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  • September 08, 2016 3:08 PM | Anonymous
    By Kristina Hamilton,
    Senior Manager, Tobacco Control

    American Lung Association in Greater Chicago

     If someone smokes in your property, you know how serious the damage can be: burned carpet, stained walls, and the residual smell.  Secondhand smoke is hard on your investment, so imagine what it does to your residents.

     In a multi-unit building, 35 to 65 percent of the air in any given unit is shared from other units and common areas. That means if just one resident smokes, all other residents in that building share the consequences, including an increased risk of heart attacks, stroke and lung cancer. If children are exposed to secondhand smoke, they will have an increased risk of asthma attacks, infections, and SIDS (crib death).

     You can protect your residents’ health and your investment by making your properties smoke-free. Going smoke-free doesn’t mean that you don’t accept residents who smoke. Simply put, a smoke-free building is one in which smoking is not permitted indoors, including in any units or common areas. Adopting a smoke-free policy is legal, profitable and easy.

     Smoke-free policies are legal. Just like your policies regarding noise and pets, you can enact policies to prohibit smoking to create a better, safer living environment for your residents. In fact, the U.S. Department of Housing and Urban Development is in the process of transitioning all of its properties to smoke-free and strongly encourages private property owners and managers to do the same.

     Smoke-free policies are profitable. Compared with a unit where smoking is allowed, smoke-free units can cost two to six times less to turn over. In addition, a poll commissioned by Cook County Department of Public Health found that more than two-thirds of suburban Cook County renters would be more likely to rent in a smoke-free building than a building that permitted smoking in units. One out of five renters even said they would be willing to pay more to live in smoke-free housing.

     Smoke-free policies are easy. Developing and implementing a smoke-free policy takes minimal effort and produces maximum results for you and your residents. Once implemented, smoke-free policies are generally self-enforcing and require little staff time. Check out this step-by-step guide to implementing smoke-free housing for rental properties. Community associations who wish to become smoke-free would require a bylaws update.

     When you’re ready to get started, Healthy HotSpot is here to help. We work with property owners and managers, public housing agencies, private developers and community organizations to transition properties to smoke-free. We can provide free technical assistance, including help with sample lease language, resident surveys, smoke-free signage, smoking cessation resources and fact sheets.

     For more information, visit www.healthyhotspot.org or contact Aesha Binion at the Cook County Department of Public Health: abinion@cookcountyhhs.org or 708-633-8342. Property owners/managers outside of Cook County may find resources here.

  • September 08, 2016 2:30 PM | Anonymous

    By Michael C. Kim
    Attorney, Michael C. Kim & Associates
    Chicago

    ACTHA Legislative Committee Co-Chair


    As in past years, the Illinois General Assembly ultimately passed legislation affecting the operations of condominium and common interest community (a/k/a townhome and homeowners) associations.  Having been passed by the Legislature, the bills have now been signed into law by the Governor.

    A synopsis of these bills is set forth below:

    HOUSE BILL 4658 (HB 4658) (now Public Act 0776, effective August 12, 2016) amends the Condominium and Common Interest Community Ombudsperson Act (the “Ombudsperson Act”) by changing the definition of “condominium association” in accordance with Section 2(o) of the Illinois Condominium Property Act (as well as a similar reference for the definition of a “master association”); placing the Ombudsperson’s office within the Real Estate Division of the Department of Financial and Professional Regulation; precluding the Ombudsperson from having any authority to consider matters subject to the Illinois Human Rights Act or brought before the Department of Human Rights or the Illinois Human Rights Commission or comparable local governmental body or a federal agency or commission; changing the date on which the Ombudsperson can offer outreach and educational courses to July 1, 2017 (originally July 1, 2018); including in the Ombudsperson’s website information concerning alternative dispute resolution programs and contacts; permitting use of a statewide toll-free number to provide information and resources; specifying that the association’s policy for resolving complaints by unit owners must include a requirement that the determination of the dispute be made within 180 days after receipt of the original unit owner’s complaint; extending the deadline for establishing and adopting the unit owner’s complaint resolution policy to January 1, 2019 (if the association is created after January 1, 2019, it must establish and adopt its policy within 180 days after its creation); eliminating the potential penalty of an association’s not being able to enforce its common expense/assessment lien rights for failure to adopt a complaint resolution policy (note that the statutory reference to Section 65(g) is probably erroneous); postponing until July 1, 2020 (and subject to appropriation of funds), the Ombudsperson’s assisting a unit owner in resolving that owner’s dispute with his/her association involving either the Condominium Property Act or the Common Interest Community Association Act; providing that the Department shall establish rules describing the time limit, method and manner for dispute resolution by July 1, 2020; stating that a request for information to the Department of Ombudsperson is not a request under the Freedom of Information Act; stating that the confidentiality provisions of the Ombudsperson Act do not extend to educational, training and outreach material, statistical data or operational material maintained by the Department  under  the Ombudsperson Act; requiring  the Department to  submit its first annual report to the General

     


    Assembly by July 1, 2018 and thereafter by October 1 of each year, which reports shall include the number of requests for information, the training, education and other information provided, the manner in which education and training was provided, and the time required to provide training, education or other information, and analysis of concerns within condominium and common interest communities; and providing a new effective date of January 1, 2017 (previously July 1, 2016) for the Ombudsperson Act, as well as a “sunset” (repeal) date of July 1, 2022 (previously July 1, 2021).

