The Illinois Condominium Property Act sets the legal framework for how condominium associations operate in the state. It outlines the powers of the board, the rights of unit owners, and the rules governing finances, meetings, and management. Board members should understand these key provisions to stay compliant and make informed decisions.
What is the Illinois Condominium Property Act?
All condominiums in Illinois must abide by the laws outlined in the Illinois Condominium Property Act (ICPA). Its purpose is to govern the creation and operation of condos in the state, including how condo associations are established, managed, and controlled.
There are several aspects of association management that the ICPA governs. Included under its laws are rules and regulations related to:
- Board member elections
- Board meeting requirements
- Budget planning
- Fiduciary responsibilities
- Unit owner dues and assessments
- Access to association records and documents, including financial documents and meeting minutes
The Condo Act in Illinois outlines the rights and responsibilities for unit owners and board members. In Chicago, condo associations may choose to incorporate as Illinois not-for-profit corporations or be organized as a limited liability company (LLC).
In terms of decision-making and association management, condo associations must be managed by a group of elected board members. There must be a minimum of three elected directors. All board members must act as fiduciaries.
Under the Illinois Condominium Act, Chicago condo associations are governed by and subject to their own individual declaration and bylaws. The ICPA allows the board to adopt specific rules and regulations related to the day-to-day use of the property.
An In-Depth Look at Key Points Under the Illinois Condo Act
Legal counsel is always welcome when interpreting the laws that govern condominiums. Board members don’t always have the expertise or legal background necessary for the job, and this can expose the association to liability. That said, it is still important to understand the key points under the State of Illinois Condominium Property Act.
Board Powers and Responsibilities
Statute: 765 ILCS 605/18.4
According to condo law in Illinois, boards have the authority to manage the association’s affairs. This includes adopting budgets, collecting dues and assessments, hiring vendors, and maintaining common elements. The board also has the authority to levy fines after providing notice and an opportunity to be heard.
Board members also have fiduciary responsibilities to fulfill. They must always act in good faith and in the best interest of the association. They should follow state laws and the governing documents when making decisions.
Open Meetings and Owner Participation
Statute: 765 ILCS 605/18 and 765 ILCS 605/18.5
The Illinois Condominium Property Act requires boards to hold open meetings. This means that unit owners have the right to attend and observe most board discussions.
Associations can generally hold closed meetings, i.e., executive sessions, but they must be for a proper purpose. Justifiable reasons include:
- To discuss legal issues where the association is involved,
- To discuss personnel issues, including hiring and dismissal,
- To discuss rule violations,
- To discuss delinquent accounts, and
- To consult legal counsel.
That said, only discussions must be held at closed meetings. Votes on these matters must still take place at open meetings.
Additionally, boards must provide advance notice of meetings. They should also make agendas available. Other than that, owners should have an opportunity to speak at these meetings.
Financial Management and Assessments
Statutes: 765 ILCS 605/9 and 765 ILCS 605/18
According to Illinois condominium law, the board is responsible for preparing and adopting an annual budget. This budget determines the amount of dues that unit owners must pay.
The Act allows associations to levy regular dues to cover operating expenses and reserve contributions. If the board adopts a budget that exceeds certain thresholds, owners may have the right to reject it through a vote.
Additionally, Illinois law grants associations the authority to impose special assessments. These typically pay for unexpected expenses or major projects that the regular budget can’t cover.
Reserve Funds and Long-Term Planning
Statute: 765 ILCS 605/9
Associations must account for future repairs and replacements. While the Act does not mandate a specific reserve amount, it requires the board to reasonably fund the reserves.
That said, if the governing documents don’t require reserve funding, an association may vote to forgo this requirement. Two-thirds of the total votes are necessary to waive this statutory requirement.
Proper reserve planning helps prevent large special assessments. It also supports the long-term financial health of the community. For these reasons, it’s a good idea to plan for contributions and avoid waiving the requirement to fund reserves.
Records and Owner Access
Statute: 765 ILCS 605/19
The Illinois Condominium Property Act gives owners the right to inspect association records. This includes financial documents, meeting minutes, and other official records.
The board must make these records available within 10 business days after the owner submits a written request. Associations may also charge a fee to cover the actual cost of retrieving and making these records available for member inspection.
Condominiums in Illinois must maintain records, including meeting minutes, for at least seven years.
Insurance Requirements
Statute: 765 ILCS 605/12
The association must carry certain types of insurance. This typically includes property coverage for common elements and liability insurance.
The governing documents and the Act outline what the association must insure and what unit owners must insure. Boards should review these policies regularly to ensure adequate coverage.
Rules, Enforcement, and Fines
Statute: 765 ILCS 605/18.4
Illinois law gives condo boards the authority to adopt and enforce community rules. These rules must be reasonable and align with the governing documents.
If an owner violates a rule, the board may take action. Associations may impose fines or penalties, but only after providing notice and an opportunity for a hearing. Due process ensures fair and consistent enforcement.
Amendments to Governing Documents
Statute: 765 ILCS 605/17 and 765 ILCS 605/27
The Act provides guidance on how associations can amend their CC&Rs and bylaws. Boards must follow proper procedures when making changes. Failure to do so can lead to disputes or invalid amendments.
The condominium instruments may only be amended by an affirmative vote of two-thirds of the membership. The governing documents themselves may specify a different percentage or majority, but thresholds may not exceed three-quarters of all voting owners.
After an amendment passes, the association must record the amendment to make it effective.
A Rudimentary Understanding
The Illinois Condominium Property Act outlines the responsibilities, powers, and limitations of a condo association. At the very least, board members must understand the basic points of this Act to avoid liability. When in doubt, it is best to consult a lawyer or an HOA management company.
If you have questions about managing your Chicago condo association and ensuring your HOA is abiding by all ICPA rules and regulations, get in touch with us at First Community Management.