Q. I’m at the board of a midsize apartment affiliation. We’re taking into account renting a portion of the average space to unit homeowners to park bikes. How a lot source of revenue can a apartment affiliation earn from renting a portion of the average space with out jeopardizing our not-for-profit tax standing?
A. No longer-for-profit standing does now not rely on how a lot a rental affiliation may earn by means of renting out commonplace spaces. However something to imagine is whether or not earnings would exceed bills, which might lead the rental affiliation to have an source of revenue tax legal responsibility.
Many associations earn additional earnings by means of renting amenity areas, roof antenna rentals and the like. The board of administrators is absolute best served to paintings with its accountant to decide whether or not there’s any source of revenue tax legal responsibility. There are commonplace methods to control source of revenue tax legal responsibility in accordance with bills equalizing source of revenue, shifting extra source of revenue to the reserve fund (if allowed beneath the governing paperwork) and even giving the additional source of revenue to the unit homeowners.
Q. I’m an proprietor in a apartment affiliation and the cost of exams and particular exams is in accordance with the share of possession assigned to devices according to the apartment declaration, which means that homeowners of bigger devices pay greater than homeowners of smaller devices. Some homeowners cry foul and say that each one unit homeowners will have to pay an identical quantity for exams, mentioning pals who reside in different states the place exams are calmly divided amongst all unit homeowners. Is there Illinois legislation in this subject?
A. In a apartment type of possession, exams and particular exams are calculated in accordance with unit percentages. Segment 4(e) of the Condo Act governs how unit percentages are calculated in Illinois.
Segment 4(e) states that unit percentages are computed in accordance with the price of the devices (i.e. by means of the developer taking as a foundation the price of each and every unit on the subject of the price of the valuables as a complete). Since greater devices are continuously extra treasured than smaller devices (i.e. with upper preliminary acquire costs), it’s anticipated that greater devices could have a better unit share, and thus, pay upper exams in comparison with much less treasured smaller devices. Except the price of all apartment devices used to be an identical within the development when it used to be at first evolved, unit percentages would now not be the similar for all devices in a apartment.
Q. Have there been any legislative updates that impact group associations?
A. On Would possibly 27, 2022, Gov. J.B. Pritzker signed two items of regulation that amend the Condo Act and Not unusual Passion Neighborhood Affiliation Act (CICAA).
Space Invoice No. 4158 provides “any reserve find out about” to the record of paperwork that should be made to be had to unit homeowners for inspection beneath Segment 19 of the Condo Act or Segment 1-30(l) of CICAA. As such, starting on Jan. 1, 2023, Illinois apartment associations and group associations which are matter to CICAA should keep a copy of the reserve find out about to be had to any unit ownerswho ask for it.
As well as, HB 4158 extends the requirement for associations to agree to the Condo and Not unusual Passion Neighborhood Ombudsperson Act to Jan. 1, 2024.
Space Invoice No. 5246 reduces the time frame for apartment associations to supply sure disclosures beneath Segment 22.1 of the Condo Act (unit resales) from 30 days to ten trade days. HB 5246 additionally caps the charges for the manufacturing of paperwork beneath Segment 22.1 of the Condo Act at $375 (with annual changes in accordance with the Shopper Value Index) and lets in for an extra $100 fee “for rush provider finished inside of 72 hours.” This transformation to the Condo Act takes impact as of Jan. 1, 2023.
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