     

    COMMENT:   The Ombudsperson Act is a “work in progress” with good intentions but hampered by lack of state funding.

    HOUSE BILL 5696 (HB 5696) (now Public Act 99-0612, effective January 1, 2017) amends the Common Interest Community Association Act and Condominium Property Act to expand the definition of “acceptable technological means” to include “any generally available technology that, by rule of the association, is deemed to provide reasonable security, reliability, identification, and verifiability.”

    COMMENT:  Essentially a restatement and reorganization of previously stated concepts in the statutes.  No material changes

    SENATE BILL 2354 (SB 2354) (now Public Act 099-0567, effective January 1, 2017) amends the Condominium Property Act and Common Interest Community Association Act and represents a significant “push back” against the 2014 Palm II appellate court ruling.  SB 2354 confirms that an executive session can be held either as a part of an open meeting OR as a “stand alone” event “separately from a noticed meeting”.  Presumably, as a “stand alone” event, there would not be a notice requirement.  Also, SB 2354 expands the subject matter of executive session to include discussion with or about independent contractors, agents or other providers of goods and services.  Thus, the board can interview and meet with contractors or other third party providers in private.  In addition, SB 2354 expressly acknowledges that the board’s consultation with association legal counsel can be had in executive session.

     

    COMMENT:  SB 2354 does not amend Section 18.5 of the Illinois Condominium Property Act which applies to master associations; so master association board meetings are NOT affected.  Note that SB 2354 did NOT amend either the Illinois Business Corporation Act or General Not for Profit Corporation Act, both of which corporation statutes have “open board meetings” sections.  It is likely that the overlooked Section 18.5 and the corporation statutes will be addressed in future legislation to make them all alike in this aspect.

     

    SENATE BILL 2358 (SB 2358) (now Public Act 99-0567), effective January 1, 2017) amends the Condominium Property Act and the Common Interest Community Association Act to state that any assignment of a developer’s interest in the property to a successor is not effective until such a written assignment is recorded (presumably with the local recorder of deeds).

    COMMENT:  Good idea.

    SENATE BILL 2359 (SB 2359) (now Public Act 99-0569, effective January 1, 2017) amends the Condominium Property Act to expressly allow the board of directors to pledge the association’s future income (assessments and other sources) and to mortgage other association assets to secure a loan.

    COMMENT:  Those declaration/by-laws that require unit owners’ approval of pledge of income (assessments) and other association assets are overridden by this statute, making it much easier to effectuate association borrowing.

    SENATE BILL 2741 (SB 2741) (now Public Act 99-0627, effective January 1, 2017) amends the Common Interest Community Association Act to allow correction of errors, omissions or inconsistencies in the governing documents in order to conform with the Common Interest Community Association Act or other applicable law, by only a vote of 2/3 of the board of directors, and negates any provision that requires vote by or notice to the membership.

     

    COMMENT:  Assumes that the board of directors is acting properly, but why eliminate notice to the owners?

     

    Overall, the passed legislation is positive and helpful.  Of course, legislation is a continuing process year after year.  Some good and bad ideas from the past sessions may come back in 2017.


  • July 28, 2016 2:51 PM | Anonymous

    ACTHA's fall events offer opportunities to move your association forward

    Make plans to attend ACTHA’s educational expo & trade shows this fall! Exchange ideas with association board members, find solutions to the biggest issues impacting community associations and meet representatives from legal, financial services, construction firms & more.

    South Expo
    Saturday, Sept. 24
    8am—1pm
    Tinley Park Convention Center

     

    · How to review/amend your Declarations & Bylaws

    · Overview of the Common Interest Community Association Act and how it differs from the Illinois Condominium Property Act

    · Everything you need to know about collecting
    assessments

    · The PALM decision today: why it’s still a hot topic


    North Expo
    Saturday, Oct. 15
    8am—1pm
    Renaissance Chicago North Shore (Northbrook)

     

    · Introduction to The Illinois Condominium
    Property Act

    · Managing your Association’s winter checklist

    · Understanding rules & regulations

    · How to fund your next project


    All ACTHA education sessions are presented by leading experts in community association management.  Registration is now available at www.illinioscondoexpo.com.

