State can involuntarily dissolve association

Q. I was looking at the Illinois Secretary of State's website, and it indicates that our homeowner association, a not-for-profit corporation, was involuntarily dissolved. What does this mean, and can it be corrected?

A. Each association that has been incorporated as a not-for-profit corporation is required to prepare and file a one-page annual report with the Illinois Secretary of State and pay a filing fee. The annual report identifies the board members. The secretary of state's office mails an annual report form to each association's registered agent about 60 days before it is due to be filed. If the association fails to file an annual report when due, it will first be deemed to be "not in good standing." The association can still file the annual report; however, it will have to pay a modest penalty in addition to the filing fee.

If the association does not file an annual report within 90 days after the date its annual report is due, the association will be involuntarily dissolved by the state. The association can have its corporate status reinstated by preparing an application for reinstatement, and filing it with the Secretary of State along with the annual report(s) that weren't filed and making payment of filing fees and penalties.

A common reason that an association does not file an annual report (and then gets involuntarily dissolved) is that the person identified as the registered agent is no longer involved with the association, and "forgets" to forward it on to the board. This might be a former board member or managing agent. I find that it is useful to have the association's attorney serve as the registered agent.

Q. The manager of our association announced the results of the board election at the conclusion of the annual meeting. This included stating who among the candidates was elected, and the number of votes each candidate received. A former board member said it was wrong to announce the number of votes each candidate received. Was it?

A. No, it was not "wrong" to announce the number of votes each candidate to the board received. It is a personal preference of the particular association whether to announce, at the meeting, the vote each candidate received or whether to simply state who was elected to the board.

Some associations only announce who was elected, and don't state the actual number of votes of each candidate, to spare the feelings of those not elected. However, the minutes of the meeting should nonetheless include those details.

Q. A board member of our condominium association sold his unit and has resigned from the board. Can the president of the board appoint someone to fill the vacancy on her own?

A. No. The president cannot fill a vacancy on the board on his or her own. A vacancy on the board can be filled until the next annual meeting by two-thirds vote of the remaining members of the board. The owners, at the next annual meeting, would then vote to fill the unexpired time, if any, left of the term of the board member whose seat was vacated.

However, if a vacancy is filled by the board, the owners may file a petition with the board to hold a special meeting of the owners. The owners could then vote to fill the vacancy for the balance of the term.

Note that if a board member resigns from an officer position (president, secretary or treasurer), but remains on the board, the board members would appoint another member of the board to serve in that office position. However, unless the association's governing documents provide otherwise, no one board member can serve in more than one officer position at a time.

• 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.