Committees and commissions differ in significant ways

Q. There has been a lot of "buzz" about the use of "committees" and "commissions" in homeowner associations. What's the difference?

A. One of the methods used to delegate a board's function is the appointment of committees and commissions. The Illinois general not for profit corporation act, applicable to incorporated associations, as well as to all condominium associations whether or not incorporated, governs the use of committees and commissions. Many associations use committees and commissions of both board and non-board members. It has to be noted that committees and commissions are legally distinguishable and have significantly different functions and power.

The board can establish committees if, and only if, the association's articles of incorporation or bylaws grant the board the power to do so. A majority of the board can create committees and appoint members. Every committee must contain two or more members of the association's board. A majority of committee members must be members of the association's board. Members of a committee serve at the pleasure of the board and may be removed at any time by the board, with or without cause. However, committees relating to the election, nomination, qualification or credentials of board directors, or other committees involved in the process of electing directors, can be composed entirely of non-board members.

Not all associations' governing documents provide for the creation of committees. If that is the case, an association can consider amending its governing documents to permit committees. An association's articles of incorporation or bylaws can generally be amended to provide for the appointment of committees. Articles of incorporation can be amended by the affirmative vote of two-thirds or more of board members, or the minimum specified in the articles of incorporation or bylaws. Both the association's articles of incorporation and bylaws should be reviewed with counsel to determine the amendment procedure.

Even if the association's governing documents do not provide for the appointment of committees, the board can still delegate to a lesser extent by use of commissions. While a committee can make decisions binding on the association, a commission may not act on behalf of the association or bind it to any action.

The board can create and appoint people to a commission, advisory body or such other body. None of the appointees to commissions have to be members of the board. So, a commission can be composed entirely of non-board members.

A commission can make recommendations to the board. However, only the board can take action with respect to recommendations made by a commission. In this regard, a commission is essentially an information-gathering body, providing the board with data that it will consider in making a decision. Commissions are often used, for example, to conduct searches for property managers, vendors like landscapers and roofers, and to prepare suggested rules.

I have often referred to the Palm decision in this column. The Palm decision rejected the board's use of commissions, despite the authority to create commissions as given in Illinois' general not for profit corporation act. In my view, the appellate court did not so much reject the use of commissions as much as it did find that the board failed to take appropriate action to establish commissions. I contend that a board can utilize committees, if authorized by the governing documents, and commissions, as long as the board takes appropriate action at a board meeting to create and appoint people to such bodies, and to establish charters or other guidelines for the operation of the committees or commissions. Such actions would need to be memorialized in the minutes of the board meeting.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. 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.