In Illinois, there is a hodgepodge of homeowner groups

Q. What is the difference between a condominium association, a common interest community association and a master association?

A. In a "nutshell," the difference between those three types of association is a matter of the statutory definition of each.

Under the Illinois Common Interest Community Association Act, a common interest community means real estate, other than a condominium or cooperative, with respect to which any person by virtue of his or her ownership of a unit administered by an association is obligated to pay for the maintenance, improvement, insurance premiums or real estate taxes of common areas described in a declaration. A common interest community may include, but is not limited to, an attached or detached townhouse, villas or group of single-family homes. A common interest community does not include a master association.

Under the Illinois Condominium Property Act, a condominium is property submitted to the terms of a declaration that expressly states the intent to submit the property to the provisions of the Illinois Condominium Property Act.

The Illinois Condominium Property Act also defines a master association. If the declaration, other condominium instrument, or other duly recorded covenants provide that any of the powers of the unit owners associations are to be exercised by or may be delegated to a nonprofit corporation or unincorporated association that exercises those or other powers on behalf of one or more condominiums, or for the benefit of the unit owners of one or more condominiums, the corporation or association is a master association.

Let me add that Illinois is in the minority in that it has a "patchwork quilt" of different statutes that govern these various types of associations, rather than a "uniform" statute for all types of associations.

Q. What is a leasehold condominium?

A. Leasehold condominium means a property submitted to the provisions of the Illinois Condominium Property Act that is subject to a lease, the expiration or termination of which would terminate the condominium. The lessor of the property must be exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986. Further, the lessor must be a limited liability company whose sole member is exempt from taxation under Section 501 (c)(3) of the Internal Revenue Code of 1986, or must be a Public Housing Authority created pursuant to the Housing Authorities Act that is located in a municipality having a population in excess of 1 million.

Q. When it comes to associations, what is the difference between a board of managers and a board of directors.

A. Board of directors refers to the governing body for a condominium or common interest community association that has been incorporated as an Illinois nonprofit corporation. Board of managers refers to the governing body for a condominium or common interest community association that is not incorporated (not a corporation).

Q. When I was on the board of our condominium, we had to maintain fidelity insurance. I now live in a common interest community association. Does our association also need to maintain such insurance?

A. The Common Interest Community Association Act does address fidelity insurance. Specifically, an association with 30 or more units must obtain and maintain fidelity insurance. The insurance must cover people who control or disburse funds of the association for the maximum amount of coverage that is commercially available or reasonably required to protect money in the custody or control of the association.

Further, all management companies that are responsible for the funds held or administered by the association must maintain and furnish to the association a fidelity bond for the maximum amount of coverage that is commercially available or reasonably required to protect those funds. The association bears the cost of the fidelity insurance and fidelity bond, unless otherwise provided by contract between the association and a management company.

• 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.