     

     

  • July 28, 2016 7:40 AM | Anonymous

     By Michael DeSantis, Attorney
     Gardi & Haught, Ltd.
      Schaumburg, IL

     

    All homeowners in our townhouse complex have either a 1 or 2 car garage.  In addition there is street parking and 2 small parking lots.

    One homeowner is renting his unit and moved elsewhere approximately 2 years ago, but left a car parked in one of the lots.  He claimed that he intended to fix up the car for sale.  It has expired license plates and city sticker (which certainly means it is not insured), and flat tires.  Neighbors have complained that this not only occupies a parking space, but is an eyesore.  The car appears to be unlocked, potentially inviting homeless occupancy or children to play inside.

    We have requested the homeowner to remove this vehicle, but he refused and claimed that his rights would be violated if we had it towed.  I'm not sure what rights he has to leave an abandoned vehicle on our property. What options does the Board have?

     

                    The authority to tow a homeowner’s vehicle must come from the association’s declaration and covenants, bylaws, or the associations’ rules and regulations. Many condominium associations’ governing documents provide board members the express authority to tow vehicles from the common elements for any number of reasons: violation of parking restrictions, expired tags, the blocking of fire lanes, an inability to operate, etc. However, in the event an association’s governing documents do not expressly provide a board the authority to tow a problem vehicle, a board can establish an express rule via its power to promulgate reasonable rules provided by the association’s declarations.

    When purchasing a condominium unit, homeowners agree to comply with the association’s governing documents. In this case, if your association’s governing documents do not provide you the explicit authority to remove the vehicle, the board may want to pass a rule prohibiting the parking of unregistered or inoperable vehicles from parking in the parking lot. Because homeowners agree to comply with association rules when one purchases a condominium, the association will not violate the homeowner’s rights once you’ve given him or her proper notice that the vehicle will be towed.

    It’s a good idea to also establish a notice requirement for the association, so that homeowner’s are given an opportunity to make arrangements to remove a vehicle and avoid sanctions. This will have the secondary effect of ensuring the association provides for a period of due process, so as to not run afoul of the rights afforded homeowners in the declaration or bylaws. Of course, this notice requirement may not be necessary when a vehicle needs to be moved on an emergency basis.

  • July 28, 2016 7:37 AM | Anonymous

    By: Nicholas Bartzen, Howard Dakoff and Patricia O’Connor, Attorneys
    Levenfeld Pearlstein, LLC
    Chicago, IL

    On July 15, 2016, Governor Rauner signed a bill which became Public Act 99-0567.  The new law amends the Illinois Condominium Property Act ("Act") and the Illinois Common Interest Community Association Act ("CICAA") to allow board members of both condominium associations and common interest community associations to meet and discuss certain association business outside of open meetings and executive session (in private gatherings, workshops or even via phone or e-mail). 

    Whereas boards have been restricted due to the 2014 Illinois Appellate Court Palm II decision, which prohibits boards from having certain discussions outside of open and executive sessions, this new law expands those topics which the board can discuss in a number of different forums, thus significantly moderating the restrictive effects of the Palm II decision. 

    By way of refresher, the Palm II decision prohibited "working sessions" and discussions by board members over e-mail or phone in condominium associations as well as casual discussions where more than a quorum of board members met to discuss topics related to association governance outside of the designated executive session of a properly noticed board of directors' meeting.  Moreover, Palm II limited those topics which the board was permitted to discuss during executive session to: (i) pending or potential litigation, (ii) issues related to employment, and (iii) issues related to unit owners' violations of governing documents.

    The amendment to the Act and CICAA, which will become effective on January 1, 2017, will greatly enhance the board's ability to work effectively and efficiently outside of the confines imposed by the Palm II decision.  After January 1, 2017, board members may privately discuss the following topics without providing notice to unit owners (private discussions may be conducted in person, via phone or via electronic communication):

    (i)         pending or probable litigation;

    (ii)       third party contracts or information regarding appointment, employment, engagement or dismissal of any employee, independent contractor, agent or any other provider of goods and services;

    (iii)       to interview any potential employee, independent contractor, agent or any other provider of goods and services;

    (iv)       violations of rules and regulations of the association;

    (v)        discussion of any association members' unpaid share of common expenses; or

    (vi)       consultation with the association's legal counsel.

    Finally, the new law not only allows boards to meet outside of executive session or open session to discuss the above issues, but it also gives boards the power to close any portion of a noticed meeting in order to discuss the aforesaid issues.  LP welcomes this change and strongly feels that these amendments will enhance the board's ability to effectively manage its association.

  • July 28, 2016 6:37 AM | Anonymous

    By Martin Stone, PCAM

    HSR Property Services, LLC
    Tinley Park, IL


    Yeah, yeah, just what you needed, another article on Palm, right?  We’ve seen a lot of articles about Palm, mostly written by learned attorneys, some written by experienced Managers, and one, I’m told, that was written by an emu.  The latter, unfortunately, was not as widely distributed or published as the others, which is a great tragedy, as I’ve heard emus have wonderful senses of humor as well as a flare for the dramatic. 

