An Industry Learns Who is There for It
This article could go on for pages if we took a deep dive into every bill introduced in the General Assembly since January 1, 2024, affecting community associations. So, let’s choose one: House Bill 4620 (HB4620). HB4620 amends subsection (c) of Section 1-45 of the Common Interest Community Association Act.
Currently, that subsection (c) establishes owner referendum rights with respect to budgets and separate (special) assessments. If an adopted budget or separate assessment would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and separate assessments payable during the preceding fiscal year, then members have the right to deliver a petition to the board. That petition would require the Board to call a meeting of the members at which the members can, by affirmative vote, reject the budget or separate assessment. In other words, under the current law, the board has the right to increase budgets or adopt special assessments to meet the financial needs of the association. However, if such a budget or special assessment exceeds the 115% threshold, then members have a mechanism to protect themselves from unnecessary or unreasonable increases.
HB4620 would modify subsection (c) by eliminating the referendum language and establishing a strict limit on budget or special assessment increases. The modified provision would prohibit any adopted budget or separate assessment that results in the sum of all regular and separate assessments payable in the current fiscal year exceeding 105% of the sum of all regular and separate assessments payable during the preceding fiscal year. In practice, the change would mean that a board could not increase an annual budget more than 5% over the previous year’s budget. The modified provision does not include any exception for any reason.
On its face this may seem like a welcome statutory change for members of a common interest community association because it means their assessments won’t increase more than a certain amount each year. However, if we look closer at what such a strict limit means, we see that it can have a significant adverse effect on the financial well-being of the association. Expenses are not subject to such a limitation regarding their ability to increase. One significant association expense is often insurance. In the current insurance market, due in part to the catastrophic incidents occurring across the nation (whether wildfires, hurricanes, tornados, etc.), associations have faced increases in premiums exceeding 100%. If a board could not increase the association’s budget more than 5%, and the association faces an increase in premiums over 5%, then the association will not be able to afford insurance. Particularly when we
18 | COMMON INTEREST®
account for the fact that other association expenses are not likely to be decreasing to offset such an increase in insurance premiums.
With the understanding that the proposed change to subsection (c) of Section 1-45 could create significant financial hardship, ILAC reached out to the sponsor of HB4620 to discuss the bill. Although the bill did move and passed out of committee, ILAC’s efforts to address HB4620 were successful, and that bill ultimately “died.” Thus, subsection (c) remains unchanged for now.
From Now and Onwards, Your Support is Needed
Although CAI works through the members and lobbyist of ILAC and through the members of PAC IL, much like an association works through its board, we cannot do what we do without the support of the CAI membership. There are certainly non-financial opportunities to support CAI’s advocacy efforts, but without your financial support, those non-financial opportunities would not be available. So, please make a financial contribution to ILAC or PAC IL, or both, in whatever amount you, or your association, or your business, can make.
A history of responsiveness and reliability
Cukierski & Associates has been a family business for more than 40 years, and in the past year alone, we’ve partnered with over 1,400 Chicago-area HOAs and condominium associations. We provide the boards of directors with stateof-the-art audit, review, and compilation reporting services to help them prepare more accurate annual budgets, make more informed operating decisions, or
At Cukierski & Associates, we’re not only experts in this area of accounting, but we also have several team members who sit on boards of directors in their own associations, so we can relate and are well versed in the dynamics and intricacies of community associations.
Want to know how we can help your association?
Check our website and reach out to start the conversation. We’d love to hear from you!
3850 N. Wilke Rd. Ste., 100, Arlington Heights, IL 60004 847-496-7180 |
info@cukierski.cpa |
www.cukierski.cpa
• Winter 2024 • A Publication of CAI-Illinois Chapter
retention
99% client
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64
