Association cannot hold raffle to raise money

Q: Our not-for-profit condominium association is short on funds for a couple of common element maintenance and repair projects. The board wants to hold a public 50/50 raffle in order to raise funds for this work. Can we do this?

A: Unless the association has a license to conduct a raffle, holding a raffle would be illegal gambling in Illinois, under the Raffles and Poker Runs Act. Only certain types of groups are eligible to obtain a raffle license. Being a not-for-profit corporation alone does not meet the requirement. An entity seeking a raffle license would also need to be, for example, a nonprofit charitable organization. A condominium association is not a charitable organization, although many people do not appreciate the distinction between a not-for-profit corporation and a nonprofit charitable organization. The bottom line is that a condominium association is not going to qualify for a raffle license.

Q: I read your recent article regarding surveillance cameras. You stated that the association cannot require an owner to turn over their personal surveillance video, but that the association could demand that the person retain the video in case it was needed for a court action. Under what authority could the association make that demand? What remedies are available if the video is destroyed?

A: There is not necessarily a duty to preserve evidence in all situations in Illinois. However, a cause of action for spoliation of evidence could result if requested video is destroyed. The safest approach would be for a party to seek a protective order requiring the preservation of evidence; the surveillance video in this instance.

Q: How long must an association permit owners to display holiday decorations?

A: The law does not provide any specific guidance here. Associations can address this in their rules. It is not uncommon for rules to require removal of holiday decorations within 30 days after the holiday.

Q: I live in a condominium. My upstairs neighbor's toilet leaked and caused water damage to my unit. It was determined that the seal around the bottom of the toilet was old and in turn caused the leak. My neighbor made a claim through her insurance company, but the claim was denied. The upstairs owner's insurance company denied the claim due to the fact that the management company provided bylaws that included outdated insurance language and have not been updated for years.

My question has to deal with the management company, and not the insurance. Should the management company have sent updated bylaws, and is the management company required to update the bylaws as the condominium laws are amended?

A: Initially, the issue as to insurance is going to be governed by Section 12 of the Illinois Condominium Property Act. The provisions of Section 12 of the Act govern the insurance issue, whether or not its language is included in the association's governing documents.

On to your issue. Management can only provide copies of the association's recorded declaration and bylaws. If the bylaws have not been updated by the association, then management would not be able to provide updated bylaws to parties. It is not within a management company's responsibility or authority to update an association's bylaws. Rather, updating the association's declaration and bylaws to conform to the Condominium Property Act would need to be accomplished by the association through its board of managers, with the assistance of legal counsel.

The situation here, though, is a subtle reminder to associations that it may be a good idea to periodically have governing documents reviewed and updated to conform to current provisions of the Condominium Property Act or the Common Interest Community association Act, as applicable.

• 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.