Making sense of types of associations and solar panel rules
Q. We have questions regarding our condominium association in Darien: How do we know if our condominium association is considered a “common interest community association?” Our association does not have solar panels. Would the Illinois Homeowners Solar Rights Act apply if we were considering solar panels? Finally, how do we know if our condominium association is a not-for-profit corporation?
A. First, pursuant to the Illinois Common Interest Community Association Act (“CICAA”), condominium associations are not formally considered “common interest community associations” per CICAA (Section 1-5 of CICAA: “Common interest community” means real estate other than a condominium or cooperative … Common interest community” may include, but not be limited to, an attached or detached townhome, villa, or single-family home.” Practically speaking, it is not uncommon for people to include condominiums in the common interest community association “group” when not discussing them outside the context of CICAA.
Second, the primary purpose of the Illinois Homeowners Solar Rights Act is to create, enhance and protect a homeowner’s right to install solar panels for their personal energy goals. Since your building is a condominium association, however, Section 45 of the Solar Panel Act specifically states that it does not apply to any building that is greater than 60 feet in height or that has a shared roof and is subject to a condominium declaration, among other things. Therefore, the Solar Panel Act does not automatically apply to your condominium association. That said, based upon the wording of your question, if your condominium association board wants to consider solar panels on the common elements for the benefit of the entire association, it would be extremely unlikely that such a project would be affected by the Solar Panel Act. However, it is highly likely that such an association-wide project would be subject to the common element alteration and expense provisions contained in your association’s declaration or bylaws. This would definitely be a project for which your Board should seek legal counsel prior to acting.
Finally, with respect to a condominium association’s status as an Illinois Not-For-Profit Corporation, Section 18.1 of the Condominium Property Act states, in pertinent part:
“Section 18.1. (a) The owner or owners of the property, or the board of managers, may cause to be incorporated a not-for-profit corporation under the General Not For Profit Corporation Act of the State of Illinois for the purpose of facilitating the administration and operation of the property.”
Practically speaking, however, almost all developers establish their condominium association projects as not-for-profit corporations. Moreover, many declarations require the Board to maintain the association’s good standing as a not-for-profit corporation. There are many reasons to do so, but the limitation of liability provided to individual board members of not-for-profit corporations is significant. Also, many banks and insurance companies will require and ask for proof of the association’s good standing as a not-for-profit Corporation. In our experience, most associations have a third party (typically the association’s attorney, but it could be other parties as well) as the association’s registered agent for the not-for-profit Corporation. This makes sense for many reasons including the fact that, as attorneys, we are prepared and have protocols in place when filing required annual reports with the Sec. of State and receiving and processing legal documents on behalf of the association. As attorneys, we have ethical guidelines which we are required to follow when acting as an entity’s registered agent with the State The easiest way to check if your association is in good standing is to go to the Illinois Sec. of State’s website, business search page: https://apps.ilsos.gov/businessentitysearch and type in the correct name of your association. If your Association is not in good standing, do not ignore it, but immediately contact your Association’s counsel or it’s Registered Agent to resolve the status of the not-for-profit standing. As attorneys for associations, we are practically 100% successful in remedying such situations.
• Matthew Moodhe 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.