May 9, 2016
2016 Legislative Updates
(Courtesy of Kovitz, Shifrin & Nesbit Law)
Illinois Condominium Property Act
Section 18(a)(6) is amended to provide that each unit owner must receive a copy of the proposed annual budget at least twenty five days prior to the adoption of the budget by the boards. The language previously said “thirty” days.” This should make it easier for associations to avoid multiple mailings in order to also comply with the requirement that written notice of that board meeting be given to owners at least 10 and not more than 30 days before the meeting. This amendment is effective June 1, 2016.
Effective June 1, 2016, Section 18(a)(9) is amended to deal with very limited issues raised by the “Palm” decision. Newly numbered subsection (A) expands what a board may discuss in a closed session to include “consideration of information relating to,” in addition to the current discussion of, litigation, employment, and a unit owner’s unpaid share of common expenses. It also clarifies that any vote on matters discussed or considered in closed session must take place at a meeting of the board of managers or portion thereof open to any unit owner.
Newly numbered subsection (B) provides that board members may participate in and act at any meeting of the board, in addition to being present in person, by telephonic means or by use of any acceptable technological means, as long as all persons participating in the meeting can communicate with each other. Participation by phone or other acceptable technology constitutes attendance and presence in person at the meeting. This loosely borrows from the not for profit corporation act, that was applicable to condominiums.
Newly numbered subsection (C) clarifies that that any unit owner may record the proceedings at open meetings of the board of managers (but not other meetings) by tape, film or other means.
Newly numbered subsection (D) provides that notice of every meeting of the board of managers must be given (it no longer says “mailed or delivered”) to every board member at least 48 hours prior to the meeting, unless the board member waives notice of the meeting. This section was previously ambiguous as to whether such notice had to be mailed or delivered to unit owners as well.
Newly numbered subsection (E) makes a stylistic change concerning the posting of board meeting notices. Notably, that section also adds that notice of every meeting of the board must also be given at least 48 hours prior to the meeting, or such longer notice as the Act may separately require, to each unit owner electronically who has provided the association with written authorization to conduct business by acceptable technological means. Moreover, to the extent that the condominium instruments of an association require, notice must also be given to each other unit owner who has not provided written consent to receive notice electronically, by mail or delivery, and that no other notice of a meeting of the board of managers need be given to any unit owner.
In an attempt to empower and support boards to act in emergencies, Section 18(a) is amended to add a new subsection 21 that addresses concerns raised by the “Palm” decision as to how a board can make decisions in such “emergencies.” It states that the board may ratify and confirm actions of the members of the board taken in response to an emergency, as the term “emergency” is defined in the Act, specifically in Section 18(a)(8)(iv). However, the board must give notice to the unit owners of the occurrence of the emergency event within 7 business days after the emergency event, and the general description of the actions taken to address the event within 7 days after the emergency event. This amendment takes effect June 1, 2016.
Unit Owner with Disability
Section 18.4(q) is amended to make a stylistic change. It requires the Board to reasonably accommodate the needs of a unit owner who is a person with a disability (the Section previously used the word “handicapped”) as required by the federal Civil Rights Act of 1968, the Human Rights Act and any applicable local ordinances in the exercise of its powers with respect to the use of common elements or approval of modifications in an individual unit. This amendment is effective June 1, 2016.
Declarations and/or By-laws Amendments
Effective June 1, 2016, Section 27 of the Act to provide that language in the condominium instruments that requires notice to (not just approval of) any mortgagees (and adds other lien holders of record as well) is valid. Additionally, the board can amend the condominium instruments, without owner approval, if there is an error or inconsistency in a condominium instrument such that they do not conform to the Act or to another applicable statute. The section previously just said “error.”
Also, the amendment clarifies that any provision in a condominium instrument requiring or allowing unit owners, mortgagees, or other lien holders of record to vote to approve an amendment to a condominium instrument, or for the mortgagees or other lien holders 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 the Act or to another applicable statute.
