Some Distinctions between Large, Small Associations
Byline: Jordan I. Shifrin
There are thousands of associations in the state of Illinois, not
surprisingly, a large percentage of them have less than 50 units.
Many of them are self-managed, have never had a manager nor the services of a professional consultant advising them how to operate.
These associations have never had an audit, never consulted with an attorney and probably have operated from year to year "by the seat of their pants."
There are obvious differences separating large and medium-size associations from the small ones, but what is universal is the concept of fulfilling the minimum legal requirements in order to keep the association and, particularly, the board, out of trouble.
Legally, there is no distinction between large and small associations and the more formalities that are overlooked, the larger the likelihood it is going to become a serious issue.
The state of Wisconsin, for example, in order to simplify governance, has a specific statute governing associations under four units.
However, in Illinois we do not have that luxury. Whether an association has four or 400 units, here are some examples of similarities and differences.
- Electing a board. Finding sufficient numbers of qualified candidates is a chore for most associations due to board member burnout or people who do not want to get involved. However, it is amazing to see a 12-unit association set up with five directors, which is not an uncommon scenario.
The bigger the association does not necessarily translate into "the bigger the board." Three is the legal minimum in which to operate an association. Any association, regardless of size, must have at least three directors.
Five is perfect, seven is good, nine the absolute maximum, yet I have seen boards with as many as 27 directors.
A small association can function efficiently with three directors and should consider amending its bylaws to allow for this setup. Ideally, the day to day workload can be handled by other types of volunteers such as committees.
The board does not have to do all of the work, they just have to administer the association.
Lastly, to legally operate, a board must only meet four times per year. Many meet more often. Quarterly meetings are far less of an imposition than monthly meetings. More often than not, it would then be easier to keep board members involved.
- Maintenance. Larger associations often have employees or even complete crews to handle on-premises maintenance. Associations with managers have the management company coordinate maintenance calls. However, just because these types of scenarios are not in place does not mean that the approach to maintenance cannot be systematic. A maintenance company can be contracted with a small association to receive service calls directly. The agreement can provide for a board member or other responsible person be contacted to authorize work to commence, or that person could even be the direct contact for any owner needing service. …