By: Michael C. Kim
Michael C. Kim & Associates
ACTHA Legislative Committee Co-Chair
Chicago

The 2017 legislative session produced only a handful of new laws that affected community associations (condominium, master and common interest community associations). All bills were signed into law by the Governor and, except for one, take effect on January 1, 2018.

 A summary of the bills (and applicable Section references to the Condo Act or CICA Act) is set forth below:

HOUSE BILL 189 (now Public Act 100-0292, effective January 1, 2018) amends the Condominium Property Act (“Condo Act”) and the Common Interest Community Association Act (“CICA Act”) as follows:

BOTH CONDO AND CIC’s

1. Mortgagee/lienholder deemed consent.  If the declaration/by-laws or other governing documents require approval of a mortgagee or lienholder of record, and if that mortgagee/lienholder receives a request to approve or consent to an amendment to those governing documents, then that mortgagee/lienholder shall be deemed to have approved or consented to the request unless it delivers a negative response to the requesting party within 60 days after mailing of the request by certified mail.
(Condo Act Sec. 27(a)(ii); CICA Act Sec. 1-20(e))

2. Requirement to use GAAP.  An association subject to either the CICA Act or the Condo Act and having 100 or more units, must use generally accepted accounting principles when fulfilling any accounting obligations under the CICA Act or Condo Act, as the case may be.
(Condo Act Sec. 18.10; CICA Act Sec. 1-45(i))

CONDOS ONLY

1. Handling Year End Surplus/Deficits.  If at the end of its fiscal year, the association has approved an end-of-year fiscal audit (if applicable), and if the fiscal year ended with a surplus of funds over actual expenses (including budgeted reserve fund contributions), then “to the extent that there are not any contrary provisions” in the association’s declaration/bylaws, the board of directors (managers) has the authority in its discretion to dispose of the surplus in one or more of the following ways;

(i) contribute the surplus to the reserve fund, (ii) return the surplus to the unit owners as a credit against the remaining monthly assessments for the current fiscal year; (iii) return the surplus to the unit owners in the form of a direct payment to them; or (iv) maintain the funds in the operating account, in which case the funds shall be applied as a credit when calculating the following year’s annual budget. If the fiscal year ends in a deficit, then “to the extent that there are not any contrary provisions” in the association’s declaration/by-laws, the board has the authority in its discretion to address the deficit by incorporating it into the following years’ annual budget. However, if 20% of the unit owners deliver a petition objecting to the board’s action within 30 days after notice to the unit owners of such action, then the board must call a unit owner’s meeting within 30 days of the date of delivery of petition and at that meeting, the unit owners may vote to select “a different option than the option selected by the board.” Unless a majority of the total votes of unit owners are cast at the meeting to reject the board’s selection and select a different option, the board’s decision is ratified (Condo Act Sec. 9c(5))

 2. Sale of entire condo property.  A unit owner who does not vote in favor of such a sale and files a written objection within 20 days after the meeting at which the sale was approved, shall be entitled to receive from the sale proceeds an equivalent to the greater of (i) the value of his/her interest as determined by an appraisal (less the amount of any unpaid assessments or charges due and owing from that owner) or (ii) the outstanding balance of any bona fide debt secured by that owner’s interest which debt was incurred by the owner in the purchase or refinancing of the unit owner’s interest (less the amount of any unpaid assessments or charges due from that owner). The objecting owner is also entitled to receive from the sale proceeds, reimbursement for “reasonable relocation costs, determined in the same  manner as under the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and any implementing regulations under the Act. This change applies to any sale that is pending or commenced on or after January  1, 2018. (Condo Act Sec. 15(a) and (b))

3. Petition for unit owners’ referendum vote on special assessment or budget increase.  The time period for delivery of a petition to the board of directors (managers) is increased from 14 to 21 days. (Condo Act Sec. 18(a)(8)(i))

 

4. Petition for unit owners’ referendum vote on board of directors’ (managers) adoption of rule for absentee ballot voting to elect directors.  The time period to delivery of a petition to the board is increased from 14 to 30 days. (Condo Act Sec. 18(b)(9)C))

 

5. Petition for unit owners’ referendum vote on intention to contract with director/director’s immediate family.  The time period for delivery of a petition to the board is increased from 20 to 30 days. (Condo Act Sec. 18(a)(16))

 