    In any case, what we haven’t yet seen-or at least what I have not yet seen-is a very straight forward, no holds barred statement (rant?) from someone willing to go on record and give the whole Palm situation a big slap in the face (see what I did there?)  So, here you are.  I am your emu.

    To clarify for those who have not read or heard the many lectures pertaining to Palm, “Palm” refers to a, now, infamous court ruling more formally known as Palm v. 2800 Lake Shore Drive.  This court ruling establishes ‘case law’, which is the interpretation or reinterpretation of an existing statute.  In this case, that existing statute was the Illinois Condominium Property Act, particularly Section 18(a)(9) which states (and always has stated) that the Board must conduct all Association business in an open meeting.  And because the Common Interest Community Association Act or CICAA (the condo Act for non-condo associations) has the exact same language in it pertaining to Meetings, the Palm ruling affects CICAA in the same way.

    Up until 2014 BP (before Palm), the big question had always been: What constitutes conducting ‘business’ at meetings?  Furthermore, the consensus (again, before Palm) had always been, quite simply:  Voting.  Workshops, walk-throughs, emails discussing repairs or proposals, violations, exterior modification requests, etc… it was all just talking or addressing routine maintenance needs, not conducting business. 

    Whether a vote before an action was taken (voting at an April meeting to replace roofs in June), or voting to ratify a decision already made (voting at a June meeting to approve the plant replacements completed in April), so long as that voting was done at an Open Meeting, it was argued quite successfully for decades that the Board was being transparent and providing full disclosure of all business being conducted. 

    But then Palm happened, and now the definition of ‘business’ conducted at meetings has been expanded and redefined as any voting or discussion involving a quorum of the Board.  In short, it means that any instance where a majority of the Board members discuss any association-related matter, whether by phone, electronically (email), or in person, for which the owners are not previously given notice and the opportunity to be present, the Board of Directors is breaking the law

    ‘But that’s ridiculous!’ we have all said.  ‘How do we avoid this?’ we have all asked.  As your trusted and faithful emu, I’m giving it to you straight, and I’m here to tell you that it is not only ridiculous, but complying with the Palm ruling is downright impossible

    Emus are nothing if not controversial in their opinions, but let me first say that Palm ruling was a good thing in that the Board of Directors that was sued was doing very naughty things, including but not limited to repeatedly voting in closed sessions and refusing to provide owners access to Association documents (minutes, contracts, etc.).  This was clearly a Board that needed to be reprimanded for such bad conduct. 

    But, as mentioned, fully complying with the requirements set forth by the Palm ruling is not possible as it would mean that a Board of Directors would have to either a) have a meeting every 2 weeks or b) not talk to each other at all about anything Association-related except for those 4 times per year when they get together for a meeting.  And let’s face it, neither is the slightest bit realistic. 

    Even if an Association could find Board members willing to give up 2 nights per month for meetings, what facility short of an Association’s own clubhouse would be available that frequently?  Most Association’s do not have clubhouses, so their Board meetings are held at libraries, town halls, community centers, and police stations.  But if you took the number of community associations in any given City or Village, and multiplied it by 2 meetings per month… you would run out of availability pretty darn fast!

    What’s that you say… have the meetings in someone’s driveway?  What about November-March, and in this year’s case, the collective better half of April?  What’s that you counter… have it inside someone’s garage?  Okay, aren’t we getting a little silly now? 

    What do the Attorneys have to say about all this?  I’ve spoken to many attorneys ever since Palm happened, mostly venting my incredulity, but also trying to wrap my head around how to help my associations adapt to this new world order. 

    Let me just say, Attorneys are very good at pointing out all of the things that would constitute a violation of the Palm ruling, but they seem just as flummoxed as I when it comes to the question, how does a Board comply with Palm?  Here are the most straight-forward suggestions that I’ve heard:

    #1:  Assign more spending and decision-making authority to Management.  This will eliminate micromanaging by the Board and allow the manager to make judgment calls and decisions consistent with the policies and procedures adopted by the Board. I love and admire the attorney who suggested this, but I must admit, I laughed out loud when I heard this one. The Board of Directors giving their Manager cart blanche when it comes to maintaining the property is just not going to happen for 2 reasons:  


    1)    Boards don’t trust their manager to this extent, nor are they able to give up this much control over where the money goes.  Speaking from personal experience as a Manager with a $1,500 spending authority in most of our Management Agreements, I still get questioned by a Board when I cut a $1,300 check for roof repairs without checking with them first, or asked why I couldn’t find someone cheaper. Can I justify my actions?  Absolutely.  But do I really want to spend all my time doing that if my spending authority was increased to, say $5,000?  Would it really make anything easier?  No. 

