Page 36 - Chicagp Fall EXPO 2019

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As your Chicago property management experts and North American leaders in the industry, we have a robust network of experts and resources available at our fingertips. We also have the ability to invest in technology and services, which benefits the community leaders and residents with whom we partner. LOCAL LEADERSHIP EXPERIENCE WITH UNMATCHED RESOURCES Chicagoland’s premier management partner SEE THE difference FOR YOURSELF www.fsresidential.com its decisions. “That said,” she continues, “meeting min- utes should be minutes. They should not be a transcription of the entire meeting. Such a document could be used against the associa- tion and could result in association liability.” Even when withholding some informa- tion from unit owners seems like the pru- dent thing to do, a board should still con- sider how owners may react to the basic idea of being left out of the loop. Moriarty recalls one instance in the middle of a con- struction defect litigation: “A group of unit owners were demanding the release of the board’s expert engineering report. On ad- vice of counsel, and to preserve privilege, the report -- which had been prepared in anticipation of litigation with the developer -- was not disclosed. The board didn’t with- hold the report to keep it from the owners; it was withheld to keep it from the developer and other defendants in the lawsuit. This was a perfectly reasonable decision, and it could have been easily communicated to unit owners, but it was not. Because of this, a group of unit owners actually started to act against the interests of the association with regard to the report, simply because they did not understand the reason why the board was withholding it. This resulted in months of conflict, acrimony and cost.” “Even fairly minor changes, like altering the hours of the laundry room, can create is- sues for some residents,” adds Axinn. “Any change in policy should first be fully dis- closed in a memorandum to all the share- holders at least 30 days before it goes into effect.” The Perils of Oversharing Of course, there is a point at which re- vealing too much information to residents can be detrimental (or just overwhelming), and as such it needs to be withheld for the greater good. A board must know how to walk this delicate line. “In addition to instances where informa- tion cannot be disclosed because of privi- lege or legal prohibition, there are times when specific information cannot be con- veyed,” says Moriarty. “For instance, if the board were in the middle of negotiating a landscaping contract, the board could not divulge to the unit owners its bottom-line contract price because of the risk that the other party to the negotiation would learn that information, and all leverage would be lost. Similarly, if the board were suing the developer for construction defects, the board could not communicate every detail of its settlement strategy to the unit owners for fear that it would undermine its bargain- ing position in the case.” “How much to disclose and when may, in those instances, be more of an art than a sci- ence,” Moriarty concludes, “but the default position for the board should be to disclose as much as it safely can and explain why it cannot disclose additional information. A board that explains where it is in negotia- tions with another party, how it got there, and what its goals are will then be able to say with some credibility to the unit owners that certain information must be withheld, if only so their position is not compromised. Owners will get it, and will likely be more appreciative and more confident in the board as a result.” n Mike Odenthal is a writer for The Chicago- land Cooperator. BOARD OPTICS... continued from page 14 nually to elect its board, set a budget, etc. Should the association’s governing docu- ments be silent on the issue, then the New Jersey Condominium Act, New Jersey Planned Real Estate Development Full Disclosure Act, and/or the Nonprofit Cor- poration Act typically provide guidance in our state. “The New Jersey Condominium Act also contains an administrative code that provides a minimum for notice to the resi- dents of a meeting. Also, the association’s bylaws will provide for specific require- ments for notice, quorum, and procedure. Typically, the announcement will pro- vide for the time, place and agenda of the meeting. Failure to do so may void board actions and/or increase the association’s exposure to litigation. “To maximize efficiency, I would rec- ommend ensuring that each meeting has a set agenda that is strictly followed. The agenda should be conveyed to all board members in advance, so that each board member can review and prepare for the meeting. Prior to an open session, the board should meet in a closed session to review the agenda and go over certain is- sues that are not appropriate for an open session. These typically include any col- lection matters, privacy matters—such as disability accommodation requests—as well as pending and/or anticipated litiga- tion. “Also, it is important to know that a board meeting is for the board to con- duct official business. If a board chooses, it can set aside a portion of a meeting for residents to voice their concerns, which should be timed to allow each resident an equal—but limited—opportunity to raise issues. If a resident feels as though their board is not conducting meetings proper- ly, they should attend a meeting and voice those concerns. It is important to remem- ber that a board is composed of volunteer owners who rely on their professionals to guide them. Often, a lack of perceived in- terest from residents causes boards to re- lax their meeting structures.” Charles A. Ryan, an attorney at Pilicy & Ryan, a law firm in Watertown, Con- necticut “In Connecticut, we’ve adopted the Common Interest Ownership Act, which CONDUCTING... continued from page 16 See us at Booth 301