Publications

Amending the Association's Documents

The first thing a new purchaser of a condominium or townhome faces is what to do with the two inch stack of paper they are given by the association. The declaration of covenants, the bylaws, the rules and regulations and assorted other paperwork is intended to govern their day-to-day living, yet who is going to read all of this?

The education and indoctrination of owners is not within the scope of this column, but rather how to make this documentation relevant and keep it up to date. A board of directors that is not pro-active and chooses to operate with "stale" documents is only looking for problems when it comes time for enforcement.

Each type of document has different requirements and should be reviewed in different contexts.

Declaration of Condominium/Covenants - The declaration is the document which sets forth the "rules of property" pertaining to the aesthetics, architectural control and maintenance of the property. Each owner is subject to these restrictions as well as all applicable law.
Changes or amendments are relatively simple since the procedure for amendment is spelled out in the document itself. Generally, a super majority (2/3 or 75%) of the owners’ consent is required to make these changes. Sometimes the mortgage holders, the developer or even the village are entitled to notice or even have veto rights. However, practicality dictates that amendments become necessary when the members of the community want to change substantive policy such as eliminating rentals, dogs, etc.
When a declaration starts to approach 15 or 20 years of age, it becomes painfully clear that changes in the law and even social changes require a revamp. Whether it is an updated version incorporating all of the new laws, a streamlining to eliminate developer references and archaic language or just a re-write to make it reader friendly, the legal fees and costs will pay for themselves over time by having a readable document that does not require a lawyer’s opinion to interpret every paragraph.

Whether it is an amendment or an amended and restated declaration, it must be recorded in the county where the property is located before it can be valid.
By-Laws - The bylaws are the administration manual for the board. Powers and duties, responsibilities, assessment authority, etc. should be set forth in a document separate from the declaration. Sometimes attached as an exhibit to the declaration or even incorporated in the body of the declaration itself, in theory, the bylaws should have a lesser amendment requirement than the declaration, since it should be more flexible. However, in most instances, the bylaws of an association also require a super majority so even to expand or reduce the size of the board requires a herculean effort to get owner support. There is a distinction between condominiums and other types of community associations with regard to recording. For condominiums, it is required by Section 17 of the Illinois Condominium Property Act and the administrative rules for each county prescribe a specific format. For other types of associations, one must look at the bylaws themselves to determine whether amendments must be recorded.
Lastly, in the event an association does not have any bylaws, they can be adopted by a simple majority of the board so long as they do not contradict any provisions of the declaration.
Rules and Regulations - The rules of an association are the day-to-day living requirements adopted by the board to supplement the declaration and bylaws. Usually, they are warranted by the other documents, but it is implicit in the nature of an association to have rules, regardless. In administering an association in the ‘90s, a board should recognize that rules should be updated annually and spell out in detail as many of the areas of responsibility as possible. Courts have become very cognizant of rules being the source for most litigation (other than assessments) and, therefore, they should be detailed, specific and most important of all, current. Most courts will give greater import to the enforcement authority of the rules versus the general statements in the declaration or bylaws.
Rules and all subsequent revisions are adopted by the board. Section 18.4(h) of the Illinois Condominium Property Act requires condominiums to send out the proposed text and have an open meeting with the owners prior to the board adopting the rules. Although generally not required for other types of associations, it is still a good practice, regardless.

It is not only important for an association to have a good set of operating documents, but even more important, to keep them up to date. By making timely changes and keeping the ownership informed of their obligations, a board should have less difficulty with enforcement.