Compliance with state law is a must if you’re part of a community association’s board. To ensure this, you will need to familiarize yourself with state laws, including the Condo Act Illinois, and make community decisions consistent with them.
What is the Illinois Condominium Property Act?
The Illinois Condominium Property Act, or 765 ILCS 605, governs condominium properties throughout the state. It outlines what is included in the condo board’s authority. It also establishes financial rules that the association should follow.
The Act works with an association’s declaration and bylaws. When a governing document conflicts with a mandatory statutory provision, the statute generally controls. Directors should check the law before relying only on older condominium documents.
Key Requirements Under the IL Condominium Property Act
This piece of legislation affects nearly every major board function. As such, boards need to review their governing documents to see if they are consistent with it.
Here are some key provisions under the Condo Act of Illinois:
1. The Board Exercises the Association’s Authority
The state law states that, for shared community associations, the board exercises the powers granted to the association unless other laws require that the decision fall to unit owners. Decisions within the board’s authority include hiring a management company or entering into contracts with vendors on the COA’s behalf.
Members of the COA board should see this authority as part of their fiduciary duty to the condominium community. Their decisions must be made for the greater good of the association rather than for individual interests. With this, board members should document the basis for every major decision they make.
2. Common Elements Maintenance
Section 18.4 of the legislation says the board is responsible for the operation and management of common element maintenance. Part of this duty includes necessary repair and replacement. A declaration may limit certain improvements, but it generally can’t prevent restoration of existing common property.
Before approving any maintenance work, the board must confirm whether the component is considered a common element. It should also check whether the declaration assigns responsibility for that limited common element to a unit owner.
3. Board Meetings
Under this legislation, board meetings need to be open to unit owners. Additionally, a notice must be posted in a location that is easy to see at least 48 hours before the meeting takes place. The notice can also be sent through electronic communication channels if the unit owner has consented to receive it.
Some of the few matters the board can discuss privately include personnel issues, litigation, owner violations, and unpaid common expenses. However, final votes should still take place during an open meeting.
4. Elections and Owner Meetings
According to the Illinois Condo Act, associations are required to hold an annual meeting of the entire membership. Electing board members should be part of that meeting’s purpose.
For this, written notices should be delivered to unit owners no fewer than 10 days before the annual meeting and no more than 30 days before it.
In elections, voting rights are typically based on each unit’s percentage interest in the common elements. Proxies are allowed, but policies governing them must comply with state law. The same notion would also apply when the COA uses secret ballots or electronic voting.
5. Detailed and Timely Annual Budgets
When creating the condo association’s annual budget, the board must ensure it is detailed and submitted on time. The board must identify all anticipated common expenses by category. It should also include the COA’s projected annual income and show the proposed assessment for each condo unit.
The law states that unit owners need to receive the proposed budget at least 25 days before it’s adopted.
When the fiscal year ends, the COA board needs to provide an itemized accounting report of the actual common expenses. It should also state whether the association closed the year with a surplus or a deficit.
6. Associations and Reasonable Reserves
The budget of your condo association is required to include reasonable reserves that are to be used for capital projects and deferred maintenance. To ensure compliance, your COA board needs to factor in the useful life of the shared element and estimate the costs of its replacement or repair.
To do this, a reserve study is useful but not automatically required under this law. Under the Illinois Condo Act, your COA can waive the requirement through a voting procedure permitted by the Act. It can also forgo the study requirement if the governing documents do not independently require reserves.
7. Assessments and Collections
When it comes to assessments, unit owners must pay a proportionate share of the building’s common expenses. This is usually based on the percentage stated in the condo’s declaration. In general, any decisions about collection should follow the governing documents and an adopted policy consistent with the law.
If these assessments are unpaid, the COA has the right to place a lien on the unit.
Owners also have a limited petition right if the annual or other separate assessments exceed last year’s total by more than 15%. However, emergency costs and law-mandated expenses are treated a bit differently.
8. Association Records
The board has a duty to maintain core records at the COA’s principal office. It is also required to retain any meeting minutes for seven years. Meanwhile, financial records must cover the current fiscal year as well as t the 10 preceding fiscal years. Ballots and proxies must generally be kept for 12 months.
Residents or unit owners may submit written requests to identify and view records. Many COA records should also be available for inspection at a reasonable.
9. Insurance Requirements
The association must maintain property insurance on the common elements and covered portions of the units. Coverage must generally reflect full insurable replacement cost after deductibles and include required building code protection.
Commercial general liability insurance must provide at least $1 million in coverage. Fidelity coverage is required for association funds and reserves under the conditions stated in the Act. Boards should review all policies at renewal.
10. Rule Enforcement and Due Process
Your COA board can adopt reasonable property rules. These include levying reasonable fines, but affected unit owners need to receive notice and be given the opportunity to present their side.
When making violation notices, they should clearly state the rule violated and describe the conduct that broke the policy.
11. Ensuring Compliance
Section 35 requires condominium associations to comply with the Condominium and Common Interest Community Ombudsperson Act. That law requires a written policy for resolving owner complaints, which should also be available upon request.
COA boards should confirm that the procedure explains how to submit a complaint and when the association will issue a final written decision. Illinois extended these compliance requirements through January 1, 2029.
11. Illinois Condominium Property Act on Water Damage
The Illinois Condominium Property Act generally requires associations to insure common elements and basic unit structures. Responsibility for water damage, repairs and deductibles depends on the cause, the association’s governing documents and whether an owner was negligent.
Building a Strong Compliance Routine
The Illinois Property Condominium Act gives boards meaningful authority while imposing detailed procedures. A board that follows the statute and its governing documents is better positioned to manage the property fairly, particularly when it seeks qualified legal advice.
The Forth Group provides condo association management services to communities in Chicago and the surrounding areas. Call us today at (312) 379-0400 or contact us online to get started!
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