New Laws Sure to Impact Your Association in 2015

2014 was an unprecedented year for impactful Illinois legislation related to community associations.  The purpose of this update is to bring to your attention those bills that were signed into law by Governor Quinn and will become effective January 1, 2015.

LIMITATIONS ON CONDOMINIUM ASSOCIATIONS RIGHT TO LEASE 

Public Act 98-0996 amends the Illinois Forcible Entry and Detainer Act and provides that, after the entry of a judgment in favor of a condominium board of managers for possession of a unit under specified provisions, the board of managers may lease the unit to a bona fide tenant for a term which may commence at any time within 8 months after the month in which the date of the expiration of the stay of judgment occurs, and may not exceed 13 months from the date of commencement of the lease.  This amendment provides some guidance to Associations when determining if seeking possession of a unit is the correct business decision.

RIGHTS OF THE BOARD TO INITIATE DISPUTES CLARIFIED

Public Act 98-1068 amends the Illinois Condominium Property Act, and provides that any provision in a condominium instrument is void as against public policy and ineffective if it limits or restricts the rights of the board of managers by: (1) requiring the prior consent of the unit owners in order for the board of managers to take certain actions, including the institution of any action in court or a demand for a trial by jury; or (2) requiring the board of managers to arbitrate or mediate a dispute with any one or more of all of the declarants under the condominium instruments or the developer or any person not then a unit owner prior to the institution of any action by the board of managers or a demand for a trial by jury. It further provides that a provision in a declaration which would otherwise be void and ineffective under the provisions of the amendatory Act may be enforced if it is approved by a vote of not less than 75% of the unit owners at any time after the election of the first unit owner board of managers.  This amendment removes some of the roadblocks that prohibit boards from taking the necessary legal steps to properly protect the association.

BOARD’S AUTHORITY EXPANDED TO ALLOW FOR ELECTRONIC NOTICE

Public Act 98-0735 amends the Illinois Condominium Property Act by adding to the list of powers and duties granted to the board of managers to include the authorization of electronic delivery of notices and other communications sent to each unit owner who provides the association with written authorization for electronic delivery and an electronic address for such use.  This amendment, along with Public Act 98-1042 below, are much needed steps to allow for the beneficial use of technology to save associations time and money.

COMMUNITY ASSOCIATIONS ALLOWED TO USE TECHNOLOGY

Public Act 98-1042 amends the Illinois Condominium Property Act and the Illinois Common Interest Community Association Act creates new sections addressing the use of technology and allowing associations to accept votes via electronic methods.  While members can opt out of the use of electronic methods, associations now have the option to take member votes and conduct elections with the use of technology generally available to its members.

CONDOMINIUM INSURANCE REQUIREMENTS GET AN UPDATE

Public Act 98-0762 amends the Illinois Condominium Property Act to replace certain specific insurance requirements.  Under the amendment, Property insurance coverage must now provide coverage in a total amount of not less than the full insurable replacement costs of the insured property, less deductibles, but including coverage sufficient to rebuild the insured property in compliance with building code requirements subsequent to an insured loss, including: Coverage B, demolition costs; and Coverage C, increased costs of construction coverage, with combined total of Coverage B and Coverage C shall be no less than 10 percent of each insured building value, or $500,000, whichever is less.  Additionally, and very notably, Section 12(a)(3)(D) will now require that the fidelity bond for the directors and officers include coverage for defense of non-monetary actions, defense of breach of contract and defense of decisions related to the placement of adequacy of insurance.  While this amendment only impacts policies purchased or renewed after its effective date, all condominium associations will need to be mindful of these changes.

ASSOCIATIONS MUST GRANT UNANNOUNCED ACCESS FOR SERVICE

Public Act 98-0966 amends the Illinois Civil Law Practice and provides that a gated residential community, including housing cooperatives and private communities, shall grant unannounced entry by an employee of the community, including its common areas and common elements, to a person who is attempting to serve process on a defendant or witness who resides within or is known to be within the community.  This amendment shall serve to expedite the service process but all associations should be aware of this new requirement.

Go to www.ksnlaw.com to see the full text of the relevant Illinois Statutes. As always, if you would like to discuss the impact of this case on your association and board of directors, please contact KSN.

 Michael G. Kreibich