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Master Associations Rule Common Areas of Living
One of the unique features of suburban condominium and townhome living is the existence of the "Master Association." Though ominous sounding, a master or umbrella association is a device used by developers to separate the administration of common facilities from the supervision of one or more condominiums. Typically, a master association will control the pool, clubhouse, tennis courts, etc. Sometimes a master association plows the snow on all of the streets, while other times the streets are dedicated to a village and plowing is handled by the municipality.
Master associations elect their own board of directors either from the membership at large or each residential association sends one or more delegates. The common areas of the master association are owned by the association and each owner in each condominium association is a member and has a right to use the facilities. Because of the inherent problem with multiple boards and overlapping authority, disputes often arise between boards as to who does what. (Master associations are incorporated in to the Illinois Condominium Property Act ("Act") in Section 18.5 and there are some statutory requirements beyond the declaration and by-laws these associations must adhere to.)
Assessment Collections
When an owner is delinquent in the payment of their assessments and they owe money to their condominium association and the master association, does the condominium association still have to pay the master association that owner’s share?
The answer to this question is wholly dependent on the express language of the declaration and by-laws. Some of the declarations provide that the condominium association acts as the collecting agent for the master association. Some have the master associations collecting for all the residential associations. Some associations directly assess and each owner sends two checks out every month, and some master associations assess the condominium association for their per capita (per number of owners) share of their operating budget.
Thus, before one can answer the question of whether the condominium has to pay the master association its share for a delinquent owner whose home is foreclosed, you must look at the operating documents to see what is required.
Maintenance Authority
Who cuts the grass? Who plows the snow? Does the master association’s authority end at the curb, at the building line? Sometimes it is the declaration and sometimes you must look at the building site plan to make those determinations. The overall maintenance of a complex should be a shared goal. However, sometimes petty squabbles, territoriality, budget limitations, etc. bring neighbors into conflicts over who is maintaining the property. When the declaration is unclear or has conflicting provisions, the case law advises that you must look at usage. For example, if a sewer pipe breaks and the documents are unclear, does the pipe service a single unit, an entire building, a phase, etc.? This then leads into the issue of...
Master Association vs. Residential Association Control
The term "master" association is really a misnomer. The term infers a boss or superior entity. In reality, the master association has its own responsibilities, budget, authority, maintenance duties, etc.
A master association’s authority runs parallel to a condominium’s. Neither entity’s power supercedes the other as they each have their own areas of responsibility. Projects should be joint and mutual in nature. All of the boards of a multi-association complex should engage in joint planning for the common good. Even though a master boards wishes to impose an architectural and aesthetic plan on its members, it must make certain it has the express authority to do so, or else it can only take place through a cooperative effort. The better way to resolve a dispute over authority is to enter into a joint resolution to have all residential associations delegate certain (or even all) authority to the master association.
Properties with multiple boards constantly debate the issue of whether to consolidate. Unfortunately, there is only one correct answer and that is contingent upon whether there can be significant cost savings, as well as utilizing an ever-shrinking pool of volunteers to fill boards and committees.
However, sometimes it can be cost effective and the boards may wish to consider a merger. Two-thirds of all of the owners can approve the merger of all participating associations into a single entity. This also requires an amendment to the governing documents.
In summary, a master association is a master in name only, as each association, whether residential or umbrella, should be the master of its own destiny.