proposed budget and the meeting notice to owners between 25 and 30 days prior to the meeting. For other community associations subject to CICAA, the proposed budget and notice can be mailed or personally delivered on the 30th day before the board meeting. This way, only one mailing or personal delivery is required.

Q. Our condo association increased regular assessments by 10% beginning Jan. 1, 2025. Now, they’re proposing a special assessment to start in June 2025 for another 10% over and above last year’s regular assessments. The special assessment is needed to pay higher than anticipated operating expenses. Does the board need to obtain unit owner approval for this special assessment?

A. The board does not need to obtain prior unit owner approval to adopt the proposed special assessment here. However, because the proposed special assessment results in an increase in total assessments greater than 15% more than last year’s assessments, the owners can invoke a procedure that would require the special assessment to be put to a vote of the owners.

A board can generally adopt a special assessment without unit owner approval at a duly called and noticed board meeting. However, under certain circumstances and after it is adopted by the board, the unit owners have an opportunity to call a meeting and vote to reject the special assessment.

Specifically, owners could invoke the process whereby any special assessment adopted by the board would result in the sum of all regular and special assessments payable in the current year exceeding 115% of the sum of all regular and special assessments payable during the preceding year.

Here, the owners with 20 percent of the votes of the association have a right to file a petition with the board within 21 days of the date the board adopted the special assessment. If the board receives a proper petition, the board must then call a meeting of the unit owners within 30 days of the date it receives the petition. The purpose of the meeting is to permit owners to vote on the special assessment. However, unless a majority of the total votes of all unit owners in the association are cast at the meeting to reject the separate assessment, it is approved.

Note that a special assessment for expenditure relating to emergencies or mandated by law can be adopted by the board without being subject to unit owner approval. “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.

• Matthew Moodhe 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.