More changes in the law governing associations

On Aug. 24, Gov. Bruce Rauner signed HB0189, and it is now known as Public Act 100-0292. The law amends both the Illinois Common Interest Community Association Act and the Illinois Condominium Property Act. The changes will become effective Jan. 1.

This is the second of three columns that will summarize the changes. Last week, we focused on the changes to the Common Interest Community Association Act, and began the discussion on the much more numerous changes to the Condominium Property Act. That discussion continues today.

The following change amends Section 15 of the Illinois Condominium Property Act. If a unit owner objects to the sale of the property pursuant to Section 15, the owner may be entitled to receive the greater of:

• The value of his or her interest, as determined by fair appraisal, less the amount of any unpaid assessments; or

• (This is the new language) The outstanding balance of bona fide debt secured by the objecting unit owner's interest, which was incurred by such unit owner in connection with the acquisition or refinance of the unit owner's interest, less the amount of any unpaid assessments or charges due and owing from such unit owner. The objecting owner is also entitled to receive from the proceeds of a sale under Section 15, reimbursement for reasonable relocation costs, as determined by the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, and as implemented by regulations promulgated under that act.

Importantly, changes made by this law apply to sales under this section that are pending, or commenced on and after the effective date of this law.

Amendment to Section 18(a) (8)(i).

The act permits owners to object to certain increases in regular or special assessments in excess of 115 percent of the prior years assessments, by submitting a petition to the board signed by 20 percent of the owners of the association. The amendment increases the amount of time (previously 14 days) to submit such a petition to the board to within 21 days of the board action.

Amendment to Section 18(a) (16).

The act permits unit owners to object to any contract entered into with a current board member, a board member's immediate family, or a company in which a board member or immediate family member has 25 percent or greater interest in, by filing a petition. The amendment increases the amount of time to file such a petition, previously 20 days, to 30 days of the board's decision to enter the contract.

Amends Section 18(b) (9)(C).

The act provides that if the board adopts a rule that permits the use of mail-in absentee ballots or electronic voting for board elections in lieu of proxies, the unit owners may object to such rule by filing a petition to the board. The amendment increases the amount of time (previously 14 days) to submit such a petition to the board to 30 days after the board's adoption of the rule.

Amends Section 18.4(a).

The act provides that unit owners may file a petition, signed by those representing 20 percent of the ownership, to contest certain capital improvement projects approved by the board in excess of 5 percent of the annual budget (excluding repair, replacement or restoration of existing portions of the common elements). The amendment increases the amount of time (previously 14 days) to submit such a petition to the board to 21 days of the board action to approve the expenditure.

Creates New Section 18.10.

This section states that associations with 100 or more units shall use generally accepted accounting principles, or "GAAP."

Associations should speak with their legal counsel to determine the impact of these changes in the law on their daily operations and to assist in amending their governing documents to conform to these changes.

Next week we will summarize the rest of the changes to the Illinois Condominium Property Act, and a very notable change to the section regarding books and records and owner rights to examine and copy them.

• 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.