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posted: 9/8/2012 4:24 AM

Associations may be liable for criminal losses

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Q. The lock on the common front door of multiunit building is broken. I reported this to the association several weeks ago; however, the lock has not been fixed. Since I first reported this problem, two units in the building have been burglarized and video shows the burglar gaining access through the door with the broken lock. Is the association liable to the two owners whose units were burglarized?

A. Under the general rule in Illinois, an association does not owe residents a duty to protect them from criminal acts of third parties which occur on the association premises. However, the association may be liable to the residents if the injury, although due to criminal activity of a third party, occurred because of a condition of the association premises.

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Here, the association was aware of the broken lock on the common entry door to the building, and did not repair it in a timely manner. The condition of the lock appears to have provided the opportunity for this burglar, and the association has exposure to liability for the loss suffered by the two owners who were burglarized.

It is important for associations to properly maintain the common areas to eliminate conditions that could give rise to criminal activity by third parties. Here, the problem was with a broken lock. Examples of other conditions of association premises that could give rise to liability to residents for the criminal acts of third parties include lights that are burned out in a parking lot, or a hole in a perimeter fence, or an overhead garage door that doesn't close soon enough after a car enters or exits.

Q. Owners in our association are told they are welcome to attend board meetings. However, when owners attend, we are not allowed to speak until the board meeting has adjourned. Are there rules governing this?

A. In all associations, board meetings are for the purpose of conducting board business. While owners are permitted to attend board meetings and observe, boards of associations are not required to permit owners to participate in a board meeting. However, the board of a common interest community association is required to reserve a portion of the meeting for comments by the unit owners. The duration and meeting order for the owner comment period is within the sole discretion of the board. Condominium and homeowner associations are not under this obligation to include an owner comment period in board meetings; however, it isn't necessarily a bad idea.

Q. Our association's declaration grants the board (with owner approval) a first right and option to purchase units. The sales price in a sale contract delivered to the board is well below market value, and the board wants to exercise the first right and option. However, the contract provides for a closing in less than one week. I thought the board had 30 days to exercise the right of first refusal?

A. The declaration for your association, as is typical when an association has a first right and option to purchase units, does give the board 30 days to exercise the right. The 30-day period begins when the contract (and other information that may be required by the declaration) is delivered to the board. Therefore, the sale of the unit here is subject to the board's 30-day first right and option to purchase. The contract, and the parties to it, can't ignore this right or the relevant time within which the board has to act. Simply put, the sale can't close before the 30-day time period expires, unless the board agrees to waive its right of first refusal. Here, the board should advise the parties to the contract that the board is proceeding with the process to exercise its right of first refusal, and that the closing needs to be postponed until at least 30 days from the date the contract was provided to the board.

Q. We are an Illinois housing cooperative. I understand that there are statutes that govern condominiums, master associations and common interest community associations. Is there a similar statute that governs housing cooperatives?

A. Housing cooperatives (co-ops) are not subject to a similar statute. Depending on whether the co-op is established as a for-profit corporation or as a nonprofit corporation, the co-op would be governed by the Business Corporation Act or the General Not for Profit Corporations Act. However, those statutes would apply to all types of corporations, and are not directed solely to co-ops. The governing documents, like the articles of incorporation, bylaws, and proprietary lease provide the essential framework for a housing cooperative.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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