Jul 22, 2016

Springfield offers some relief from Palm II

Governor Rauner recently signed into law a bill passed by the legislature in Springfield that will affect portions of the Illinois Condominium Property Act (Condo Act) and the Common Interest Community Association Act (CICAA).

Public Act 99-567, which goes into effect on January 1, 2017, modifies portions of the Condo Act and CICAA which require that most Association business be conducted in Board meetings open to all Association members. The existing language of CICAA section 1-40(b)(5) and Condo Act section 18(a)(9)(A) specify limited purposes for which a Board may close a portion of an otherwise open Board Meeting, which include discussing or considering information on litigation, certain employment/employee matters, rule violations and failures to pay Association common expenses. The new provisions allow Boards not only to close a portion of a meeting, but now permit Boards to meet separately from a noticed meeting for specified purposes.

For CICAA and Condominium Associations, those purposes include discussing litigation, discussing third-party contracts and matters related to employment, hiring or dismissal of employees, contractors, agents and other providers, as well as to interview potential employees, contractors, agents or providers and discuss violations and delinquent member accounts. An additional new basis for the Board to meet outside of a noticed meeting is to consult with the Association’s attorneys.

This change appears to be a legislative response to the tight restrictions on Board action that the Appellate Court placed upon Condominium Associations (and by inference, Homeowners’ Associations) under the Palm v. 2800 Lake Shore Drive Condominium Association decision (2014 IL App (1st District) 111290 (May 2, 2014) (“Palm II”). After January 1, 2017, no longer will Boards have to call and convene an open Board Meeting only to adjourn to a closed session to meet with the Association’s attorney to discuss violations, handle employment matters or review potential contracts and contractors. Of course, these changes do not alter the requirement that all Board votes that come of such discussions be held in an open Board meeting. Still, they take some of the pressure off of Boards by allowing them to discuss the matters that comprise much of their business in a less formal setting.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: James P. Arrigo, Principal