Can the Homeowner Associations Resurrect Condo Sales?

A funny thing happened during the real estate boom: Condo owners became vital businesspeople and condo boards (pictured) became crucial to their building's future. Whether they wanted to or not, the individuals behind the Homeowners'/Condo Associations often times determined the fate of their entire building, and, to some degree, the Chicago condo market.

One developing -- and concerning -- trend is the increase of associations that are struggling financially. As a result, assessments are rising, at a time when homeowners can't afford it, and the entire building struggles with foreclosures, short sales or low sale prices.
I've seen many legal issues arise from this segment of the industry, more so over the last year. In particular, more homeowners are seeking legal advice to find out their recourse against associations that mismanaged reserves and submarined the unit owners.
There are some options, depending on whether duties and/or contracts were breached. But the rise of association issues has made it clear that these associations play a key role in the condo real estate market. When condo boards and overall associations are healthy, the real estate itself has a greater value. I've personally seen several real estate transactions fail to close because of legitimate concerns about low (or no) reserves in the association. 
If you're a condo unit owner and have never been involved in the decisions of your condo board, now is the time to take an active role. And even if you're not a board member, sit in on a meeting or two just to see the types of decisions being made about your building. It can give you tremendous insight into the future of your building, and how your assessments will change in the coming years. If associations are run better and overall financial security increases in condos across Chicago, the condo market will greatly benefit -- and so will condo property values.

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  • I was on the board until recently. However, once it appeared that other board members were usurping authority not granted by the condo act, declaration, or rules, and did not understand that that was wrong, were signing contracts without authority, and were letting the property manager do a minimalist job, I decided that they would not gang up on me to prove me the insane one, and resigned. The legalism I put on my resignation was similar to what you indicated in your third pargaraph--I could not remain on the board and be a potential plaintiff against the association.

    Unfortunately, two other members who were fairly meticulous recently died. Hence, that may leave the board with people who, at the least, are not scrupulous to detail, either with regard to proper procedure or making sure contractors do an adequate job before authorizing payment.

    Hence, besides the legal issues involved, one has to consider the behavioral dynamics of the board. While the detail people, including myself, were certainly not those having people skills, there has to be a method, short of litigation, to keep the petty tyrants and lazy management under control. Alas, I have not found it; maybe you have some suggestions.

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