A Rundown of New Laws that Could Affect Your HOA

 

Illinois legislators, as well as the city of Chicago, have been busy making some important legal changes that have a direct impact on condominium and homeowners associations (HOAs). We discussed some of them in depth in previous articles. In this article, we provide a summary of the new laws with which your HOA board and residents should be familiar.

Closed (Executive) Meetings—Effective January 1, 2017

Public Act 99-0567, mitigates certain aspects of the First Appellate Court decision in Palm v. 2800 Lake Shore Drive. Although the Palm suit was brought by a condominium owner, this new law amends both the Common Interest Community Association Act (CICA) and the Illinois Condominium Property Act (ICPA), so it applies to all types of community associations. As a result of this change, your board is allowed to do more in a closed session:

  • Discuss probable, pending or imminent legislation
  • Discuss third-party contracts or information regarding appointment, employment, engagement or dismissal of an employee, independent contractor, agent or other providers of goods and services
  • Interview potential employees, independent contractors, agents or other providers of goods and services
  • Discuss violations of the association’s rules and regulations
  • Discuss an owner’s unpaid assessments
  • Consult with the association’s legal counsel

Board members also can discuss allowed topics outside of regularly scheduled board meetings—even in emails. Furthermore, the board is no longer required to notify owners or invite them to attend a meeting in order to hold a closed session. Keep in mind, however, that your board cannot hold a vote or make a decision during these closed sessions.

Correcting Errors, Omissions or Inconsistencies—Effective January 1, 2017

Public Act 99-0627, which amends the CICA only, allows your board to make certain changes to your governing documents without a full membership vote. Specifically, if your governing documents are not in compliance with the CICA or any Illinois laws because of an error, omission or inconsistency, you can adopt an amendment by a two-thirds vote of the board to make the correction. You do not need to notify HOA members or have them vote on such amendments.

Chicago Short-term Rental Ordinance—Effective July 1, 2016

This ordinance takes Chicago’s existing ordinance regarding short-term and vacation rentals a step further. Changes that specifically affect associations are designed to:

  • Prevent owners from listing their homes if their association’s governing documents prohibit short-term rentals
  • Require people who want to list their homes as vacation rentals to register with the city and obtain a license
  • Allow entire buildings to opt out of short-term rentals
  • Limit the number of units that can be vacation rentals within a single building
  • Make listing sites like Airbnb and VRBO responsible for complying with Chicago regulations
  • Establish clear penalties for violators

Chicago Recycling Ordinance—Effective January 1, 2017

Condominiums and co-ops run by an HOA are among the multi-unit buildings that must comply with Chicago’s new recycling ordinance. This means implementing “single-stream” recycling—combining all recyclable materials in a single container but separating them from other trash. The ordinance specifies which items can be recycled, which items are prohibited and how associations should go about collecting recyclables. Condos and co-ops also have certain requirements regarding signage and resident education. This includes putting up flyers and giving residents at least 10 calendar days’ notice of any changes to the program. Fines for not complying with the recycling ordinance can be as much as $1,000 per day.

Anytime your HOA is faced with changes to relevant laws, it’s a good idea to consult with your attorney. If you are managed by a professional property management company, talk to your association manager as well.

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