Saturday, April 19, 2014

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Lakeside Community Association Ombudsman

The State of Illinois currently does not know how many community associations there are in the state, nor is there readily-available information for homeowners trying to understand what regulations govern their associations. This makes it hard to draft policies to meet the needs of associations, unit owners, and the state.

At the association level, disputes occur over what the law says, what are the rights of owners and boards, and whether an association is acting within its authority. Because there is no single source for authoritative guidance, association management can be far more difficult than it needs to be. It also leads to expensive and time-consuming lawsuits that clog up the courts, add unnecessary costs to association management, and promote conflict rather than cooperation.

Lakeside has worked with community associations since 2006 and concludes that the state regulatory framework for associations needs improvement. After examining regulations in other states with a high numbers of condominiums, we found that many have a state office, which acts as an association ombudsman. Lakeside believes that Illinois associations and homeowners could benefit from a well-constructed ombudsman office, with clear limits on the ombudsman's powers and responsibilities. We have created a white paper on what we think makes the most sense. You can download our document here.

In Illinois, community associations can include condominiums, townhouse associations, homeowners associations, and co-operatives, or co-ops. All are governed by different state statutes, as well as their own governing documents. There are also federal, local, and state laws governing associations. A central clearinghouse listing the appropriate statutes, with links to administrative agencies, is one purpose for the ombudsman.

The multiple laws and regulations governing associations can frequently be difficult to navigate and comprehend. Boards of directors have a great deal of discretion - and responsibility, over the daily management and operation of their buildings. While most boards act in the best interest of their members, are financially prudent, and responsive to the needs of the unit owners, significant problems arise for residents when this is not the case. Difficulties also emerge when boards of directors are unable or unwilling to remedy disputes between residents. Disputes regarding transparency, finances, board elections, management decisions, rules and regulations and other issues between residents and their boards are all too common. An ombudsman with power to take complaints from unit owners and provide alternative dispute resolution functions could help, as would having a state authority to whom boards and owners can turn for guidance.

Lakeside also believes firmly that education and prevention are the best actions for any association seeking to strengthen itself and its community. While there are different industry training programs and fee-for-service classes and seminars, there can be significant variation in the quality and content of these classes. The ombudsman could help by working with the industry, community association leaders, and others to develop common standards for board training, association management training, conflict resolution, and other topics. The ombudsman could also provide a single-source listing for events and training opportunities.

We believe the time for an ombudsman is past due. Please review our white paper on the Illinois ombudsman concept. We also have created a short survey where you can let us know whether you support continuing to develop this office. Click this link to take our survey and let us know what you think.

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