An association can keep its mask mandate

Q: Illinois has "fully opened" with its move into Phase 5 of the COVID-19 restrictions. Can associations keep face covering mandates in place?

A: Yes, at this time, associations can keep common area face covering requirement rules in place. This recognizes that it can be difficult to police who is deemed "fully vaccinated."

Q: I previously lived in a condominium, and I recall a meeting of the owners is required to discuss proposed rules before the board can adopt those rules. I now live in a community governed by the Illinois Common Interest Community Association Act. Is there a similar procedure the board of our common interest community association must follow to adopt or change rules?

A: Unlike the Illinois Condominium Property Act, the Illinois Common Interest Community Association Act does not describe a specific procedure to be followed by the board to adopt rules. Therefore, the board of a common interest community association can adopt rules at a board meeting, without first holding a meeting of the owners to discuss the proposed rules.

Q: From time to time, the board of our association adopts rules that are described in the meeting minutes; however, the approved rules are not published anywhere else. An owner would need to obtain and track all these meeting minutes to begin to understand and be aware of the rules. Is there a better way to handle this?

A: The board is acting properly in adopting rules at its board meetings and recording that action in the meeting minutes. However, the board should prepare and publish a document that memorializes the compilation of rules as adopted from time to time. The updated adopted rules should be distributed to owners.

Q: The board of our condominium allows owners to install doorbells on entry doors of individual units. New doorbells have the ability to record both video and audio of passersby in the common element hallway between these units. Is this permitted?

A: Illinois adopted a new "eavesdropping" law in 2014, after a prior law was found to be unconstitutional. Audio taping in a common element hallway does not appear to be prohibited by the current eavesdropping law. This is based on case law addressing privacy in hallways of an apartment building that provides that there is no recognized reasonable expectation of privacy in such an area.

Q: The records of our association are in shambles, and we have all new board members. One of the questions we are trying to determine is whether our community association needs to pay income taxes?

A: There is a somewhat common misconception about the income tax responsibility and filing requirements for condominium and community associations.

Community associations are entities that must account for their taxable income. Even if no tax is owed, there is still a filing requirement. A community association will generally not qualify for tax-exempt status under Section 501(c) of the Internal Revenue Code.

Nonetheless, Section 528 of the code permits a qualifying community association to make an election to receive certain tax benefits that, in effect, permits the exclusion of certain income (referred to as "exempt function income") from its gross income, thereby reducing (if not eliminating) its income tax liability. If such an election is made, the community association is not taxed on its exempt function income. However, the community association is taxed at the rate of 30% of the "homeowners association taxable income." This rate applies to both ordinary income and capital gains. Associations should speak with their accountant to determine on what form (Form 1120-H or Form 1120) it should file to have the least (if any) tax liability.

• 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.