Association could take action on vacant lots

Q. All of the lots in our 20-year-old, single-family homeowners association have been sold by the developer. However, a few lots are still vacant, and there is nothing in our covenants that requires a home to be constructed within any specific period of time. Can the association amend the covenants to require a home to be built within a certain amount of time?

A. An association's governing documents can be amended by following the procedure set forth in the covenants. In general, a properly adopted amendment will be valid unless it violates some public policy. I am not aware of a public policy that would be offended by imposing a reasonable time within which a lot owner must build on their lot.

Q. What is the difference between an association's declaration and its bylaws?

A. In general, the declaration creates the community, establishes the units, provides the covenants that regulate the use and occupancy of the units, and establishes the assessment obligation. These restrictions may address the "do's and don'ts" and impose limitations on the use of a unit, and on the leasing of units, and the keeping of pets, and provide architectural controls.

In a nutshell, the bylaws provide for the governance and administration of the community. The bylaws would, for example, establish the board of directors and provide for the election of a board, the number of board members, officers of the board, the number of meetings of the board, and voting rights of the members of the association. The bylaws would also recite the powers and duties of the board.

Sometimes the bylaws are a separate document from the declaration (and often an exhibit to the declaration); sometimes certain sections of the declaration are identified as the bylaws. I prefer the former. However, in Illinois, both the declaration and bylaws need to be recorded with the recorder of deeds.

Q. Our current board members have been on the board now for many years. The current five members have all agreed that we will not run again next year when our terms are up. However, we cannot find five people who are interested in being on the board, and only two have shown a little interest. Please tell me what will happen if we cannot find people to fill these positions.

A. Each director of a not-for-profit corporation holds office for the term for which he is elected and until his successor shall have been elected and qualified. Therefore, even if a board member's term expires next year, the board member would continue to remain on the board until another person is elected. The association should also consider amending the governing documents to reduce the number of board members from five to three.

Q. What happens if all of the board members of our association resign? Will the state take over?

A. Arguably, it is a serious breach of fiduciary duty if all board members resign. If all board members do resign, the state does not step in to appoint a party to operate the association. The unit owners could call and hold a special meeting for the purpose of electing new board members. If the owners don't do that, an owner or possibly a third-party vendor of the association would have to file suit to have a court appoint a receiver to operate the association. Often, that receiver would be an attorney who would charge the association his or her hourly rate to operate the association. That can become prohibitively expensive very quickly.

Q. We have outdated covenants for our common interest community association, and we would like to update them. Is there a standard set of regulations that we can follow to update and what else is involved?

A. The association can update its covenants to comply with the provisions of the Common Interest Community Association Act. Such an amendment can be adopted by the board, without owner approval. However, it's not a "do it yourself" project, and the board should consult with an attorney to draft the appropriate amended and restated declaration of covenants.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. 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.