Q. I am a unit owner in a condominium association that hired an elevator consultant to manage an expensive elevator modernization project. The consultant failed to fulfill the full scope of consultant services under their consulting agreement by not ride-testing the elevator, and it has also been discovered that the elevator contractor did not properly modernize the elevator by failing to install all required components. Which party does the association have claims against and for what?
A. There are two different contracts and parties at issue here in what appears to be a breach of contract of both agreements. A review of the respective contracts for scope of services, representations and remedies is required for an analysis of remedies. Notwithstanding the foregoing, the association has claims against both vendors.
To the extent the elevator contractor failed to properly modernize the elevators by failing to install required components per their contract, the contractor is responsible for installing the missing components at their cost. Concerning the elevator consultant, if the association paid for certain services and the elevator consultant failed to perform those services, that is a breach of their contract, and the association is entitled to an abatement off the consultant fee for the services not performed. Both contracts should be reviewed to see if there are provisions regarding limitation of damages that could affect remedies.
Q. I am on the board of a large, single-family homeowners’ association. One homeowner in particular has failed to maintain his property as required per the association declaration. Every month the homeowner receives multiple violation letters with hefty fines for the different violations that need to be addressed. Instead of completing the required maintenance, the fines are paid. The cycle has been going on for well over a year. What additional recourse does the association possess?
A. Community association declarations have a remedies section for breaches of the governing covenants. While fines are the most common remedy to be used as a first step (and the board should consider raising significantly the amount of the fine levied to entice compliance), association declarations also contain additional remedies for violations including, but not limited to summarily abating violations and assessing the cost to the homeowner and/or filing a lawsuit to force full compliance with the association declaration.
The association declaration should be reviewed to confirm whether the association is entitled to recover legal fees and costs for the enforcement action.
Q. I am a unit owner in a condominium association. Our board recently revised the association’s rules and regulations. I seriously doubt the board presented the draft revisions to the village prior to approving them. Additionally, board members have committed violations of the newly adopted rules. Are individual board members subject to fines for violations or should they otherwise be held accountable for violating rules they adopted?
A. Section 18.4(h) of the Condominium Act grants a condominium board of directors the ability to adopt and amend rules and regulations covering the details of the operation and use of the property. There is no requirement for a municipality to review or approve rules and regulations to be adopted in a condominium association.
All unit owners are required to comply with properly adopted rules and regulations that do not violate constitutional rights or are otherwise inconsistent with the declaration and by-laws. Board members are absolutely required to comply with the association’s governing documents, and failure to do so will subject a board member to a fine or other remedy outlined in the governing documents like any unit owner. If all the members of the board are intentionally ignoring violations of board members, that would be a breach of fiduciary duty and subject those board members to liability for breach of fiduciary duty. Rules and regulations must be uniformly enforced against all unit owners.
Got a question for the Condo Adviser? Email ctc-realestate@chicagotribune.com.
