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posted: 5/17/2014 12:01 AM

Court ruling guides most homeowner associations

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Q. What impact, if any, does the ruling in Palm v 2800 N. Lake Shore Drive Condominium Association have on homeowner associations not expressly governed by the Illinois Condominium Property Act? We are not a condominium, but a common interest community association comprised of single-family homes.

A. The Palm decision addresses the practices and procedures in a condominium association. However, the definition of a "board meeting" is the same in the statute that governs condominiums and in the statute that governs common interest community associations. There is not a significant enough difference between condominium and common interest community associations to think that the issues addressed in Palm would be addressed differently by the courts in a case involving a common interest community association.

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In an abundance of caution, common interest community associations located anywhere throughout the state must carefully consider strictly following the dictates of the Palm decision in an effort to avoid legal claims.

Q. The balconies are pulling away from the building in our association. The board of managers of our condominium association intends to levy special assessment to address this issue. The amount of the special assessment for a one-bedroom unit may be about $20,0000. What remedies are available to the association if an owner does not pay the special assessment?

A. A delinquent special assessment can be collected by the association in the same manner as a delinquent regular assessment.

Illinois allows associations to evict an owner who does not pay assessments (regular or special), similar to how a landlord can evict a tenant for nonpayment of rent. The legal proceeding, known as forcible entry and detainer, permits the association to take possession (not ownership) of a delinquent owner's unit.

The process is initiated by sending a statutorily required notice and demand to the owner. If the owner does not pay, an eviction suit is filed.

When the association obtains a judgment, the unit is then leased to a third party, and the rent received is applied to the payment of outstanding assessments and other charges and the association's attorney's fees. When the owner's account is brought current, the owner can request the court to return possession of the unit to the owner. Most owners bring their account current before the time for eviction.

It's an effective remedy, but implementation should not be delayed. Collection should be implemented whenever an owner is delinquent for 60 days, in order to avoid the potential impact of a mortgage foreclosure.

Q. Following our recent annual meeting, the new members of the board met in private and determined who would serve in each officer position. Was this appropriate?

A. No. The election of the association's officers, being the president, secretary, treasurer, and vice president if applicable, must be conducted by the board at a duly called and held board meeting or portion thereof open to all of the owners.

Update: Since my column on the Rule 23 Order in Palm v. 2800 North Lakeshore Drive, the appellate court has published the decision. As a result, the appellate court's decision can now be cited as precedent and will be fully applicable to condominium associations within Cook County.

Moreover, it is likely that appellate courts in other Illinois jurisdictions will also apply the decision in this case to associations within their jurisdiction.

Practically speaking, the impact of the appellate court having published the decision is that Cook County condominium associations will be required to follow the rulings in Palm. Condominium associations located in other counties, and community associations located anywhere throughout the state, must carefully consider strictly following the dictates of the Palm decision in effort to avoid future legal claims.

• 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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