bylaws, members may be required to pay assessments to the master association directly. Alternatively, the underlying associations may pay assessments to the master association, which are collected from their respective members as part of the assessments due to the underlying association.
An underlying association is vested with the administration and maintenance of property and structures used, owned, and/or benefiting only the members of that given underlying association. Thus, an underlying association’s governance jurisdiction is limited to its members and the property described in its declaration. Again, it does seem that the “smaller” association is a “fief” within the larger community.
The board of managers of a master association often comprises members of the board of managers of the underlying associations. Even if it does not, the master association board would still be chosen from among members of all underlying associations. Thus, although separate and distinct associations, a master association and its underlying associations do share membership, since all associations form a single, larger community.
Taking into consideration the makeup of the master association board of managers and the division of power
among associations, it does not seem that the master association board is akin to a “king.” Instead, it seems similar to a coalition of nobleman, perhaps analogous to the Knights of the Round Table.
With that in mind, it is self-evident that a master association and underlying associations should work in concert to promote and maintain a peaceful and vibrant “kingdom.” In the event that interests of the some or all of the boards diverge, discord may ensue leading to legal action, which can be costly and time consuming.
As opposed to a monarchal system where lords must answer to their king, underlying associations do not necessarily answer to a master association. Rather, the relationship is a shared form of governance in which each association is designated powers and duties to be exercised for the benefit of the members the associations that form a single community. Thus, it is important for the master association and underlying associations to strive to maintain positive and amicable relations; otherwise, costly and contentious litigation could result. If Game of Thrones is any indication, no one wants to live in a kingdom divided. 1
Note that “smaller” and “larger” are used for purposes of distinguishing the different types of associations. A master association is “larger” in the sense that its membership consists of the membership of all “smaller” associations.
your community will run smoothly.
With community association banking expertise like ours, it’s easy to keep your associations on track.
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Tom Engblom CMCA AMS PCAM VP/Regional Account Executive 312-209-2623 Toll Free: 866-800-4656, ext. 7498
tom.engblom@mutualofomahabank.com
mutualofomahabank.com AFN45798_0713
14 | COMMON INTEREST®
Member FDIC Equal Housing Lender A Publication of CAI-Illinois Chapter
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