How much is too much? That’s a question many condo unit owners in Chicago have when it comes to assessment increases. While all owners generally understand – and may even expect – fluctuations in the assessments they owe, no one wants to face stiff increases, especially when those increases are the result of poor financial management by the board.
Read on to learn more about assessment increases and what provisions are included in the Illinois Condominium Property Act (ICPA) to address assessment increases.
Is There a Limit to Assessment Increases?
Assessment fees are the primary source of income for Homeowner Associations and are established based on the annual budget. As the board reviews its operating and reserve funds, it calculates an appropriate assessment amount for the upcoming year. This process should be done in full transparency so all owners understand how their money is being spent.
Despite smart planning, however, there are situations that may warrant a special assessment or an assessment increase for the upcoming year. When that happens, is there a maximum assessment threshold the board can impose?
The short answer is yes, and the magic number is 15%.
Per the ICPA, “If an adopted budget or any separate assessment adopted by the board would result in the sum of all regular and separate assessments payable in the current fiscal year to exceed 115% of the sum of all regular and separate assessments from the preceding fiscal year, unit owners with 20% of the votes of the association may deliver a written petition to the board of managers within 14 days of the board action.”
In sum, if assessments are greater than 15% from the previous fiscal year, owners have an opportunity to veto the special assessment increase.
Turn to Us With Questions
Whether you serve on your condo association’s board or are an engaged unit owner with questions, there’s a lot to know about managing a Chicago condo association. Our team at First Community Management is here to make the job easier. Get in touch with us for help with all aspects of association management. We partner with more than 115 HOAs in the greater Chicago area and are here to help your association.