Violation fines should come after written notice and hearing
Q. I am on the board of a condominium association. I have a question about the notice of violation we issue. The notice of violation describes the violation, states that a fine has been levied and in what amount, and describes how an owner can appeal the fine. Is this correct?
A. Many associations levy a fine and then give the owner a right to appeal. I find this process questionable.
The Illinois Condominium Property Act allows the board to levy a fine for a violation of the declaration or rules, after providing written notice of a violation and an opportunity for a hearing. Further, the decision to levy a fine must be made at an open board meeting.
Therefore, a fine levied in the manner described for your association is likely subject to successful challenge. That said, there is no Illinois appellate court decision on this issue at this time.
I am not a gambler by any means. However, based on the totality of the Illinois appellate court decisions regarding condominiums over the last 10 or so years, I would bet the farm that my interpretation is the one that would be supported by the appellate court.
Q. Our association has been around for 30 years, and I will call it “ABC Master Association.” There are three underlying associations that are members of “ABC Master Association.” None of the underlying associations are condominiums. The board of the “ABC Master Association” always assumed it was a “master association” (it’s in our name) and governed by Section 18.5 of the Condominium Property Act. We have followed that section. A board member recently suggested we are not a “master association” — can you explain why we would not be a “master association?
A. Section 18.5(a) of the Illinois Condominium Property Act defines “Master Association. It states as follows:
“If the declaration, other condominium instrument, or other duly recorded covenants provide that any of the powers of the unit owners associations are to be exercised by or may be delegated to a nonprofit corporation or unincorporated association that exercises those or other powers on behalf of one or more condominiums, or for the benefit of the unit owners of one or more condominiums, such corporation or association shall be a master association.”
Since none of the underlying associations is a condominium, “ABC Master Association” (despite the name) is not a “master association.”
Rather, “ABC Master Association” is actually a “Common Interest Community Association,” governed by the Common Interest Community Association Act. Section 1-5 of the Common Interest Community Association Act defines “Common Interest Community,” and states as follows:
“’Common interest community’ means real estate other than a condominium or cooperative with respect to which any person by virtue of his or her ownership of a partial interest or a unit therein is obligated to pay for the maintenance, improvement, insurance premiums or real estate taxes of common areas described in a declaration which is administered by an association. ‘Common interest community’ may include, but not be limited to, an attached or detached townhome, villa, or single-family home. A ‘common interest community’ does not include a master association.”
Do note that Section 1-75(a) of the Common Interest Community Association Act states:
“A common interest community association organized under the General Not for Profit Corporation Act of 1986 and having either (i) 10 units or less or (ii) annual budgeted assessments of $100,000 or less shall be exempt from this Act unless the association affirmatively elects to be covered by this Act by a majority of its directors or members.”
As such, “ABC Master Association” is a Common Interest Community Association, governed by the Common Interest Community Association Act. However, whether or not “ABC Master Association” is currently exempt from the Common Interest Community Association Act will depend on the factors described in Section 1-75(a) of the Common Interest Community Association Act. If “ABC Master Association” is exempt from the Common Interest Community Association Act, the board could elect to be covered by it.
• 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.