Public Act 099-0472 / House Bill 2640 approved August 27, 2015

Effective Date June 1, 2016

This communication is to inform about the recent changes to the ICPA and CICAA which were recently approved by the Governor and will become effective June 1, 2016. The notations for additions to the Act are underlined and deletions are stricken.

Common Interest Community Association Act

Section 1-15 (b) which discusses the provisions of Community Instruments severed by the Act, has now been deleted.

Section 1-15(b) (Blank) All provisions of the declaration, bylaws, and other community instruments severed by this Act shall be revised by the board of directors independent of the membership to comply with this Act.

What does this mean for the Association?

The purpose of this subsection has always been vague and open to misinterpretation; therefore it has now been deleted. There is no substantive impact.

Changes to the Illinois Condominium Property Act

  • Section 18(a)(6), Proposed Annual Budget
  • Section 18 (a)(9), Board Meetings
  • Section 18(a)(21), Emergency powers of the Board
  • Section 27, Amendments to governing documents

Section 18 of the ICPA

  1. Section 18(a)(6) that each unit owner shall receive, at least 30 25 days prior to the adoption thereof by the board of managers, a copy of the proposed annual budget together with an indication of which portions are intended for reserves, capital expenditure or repairs or payment of real estate taxes.

What does this mean for the Association?

The Board would now have 5 more days to prepare and deliver an annual budget to the owners.

  1. Section 18(a)(9) regarding Board Meetings has been expanded, clarified and subsections numbered.

(a)(9)(A) that every meeting meetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss or consider information relating to: (i) 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 (iv) a unit owner’s unpaid share of common expenses; that any vote on these matters discussed or considered in closed session shall take place be taken at a meeting of the board of managers or portion thereof open to any unit owner;

(B) that board members may participate in and act at any meeting of the board of managers in person, by telephonic means, or by use of any acceptable technological means whereby all persons participating in the meeting can communicate with each other; that participation constitutes attendance and presence in person at the meeting;

(C) that any unit owner may record the proceedings at meetings of the board of managers or portions thereof required to be open by this Act by tape, film or other means, and ; that the board may prescribe reasonable rules and regulations to govern the right to make such recordings; ,

(D) that notice of every meeting of the board of managers such meetings shall be mailed or delivered given to every board member mailed or delivered at least 48 hours prior thereto, unless the board member waives notice of the meeting pursuant to subsection (a) of Section 18.8; a written waiver of such notice is signed by the person or persons entitled to such notice pursuant to the declaration, bylaws, other condominium instrument, or provision of law other than this subsection before the meeting is convened, and

(E) that copies of notices of every meeting meetings of the board of managers shall be posted in entranceways, elevators, or other conspicuous places in the condominium at least 48 hours prior to the meeting of the board of managers except where there is no common entranceway for 7 or more units, the board of managers may designate one or more locations in the proximity of these units where the notices of meetings shall be posted; that notice of every meeting of the board of managers shall also be given at least 48 hours prior to the meeting, or such longer notice as this Act may separately require, to: (i) each unit owner who has provided the association with written authorization to conduct business by acceptable technological means, and (ii) to the extent that the condominium instruments of an association require, to each other unit owner, as required by subsection (f) of Section 18.8, by mail or delivery, and that no other notice of a meeting of the board of managers need be given to any unit owner;

What does this mean to the Association?

This will expand the powers of the use of technology. A Board member may now, by using acceptable technological means, teleconference, or Skype, etc. and be considered present for quorum at a Board Meeting. It also changes the notice requirement from simply mailed or delivered to ‘given’ which encompasses technological means to include email, text, etc. Therefore, all owners that have consented to electronic delivery need to be notified in that way at least 48 hours before the board meeting.

  1. Section 18 (a) (21) regarding Emergency powers has been added

(21) that the board may ratify and confirm actions of the members of the board taken in response to an emergency, as that term is defined in subdivision (a)(8)(iv) of this Section; that the board shall give notice to the unit owners of: (i) the occurrence of the emergency event within 7 business days after the emergency event, and (ii) the general description of the actions taken to address the event within 7 days after the emergency event.

The intent of the provisions of this amendatory Act of the 99th General Assembly adding this paragraph (21) is to empower and support boards to act in emergencies.

What does this mean for the Association?

The Board would have greater authority to act in emergency situations, with the responsibility to inform owners of their actions.

  1. Section 27, Amendments to governing documents

(a) If there is any unit owner other than the developer, and unless otherwise provided in this Act, the condominium instruments shall be amended only as follows:

(i) upon the affirmative vote of 2/3 of those voting or upon the majority specified by the condominium instruments, provided that in no event shall the condominium instruments require more than a three-quarters vote of all unit owners; and (ii) with the approval of, or notice to, any mortgagees   or other lienholders of record, if required under the provisions of the condominium instruments.

(b)(1) If there is an omission, error, or inconsistency in a condominium instrument, such that a provision of a condominium instrument does not conform to this Act or to another applicable statute, the association may correct the omission, error, or inconsistency to conform the condominium instrument to this Act or to another applicable statute by an amendment adopted by vote of two-thirds of the Board of Managers, without a unit owner vote. A provision in a condominium instrument requiring or allowing unit owners, mortgagees, or other lienholders of record to vote to approve an amendment to a condominium instrument, or for the mortgagees or other lienholders of record to be given notice of an amendment to a condominium instrument, is not applicable to an amendment to the extent that the amendment corrects an omission, error, or inconsistency to conform the condominium instrument to this Act or to another applicable statute or by a majority vote of the unit owners at a meeting called for this purpose, unless the Act or the condominium instruments specifically provide for greater percentages or different procedures.

What does this mean for the Association?

Approval would no longer be needed from the mortgagees for Amendments to the governing documents. However, notice is still required to all mortgagees and other lien holders of record.

Also, regarding Amendments to the governing documents to correct errors, omissions or inconsistencies, the Board may adopt the Amendment without a vote of the unit owners.

You can view the status of HB2640 here.

If we can assist your association in a legal matter, do not hesitate to contact KSN at 855-537-0550 or visit our website at www.ksnlaw.com.