    2)    This suggestion essentially puts Managers in a position of decision maker.  And most Managers do not want to be (nor should they be) the decision maker because, while a Board member cannot generally be held personally liable for their actions (i.e. decisions), a Management company most certainly can be.  And why would a Manager take on additional risk and liability?  A manager, first and foremost, carries out the decisions and directives of the Board, who can delegate tasks, but cannot delegate responsibility
    .#2:  Assign more decision-making authority to the Board president or another designated Director, and eliminate unnecessary Board discussion. 

    Second verse, same as the first.   While there are some Boards out there whose directors are more than happy to sit back and let that designated Director call most of the shots, the majority wish to be involved in the decisions making process.  So I strongly believe this suggestion would fail for much the same reasons the first suggestion would... most Board members aren’t going to give up all the control to someone else, whether it’s another Board member or their Manager.    

    #3:  Have monthly Board Meetings, and Board members should refrain from any discussions of any kind outside of said monthly meeting.

    While this suggestion comes closest to plausible, it doesn’t quite hit the mark.  Though some associations have monthly meetings, most do not.  Whether it’s because they aren’t able or willing to give up more of their free time to have more meetings, or that it’s simply too difficult to coordinate all of the different Board members’ collective personal schedules in order to do so, monthly meetings just aren’t going to happen for many Associations.  And if the solution isn’t applicable to all Associations, then it isn’t a very effective solution.

    So, what do you do?  How do you comply with the Palm ruling?  More accurately, how can you avoid violating Section 18(a)(9) of the Condo Act now that it has been filtered and interpreted by the Palm ruling?  First, let’s keep in mind the following:

    1)    There is no Board of Review or governing body that enforces Palm or issues fines for violations.   “There is no Palm Police,” says Dawn Moody of Keough & Moody, but adds quickly with a chuckle “…at this time.”  Therefore, in order to be found in violation of Palm, someone would have to be so disgruntled that they sue you and a judge would have to rule that you are indeed a stinker.
       

    2)    Since this type of case would not be for personal damages, no attorney would take the case for a percentage of a monetary judgment, because there would not be any monetary award or judgment.  Meaning, the disgruntled owner would have to flip the bill if he wanted to sue.  According to Stuart Fullet of Fullet, Rosenlund, Anderson, the first year of litigation will cost anywhere between $25,000 and $50,000, and that’s on the low side, meaning a 14-year litigation would cost somewhere in the neighborhood of $400,000.  You know anyone willing to cough up $400,000 because you ratified the Board’s approval of the sealcoating contract a month after the parking lot was sealed?

    3)    In said lawsuit, in order to be entitled to monetary damages, said disgruntled owner would have to prove that they suffered a loss by the Board’s alleged non-compliance with Palm.  I don’t see how ratifying the renewal of your Lawn Maintenance contract can cause anyone a loss, but maybe I’m too insensitive to people’s feelings.

    4)    The Association’s Directors & Officers insurance policy would generally cover the cost of the Association’s or Board’s defense in the event that the Board is sued for violating the Act.  In other words, the plaintiff needs a whole heck of a lot more money than the Defendant would.

    5)     “Palm” was the end result of a 14-year lawsuit, filed by an Association member by the name of Gary Palm (who happened to be an attorney), against his Association and its Board of Directors for what were clearly violations of the Condo Act.  This was not a Board that signed a snow removal contract in late October and waited until their November Board meeting to ratify the approval.  This was a Board that repeatedly had closed sessions at which they did all their voting and stonewalled Gary Palm when he requested copies of Association records the Act clearly entitled him to examine.  And Mr.  Palm (now deceased, by the way) was not an individual who spent hundreds of thousands of dollars of his own money, which 14 years of litigation would most certainly have cost him.  This was a disgruntled owner who happened to be a lawyer with enough time and energy to handle the suit himself.


    So, keeping these things in mind, what should you do about Palm?  Now we come to the most controversial part of the article.  My suggestion…

    Do nothing

    To confirm, do nothing provided you have always been sure to make all votes in an open meeting (4 per year is just fine), so that all owners know every decision you are making on their behalf.  Continue to be as transparent as possible.  Schedule your meetings, albeit 4 of them, around the main decision making times of the year (plant replacements, painting projects, paving projects, roof projects, contract renewals, etc.) so that, as often as possible, the Board is discussing and voting before the actions are taken. 

    And in the event you are in a situation where you need to sign a contract before the next meeting, maybe to avoid a lapse in service or missing out on a significant cost savings, then make sure you ratify that decision at the very next meeting.  Truth be told, I’m not a big believer in ‘emergency meetings.’

    Make sure any owner hearings you have for violations are scheduled for the same night as a Board meeting.  Be sure you host an open forum for all owners present as the last agenda item of every Board meeting.

