Winter 2015
Illinois legislation amending the Illinois Condominium Property Act or other statutes that affect Condominiums and Common Interest Community Associations
Email notices
 
Amendments adding new Sections 18.4(s), 18(b)(9A) and 18.8 to the Illinois Condominium Property Act (ICPA) allow email notices, approvals and communication with owners and members and will impact how a Board communicates and gains approvals from its members and maintains records. Since timely communication between a Board and its members is critical for well managed and successful Condominium Associations, these changes should be reviewed and considered by Association Boards.

Section 18.4(s) authorizes Condominium Boards to adopt rules permitting delivery of notices and other communications required or contemplated under the ICPA by email and other electronic means to Owners (members) who agree and give written authorization for electronic delivery and provide an electronic address to which such communications are to be transmitted. A rule must be adopted by the Board to allow the right to use an electronic (email) address. The rule must give the Unit Owner the right to designate an electronic address or a U.S. Postal Service address, or both, as the Unit Owner's official address for the purposes of maintaining the official list of Unit Owners that every Illinois Condominium Association must maintain and make available to Unit Owners for examination and copying.

Upon adoption of a rule, as stated in the amended ICPA Section 18(b)(9A), the Board is now authorized to use electronic technology to conduct Board elections, in which case proxies and ballots may be submitted electronically, provided that the electronic proxy or ballot includes information from which it can be determined that the vote was authorized by the Unit Owner or the Unit Owner's proxy.

A new Section 18.8 (use of technology) authorizes the use of technology in implementing the provisions of any condominium instrument or any provision of the ICPA concerning notices, signatures, votes, consents or approvals through "acceptable technological means," as long as a record of the vote is created and there is sufficient security, reliability, identification and verifiability in the Association's records.
 
No action that is required or permitted within any condominium instrument or any provision of the ICPA need be acknowledged before a notary public (unless a notary is required for a document to be recorded) if the identity and signature of the person can otherwise be authenticated to the satisfaction of the Board.

Insurance

All insurance policies that are to be issued to Condominium Associations after June 1, 2015, must reflect changes to ICPA Section 12.

Section 12(a)(1) of the ICPA requires that, not only must Associations carry property insurance for the full insurable replacement cost of the property, less deductibles, the insurance must now include the increased costs of construction due to building code requirements, demolition costs and the increased cost of construction coverage. The combined new coverage is not to be less than 10 percent of each insured building value, or $500,000, whichever is less. This higher coverage limits may result in higher property insurance premiums.

All Illinois Condominium Associations must carry directors and officers (D&O) liability coverage to protect volunteer directors and officers from claims and lawsuits. As amended, ICPA Section 12(a)(3)(D) requires that D&O insurance policies provide coverage for non-monetary claims (an injunction or a declaratory judgment), breach of contract actions and claims related to placement or adequacy of insurance. In addition, the D&O liability coverage must include coverage for past, present and future Board Members, the managing agent and employees of the Board or its managing agent.
 
The definition of “improvements and betterments” in ICPA Section 12(b) has been revised to include “additions, alterations or upgrades installed or purchased by a Unit Owner.”
 
In addition, ICPA Section 12(h) has been modified to take away a Condominium Board's authority to purchase liability insurance on behalf of Owners who did not comply with a mandatory insurance rule that the Board had in place. Many insurance experts questioned the right of the Association to obtain coverage for an Owner.
 
Other new laws affecting condominiums

Process server access: A new change to the Illinois Code of Civil Procedure P.A 98 0966.

This new law requires employees of a gated residential community (Condominium or Common Interest Community Association or Cooperative) to grant entry into the community, including the common elements and common areas, to a process server who is attempting to serve process on a defendant or a witness who resides within or is known to be within the community.

Lease of a unit pursuant to an Order for Possession.
 
An Association, under the Forcible Entry and Detainer Act, is allowed to take possession of a Unit to collect delinquent assessments when an Order for Possession is granted by the court. The Association may, but is not obligated to, rent the Unit and collect the rents to apply toward the delinquent assessments. In order to give Associations more time to complete repairs so the Unit could be leased, Illinois law now provides that an Association may enter into a lease at any time within the first eight months after expiration of the stay on an Order for Possession and that any such lease may run for up to 13 months. Under prior law, a lease could not run for more than 13 months after expiration of the stay of the Order for Possession. Additionally, the 13-month lease can be extended for one or more additional terms not to exceed 13 months per term.
 
 
Steven Bloomberg is a Principal at Chuhak & Tecson, P. C. who focuses his practice on condominium and common interest community association law, corporate and real estate matters and local governmental law. He is also a founder of the Community Association Institute of Illinois.

Steven has represented hundreds of associations throughout the Chicago area and has extensive experience serving the needs of and guiding boards of directors through a wide variety of issues.
 
Learn more about Steve and watch his video here.
 
The author, Steven Bloomberg, invites you to contact him and welcomes your inquiries.
 
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Circular 230 Disclosure
To the extent that the information contained in this newsletter concerns federal or state tax issues, such information was not written or intended to be used, and cannot be used, for (1) avoiding federal or state tax penalties or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein.
 
 
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