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The following are frequently asked questions about condo law and general answers to those questions based on the Illinois Condominium Property Act (unless otherwise noted). The information given is intended for general informational purposes only. Answers to any specific problem may depend on particular facts at issue, and may change answers found here.
“Board of Directors” and “Board” is used instead of “Board of Managers” but they mean the same thing.
“The Act” or “Act” means the Illinois Condominium Property Act.
What is a condo association?
How is a condo association formed?
What law governs condo associations?
What law covers condo owners?
What is the “declaration”?
What are “bylaws”?
What are “rules and regulations”?
What is the procedure for amending the bylaws and declaration?
What is the procedure for a board to adopt a rule?
How is the board of directors elected?
What kind of notice is required for meetings of the association?
What kind of notice is required for meetings of the board of directors?
Can a unit owner who is not on the board to call a meeting of the association?
How is the operating budget for the association drawn up?
How can unit owners know how the prior year’s budget was actually spent?
Does a condo association have to have reserves?
What kind of reserves should a condo association have?
What kind of records does an association have to keep?
Who has the right to see the association’s records?
Is there a certain number of meetings the board must have per year?
Are unit owners entitled to copies of minutes from board meetings?
Can unit owners record (electronically, video, or digitally) board meetings?
What happens when a condo owner does not pay assessments?
Can a condo board or an association prohibit renting a unit? If so, how?
Can a condo board or an association prohibit pets, even if pets have been allowed all along?
If a unit owner is renting out the unit, and the tenant is violating association rules, what recourse to other unit owners have?
How is a condominium turned over to the association from the developer?
Can a unit owner who is not on the board do anything to protest an increase in the assessments?
Can a unit owner refuse to pay the assessment for any reason (i.e., doesn’t agree with the assessment or disputes the validity of the assessment)?
Do unit owners have to have home owners insurance? Does the association have to have insurance? What insurance covers what?
Can the board of directors have closed meetings?
How are officers (president, vice president, secretary, treasurer) elected?
Is there a procedure where an officer can be removed from office?
Is there a procedure where a director can be removed from office?
What is the correct procedure for the association to hire services from a maintenance company, a management company, legal counsel, or any other service providers?
What happens if there is a vacancy on the board of directors?
Are there circumstances when the action of an association requires unanimous approval of all unit owners?
Can a property manager or someone from the board ever come into a unit without the owner’s permission?
How does proxy voting at association meetings work?
Does the board have to distribute a list of unit owners?
Can unit owners install a satellite dish on or near their unit?
If repairs are necessary only on limited common elements, can the association charge only those owners benefitting from the limited common element for the repairs (i.e., do all unit owners have to pay, even though they get no benefit from the limited common element(s))?
Who pays the property taxes for individual units – the unit owner or the association?
Q: What is a condo association?
A: A condo association is a specific way for multiple people to own property. In a condo association, unit owners own their own units, and all of the unit owners jointly own the common elements (the part of the property outside of their units) of the property.
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Q: How is a condo association formed?
A: A condo association is created when the declaration of condominium association and plat is recorded pursuant to the Illinois Condominium Property Act. English translation: the owner(s) of the property decide he/she/they want to form a condo association; a condo declaration (which is the “constitution” of the association) is drafted and it is recorded at the Recorder of Deeds office. The owner(s) of the property may be a developer, a single individual, a group of people, a landlord, etc. – anyone who owns the property or has an ownership interest in the property. Forming the condo association takes the property out of their ownership, and the property is now owned by the condo association.
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Q: What law governs condo associations?
A: Illinois state law and local ordinance, primarily. State laws which apply to condos include the Illinois Condominium Property Act and the Illinois Not-for-Profit Corporation Act (since many condo associations are not-for-profit corporations). Local municipalities may also have ordinances affecting condos; Chicago, for instance, has the Chicago Condominium Ordinance.
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Q: What law covers condo owners?