    To confirm, this is just one Manager’s opinion, and I don’t necessarily expect too many others to share it.  But I am nothing if not brutally honest and blunt.  And it is with that honesty and bluntness that I say to my Boards:  If you’re truly not doing anything wrong or inappropriate, what can anyone do to you?  Form everything I’ve seen and heard over the past 2 years since we all got smacked with Palm (see? I did it again), the answer is ‘nothing.’  So, to the question, ‘What should we do about Palm?’…  I give the same answer:  Nothing.  Again, just one fed up Manager’s opinion. 

    Finally, what about all of those ‘illegal’ email discussion threads among the Directors that eventually end with a Board consensus?  (shrugs)  The world is different than it was 14 years ago, when Gary Palm first got his britches twisted enough to file suit.  There were no smart phones.  Email in offices wasn’t as prevalent as it is now.  Faxing was the quickest way to put printed word in someone else’s hand and now faxing is an antiquated joke.  Many offices are completely paperless!  The result… People are now accustomed to and therefore demanding of instant gratification.  So to try to tell a Board of Directors to deny themselves that instant gratification, and to keep it all bottled up until the next meeting … you’d have better luck trying to put lipstick on an emu.

     



     
  • June 08, 2016 8:19 AM | Anonymous

    By Douglas J. Sury, & Member of ACTHA Legislative Action Committee
    Keay & Costello, P.C.
    Wheaton, IL

    For many members of ACTHA, Pat Quinn’s signing of the Condominium and Common Interest Community Ombudsperson Act in December 2014 was a pleasant surprise. While different versions of ombudsperson legislation had been introduced in several previous legislative sessions, there wasn’t much hope that the concept of an ombudsperson would ever become a reality. That, however, has changed...somewhat.

    The dynamic in Springfield between the executive and legislative branches is obviously different than when the bill originally passed. At the time the bill was passed, both houses of the legislature and the governor’s office were under the leadership of the democrats. That is no longer the case. Discussions with the new executive branch leaders continue over the true role of the ombudsperson and the office. Should it be solely educational and a resource for owners and boards?  Should it take a more active role in assisting in resolving disputes?  Should the office do both?  Representatives from ACTHA were involved in meetings during the current 99th General Assembly with legislative leaders, the Department of Financial and Professional Regulation (which is the department under which the ombudsperson will operate), and other stakeholders in an attempt to reach consensus as to what the ombudsperson office should be. As of the authoring of this article, House Bill 4658, which makes several changes to the original Act, has passed both houses of the General Assembly. Since the bill was a bipartisan effort, there is expectation that it will ultimately be signed by Governor Rauner. This article will therefore attempt to highlight certain portions of the Act and the current state of the ombudsperson, in light of the changes contained in House Bill 4658:

    The Current Role of the Ombudsperson

    No later than July 1, 2017, the ombudsperson is to be offering training, outreach and educational materials to the public and it may also offer courses related to the management and operation of community associations, the Condominium Property Act and the Common Interest Community Association Act. The ombudsperson is to also offer a toll-free number for contact and inquiry purposes in addition to providing information regarding alternative dispute resolution providers (arbitrators, mediators) and methods available to communities and their members. The ombudsperson does not have authority to consider any matters involving claims under the Illinois Human Rights Act or that are properly brought before the Department of Human Rights or the Illinois Human Rights Commission.

    Reporting to the General Assembly

    The Department of Financial and Professional Regulation is required to provide its first written report of the ombudsperson’s activities to the General Assembly no later than July 1, 2018 and beginning in 2019, annual reports of the office’s activity are to be filed no later than October 1st.

    It is expected that the General Assembly and administration will use these reports to evaluate the proper, future role of the ombudsperson.

    Registration of Community Associations

    The requirement that all community associations register with the Department has been removed.

    Association Internal Dispute Resolution Policies

    All associations subject to the Condominium Property Act and the Common Interest Community Association Act must adopt their own policies for resolving complaints made by owners no later than January 1, 2019. The original bill required the policies to be in place by January 1, 2017 so associations have been afforded two additional years to develop these policies. The Act currently provides that these policies must include a form on which an owner may make the complaint, a description of the process by which the complaint must be submitted, the timeline in which the Association will resolve the complaint, and the requirement that the Association make its “final” decision within 180 days.

    While House Bill 4658 still offers opportunities for the ombudsperson to directly assist owners and boards in resolving disputes, the funds for such services have yet to be provided. ACTHA leaders stressed to legislative leaders that education should be a primary responsibility of the ombudsperson. House Bill 4658 is a step in that direction, but the final complexion and role of the office has still not been determined. Stay tuned…

  • June 08, 2016 6:13 AM | Anonymous

    By John Carr, ACTHA Lobbyist and Legislative Committee Member

    2016 will be remembered as one of the most challenging legislative sessions since the Governor Blagojevich impeachment proceedings from 2008-2009.  In addition, the General Assembly had far fewer session days in 2016 which substantially limited the number of measures legislators could consider during the year.  Overall though, ACTHA opposed several bills that could have harmed condominium associations statewide (HBs 4489, 4490 and 4491) and was instrumental in amending HB 4658, a bill lessening the powers and duties of the Illinois Condominium Ombudsman. 