6. Unit Owners list.  Under Section 19 of the Condo Act, a current list of unit owners to be provided to a requesting owner must include e-mail addresses and telephone numbers. (Condo Act Sec. 19(a)(7))

 

7. Books and records available to Unit Owners under Section 19 of the Condo Act.  Under Section 19 of the Condo Act, a unit owner’s right to inspect/copy books and records is not limited to “books and records of account” but now includes all books and records of the association, including all account records. No “proper purpose” need be given by an owner to inspect or copy contracts, leases or other agreements and the association’s other books and records to the requesting unit owner is reduced from 30 days to 10 “business” days. Failure to make the requested record available within 10 business days shall be deemed a denial by the board. A unit owner’s right to inspect and copy the unit owners’ list (names, addresses, e-mail address, phone numbers and weighted vote) and ballots and proxies for matters voted on by the membership must be for a purpose “that relates to the association” and not for a “commercial purpose” (defined as use for “sale, resale, or solicitation ro advertisement for sales or services”). The association or its management agent “may require the member to certify in writing that the information contained in the records shall not be used by the member for any commercial purpose or for any purpose that does not relate to the association” and for a false certification, the board may impose a fine on the violating unit owner (after notice and opportunity for a hearing). Finally, the charge back of actual costs of retrieving, making available or copying the records, to a requesting unit owner is not mandatory but only permissive. (Condo Act Sec. 19(a)(9), (d-5), (e), and (f))

 

8. Combinations of units.  It is now made clear that if there is a combination of units (being reflected in a amended plat of survey), then the exclusive use of adjacent common elements to and by that combined unit is expressly permitted. Such exclusive use would be as a limited common element, provided that area in question is “not necessary or practical for use by the owners of any other units.” Such creation of a limited common element does not require unanimous consent of all unit owners or any other percentage requirements in the declaration/by-laws or any amendment under the Condo Act apart from Section 31. (Condo Act Sec. 31(a), (e) and (f))

HOUSE BILL 3359 (now Public Act 100-0173, effective January 1, 2018) amends the Illinois Code of Civil Procedure (and other statutes) to change references to “forcible entry and detainer actions” to “eviction actions” (which is the more commonly understood terminology). The term “eviction” replaces “terminate the right of possession” and “eviction order” replaces “judgment for possession”. In addition, a standardized residential eviction order form is to be determined by the Illinois Supreme Court for statewide use. Overall, no substantive changes are made.

 

HOUSE BILL 3855 (now Public Act 100-0201, effective August 18, 2017) amends the Community Association Manager Licensing and Disciplinary Act and the Common Interest Community Association Act by making various stylistic changes and corrections, but no substantive changes.

 

SENATE BILL 885 (now Public Act 100-0416, effective January 1, 2018) creates a new “Installment Sales Contract Act” , and changes the Condominium Property Act’s reference to “installment contract” to “installment sales contract” (as defined in the new statute); those sections of the Condominium Property Act deal with the ability of contract purchasers to be counted toward a quorum for membership meetings, voting in election of board members and serving on the board of directors (manager), unless such rights are reserved in writing by the contract seller. This change affects condominium and master associations. To determine whether an installment contract qualifies for this treatment, the association needs to check the definition of “installment sales contract” under that new Installment Sales Contract Act. (Condo Act Sec. 18(b)(11) and 18.5(e)(5))

 

The results (especially in House Bill 189) are quite a mixture of good, bad and mediocre, and obviously a curious sausage produced by the efforts of the House Judiciary Committee.

 

Upcoming Legislative Dates

Election Day: Nov. 7

Veto Session: Oct. 24-26 and Nov. 7-9

 

 

Easy-to-read guide available at http://www.idfpr.com/CCICO

Illinois condominium owners now have a comprehensive, educational guide at their fingertips thanks to a recently compiled handbook by the Illinois Condominium and Common Interest Community (CCIC) Ombudsperson, Adrienne Levatino. The Condo Unit Owner’s Rights and Responsibilities Handbook provides an unbiased, objective look at Illinois law governing condominium unit owners and marks the kick-off of the Ombudsperson’s education program aimed at informing condo owners of their rights and responsibilities. Future publications will address the rights of condominium and common interest association boards and the rights and responsibilities of owners living in common interest communities.

