Board needs authorty to handle emergency repairs
Q. A pipe in a unit in our condominium burst, causing water to flood the common elements and other units. Our president sent an email to all board members asking us to vote on emergency repairs. One of the board members, referring to the Palm decision, said we could not take a vote via email, and that we had to call a meeting. Significant water damage would occur if the board has to wait 48 hours to call a meeting to make a decision. Is there anything in place to address emergencies such as this that would permit the board to take a vote via email or by phone without a meeting?
A. There are times when an emergency situation arises that requires swift action and decisions when there is an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners (e.g., matters involving "fire, flood or blood"). The Illinois Condominium Property Act governs the forum in which decisions of the board of managers are to be made. The act requires decisions of the board, and any vote on matters discussed in meetings or portions thereof permitted by law to be "closed" to owners ("executive sessions"), be made at board meetings, or portions thereof, open to all owners, called on at least 48 hours prior notice.
It must be noted that neither the act nor the Palm decision currently provide for informal board decisions (emergency or otherwise) to be made outside of duly called and held board meetings - these actions could currently be deemed a breach of fiduciary duty.
However, there is some relief on the horizon. Effective July 1 of this year, Section 18(a) of the Illinois Condominium Property Act is amended to add a new subsection 21. This new section addresses concerns raised by the Palm decision as to how a board can make decisions in an "emergency." This new section provides that the board may ratify and confirm actions of the members of the board taken in response to an emergency, as the term "emergency" is defined in the act. "Emergency" means an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners.
This would permit the board to make decisions in an "emergency" outside of a board meeting. However, the board must give notice to the unit owners of the occurrence of the emergency event within seven business days after the emergency event, and provide a general description of the actions taken to address the event within seven days after the emergency event. While this new section does not indicate how the emergency decision would be made, presumably it could be made by the board informally in person, by phone or by email, for instance.
Currently, though, the board cannot generally make informal decisions even in an emergency, and a meeting of the board must be properly called and noticed to address the emergency. That said, from a practical standpoint, this issue still can be addressed. The board should consider adopting a resolution by motion at a board authorizing a board member and/or its management company to make decisions in an emergency. Such a resolution should be detailed in terms of what constitutes an emergency and any limitations on such authority. Of course, after July 1, the amendment to Section 18(a)(21) of the act will be effective, and it does offer a significant solution to the issue. However, the resolution I discuss here can be used now and even after the change to Section 18(a) is effective, and could further expedite the handling of emergencies by the board.
• 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.