There have been a number of changes in Illinois laws in 2015 that have impacted the management of condominium and common interest community associations. Below is a summary we have compiled in an attempt to keep our clients and the community aware of the implications of these legal updates.
Changes to the Illinois Condominium Property Act (ICPA)
1. Expansion of the powers of the Board
- Amendment to the ICPA by Adding Section 18.8
- Known as Public Act 98-1068 or HB4783
- Effective January 1, 2015
- New Section voids governing document restrictions that attempt to limit or restrict the rights of the Board.
- Regardless of what the governing documents say, the Board shall no longer be required to obtain the prior consent of the unit owners to take any action, including the filing of a lawsuit or demanding a trial by jury.
- Regardless of what the governing documents say (notwithstanding Section 32 of the ICPA), the Board shall no longer be required to arbitrate or mediate a dispute with the declarant or the developer or any person not then a unit owner prior to filing of a lawsuit or demanding a trial by jury.
- A provision otherwise voided by this Section may be enforced if approved by a vote of not less than 75% of the unit owners at any time after the election of the first unit owner board.
2. Ushering new era of electronic notices/communication
- Amendment to Section 18.4 of the ICPA
- Known as Public Act 98-0735 or HB4784
- Adds new Sub-Section (s) to 18.4 related to the adoption and amendment of rules and regulations related to electronic delivery of notices and other communications.
- Such rules and regulations shall be related only to notices/communications required or contemplated by the ICPA.
- Such rules shall authorize electronic delivery of notices/communications to each unit owner who provides the association with written authorization for electronic delivery and an electronic address.
- Such rules and regulations shall authorize each unit owner to designate an electronic address or postal address (or both) on any list of members or unit owners which the association must make available pursuant to any valid records request.
3. Allowing technology in matters requiring member voting
- Amendment to Section 2 and 18 of the ICPA, and addition of 18.8
- Known as Public Act 98-1042 or HB5322
- Adds the definitions of “electronic transmission” and “acceptable technological means” to Section 2 of the ICPA.
- Adds provision to Section 18(b)(6) of the ICPA recognizing right of the Board to adopt rules and regulations relating to notice by electronic transmission.
- Under the new provision in 18(b)(6), if the appropriate rules and regulations exist related to electronic notice, consent must still be given by the unit owner and the director/officer must certify in writing to the delivery by electronic transmission.
- Adds provision to Section 18(b)(9) of the ICPA stating that if the appropriate rules and regulations exist, a vote or proxy may be submitted by electronic transmission, provided that the electronic transmission shall either set forth or be submitted with information from which it can be determined that the vote/proxy was authorized by the unit owner.
- Adds provision to Section 18(b)(9)(B-5) of the ICPA addressing the Board’s right to adopt a rule (or if the Declaration or Bylaws so state) at least 120 days before an election to eliminate the use of proxies.
- Under the new provision in 18(b)(9)(B-5), if such a rules has been adopted related to electronic transmissions, the use of acceptable technological means may be used to vote.
- Under the new provision in 18(b)(9)(B-5), specific notice and deadline requirements are set forth related to notice, candidacy, balloting and how that is impacted by the use of acceptable technological means.
- Adds provision to Section 18(b)(9)(D) of the ICPA stating that votes cast by electronic or acceptable technological means are valid for the purpose of establishing a quorum.
- New Section 18.8 of the ICPA is created that specifically addresses the use of technology.
- Any notice required to be sent or received or signature, vote, consent or approved required to be obtained may be accomplished by using technology generally available to that time.
- This right to use technology extends to the association, unit owners and other persons entitled to occupy a unit.
- A verifiable electronic signature now satisfies any requirement for a signature under the ICPA or the governing documents.
- Voting on, consent to, and approval of any matter under the ICPA or the governing documents may now be accomplished by electronic transmission, provided that a record is created as evidence and maintained as long as the record would be required to be maintained in non-electronic form.
- Going forward, subject to other provisions of law, no action required or permitted by the ICPA or the governing documents must be acknowledged before a notary public if the identity and signature of the person can be authenticated to the satisfaction of the Board.
- Individuals must provide written authorization to conduct business using electronic transmission or other equivalent technological means. If they fail to authorize it, the association must (at its expense) conduct business with that person without the use of electronic transmission or other equivalent technological means.
4. Revisions to insurance requirements for associations
- Amendment to Section 12 of the ICPA
- Known as Public Act 98-0762 or SB3014
- Effective June 1, 2015
- Amends the language in 12(a)(1)(iii) regarding property damage insurance and amounts of coverage.
- Adds a provision to 12(a)(3)(D) related to directors or officers liability coverage requiring coverage for defense of non-monetary actions, defense of breach of contract, and defense of decisions related to the placement or adequacy of insurance. This coverage shall include past, present and future board members while acting in their capacity as members of the board, and managing agent, and employees of the board and managing agent.
- Adds a provision to 12(b) that extends the definition of Improvements and betterments” to include “built-in cabinets installed by unit owners, or any other additions, alterations, or upgrades installed or purchased by any unit owner.”
- Eliminates portion of 12(h) that allowed board to purchase insurance on behalf of an owner who fails to purchase it.
- This amendment only applies to insurance policies issued or renewed on or after June 1, 2015.
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.