 

“Living in a condominium community presents its own unique set of challenges that are starkly different from those in a single family dwelling”, said Kreg Allison, Director of the Division of Real Estate for the Illinois Department of Financial and Professional Regulation (“IDFPR”). “Individual rights and obligations can often be confused in the condo setting, leading to disputes between unit owners and associations. By providing an easily accessible, inclusive handbook for condo owners, we strive to education everyone involved, set reasonable expectations and minimize disputes.”

 

The Condo Unit Owner’s Rights and Responsibilities Handbook may be found in the Publications tab on the CCIC Ombudsperson webpage at
http://www.idfpr.com/CCICO.

 

 

The Building Group, which manages over one billion dollars in real estate along Chicago’s Lakefront, has moved to 1221 North LaSalle Street. Now more centrally located to serve its portfolio of luxury condominium, cooperative, rental and mixed-use properties, The Building Group’s new home is also a testing ground for green techniques. The redesign and repurposing of the building – which includes apartments, commercial and retail space – signals the firm’s continued pursuit of earth-friendly tactics that save money for clients.

President Jim Stoller explains that The Building Group’s commitment to maximizing the value of its clients’ real estate complements the firm’s commitment to sustainability.  “The new facility is our ‘innovation laboratory’ where we explore ways to reduce the overall carbon footprint as well as the operating costs of a building.”

The building’s interior has all LED lighting and VOV-free paints, plus other green features such as an indoor bike rack and uses eco-friendly cleaning supplies. Lowering our environmental impact, however, takes many forms and “doesn’t necessarily mean installing windmills,” says Stoller. “It means being smart about resources.” For example, rather than a single temperature for an entire office, there are multiple zones for heating and cooling, resulting in more targeted control. And instead of traditional carpeting, carpet tiles are used which can be replaced individually if stained or damaged.  

Ultimately, the systems and techniques that are successful at 1221 N. LaSalle are added to The Building Group’s toolbox of client services. Cost-saving green methods have been used for years throughout the Building Group’s real estate portfolio, concentrated primarily in the Streeterville and Gold Coast neighborhoods. These include paperless electronic communication and assessment/rent-collection systems; sophisticated recycling programs for paper, electronics, batteries and light bulbs; using high efficiency equipment; and roof gardens.

A licensed architect and MBA (Northwestern), Stoller founded The Building Group, Inc., over 20 years ago. Today, the firm is Chicago’s most technically and service oriented property management company. Its team of over forty in-house experts provide its many clients with rigorous and secure financial controls, extensive educational resources, superior communication and ethical and transparent operating procedures.  

By: John Cabral, Conflict Specialist
Oak Park Mediation and Conflict Support
Oak Park

Lots of different, very uncomfortable behaviors can start happening in the most peaceful association.  One phenomenon we see now and then is an aggressive email campaign seemingly designed to discredit or intimidate the Board. An owner uses the association listserv to send frequent complaining emails to the whole community.  

What to do?

Some boards just vote to change the “rules and regs” so that now, posting to the whole community is a “privilege” that can be rescinded if an owner is sending “abusive” messages.

But everybody will know who the new rule is directed at.  Depending on the level of antagonism going on, this measure might soon bring attorneys into the picture.  Discriminating against certain owners is illegal. And actually removing the offending owner from the listserv will be messy and awkward.  The owner’s sense of victimhood will intensify.

This is the “legislative” method.  You can improve the odds it will succeed, without leading to bigger problems, if the Board consults with the community first. The Board can take a survey of the owners to gauge support for restrictive measures: a high favorable response rate will legitimize the new measures considerably. 

Better yet is if the Board consults directly with the angry owner about the proposed new rule.

In my experience, underneath this kind of behavior there is something else going on. Usually the person actually has a deep need to contribute their knowledge or expertise to the community but believes from previous experience that “nobody ever listens to me”.  They would love to be seen as a valuable member of the community but have decided beforehand that nobody cares.

Therefore, it might lead to a real transformation if somebody—a board member, another owner who gets along with the offending emailer, a people-oriented property manager, or a professional conflict specialist-- approaches this owner and asks her or him to please join the Parking Lot committee or the Tax Appeal committee or the Financial Committee.  “We need more people and it’s obvious from your emails that you have some expertise.”

Whether you follow this course or not, it never hurts to make concrete requests for the behavior that you would like to see the owner adopt.  And be sure to couch the requests in the needs the Board is ultimately trying to fulfill.  For example, “We’re trying to build trust and safety and neighborliness in the association: would you be willing to send only one email message per day to the list”?

