How is it June already? If most of you are like us at K&M, you are having a hard time believing we are approaching the second half of 2025 in less than thirty (30) days. Before you know it, you will be in the thick of budget season. Now is a great time to evaluate where your association is with its current budget and meeting the goals for the community set by the board of directors.
Here are some recommendations of what you should be doing now to help the second half of this year be a success and to help plan for 2026.
- Review the Maintenance Needs of the Building
Every building needs maintenance, and depending on the age of your community, the buildings may also be in need of substantial repairs and replacements. Now is the time to make sure the association is on track to get these repairs completed. See our May Newsletter, which reminds community associations that “Capital Maintenance and Repairs are as Vital as Ever.”
- Review the Association’s Financial Standing
Typically, board members review the association’s spending history every month. Now is the time to really look at that spending and see how it compares to the yearly budget. How is the association doing with its spending? Are you over or under budget? If it looks like you are over-budget, what changes can be made to get back on track? Remember, completing this analysis now may help to prevent a special assessment later and/or an 2026 increase larger than any member of the association would like to see.
- Review the Association’s Delinquencies
In order to pay the association’s bills and to properly consider its financial standing, the board of directors has to review its delinquencies. We often say that assessments are the lifeline to every community association. By definition, a lifeline is the thing one depends on to escape a difficult situation. Collecting assessments on a regular basis can help an association avoid unnecessary increases in assessments. Review your association’s delinquencies and take all steps now to collect the amounts due and owing to the association. We often hear members of the board say they do not want to refer people to legal. We get it, but sometimes such a referral is needed in order to collect the amounts due to the association. Also, the higher the balance due to the association, the harder it can be for an owner to catch up. Also, referring a matter to legal does not mean that the association is not going to work with the owner. The opposite is typically what is true! Remember, collecting assessments does not always mean referring the matter to legal. It can and should include reminder notices from management. While we encourage associations to make efforts to collect assessments before referring the matter to legal remember, 1.) to have only one person communicating with the owner so we know exactly what was done and said, and 2.) to have all communications in writing.
- Review Last Year’s Election and Allow Plenty of Time for Planning for this Year’s Election
Those of you who regularly attend our webinars know how important this review is to Dawn. This is because she regularly sees issues with elections that could have been avoided. Also, correcting an election error can be expensive as it typically requires a second mailing. Not only is there typically a financial cost, but also an error in an election can “cost” a board credibility (and even result in a board member losing an election!). Set up a time to briefly discuss what worked and what did not work at last year’s election. Decide how these issues will be resolved and listen to the recommendations of your managing agent and/or legal counsel. Then, create the timeline for this year’s election, i.e., when will the annual meeting/election occur; when will the call for candidates be made; when will the election documents be drafted; when will the election documents be reviewed; and when will the election documents be mailed out. Don’t wait until the last minute and allow plenty of time to ensure that everything is done correctly!
- Review the Complaints by Owners and Violations of the Association’s Community Instruments to Date
Rules and regulations are not documents that should only be looked at every few years. A board of directors wants to be sure that the current rules and regulations are providing it with the tools necessary to properly manage the community. Amending the rules is an easy process and can be done by board approval only. Now is the time to talk about what common violations are seen within the community and determine if the association’s documents provide the board with the tools necessary to deter this conduct. Along these same lines, the board should review how it is addressing these common complaints. That is, is the board making the necessary decisions to encourage an owner to stop the conduct? Management and legal will have ideas on what can be done to stop violations, so they should be included in these discussions.
- Review the Association’s Policies and Procedures
In addition to reviewing the rules and regulations and the declaration, the board should review its own policies and procedures and ensure that what is in place is actually working. As board members are volunteers who are running a corporation, we want to be sure all is in place to ensure the corporation’s success, make it as painless as possible to serve on the board, and use the actions of the board as a means of encouraging other owners to serve on the board of directors. This requires policies and procedures that promote efficiency, fairness, and sound decision-making. The board should adopt policies and procedures to allow the business to continue to run and things to be completed between board meetings. This can be done by a proper delegation of authority either to management or specific board members. It also can be done by delineating specific procedures to be followed on common matters, i.e., addressing violations, document requests by owners, and requests for accommodation. (For condominium associations who have not yet adopted an accessible parking policy as required by the Illinois Condominium Property Act, now is the time to adopt that policy!) Policies and procedures can also help each member of the association’s team meet its goals and the expectations of the board of directors. This review should be performed with the input of management and legal.
- Review the Members of Your Association Team
The members of the board, management, legal, and other professionals contracted to do business with the association are all on one team. A team is to be made up of individuals who collaboratively come together to achieve a shared goal. Everyone on this team plays a different role, and each role is important. Like any good coach, the members of the board should evaluate the strength of their team. Now is the time to determine if every member of the team is helping the association to meet its goals. If not, the board should talk to the teammate about what it believes is needed and what changes can be made to help the members. Give the teammate a chance to do it differently and better! This requires direct communication. If this communication has already occurred and the problem exists, the board may need to make a change with who is on its team. Allow plenty of time to make a change and ask for recommendations from those in the industry. (Yelp and Google reviews are typically written by disgruntled people who often were not directly involved in the management of a community association.)
Every association is different, and the above are recommended tips for all community associations. If you have any questions about what your community’s review right now should entail, let us know. As Gabby has said before, we often have wish lists for our clients!
Chuck Keough (cmk@kmlegal.com), Dawn Moody (dlm@kmlegal.com) and
Gabby Comstock (grc@kmlegal.com)
Read the full version of the newsletter here.