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This article will provide an overview of the Illinois Condominium Property Act, 765 ILCS 605 et. Seq. This article will also discuss common problems that arise under the Illinois Condominium Property Act (“ICPA”). Read on to see a highlight of Illinois condominium laws explained.
What is the ICPA?
ICPA is the governing Illinois statute for condominium owner associations (“COA”). Condo Owner Associations manage the daily operations of the condominium development. They are responsible for maintaining common elements such as lobbies, hallways, elevators, and outdoor spaces. They are also responsible for collecting assessments from condo owners to pay for the maintenance of the condominium development.
What controls Condo Owner Associations?
The controlling document for COAs is the Declaration of Condominium, rules, and regulations and its bylaws. These documents are to be recorded with the local recorder of deeds and given to a member upon request. The bylaws will determine how the COA is governed and operated, as long as they do not conflict with the ICPA.
How are Condo Owners Associations organized?
In Illinois, Condo Owners Associations can be organized in two common forms. A COA can be incorporated as a not-for-profit business under the General Not for Profit Corporation. A Condo Owners Association can also be organized as a limited liability company or LLC. Both forms of corporate organizations must register and file the proper paperwork with the Illinois Secretary of State. In addition to the required paperwork, the proper fees must be paid annually, and maintain proper paperwork with the Secretary of State to remain in good standing. Both forms of entities require listing the officers and their addresses with the Secretary of State.
Who manages a COA?
A COA is managed by a board of directors elected by following the procedures of the declaration and bylaws. These procedures will vary by association but must not conflict with the ICPA. Generally speaking, a president, a secretary, and a treasurer will be elected to the Condo Association Board of Directors.
What happens if a condo owner has an issue against the Condo Owners Association Board Members?
There are several potential ways to bring a cause of action against a COA. Condo owners will usually allege breaches of the declaration or other controlling legal documents. Courts will have to examine these documents as a whole to decide whether the COA’s actions were appropriate.
Common allegations brought against a COA include: violating controlling legal documents of the Condo Owner’s Association Board’s failure to obtain a required vote before taking action and the Condo Owner’s Association Board’s failure to give proper notice of a possible vote or action to be undertaken, which the Illinois Condominium Property Act requires. Such actions constitute a breach of fiduciary duty that the COA owes the condo unit owners.
What is a fiduciary duty?
A fiduciary duty in Illinois is a duty of care owed to another based upon a relationship. Condo Owner Association owes a fiduciary duty to the unit owners. In order to have a breach of fiduciary duty, there first must be a fiduciary duty owed, a breach of that duty, and damages caused by that breach of fiduciary duty.
The Illinois Condominium Property Act imposes a fiduciary duty upon the condo board. The Act states: “in the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.” Suppose the board members cannot act reasonably and breach their fiduciary duties. In that case, liability will be attached to the board members and individual members.
One of the duties of the Condo Board is found under the ICPA 765 ILCS 605/19(b) and (e). It allows upon written request of the Condo Board to inspect, examine or copy the financial records of the COA within ten days.
What types of records is a Condo Board Association required to maintain pursuant to the ICPA?
Below are the records required to be maintained but are not limited to:
- The declaration, bylaws, and plats of the survey
- Rules and Regulations
- Articles of incorporation and any amendments
- Minutes of meetings for the past seven years
- Current insurance policies
- Contracts, leases, and other binding obligations
- Ballots and proxy votes for unit owners for the previous twelve months
- Books and records for the past ten years.
A breach of fiduciary duty cause of action can take many forms. It is a breach of fiduciary duty by the Condo Association board to fail to acquire adequate insurance or failure to obtain insurance coverage for fraud. As stated above, it is a breach of fiduciary duty for the Condo Association Board to dishonor a request to inspect financial documents or other documents the Condo Board Association Board is supposed to maintain to a unit owner. It is also a breach of fiduciary duty for the Condo Board Association Board to fail to maintain common elements of the condo building.
Breach of fiduciary duty in these matters are not torts (civil wrongs) but are based upon a contract theory of agency. This means that an action of negligent fiduciary duty does not exist.
Can a Condo Association Prohibit Emotional Support Animals?
Under the Federal Fair Housing Act, a Condo Owners Board Association must accept emotional support animals. It also violates the Illinois Human Rights Act to refuse to permit a support animal. Support animals can provide emotional support for a person with mental or physical disabilities that limit at least one significant life activity or bodily function. Unlike a service animal, a support animal is not trained to do tasks or perform work. They do provide therapeutic support to people with many different types of conditions. It is considered discrimination for the Condo Association to prohibit emotional support animals.
Whom do I complain to about a Condo Owners Association?
The Illinois Department of Financial and Professional Regulation established an Ombudsperson for the Condominium and Common Interest Community. The Ombudsperson cannot resolve legal issues or provide legal advice but is designed to help Condo Owners Associations and unit owners understand their rights and obligations under the Illinois Condominium Property Act.