A: In addition to the same state and local laws that govern condo associations, condo owners are governed by the association’s declaration, bylaws, and rules and regulations.
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Q: What is the “declaration”?
A: A declaration is the “constitution” of the association, and it specifies and provides for the governing of the association and how the association is set up, i.e., how elections are conducted, when meetings are held, etc. The declaration is a recorded document, which means that the provisions of the declaration are binding on the entire property in perpetuity, including each unit. Therefore, everyone who ever owns a unit in the condo association – anyone who owns a unit now or ever buys a unit in the future – is subject to the provisions of the declaration. The declaration can be amended by a super majority of the unit owners, and any amendment to the declaration also has to be recorded.
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Q: What are “bylaws”?
A: The bylaws are additional rules governing how the association is to be run; bylaws are voted on and adopted by the entire association (almost always by a super-majority – typically 2/3 or 3/4). Many associations have their declaration and bylaws together as a single document.
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Q: What are “rules and regulations”?
A: Rules and regulations are rules governing particular aspects of the association, and are adopted and voted on by the board only. Rules and regulations cannot override the declaration or bylaws. Since rules and regulations are adopted by the board only, they are easier to change – for instance, a new board can nullify any rule or regulation adopted by a previous board, as well as enact new rules and regulations.
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Q: What is the procedure for amending the bylaws and declaration?
A: An amendment to the bylaws and declaration has to be approved by the unit owners – and almost always by a super-majority; some declarations and bylaws call for 2/3 approval, some for 3/4 approval. Once approved, the amendment must be recorded to be effective.
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Q: What is the procedure for a board to adopt a rule?
A: The board should send notice to the unit owners 10-30 days before a board meeting that the proposed rule(s) will be voted on. At the board meeting, there should be an opportunity for the unit owners to discuss the new rule (or revision to a rule, as the case may be). After discussion from the unit owners, the board should vote on the rule. A majority of the board can enact the new rule. As long as this proper procedure is followed, and as long as the rule does not violate local, Illinois, or federal law, the rule is proper.
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Q: How is the board of directors elected?
A: The board is elected by a vote of the members of the association. The bylaws of the association must say how many of the board members are up for election each year, but at least 1/3 of the board has to be up for election each year. No director may serve a term longer than 2 years.
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Q: What kind of notice is required for meetings of the association?
A: Written notice must be mailed or delivered to all unit owners no less than 10 days and no more than 30 days before the meeting, and the notice must state the date, time, and place of the meeting.
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Q: What kind of notice is required for meetings of the board of directors?
A: Notice of the board meeting must be posted in entrances, elevators, or other conspicuous places in the building at least 48 hours before the meeting.
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Q: Can a unit owner who is not on the board to call a meeting of the association?
A: The association is required to have at least one meeting per year, and may have more. A meeting of all unit owners can be called by the association president, by the board of directors, or by a petition signed by 20% of the unit owners.
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Q: How is the operating budget for the association drawn up?
A: The board of directors prepares a proposed budget for the entire association. The proposed budget has to cover all of the anticipated common expenses and all of the anticipated income for the coming year, and must include the proposed assessments for each unit for the coming year. The board of directors has to distribute a copy of the proposed budget to all of the unit owners 30 days before the board votes on the budget at an open meeting properly called for that purpose.
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Q: How can unit owners know how the prior year’s budget was actually spent?
A: Each year the board of directors must distribute to all unit owners an itemized accounting for the prior year of the revenues collected and the amounts spent, and what the expenses were. The accounting must clearly state whether there was a deficit or a surplus for the year.
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Q: Does a condo association have to have reserves?
A: The board must maintain a reasonable reserve fund to pay for capital expenditures and major repairs and replacements to the common elements. The board should make contributions to the reserve fund in each year’s budget. Having a reserve is required by the Act, and is, for obvious reasons, a wise and prudent course of action for any association. An exception to the requirement for reserves does exist, however: if an association’s declaration does not have a requirement to have a reserve fund, the association may opt, by a 2/3 majority of unit owners, to not have a reserve fund.