     

    The ACTHA bill tracker follows:

     

    HB 2642 (Cassidy-Passed the General Assembly on 5/31/2016.)  ACTHA supported this bill as championed by the Chicago Bar Association.  It requires written notice procedures for storage fees in a lien situation.  The bill amends the Illinois Labor and Lien Act.

     

    HBs 4489, 4490, 4491 (Drury).  These bills sough to overturn the Illinois Supreme Court ruling in the Spanish Court case.  ACTHA opposed the bill, offending both the sponsor and another member of the House Judiciary Committee.  The sponsor held these bills for the remainder of the session.  Note the defendant for the Supreme Court case resides in Drury’s district.

     

    HB 4658 (Nekritz-Breen.  Passed the General Assembly on 5/31/2016).  This bill amended the Condominium Ombudsman Act.  The proponent of the legislation was the IL. Department of Professional and Financial Regulation.  The Department sought a less aggressive version of the Act because existing law would have become effective on July 1, 2016, without any funding sources from the State.  The bill requires the Ombudsman to engage in primarily a consumer education role that promotes methods of alternative dispute resolution for solving association disputes.  ACTHA was engaged in amending the law based upon suggestions obtained during the February Legislative Meeting.

     

    HB 5927 (Fine) was Doug Sury’s initiative that we are holding over until 2017.

     

    SB 2354 (Haine-Passed the General Assembly on 5/18/2016).  The Illinois Lake Communities Association was the chief proponent of this legislation.  ACTHA also supported the measure in House and Senate committee hearings.  The bill makes a technical change to CICCA regarding association board meetings and closed sessions.

     

    SB 2358, 2359 (Mulroe-Passed the General Assembly on 5/18 and 5/30, 2016.  CAI was the chief proponent of both bills. 2358 was a technical change to CICCA regarding developer assignment responsibilities.  2359  amends the Condominium Act to allow a board to assign income by a simple majority vote.  ACTHA was neutral on both measures.

  • June 06, 2016 9:30 AM | Anonymous

    By David C. Hartwell, Attorney
    Penland & Hartwell, LLC
    Chicago, IL        

    This US economy is changing rapidly and one segment that is growing faster than most is the relatively new concept of a shared economy where individuals can engage in informal business opportunities without having to succumb to the formal business model.  Popular examples of these shared services are UBER, LIFT, AirBNB, VRBO.  Because these services have become so popular and dynamic in their explosive growth, it is often difficult to identify and assess their impact and effect.  In regard to services such as AirBNB or VRBO, a person can easily and efficiently utilize an internet based platform to engage in the short term rental of their apartment, condominium or house, which are commonly referred to “vacation rentals”.  However, such uses often times violate provisions of a lease or the covenants and rules and regulations of a condominium or homeowners association.  This article shall examine the proliferation of vacation rentals in the Chicagoland area and how associations are addressing them.

                Recent news of the proliferation of vacation rentals in Chicago has illuminated the fact that for certain neighborhoods or buildings, vacation rentals are significant and are having a substantial impact.  The Chicago City Council has sought to address these types of rentals because of the negative impact on hotel room rental and hotel tax to the City.  While legislation is still pending, how effective it will be remains to be seen because identification of rentals and enforcement of code provisions will be difficult at best.  Boards of directors for condominium associations have also sought to address vacation rentals because such rentals frequently violate the covenants, the declaration and rules & regulations; and many have argued that these types of rentals downgrade the livability of the building.  Readers should note however that some high rise condominium buildings allow for such vacation rentals and have adopted strategies to embrace it.

                Typically, declaration covenants for a condominium association prohibit short term leasing of a unit in several ways.  The declaration may ban unit leasing altogether, or if leasing is allowed, may prohibit short-term leasing, requiring units be leased for a minimum of six or twelve months.  Secondly, most all declarations include a covenant that disallows an owner from utilizing his/her unit for business purposes.  Despite creative arguments to the contrary, it is indefensible that use of a unit for vacation rental is not a business purpose.  Additionally, many associations have enacted rules & regulations prohibiting short term rentals and prohibiting subleasing of units.  Therefore, boards are generally equipped with remedies to address vacation rentals.

                If a board does not consider the association’s governing documents to be sufficient, it can seek to amend the declaration or alternatively enact additional rules prohibiting such rentals.  Amendments are often challenging because to successfully pass one, a super majority of either two-thirds or 75% of the unit ownership is required.  Enactment of rules is a more streamlined process, requiring only a vote of the board; however the Illinois Appellate Court has recently created a new wrinkle in the February 3, 2016 decision of Stobe v. 842-828 West Bradley Place C. A.  The Court invalidated a percentage leasing restriction rule on the basis that the covenant allowing for leasing did not also specifically authorize the Board to enact additional rules to restrict leasing.  Therefore, boards will need to carefully review the leasing covenant in the declaration to determine if it can successfully enact rules to curtail or eliminate vacation rentals of units.      

