Does a condo board’s liability insurance cover volunteer committee members?
Q. Should volunteer unit owners who serve on our condominium association’s committees/commissions be covered under the association’s liability insurance coverage? Owners have questioned what their liability would be if they serve in a volunteer capacity. How do insurance companies view volunteers in terms of liability coverage?
A: Yes. Under the Illinois Condominium Property Act, a condominium association board is required to obtain directors and officers liability insurance coverage. Standard association directors and officers liability insurance coverage protects not only board members but also employees and volunteer, such as committee/commission members. Typically, insurance policies define covered individuals as any natural person who has been elected or appointed a director, officer or advisory board, committee or commission member of the association. As a result, a duly constituted committee or commission will usually fall under the defined coverage. If a claim were asserted against a committee/commission member, it would likely be covered subject to the policy terms, conditions, and exclusions.
Q: We just found out that our condominium association’s not-for-profit corporation status has been dissolved for many, many years. We are self-managed and not really sure how we go about addressing this problem. Any suggestions?
A: Depending upon the length of time the corporate status has been dissolved, the association has two options. The first option is to reinstate the corporation. To reinstate the association, all past due annual reports (this includes the current annual report), the application for reinstatement and the change of registered agent must be filed. If the association has been dissolved for more than six years, the reinstatement must be filed via paper forms. The secretary of state allows the listing of the current board on all past due annual reports, since an officer of the board must sign the reports. The forms are then sent to Springfield for filing. A minimum of three board members are required by the Illinois Secretary of State. Upon the filing, the corporate existence for all purposes shall be deemed to have continued without interruption from the date of dissolution, and all powers, duties, and obligations shall be revived as if it had not been dissolved, all acts and proceedings of the members and board members shall stand as ratified and confirmed.
The other option is to reincorporate. To reincorporate would require filing new articles of incorporation with the Illinois Secretary of State. If the association has been dissolved for more than three years, you can reincorporate using the same name. A minimum of three board members are required and this can be filed electronically.
Q: Our condominium association utilizes an on-site property manager who is an employee of the management company. One of the unit owners asked us whether both the on-site property manager and the management company were properly licensed with the Illinois Department of Financial and Professional Regulation. Are both the property manager and the management company required to be licensed?
A. Yes — both the management company and the individual on-site manager must be licensed (unless the manager meets an exemption). Under the Illinois Community Association Manager Licensing and Disciplinary Act, a “community association manager” must be licensed with the IDFPR. A community association manager is defined as an individual who provides community association management services (e.g., administering finances, maintenance, records, meetings) to a community association. The act also covers management companies or firms (corporations, LLCs, partnerships, etc.) that provide community association management services. If you have a situation where a person is managing a community association (condominium, townhouse or homeowners association) and they are receiving compensation for management services, they need the individual CAM license; and if a firm is providing those management services, that firm must hold the CAM company/firm license.
• 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.