Including lawyer in emails is no substitute for an open meeting

Q: I understand that a quorum of the board of a condominium can consult with the association's legal counsel without having an actual board meeting. If the board members "cc," or include, legal counsel on email discussions among all the board members, regardless of the topic, can the board avoid holding a board meeting?

A: As set forth in Section 18(a)(9)(A) of the Illinois Condominium Property Act, the board may close any portion of a noticed meeting or meet separately from a noticed meeting to, among other topics, consult with the association's legal counsel. This would permit the board to "consult" with counsel via email. To "consult" generally means something like seeking information or advice from legal counsel.

So, merely "cc'ing" counsel on email communications between board members, where the board is not seeking any information or advice from counsel, is not likely going to protect a communication as one that can take place outside of a board meeting.

However, if board members are engaging in an email dialogue with counsel wherein information or legal advice is being discussed, that would be a legitimate exception to the requirement that discussions concerning association issues involving a quorum of the board must take place at an open board meeting.

Q: I live in a common interest community association, the initial phase of which was intended to be comprised of more than 200 units. The declaration was recorded, and the first sale occurred, in 2020; however, only a fraction of the units have been sold. All of the unsold units were sold in bulk to a single entity. The entity that purchased the unsold units is claiming they are a successor developer, in order to take advantage of some favorable provisions in the declaration. Is this purchaser of all the unsold units a successor developer?

A: The Illinois Common Interest Community Association Act provides that "(a)ny assignment of a developer's interest in the property is not effective until the successor: (i) obtains the assignment in writing; and (ii) records the assignment." This language, also found in the Illinois Condominium Property Act, effectively prevents the successor to a developer's units (and others), from claiming certain rights of the developer relative to the property, without documented, recorded proof. It will also protect successor owners of a developer's remaining units (like a foreclosing lender) from being incorrectly characterized as a successor developer.

Q: I was recently looking at a condominium unit in the Northwest suburbs. My real estate agent said the association is a "leasehold condominium." He started to explain it to me, but it was very confusing. Can you explain what he meant by a "leasehold condominium?"

A: Initially, there are not very many leasehold condominiums in Illinois.

The Illinois Condominium Property Act permits what is known as a "leasehold condominium." A leasehold condominium means a property submitted to the provisions of the Act that is subject to a lease, the expiration or termination of which would terminate the condominium.

That means the ground upon which the buildings and condominiums are located is owned by a third party. In the case of a leasehold condominium, a unit owner is the lessee or lessees of a unit whose leasehold ownership of the unit expires simultaneously with the lease described above.

In addition, the lessor of the property must meet certain qualifications. The lessor must be an sole entity or limited liability company exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or 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 inhabitants.

• 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.