An unsecured $6,000 loan at 5 ¼ % for three years. Effective January 2008. Nothing repaid as yet
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An unsecured $6,000 loan at 5 ¼ % for three years. Effective January 2008. Nothing repaid as yet
Our 44 unit condo has four Board of Directors. The four Board members made a decision to loan one of ther Board members $ 6,000. The other 40 unit owners qwere not told of the transaction nor were they asked for its approval..Improper procedure? Illegal procedure? I do not want any legal proceedings because of the cost but the person receiving the loan is harrased by collection agencies.
Asked on May 18, 2009 under Real Estate Law, Illinois
Answers:
B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You should absolutely talk to a local attorney about this. One place to find a qualified real estate and condominium lawyer is our website, http://attorneypages.com
That money belongs to the condominium association, I'm assuming, which means it belongs to all of you, and the association board has a duty to all of you, to put the association's interests above their personal needs, and that is called a fiduciary duty. The situation, as you've described it, is fundamentally wrong.
You may not be required to pay the cost of this. Breach of a fiduciary duty is very, very serious, and the four board members who did this might well be forced to not only repay the money, but also to pay for the costs of the lawsuit to make that happen, because you would be suing, really, on behalf of the association, and the association should not have to pay for the cost of protecting itself against something like this.
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