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Q: What kind of reserves should a condo association have?
A: The amount of reserves depends on the size of the building, the condition of the common areas (and the limited common elements if they are paid for through the reserves as per the declaration and bylaws), the useful life of components of the building, etc. There are professional services which can do a study to determine how much of a reserve a particular association should have, which can provide an excellent guideline.
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Q: What kind of records does an association have to keep?
A: An association is required to keep the following records at its principal office: declaration, bylaws, and rules and regulations; incorporation documents, if the association is incorporated; minutes of all association meetings and board meetings for the past 7 years; insurance policies; all contracts and leases affecting the association or any unit owners; a current list of all names, addresses, and weighted votes of every association member entitled to a vote; ballots and proxies for all matters voted on by association members for the past 12 months; and financial books for the association for the past 10 years.
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Q: Who has the right to see the association’s records?
A: Any association member (or an agent of an association member) has the right to see and make copies of the declaration, bylaws, rules and regulations, incorporation documents, minutes of all association meetings and board meetings for the past 7 years, insurance policies at any reasonable time at the association’s principal office; an association member need only provide a written request to the board of directors (or management company or other agent of the board) stating what specific records he or she wants to see and/or copy. The board of directors (or management company or other agent of the board) must make the requested records available within 30 days, or else the association may be liable for reasonable attorney’s fees in a legal action to compel production of the records.
In order to see and/or make copies of all contracts and leases affecting the association or any unit owners; a current list of all names, addresses, and weighted votes of every association member entitled to a vote; ballots and proxies for all matters voted on by association members for the past 12 months; and financial books for the association for the past 10 years, the association member must make a written request to the board of directors (or management company or other agent of the board) stating what specific records he or she wants to see and/or copy and state the purpose of the request. Only a proper purpose will allow the association member to see and/or copy these records.
The Chicago Condominium Ordinance, however, allows all unit owners to inspect the financial books of the association within 3 days of a written request to do so.
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Q: Is there a certain number of meetings the board must have per year?
A: The board must have at least 4 open meetings per year.
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Q: Are unit owners entitled to copies of minutes from board meetings?
A: If minutes are produced, unit owners may ask for a copy. Boards are not legally required to post or distribute minutes, however.
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Q: Can unit owners record (electronically, video, or digitally) board meetings?
A: Yes, they can, as long as it is not disruptive. The board may enact rules regarding recording the meetings to prevent disruption, but cannot prohibit recording the meeting.
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Q: What happens when a condo owner does not pay assessments?
A: The association can put a lien on that owner’s unit. The association can initiate collection of past-due assessments (and costs and interest) by sending a demand for possession that should be paid in 30 days, followed by an eviction lawsuit if the demand is not paid. The most prudent path is to turn the matter over to an attorney when the assessments are 60 days past due; 60 days because any sooner would be jumping the gun; 60 days because if the unit owner has no intentions or ability to pay, the entire process for a judgment and enforcement of the judgment can take as long as 6 months (including the 60 days), and waiting more than 60 days to begin the process only adds more time.
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Q: Can a condo board or an association prohibit renting a unit? If so, how?
A: Yes, renting out a condo unit can be prohibited. A condo board can make a rule prohibiting renting units, and an association can amend the declaration and bylaws to prohibit renting. Frankly, amending the declaration and bylaws is the more secure of establishing this prohibition. Amendments to the declaration and bylaws are presumed valid by Illinois courts in case of a challenge by a unit owner (that is, as long as the amendment to the declaration and bylaws were properly adopted by the association, the court will not scrutinize the amendment, inasmuch as it was approved by the unit owners). However, changes to the rules by the board alone are not presumed valid by a court, and are open to the court’s scrutiny and the possibility that the court will find the rule unreasonable. Any leases that are in existence at the time of the rule change or the amendment to the declaration and bylaws will still be valid – the prohibition will kick in when those particular leases expire and they will not be eligible for renewal; thus, in time, the prohibition from renting out units will become enforced throughout the building.