                As stated above, most associations already have sufficient prohibitions and remedies to address vacation rentals; but identification of such rentals is difficult.  Typically, rental websites do not state the address of building on the initial advertisement.  To obtain this information, a person would need to sign up with the service and pay a fee.  Undertaking this level of investigation would be burdensome for most associations.  Usually identification of vacation rentals arises form vigilance.  A random traveler entering a building with luggage is indicative of a vacation renter and doorpersons should be able identify these people and make a simply inquiry of the nature of their stay.  Often times, vacation travelers make inquiries with doorpersons and property managers as if they were a concierge, again another good sign of a vacationer.  For those building which do not have a doorperson or security, the vigilance must come from fellow unit owners.

                Once a vacation rental operation is suspected, the board should undertake reasonable investigation to ascertain a likelihood of its occurrence and engage in the rule enforcement process.  Gathering evidence is important, such as a screen shot of an advertisement, a statement of a neighboring unit owner, or a statement of a doorperson or property manager. In my experience, once a unit owner has experienced the rule violation process and been assessed a fine (which is often significant) the practice stops.

                Lastly, it is important for boards to understand why this is a critical issue.  While livability in a building is always important for boards to address, there are more significant considerations.  Unit owners renting to vacationers almost never inform door staff, property management or security of an incoming vacationer, thus raising security concerns of unidentified people entering the building.  Second, general liability insurance policies may not cover losses occurring from vacation rentals, which would open the association to uncovered liability.  Third, an argument could be made that the short-term rental of unit or rooms to vacationers could cause the building to be viewed by officials more as a public accommodation instead of a private residence, which could implicate the association to follow provisions of the Americans With Disabilities Act, additional building code and fire safety provisions, and other codes and regulations.

                Vacation rentals are not likely to disappear and therefore boards need to understand their impact on the building and owners, how to identify the rental, and how address them.  Boards should work in conjunction with property management and their legal counsel to have a protocol for attending to vacation rentals and being prepared should vacationers begin showing up in your building.

    By: David C. Hartwell

    Penland & Hartwell, LLC

    1 N. LaSalle Street, 38th Floor

    Chicago, Illinois 60602

    312-578-5610

    Dhartwell@penhart.com

  • June 01, 2016 1:02 PM | Anonymous

    By Stephen Daday, Attorney
    Klein, Daday, Aretos & O'Donoghue
    Rolling Meadows, IL

    We have all heard the old adage that "a man's home is his castle." But whose castle is it in the context of community living and condominium ownership?

    The competing interests of individual privacy collide with the association's interest in security on an almost daily basis. Where do those interests compete and where do they intersect?

    The individual’s right to privacy is time-honored and engraved in principles that the United States Supreme Court has articulated in many cases and is codified in the Illinois Constitution.

    Section 6 of the Illinois Constitution guarantees the right to privacy. “'The people shall have the right to be secure in their persons, houses, papers and other possessions against unreasonable searches, seizures, invasions of privacy or interceptions of communications by eavesdropping devices or other means.”

    Two Illinois statutes have particular importance in the context of condominium living and governance. The Illinois Eavesdropping Act 720 ILCS 5/14-1 et seq. prohibits the recording of "private conversations." The statute defines private conversations as “oral conversations transmitted under circumstances reasonably justifying the expectation that the conversation would remain private” and further prohibits surreptitious recording of conversations without all parties to the conversation consenting to the recording.

    The legislature has also enacted the Video Recording Act 720 ILCS 5/26-4. The law protects against the intrusion by video recording where an individual has a reasonable expectation of privacy, without that person’s consent.

    What if the association has an issue with criminal activity on the premises? Do those circumstances permit the association to act to protect members by videotaping activity?

    Despite the existence of various statutes, the prohibition against intruding on an individual's expectation of privacy does not extend to the common areas of the association where an expectation of privacy simply does not exist.

    By its very definition all owners have an interest in the common areas of the association like parking lots, hallways, laundry areas, pools, and similar areas which do not intrude on the individual unit owner’s areas of seclusion such as his own unit.

    The association has the right to record by video common areas of the property. It does not have the right to record by video any part of an individual owner’s unit or record audio conversations or audio transmissions even in the common areas without all parties’ consent.

    The association has the obligation to protect all of unit owners and provide a safe and secure environment for those owners.

    The association’s obligation does not trump the individual’s right to be secure and free from intrusion within their own units, the association clearly has the right and the obligation to secure the common areas of the property, which may include video recording.

    It is very clear that although a man's home is his castle, his castle does not extend beyond the walls of his unit.

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