It always pays to assume the best, not the worst.  This owner may actually want recognition and validation, not necessarily the destruction of the whole association. 

By: Scott A. Rosenlund, Attorney
        Fullett Rosenlund Anderson PC
       Lake Zurich | Chicago

Q:        I recently joined the board of my townhome association and discovered that the previous secretary redacted meeting minutes, providing edited versions for real estate transactional purposes. Is this legal? If not, is there any recourse against the secretary/association?

 

A:         Illinois statutes applicable to community associations and most association governing documents provide that the duties of association secretaries include keeping meeting minutes. If the association is subject to the Illinois Common Interest Community Association Act (“CICAA”), Section 1-25(f)(2) of CICAA requires election of a secretary “who shall keep the minutes of all meetings of the board and of the membership.” With respect to condominiums, similar language appears in Section 18(d) of the Illinois Condominium Property Act (“Condominium Act”). However, notwithstanding the division of labor amongst different association officers, an association secretary should not unilaterally revise or redact board-approved meeting minutes. Board meeting minutes and other association communications generally should be approved by the board as a whole at open board meetings.

            Whether there is legal recourse against the secretary or the association will greatly depend upon any number of factual variables. For example, there could be potential exposure to claims if the minutes were, without disclosure, intentionally falsified to conceal material financial decisions (e.g., a large special assessment or association expenditure), a unit purchaser reasonably relied on the altered minutes when deciding whether to purchase a unit and the purchaser could prove that he or she incurred damages based on this reliance. Alternatively, if the minutes were redacted simply to omit information which might be considered sensitive or embarrassing to an individual (e.g., information regarding the name or address of a unit owner who was fined for a minor rule violation), such action might have been technically improper, but the purchaser would find it very difficult to establish that he or she somehow incurred damages due to the omission.

            A more common concern would be ensuring that the association furnishes accurate and complete copies of approved minutes to unit owners who make proper written requests to review minutes under (depending on the type of association) Section 1-30(i) of CICAA, Section 19 or 18.5(d) of the Condominium Act, Section 107.75 of the Illinois General Not For Profit Corporation Act of 1986, municipal ordinance and/or the governing documents.

            The board also should make sure that board meeting minutes follow a proper format. The purpose of board meeting minutes is to create an official record of formal corporate actions (i.e., board decisions), rather than to serve as a transcript of a board meeting or to convey information more suitable for newsletters, websites or other types of communications. If the board meeting minutes have been approved by the board, are accurate and complete, use a proper format and tone and do not contain extraneous information, well-intentioned, responsible board members should have no motivation to edit or redact the minutes prior to dissemination. 

1.     How did you get to become involved with ACTHA?

I always like to do the best job at whatever I do. When I joined my association in the 1970s, I began to seek knowledge by attending workshops, seminars and conferences in the field. I attended most of the educational offerings at CAI and later attended educational programs through ACTHA. I found that ACTHA provided quality education sessions locally. Members at both organizations continually asked me to participate in its leadership. I have served on ACTHA’s Education, Membership, Bylaws and Executive Committees.  I was elected to the ACTHA Board of Directors in 2013, served as V.P. and was just elected President.

2.     Tell us about your association. What issues is your association currently addressing?

My association, Westgate Terrace C.A., is a 48-unit community located in a park like setting with over 160 trees located in the University Village neighborhood on the Near West Side of Chicago. We have engaged owners and have never had a problem getting owners to serve on our nine-member board!

The main issue facing my association is the lack of operational knowledge amongst the board members. Board members need a foundation of knowledge to make good decisions, and many lack knowledge in construction technology, accounting, budgeting, planning, landscaping, aesthetics, meeting rules, laws and much more in order to make wise decisions. Other factors such as personality/ego issues, personal agendas, lack of understanding of fiduciary responsibility and, most importantly, the unwillingness to seek knowledge through consultants or education, can result in contentious board meetings and impede progress. Boards need training, and ACTHA offers such training! The problem is getting board members to recognize the need for training in order to serve well in their respective roles.

Additionally, my association is working through a transition of a newly-hired manager.  Outlining expectations and responsibilities for management can help provide for a successful transition.  Like many other newly-formed boards, we acted without utilizing the wealth of available operational information.