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Q: Can a condo board or an association prohibit pets, even if pets have been allowed all along?
A: Yes, pets can be prohibited. A condo board can make a rule prohibiting pets, and an association can amend the declaration and bylaws to prohibit pets. Frankly, amending the declaration and bylaws is the more secure of establishing this prohibition. Amendments to the declaration and bylaws are presumed valid by Illinois courts in case of a challenge by a unit owner (that is, as long as the amendment to the declaration and bylaws were properly adopted by the association, the court will not scrutinize the amendment, inasmuch as it was approved by the unit owners). However, changes to the rules by the board alone are not presumed valid by a court, and are open to the court’s scrutiny and the possibility that the court will find the rule unreasonable. Any pets owned by unit owners at the time of the rule change or the amendment to the declaration and bylaws will still be valid.
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Q: If a unit owner is renting out the unit, and the tenant is violating association rules, what recourse to other unit owners have?
A: Just as unit owners have to abide by the rules of the association, so do tenants who are renting from a unit owner. If a tenant fails to abide by the rules, the association can terminate the tenant’s lease and initiate eviction proceedings.
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Q: How is a condominium turned over to the association from the developer?
A: The unit owners have what is called, appropriately enough, a “turnover meeting” where they elect a board. The turnover meeting should take place either when at least 75% of the units have sold or 3 years after the developer recorded the declaration, whichever occurs first. Within 60 days of the turnover meeting, the developer is to give the new board several important things, including the plans and specifications for the construction or rehabilitation of the property, information about the association’s bank account(s), and an accounting of income and expenses from the sale of the first unit until the turnover meeting. If the developer does not initiate the turnover process, the unit owners can petition the developer to do so by calling a meeting on 21 days notice.
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Q: Can a unit owner who is not on the board do anything to protest an increase in the assessments?
A: If the board votes to increase assessments by more than 15% from the prior year, within 14 days of the board vote, 20% of the unit owners can petition for a vote on the assessment increase; a meeting of the unit owners must then be called within 30 days, and a majority of the owners can defeat the assessment increase.
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Q: Can a unit owner refuse to pay the assessment for any reason (i.e., doesn’t agree with the assessment or disputes the validity of the assessment)?
A: The only way a unit owner can lawfully refuse to pay assessments is because the assessment was not properly adopted by the board. Otherwise, all unit owners must pay assessments according to the most recent budget adopted by the board.
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Q: Do unit owners have to have home owners insurance? Does the association have to have insurance? What insurance covers what?
A: There are several kinds of insurance that come into play with condo associations.
Unit owners should have insurance for the interior of their unit. An association can require unit owners to have insurance for their units. The association should have insurance for the common areas of the building. The association’s insurance policy should cover the limited common elements, too, unless the board votes to not include the limited common elements from the policy. Sorting out what insurance covers damage depends on the source of the damage – regardless of the fact that damage may be in common areas and a unit or more than one unit. If the source of the damage comes from a unit, then that unit owner is liable (whether the owner is negligent or not), and that owner’s insurance should cover the damage. If, however, the source of the damage comes from a common element, then the association’s policy should cover the damage.
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Q: Can the board of directors have closed meetings?
A: All board meetings where the board will be voting on matters must be open to unit owners, and they must also get proper notice of the meeting. The board, however, can conduct certain business in a closed meeting (for example, personnel matters, fines against specific unit owners, among other things). Of course, a quorum of the board may opt to meet up – or even meet up by chance (in the mail room on their way home from work, for instance) – and end up discussing association business, and this is perfectly proper as long as they do not take any votes and enact any rules or policy. In fact, any group of unit owners can meet and discuss association business to their heart’s content.
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Q: How are officers (president, vice president, secretary, treasurer) elected?
A: Officers are elected by the directors from among themselves. So, all officers are also directors.
