2017 Legislative Updates

2016 was another fertile year for Illinois legislation affecting condominium and common interest community associations. This update will provide a summary of the amendments to the Common Interest Community Association Act and to the Condominium Property Act effective January 1, 2017.

If you have questions or concerns regarding these legislatives updates and their effect on your association, please do not hesitate to contact Kovitz Shifrin Nesbit at 855-537-0550 or visit our website at www.ksnlaw.com.

Closed Board Meetings/Executive Session

Section 1-40(b)(5) of the Common Interest Community Association Act and Section 18(a)(9)(A) of the Condominium Property Act are amended to provide that the board may close any portion of a meeting for which notice was given or meet separately from a board meeting:  (i) to discuss probable or pending litigation; (ii) to discuss third party contracts or information regarding appointment, employment, engagement, or dismissal of an employee, independent contractor, agent, or other provider of goods and services; (iii) to interview a potential employee, independent contractor, agent, or other provider of goods and services; (iv) to discuss violations of the rules and regulations of the association; (v) to discuss member’s or unit owner’s unpaid share of common expenses; or (vi) to consult with the association’s legal counsel.  This change permits limited use of workshops, held without notice and without owners in attendance, to discuss issues that can also be discussed in “executive session” of a board meeting.  This is a limited legislative response to the Palm decision.

The legislation also provides that in addition to discussion of employment matters in the closed portion of a meeting (also known as executive session), the board may also discuss the engagement of any independent contractor, agent, or other provider of goods and services and interview a potential employee, independent contractor, agent, or other provider of goods and services. This codifies and expands on case law.

Finally, the legislation provides that the board may consult with the association’s legal counsel during the closed portion of a noticed meeting, or a meeting separate from a noticed meeting. This is really nothing more than codification of existing law.

Ability of the Board to Pledge Association Assets

Section 18.4(m) of the Condominium Property Act is amended by removing language that made the board of manager’s power, to assign the right of the association to future income from common expenses or other sources and to mortgage or pledge substantially all of the remaining assets of the association, subject to owner approval if required by the declaration. Thus, the assignment of the right of the association to future income from common expenses and to pledge all or substantially all of the remaining assets of the association can be approved by the board alone, even if the declaration requires owner approval.

This makes this section of the Condominium Property Act consistent with section 18(b)(13)(ii) regardless of whether the declaration requires owner approval. This will make it easier for condominiums to obtain loans.

Amendments to Declaration In Case of Error, Omission, or Inconsistency

Section 1-60 of the Common Interest Community Association Act is amended to provide that if a provision of the community instruments does not conform to the Act or to another applicable law because of an error, omission, or inconsistency in the community instruments of the association, the association may correct the error, omission, or inconsistency to conform the community instruments to the Act or to another applicable law by an amendment adopted by vote of two-thirds of the board of directors, without a membership vote.

The law also provides that a provision in the community instruments requiring members of record to vote to approve an amendment to the community instruments, or for the members of record to be given notice of an amendment to the community instruments, does not apply to an amendment that corrects an omission, error, or inconsistency to conform the community instruments to the Act or to another applicable law.

Finally, the law deletes language providing that corrections of errors or omissions in the community instruments may be adopted by a majority vote of the members at a meeting called for that purpose unless other procedural requirements apply. Essentially, only the board can amend the governing documents in the event of an error, omission, or inconsistency with the Act.

Acceptable Technological Means

Sections 1-5 and 1-85 of the Common Interest Community Association Act and Sections 2(z) and 18.8 of the Condominium Property Act are amended to provide that the term “acceptable technological means” includes, among other things, any generally available technology that, by rule of the association, is deemed to provide reasonable security, reliability, identification, and verifiability.

The law also provides that any notice required to be sent or received, or signature, vote, consent, or approval required to be obtained under any condominium instrument or any provision of the Illinois Condominium Property Act, as well as the performance of obligations or exercise of rights, may be accomplished by acceptable technological means.

This change with respect to condominiums does need to be read together with Section 18.4(s) of the Condominium Property Act, with respect to notices to owners.

The law also states that Sections concerning the use of acceptable technological means do not apply to any notices required: (i) under the Forcible Entry and Detainer Article of the Code of Civil Procedure; or (ii) in connection with foreclosure proceedings in enforcement of any lien rights” under the Act (instead of “notices required under [the Forcible Entry and Detainer Article] of the Code of Civil Procedure related to: (i) an action by the common interest community association to collect a common expense; or (ii) foreclosure proceedings in enforcement of any lien rights” under the Act).

Developer’s Rights

The Common Interest Community Association Act is amended to add Section 1-47, and the Condominium Property Act is amended to add Section 9.5. These additions provide that any assignment of a developer’s interest in the property is not effective until the successor has obtained the assignment in writing and recorded it.

This effectively prevents successor developers and others, purporting to hold the rights of the developer relative to the property, from claiming certain rights without documented, recorded proof. It will also  protect successor owners (like a foreclosing lender) from being characterized as a successor developer.

Condominium and Common Interest Community Ombudsperson Act

Various sections of the Condominium and Common Interest Community Ombudsperson Act are amended. With regard to the adoption of the complaint resolution policy – a requirement previously established by the legislation enacting the Ombudsperson Act itself – adoption of the unit owner complaint resolution policy must now be accomplished no later than January 1, 2019, or if the Association is first created after January 1, 2019, the policy must be adopted within 180 days.  Additionally, the Bill removes the Section of the Act that requires Associations to register with the Department of Financial and Professional Regulation.

An association’s final determination in response to a unit owner’s complaint must be made within 180 days after the Association received the owner’s original complaint. It previously required the final determination to be issued with a “reasonable time”. Disputes cannot be submitted to the Ombudsperson until July 1, 2020 and if the legislature appropriates funds.

The law provides that neither the Ombudsperson nor the Department shall have any authority to consider matters before a comparable department or body established by a county, municipality, or township (such as the Illinois Human Rights Commission) pursuant to an ordinance prohibiting discrimination and established for the purpose of investigating and adjudicating charges or complaints of discrimination under the ordinance, or before a federal agency or commission that administers and enforces federal anti-discrimination laws and investigates and adjudicates charges or complaints of discrimination under such laws. The law also provides that certain confidentiality provisions do not extend to educational, training, and outreach material, statistical data, or operational information maintained by the Department in administering the Act.

Finally, the law provides that the Act is automatically repealed on July 1, 2022 (instead of July 1, 2021).

If you have questions or concerns regarding these legislatives updates and their effect on your association, please do not hesitate to contact Kovitz Shifrin Nesbit at 855-537-0500 or visit our website at www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.

This article is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this article you understand that there is no attorney client relationship between you and the article author. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. © 2017 Kovitz Shifrin Nesbit, A Professional Corporation.