3.     What’s in store for ACTHA in the coming year?  

ACTHA faces many challenges for the immediate future. Our major initiative is getting the message out to all the owners who live in association environments that we exist and serve as a valuable resource. Like most non-profits, we have a tight budget as well as membership growth challenges. We are experimenting with different venues and offering new and different, meaningful experiences at our conferences to help owners, leaders and board members make better decisions. We also need to continually add to our assortment of vendors to best serve community associations and to help support ACTHA. We need a proper mix of vendors that will attract homeowners as well as board members. We are located in the Chicago metropolitan area and have access to a wealth of quality vendors and opportunities. We must think positively and big!

4.     What trends to you see in our industry?

Due to economic feasibility, I see continued growth for people living in community association environments.  I see many boards abdicate their board responsibility role to lawyers or community managers.  Sometimes there is mismanagement and money wasted, and the board isn’t always aware of it.  All owners need to realize that they live in an environment where they have a mini-government and that their active participation is needed to help maintain their properties properly and keep property values up.  Owners need to be the drivers of boards.

Owners must expect boards to learn to lead instead of letting others (e.g. attorneys or managers) do their jobs for them.  We certainly need legal and management guidance; however, Board members should make policy decisions for the owners, managers should execute the Board’s decisions and lawyers guide the Board in meeting their objectives.  In order to be effective, owners and board members need to be educated.  ACTHA offers such education. In some states, newly elected board members must attend a training session to learn of their responsibilities in an association environment.  Remember, association boards run a business, many with multi-million dollar budgets!  I look forward to ACTHA serving as the source for such education and becoming more recognized and even accredited.

5. What’s the best piece of advice you’ve received through ACTHA that helped your association?

ACTHA opens you up to a vast world of leadership knowledge in a community association environment. I learn something worthwhile at every event offered by ACTHA.  Learning and growth never ends!

ACTHA recently conducted a seminar on “How to Be a Great Board Member in 90 Minutes or Less” in Olympia Fields. Below is a recap of a few lessons learned from our presenters, attorney Bob Prince of Cervantes Chatt & Prince P.C. and manager Chris Berg of Independent Association Managers, Inc.:

 1. As a board, surround yourself with a solid team of advisors. An attorney, financial professional, manager, etc; can provide vital information to help a board make educated decisions. This may also limit liability in any litigation against the association.

2. Get it in writing. Professional opinions, advice and analysis should always be provided in writing. Don’t rely on hearsay or assertions.

3. The board speaks with one voice. Each board member has equal decision-making authority. The President has no more authority than the Treasurer or a board member at-large. Once a decision is voted on, all board members should support the decision externally in their community.

4. Be prepared. Review materials prior to meetings. It’s okay to discuss issues with board members outside of a meeting—just be sure it doesn’t meet a quorum and that no decisions are made.

5. Communicate. Not only with fellow board members, but with the community. Printed newsletters and/or consistent email updates keep owners engaged and aware of what’s going on in the association.

By: Charles Keough
Keough & Moody, PC
Naperville and Chicago

A community association’s declaration, plat of survey/subdivision, bylaws, rules and regulations, and Articles of Incorporation are important documents that members may be interested in reviewing. In the case of a declaration, bylaws and rules and regulations, members should have a working knowledge of such documents. Failure to comply with these instruments may result in serious consequences. Yet commonly, unit owners do not have copies of these documents or even know where to find them. This article provides simple instructions for members of condominium or common interest community associations interested in locating these important materials.

Written Request to the Board

Every member of an association has the right to examine and make copies of the association’s declaration, bylaws, plat, rules and regulations, and Articles of Incorporation. After submitting a written request to the Board or its authorized agent identifying the documents sought for examination, the Board will typically make the requested records available within thirty days. Be prepared to pay a fee however; the Board is permitted to charge for the actual cost of retrieving and copying these records.

Additional Options

Alternatively, if an owner would like to locate and review one of these documents without submitting a written request to the Board, the process will depend on the document sought:

Declaration, Plat, and Bylaws: In order for a property to be legally considered a condominium or common interest community association, the declaration, plats of survey, and bylaws (either embodied in the Declaration or attached as an exhibit) must be recorded in the office of the recorder of the county where the property is located. There, it is easy for a unit owner to find any documents recorded against their property using their name and Property Index Number (PIN). Though a plat may be difficult or impossible to locate online, generally declarations and bylaws are available online (but may be date-restricted).

Rules and Regulations: Unfortunately, you will not typically find these recorded in the county recorder’s office. These you may obtain on your association’s website or from management and/or the board of directors.

