New laws affecting real estate associations

This year, just like very other odd numbered year, bills are pending in the Illinois legislature that may effect the day to day living of all residents of community associations.

One needs to be at least generally familiar with some of the new laws so when relative issues come up, the conscientious board member/property manger can ask the right questions.

Although some of these are still awaiting the governor's signature, most of them will take affect in the near future.

Here is a basic overview and for further detail you can go to www.ilga.gov/ an excellent resource for Illinois statutory updates.

Human rights: Effective 1/1/08 A petitioner alleging unlawful discrimination can elect to go to the Circuit Court or remain before the Human Rights Commission for a period of one year after the filing of a complaint.

This impacts associations as complaints in this area continue to multiply and if it is a state complaint (in lieu of a local, county or Federal) only the petitioner has the right to decide whether to hear the matter in court or before the commission.(HB 1509)

Municipal code: A municipal attorney can outsource collection of fines and the offender is not only liable for the fines, but also the costs of collection and attorneys fees.

This could be very costly for an association that is disputing an unpaid fine for a building code violation or water bill because in the past it was handled in-house and their was no statutory basis to recover fees.(S.B. 825)

Attorneys: The unauthorized practice of law (by board members, managers, accountants, real estate brokers etc) can result in equitable remedies, and civil penalties up to $5000 and actual damages.

Note: The preparation of legal documents is considered the practice of law and can only be performed by an attorney licensed by the state.(S.B. 148)

Condominiums

•For associations where the minimum voting requirements for taking action is 50 percent because 30 percent or less of the units possess more than 50 percent of the votes, garage and storage units cannot be used for this type of calculation.(S.B. 528)

•Creates minimum standards for association managers to follow regarding financial procedures. (H.B. 1071)

A baby-step toward full accreditation and licensing of property manages, it least it sets a standard for boards to perform an objective evaluation.

•Creates statutory remedies for a Tenant when the Landlord fails to give proper notice of intent to convert. (H.B. 1797)

•Creates a 7-person Condominium Advisory Council to review the relevant statues and report back to the governor with recommendations.( H.B. 759)

Tenancy during foreclosure: A tenant can remain in possession during foreclosure for the lesser time period of 120 days after service of a supplemental petition or the duration of the lease.

This is particularly relevant when the unit in foreclosure is being leased by the association after obtaining an order of possession.( (S.B. 258)

Mold: All mold remediation services must register with the state and provide evidence of financial responsibility to the Department of Public Health.

This prevents unwary boards from hiring less than reputable mold remediators.(S. B. 1257)

Tax deeds: The owner of a Certificate of Purchase (from a tax sale) from a scavenger sale can file a petition at any time up to six months before the expiration of the redemption period from a sale, it requires the tax purchaser to give notice not less than three, nor more than six months prior to the expiration of the redemption period. (S.B. 461)

Co-ops: The VA can now purchase cooperative share loans which is great news for Veterans in the market for affordable housing financing.(Federal Public law 109-461)

One of the main reasons a property manager and/or an association board of directors needs to periodically consult with legal counsel is not only to be made aware of pending or enacted new laws, but also interpretation of them. Sometimes new legislation is for the purpose of reform of outmoded practices, sometimes it is a societal change, sometimes it is just for political reasons and at other times it could be in conjunction with an appellate court decision handed down that contradicts existing law or practice.

Once the board has been made aware of relevant legal changes, the board must be sure it is following proper procedure in conjunction with the applicable laws.