Tag: Condominium Associations

Attention Condominium & Common Interest Community Associations: Have You Prepared Your Complaint Resolution Policy Yet?

The Illinois Condominium and Common Interest Community Ombudsperson Act, 765 ILCS 615/1, et seq. (the “Act”) requires all condominium and common interest community associations to have in effect by January 1, 2019 a written policy for resolving unit owners’ complaints. The Act originally established the office of the Office of the Condominium and Common Interest Community Ombudsperson (the “Ombudsperson”), whose job is to educate, train and assist unit owners, condominium and common interest community associations and their respective boards about the laws governing them, and, beginning on July 1, 2020, to assist with the resolution of certain disputes between unit owners and associations.

Before any unit owners may make complaints to the Ombudsperson, however, their associations must first prepare their own complaint resolution procedures. If you, like me, are on the Board of your condominium association, you and your board members are responsible for preparing this written policy (or directing your association’s legal counsel to prepare it) by no later than January 1, 2019.

But don’t wait until the last minute to draft the policy. Once the policy has been drafted, you must then circulate a copy of the proposed policy to the owners for review, and thereafter allow comment on the draft policy by the other owners at a properly-noticed Board meeting. At the meeting, the Board can approve the policy, and then it becomes part of the condominium declarations or other governing documents.

The policy must include: (1) a sample form on which a unit owner may make a complaint to the association; (2) a description of the process by which complaints shall be delivered to the association; (3) the association’s timeline and manner of making final determinations in response to a unit owner’s complaint; (4) a requirement that the final determination made by the association in response to a unit owner’s complaint be: (i) made in writing; (ii) made within 180 days after the association received the unit owner’s original complaint and (iii) marked clearly and conspicuously as “final”.

Keep in mind that the Act applies only to complaints by unit owners to the association—not to complaints by the association against a unit owner, or complaints by unit owners against other unit owners. Thus, typical complaints will likely include whether a Board provided adequate notice of meetings, whether the Board improperly conducted business outside of an open meeting, or whether the Board failed to adhere to governing law or the association’s governance documents.

If you or your association has questions or requires additional information on this issue, or if you or your business has any other questions regarding litigation or dispute resolution, please contact:
Katherine Grosh at kgrosh@lgattorneys.com or (312) 368-0100.

Is Your Condominium Association’s Leasing Restriction Enforceable?

Leasing restrictions are a common issue in condominium associations. Associations have adopted different forms of leasing restrictions, often with the goal of maintaining a certain owner-occupancy rate. Common restrictions include restrictions on the length of leases and a limit on the number of units that may be leased at any one time. A higher owner-occupancy rate is desirable is desirable for a condominium association so that units meet FHA and conventional lender requirements for refinancing and sales.

Condominiums associations are controlled by the association’s governing documents: the condominium association declaration and bylaws which are recorded with the county recorder of deeds; and rules and regulations passed by the association’s board of managers. Leasing restrictions have often been adopted by the board as a rule and regulation rather than by an amendment to the declaration, which requires a vote of the unit owners.

On February 3, 2016, the Illinois Appellate Court for the First District in Stobe v. 842-848 W. Bradley Place Condominium Association, ruled that a condominium association board may not adopt a leasing restriction as a rule or regulation, if the declaration recognizes a unit owner’s right to lease his unit. In Stobe, the association’s declaration and bylaws did not expressly state that unit owners had a right to lease their units, but did include certain restrictions on leasing, including that no unit could be leased for hotel or transient purposes for less than six months, and limitations on the lease or sublease of parking spaces.

The Appellate Court held that the board lacked the authority to pass a rule restricting leasing because the association’s declaration expressed certain limitations on leasing and, therefore, any restriction of an owner’s right to lease their unit conflicted with the declaration’s intent and must instead be done through an amendment to the declaration. In its decision, the Court rejected the association’s reliance on Apple II Condominium Association v. Worth Bank and Trust Co., in which the Court held that an association may prohibit the leasing of units either by a board rule or amendment to the declaration. Since the Apple II case involved whether an amendment restricting leasing was valid, and not a rule adopted by the board, the Court in Stobe found that the Apple II holding with respect to leasing restrictions through a board rule was merely dicta and not controlling law.

As a result of the Stobe decision, if a condominium association’s declaration indicates an intention that owners have the right to lease their units, any leasing restriction must be done through an amendment to the association’s declaration, rather than the adoption of a board rule.

If you have any questions regarding leasing restrictions in your condominium association governing documents, or how this case may impact your association, please contact:

Kristen E. O’Neill at:

koneill@lgattorneys.com or 312-368-0100.

Attention Condominium Associations, Condominium Unit Owners, and Condominium Board Members!

The Illinois Condominium Property Act (the “Act”) provides that all meetings of condominium board members are to be held in person and open to all unit owners, with very limited exceptions.

In fact, the Act requires that a condominium association’s bylaws must provide:

“[M]eetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner’s unpaid share of common expenses, that any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner.” 765 ILCS 605/18(a)(9) (West 2004).

The Illinois Appellate Court, in the recent decision of Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2014 IL App (1st) 111290 (2014), held that the board of directors of the condominium association violated the Act by conducting business at closed meetings, including discussion regarding association matters and soliciting input by email, canvassing board members by phone and deciding on matters in closed “working” sessions prior to presentation of the matters for a vote in an open meeting, and that such closed working or executive sessions, which are not open to unit holders, are impermissible. The facts of Palm may serve as a good guide to condominium board members and unit owners alike – to determine what may constitute a closed working or executive session.

Condominium associations should review both their bylaws and their actions to ensure compliance with the Illinois Condominium Property Act and to avoid the practice of conducting closed working or executive sessions, which are not made open to unit holders. If you have any questions regarding condominium board procedures, please contact:

Jeffrey M. Galkin at:

(312) 368-0100 / jgalkin@lgattorneys.com

testimonials

"We've worked with Levin Ginsburg since the 1980s...we have grown with them and have a very high level of comfort and confidence with this firm." Jay Nichols, President,
Badger Murphy
"Astute, responsive and practical. Those are three reasons why we work with Levin Ginsburg." Bryan L. Oyster, V.P. and General Manager,
Bentley Forbes