Articles of Incorporation: To obtain copies of an association’s Articles of Incorporation, the Illinois Secretary of State’s Office requires: 1) a request by mail sent to “Secretary of State Corporations Division, 501 S. Second St., 3rd Fl., Springfield, IL 62756” along with a $25.00 check, or 2) a request by telephone to 217-782-6875 with a $27.50 credit card payment. However, much of the important information contained in the Articles of Incorporation—such as the legal name, status, date of incorporation, or names and addresses of the registered agent, president, and secretary—is available for free on the Secretary of State’s website at https://www.ilsos.gov/corporatellc/CorporateLlcController.

Answers provided by:

Karyl Dicker Foray, CIRMS, CRIS Rosenthal Brothers, Inc Deerfield

Joel Davis, CPCU, CIC, CIRMS Community Association Underwriters of America, Inc. Hoffman Estates

Foray: There are various ways that an Association can require unit owners to provide proof of insurance.  They can 1) make it a requirement under their Rules and Regulations or 2) through an amendment to their Declarations and Bylaws or 3) through a Board Resolution.  Condo associations can only require proof of liability insurance (since the Association really doesn’t care if they have insurance to replace clothes, furniture, etc).  See Section 12 (3)(h) of the Illinois Condominium Property Act for exact wording.  If it is a townhome association and the association doesn’t insure the units at all then they can require that proof of property and liability be provided.  Associations may fine unit owners who fail to provide proof of insurance, on a monthly basis, until the Certificate of Insurance is provided. 

Davis: Section 12(h) of the Illinois Property Condominium Act addresses this issue.  Once a rule has been adopted by a condo association requiring owners to provide proof of coverage, the board has the authority to impose fines for owners who don’t comply. Outside of fines, I suggest an informational meeting be held with owners to explain the importance of verifying unit owner coverage. Owners can easily request that his/her insurance agent set up their policy so automatic policy renewal information is sent to the Property Manager or member responsible for verification.

By: David Bendoff, Attorney
Kovitz Shifrin Nesbit
Mundelein | Chicago | Naperville

Question: Our association utilizes mail in ballots for elections to the board.  The association’s accounting firm (which also tallies our election results) opened the ballot box before last year’s election with only their personnel present in order to ensure a quorum before the annual meeting.  Shouldn't that ballot box be sealed until, and only opened at, the election?

Answer:  One of the purposes of having an independent third party act as an election inspector is to ensure a fair election; this involves maintaining the security of the ballots and ballot box.  The practice of opening the ballot box, and the actual ballots prior to the annual meeting, can jeopardize that purpose and may give rise to an appearance of impropriety. 

And even the most unintended of consequences can result when ballots are removed from the ballot box prior to the election.  For example, a ballot can be inadvertently lost or misplaced. 

The Condominium Property Act (Section 18(e)) does provide that “a candidate for election to the board of managers or such candidate's representative shall have the right to be present at the counting of ballots at such election.”  The Illinois General Not for Profit Corporation Act (Section 107.35) authorizes the appointment of election inspectors, and provides in relevant part:

“…..the chairman of the meeting may, or upon the request of any members shall, appoint one or more persons as inspectors for such meeting……”  Such inspectors shall ascertain and report the number of votes represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the members.”

I infer from these statutes that the ballots are to be opened, for all purposes, at the annual meeting, and not before.

Other states do have regulations in place that expressly provide that no person shall open or otherwise review any ballot prior to the time and place at which the ballots are counted and tabulated. 

Many associations adopt, or their governing documents expressly require them to follow, Robert’s Rules of Order.  The 11^th Edition provides that “(t)he person designated as addressee for the returned ballots should hold them in the outer envelopes for delivery, unopened, at the meeting of the tellers where the votes are to be counted.”

Moreover, a quorum is determined at the annual meeting, not prior to the annual meeting.  There may be some administrative convenience of having the election inspector review ballots before the annual meeting.  However, I don’t believe it is the best practice, and may open the door to attacks on the election procedure by those that might claim that this practice involves a nefarious purpose.  It just doesn’t seem like a practice whose benefit is outweighed by the risk.  The inspector could certainly keep a count of the ballots received as they are placed in the ballot box, and this would give a general sense of whether there is quorum.  However, I would not suggest opening the ballot box and reviewing any ballots prior to the annual meeting.