Buyers can request condo boards financials

Q: I purchased my condominium unit in summer 2014, however, I have since learned that the condominium association has been operating at a loss for many years. The board is unable to pay its expenses because only about half of the unit owners have been paying assessments in our small association and, thus, the board is now proposing a six-figure special assessment to pay its bills. How could I have found out about the association’s financial condition before my closing?

A: First, the condominium board has a fiduciary obligation to the unit owners to pay for incurred expenses regarding the maintenance, repair and replacement of the common elements. If regular assessments are insufficient to pay such amounts, the board is within its rights to adopt a special assessment pursuant to Section 18(a)(9) of the Condominium Act and should also aggressively pursue collection of delinquent assessment from the nonpaying unit owners.

 Second, regarding a condominium unit purchaser learning about the financial condition of a condominium association, Section 22.1 of the Condominium Act gives prospective purchasers the right to request certain documents and information. Included in those statutory disclosures are a statement from the association as what capital expenditures are anticipated by the association within the current or succeeding two fiscal years; the amount of reserve funds; and a statement of the financial condition of the association.
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