Former duplicate numbered section 18.8 that, among other issues, eliminated requirements for unit owner approval to initiate litigation, is renumbered as section 18.9.
Section 35 is added that provides that every condominium association must comply with the Condominium and Common Interest Community Ombudsperson Act and is subject to all provisions of the Condominium and Common Interest Community Ombudsperson Act. Notably, this new section is scheduled to be automatically repealed on July 1, 2021. SeeCondominium and Common Interest Community Ombudsperson Act.
Common Interest Community Association Act
Limited Liability Company
Various sections are amended to provide that a common interest community association can be organized as a limited liability company, established by articles of organization, and governed by an operating agreement. As such, the articles of organization and operating agreement are included among the books and records available for examination and copying by members of the association in Section 1-30(i). A limited liability company is added to the list of entities with whom the board member conflict of interest provisions of Section 1-30(b) apply.
Additionally, effective June 1, 2016, Section 1-15(b), which discussed provisions of the Community instruments beings served by the Act, is deleted in its entirety.
Section 1-90 is added that provides that every condominium association must comply with the Condominium and Common Interest Community Ombudsperson Act and is subject to all provisions of the Condominium and Common Interest Community Ombudsperson Act. Notably, this new section is scheduled to be automatically repealed on July 1, 2021. See Condominium and Common Interest Community Ombudsperson Act.
Condominium and Common Interest Community Ombudsperson Act
On July 1, 2016, the Condominium and Common Interest Community Ombudsperson Act will go into effect. It establishes the Office of the Condominium and Common Interest Community Ombudsperson. This regulatory division is designed to educate and assist condominium and common interest community owners and managers about the Condominium Property Act and the Common Interest Community Association Act. The “Ombudsperson Act” also tasks the division with responsibilities including association registration, legislative reform, complaint resolution, and enforcement. Notably, complaints can’t be filed by unit owners until July 1, 2019 and the law will be automatically repealed July 1, 2021.
By January 1, 2017, associations must adopt a written policy for resolving complaints made by unit owners. The policy must include a sample form upon which owners can make complaints, a description of the process by which complaints are to be delivered to the Association, the Association’s timeline and manner of making final determinations in response to a unit owner’s complaints, and requirement that the final determination made by the association in response to a unit owner’s complaint be in writing, within a reasonable time after the unit owner’s original complaint, and marked clearly and conspicuously as “final”.
On or before July 1, 2018, the ombudsperson person must offer training, educational materials, and courses to unit owners, associations, boards of managers, and boards of directors in subjects relevant to the operation or management of condominiums and common interest communities and the Condominium Property Act and the Common Interest Community Association Act.
Beginning July 1, 2019, qualifying unit owners may make complaints to the Ombudsperson for assistance in resolving a dispute between a unit owner and an association that involves a violation of the Condominium Property Act or the Common Interest Community Association Act. Notably, the Ombudsperson shall not accept requests for resolutions of disputes with community association managers, or of disputes for which there is a pending complaint in any court or administrative tribunal.
In order for a unit owner to make a complaint, they must meet various qualifications, including that they must not owe any funds to the association unless those funds are central to the dispute, the dispute must have occurred within the past 2 calendar years, and the owner must have followed the above-described complaint procedure within their own Association and received a final adverse decision. The requirements of what must accompany the complaint are also outlined.
Every association is required to register with the Department of Financial and Professional Regulation. A registration is valid for 2 years. The initial registration for the Association existing on July 1, 2016 is due within one year, or at such later time as the Department has adopted rules and forms for registration.
Do note that common interest community associations that are exempt from the Common Interest Community Association Act are exempt from the Ombudsperson Act.
If you have questions or concerns regarding these legislatives updates and their effect on your association, please do not hesitate to contact visit our website at www.ksnlaw.com.
Categories: Advisory, Recent
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