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Q: Is there a procedure where an officer can be removed from office?
A: An officer can be removed from office by a majority vote of the board of directors. The former officer will continue to serve on the board of directors, however, until removed by the unit owners according to the declaration and bylaws.
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Q: Is there a procedure where a director can be removed from office?
A: The procedure should be included in the association’s declaration or bylaws. (The exact procedure may vary from association to association) Typically, the procedure requires a 2/3 or 3/4 vote of the unit owners to remove a director from office.
Q: What is the correct procedure for the association to hire services from a maintenance company, a management company, legal counsel, or any other service providers?
A: The decision to engage the services of a professional is the responsibility of the board of directors. Likewise, the decision to terminate the services of a professional is the board’s responsibility. All of the terms of the professional engagement – the costs, the scope of the services, etc. – is for the board to decide. If unit owners are unhappy with the board’s decisions in this regard, the solution is to elect new directors at the next annual meeting.
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Q: What happens if there is a vacancy on the board of directors?
A: The board of directors may elect a replacement for any vacancy, and that replacement will serve until the next annual meeting (not for the balance of the vacated term). 20% of the unit owners can also call a meeting to fill a vacancy, and if a replacement is elected, that replacement will serve for the balance of the vacated term (not just until the next annual meeting). All of this being said, however, there is no requirement that a vacancy on the board must be filled. If there is a vacancy – or even more than one vacancy – the board can continue to operate as long as it can get a quorum, and that quorum continues to be a majority of the number of directors when there is no vacancy.
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Q: Are there circumstances when the action of an association requires unanimous approval of all unit owners?
A: Yes, for example when the association is giving away or selling part of the common elements, since it affects all unit owners by removing part of the common areas to private use. The declarations and bylaws of different associations may also call for unanimous decisions in other circumstances as well.
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Q: Can a property manager or someone from the board ever come into a unit without the owner’s permission?
A: Yes, but only under certain circumstances. They can enter without notice in the case of an emergency. They can enter with notice for the purpose to inspect for maintenance and repairs, or if the condition of the unit is a nuisance to other owners in violation of the declaration, bylaws, or rules.
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Q: How does proxy voting at association meetings work?
A: If the board issues a proxy, it has to include a space for owners to select a proxy holder and spaces for write-in candidates. If the board does not enact a rule that only the board’s proxy is valid, then owners may use their own proxies. A proxy needs to be dated and signed.
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Q: Does the board have to distribute a list of unit owners?
A: The board must keep a list of the unit owners and their percentage of ownership, and this list can be given to unit owners who request a copy for proper purposes.
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Q: Can unit owners install a satellite dish on or near their unit?
A: The federal Telecommunications Act of 1996 permits unit owners to attach satellite dishes on areas in the exclusive control of the unit owner. The Telecommunications Act further says that the satellite dish cannot be more than 1 meter in diameter. With the permission of the board, unit owners can install satellite dishes on areas outside of their exclusive control. If the association provides a central antenna system that has the same transmission quality as satellite at comparable cost, an association can prohibit installation of satellite dishes even in areas in the exclusive control of a resident.
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Q: If repairs are necessary only on limited common elements, can the association charge only those owners benefitting from the limited common element for the repairs (i.e., do all unit owners have to pay, even though they get no benefit from the limited common element(s))?
A: It depends on what the declaration or bylaws say. It is legal to have the declaration and bylaws say that only the owner(s) benefitting from the limited common element(s) must pay for the upkeep/maintenance/repairs of those limited common element(s).
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Q: Who pays the property taxes for individual units – the unit owner or the association?
A: The unit owner pays. In some new developments it may take several tax bills before the assessor is able to issue bills to individual units; in that case, there is one single tax bill for the entire property, which the association pays – that is only temporary, however (until the assessor is able to begin billing each unit separately). Otherwise, each unit owner receives a property tax bill, and each unit owner has to pay the property tax bill.
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