Use of party room requires new rules

Q: The rules for our condominium association address the use of the association's party room. The party room needs to be reserved, and the resident reserving the party room needs to sign an agreement describing the details of the reservation. The rules refer to the party room agreement; however, the party room agreement is not part of the rules. From time to time, the board adds provisions to the agreement about the use of the room. This seems like an end-around the process to amend the rules. Can you comment?

A: A party room agreement should be relatively brief. The agreement should describe the details of the reservation, like the date and time of the event, and should refer to the rules and incorporate the rules by reference. The agreement can include language that the resident agrees to abide by the rules regarding the party room. Some party room agreements reiterate the language of the rules regarding the use of the room.

However, the agreement and its contents should not be a substitute for language in the rules. The conservative approach is to include any party room "do's and don'ts" in the actual rules, and not simply in the party room agreement. Better drafted rules would include the party room agreement as an exhibit to the rules.

Q: Our small common interest community association of single family homes is incorporated as a not-for-profit corporation and exempt from the Common Interest Community Association Act. Our bylaws provide that each of the three board members serves for a one-year term. Can we revise the bylaws to provide that terms are for two years so that we don't need to do an election every year?

A: The Illinois General Not for Profit Corporation Act provides that the terms of all directors expire at the next meeting for the election of directors following their election unless their terms are staggered. Terms of directors can be increased to two years; however, the terms would have to be staggered. That means that, for your three-person board, the members would elect two board members and one board member in alternating years. As such, even if board terms were increased to two years, the association could not avoid annual elections.

Q: There has not been any election for our common interest community association board in a couple of years, and the terms of board members are one year. Do any of the members still retain their positions and ability to spend money?

A: This is an issue that has been coming up with greater frequency in the last year, mostly because of limitations on gatherings imposed by the COVID-19 pandemic. Under Illinois law, a member of the board serves until their successor is elected. So, the failure to hold an annual meeting when it was supposed to occur does not affect the validity of the board or of any action taken by the board.

However, the Illinois Not for Profit Corporation Act describes the process that owners can follow if an annual meeting is not held at the time proscribed by the association's governing documents.

If an annual meeting has not been held within the earlier of six months after the end of the corporation's fiscal year or 15 months after its last annual meeting, a unit owner may make a request for a meeting in writing directed to the president of the association. If a notice of annual meeting is not delivered by the association to members entitled to vote within 60 days of such a request, then any member of the association who is entitled to vote at an annual meeting can file suit in the circuit court. The suit would seek an order directing that the annual meeting be held, and fixing the time and place of the annual meeting.

• 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.