This is the first in a series of articles regarding changes in the IL Condo Act that will become effective in 2018.

The Illinois Condominium Property Act has created a new section that states, at the end of the Association’s fiscal year, and once the Association has approved any year end fiscal audit if necessary, and if the fiscal year ended with a surplus of funds instead of expenses, including budget reserve funds, then the Board had the authority to dispose of the surplus through the following methods:

  1. Contribute the surplus to the reserve fund
  2. Return the surplus to the unit owner as a credit toward leftover monthly assessments for the current fiscal year
  3. Return the surplus to the unit owners in the form of a direct payment
  4. Maintain the funds in the operating account, where funds are applied as a credit when calculating the coming annual budget.

If the fiscal year ends with a deficit, the Board has the discretion to address the deficit by incorporating it into the budget for the following year.

Unit owners can object to the Board’s decision as follows: If 20% of the unit owners object within 30 days’ notice to the action, the Board may call a meeting of the unit owners within 30 days of the date of delivery of the petition. At the meeting, unit owners may vote to select a different option than that chosen by the board. Unless most of the total votes of unit owners are cast at the meeting to reject the Board’s selection, and choose a different option, the Board’s decision is ratified.

In general, when a condominium unit is foreclosed, any assessment balances unpaid by the prior owner are extinguished by the foreclosure. IL law then allows associations to recover certain amounts from a third party purchaser if they have taken the proper steps

A recent opinion from Illinois’ First Appellate District provides that “prompt” payment of assessments is required to extinguish pre-sale assessments under the Condominium Property Act. This means that, potentially, the bank could be held responsible for the prior owner's balance if they don't "promptly" start making assessment payments on the unit. 

The problem, however, is that there is no strict definition of "prompt" established by law to determine whether or not the lien has been successfully extinguished by the bank.

Further guidance regarding the payment timing required to confirm the extinguishment of a condominium association’s lien will hopefully be provided in a pending Supreme Court appeal.

Read more about current events on this topic here.

While we're currently enjoying the dog days of summer, many snow removal companies are already locking in their contracts for the coming winter months. Once they fill up their schedules, they may stop taking new clients. If your condominium association has not yet put a snow removal contract in place, now is the time to do it. Having this information will also help you to budget for 2018.

Contact a HausFS Recommended Vendor now to get your snow removal contract in place and avoid the last minute scramble! 

In Lake Point Tower Condominium Association v. Waller,  the condo board filed a collection lawsuit against a unit owner. That owner asked that the lawsuit be dismissed, claiming the board had not voted on the action at an open board meeting and had improperly delegated the authority to initiate the lawsuit to the property manager. The trial court granted the dismissal to the owner, even though the board subsequently ratified the action at an open board meeting, and determined that the association could not proceed on the initial lawsuit. The association appealed this decision.

The Appellate Court determined that the trial court erred in dismissing the lawsuit as the association had ratified the action, even though it was after the lawsuit was filed. Furthermore, the court concluded that the Illinois Condominium Property Act did not preclude an Association’s Board from delegating authority to initiate collection lawsuits to the property manager.  

Per attorney Rob Kogen of Kovitz Shifrin Nesbit, condo boards should make a motion in an open meeting to allow a board member or the property manager to turn delinquent accounts over to an attorney for collection. Once the meeting minutes reflect a resolution allowing for this, the board does not need to vote at an open meeting on every owner account that is to be turned over for collections. As always, the minutes should be retained in the association's permanent files.

To read more about the case, click here.

Boards are continually bombarded with complaints from residents about the transmission of cigarette smoke into their homes. Most governing documents prohibit residents from engaging in “noxious or offensive activities,” leading residents to look to the Board to solve smoking related complaints.

In a condominium association, the Board determines whether a nuisance exists by ascertaining whether the conduct is unreasonable for the average person residing in the building property. The dangers of second-hand smoke have been sufficiently established in medical circles for the Board to reasonably conclude that it is justified in imposing abatement requirements.

This article from the CAI Illinois blog offers a strong template for rules regarding smoke transmission.

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