In a recent article, the Chicago Daily Law Bulletin cites data from a handbook published by Adrienne M. Levatino, condo and common-interest community ombudsperson for the Illinois Department of Financial & Professional Regulation (IDFPR) estimating that as of 2015, about 30% of the state’s population—around 3.7 million people—reside in a condo development.
Levatino describes condo associations as “a sort of highly-local mini-government” with their own declaration, bylaws, and internal rules set under the framework of the Illinois Condominium Property Act, and outlines special considerations that condo communities should address in the age of COVID-19. The Daily Law Bulletin provides several after speaking with attorneys and regulators in the industry.
1. With gatherings restricted to 10 people or fewer, condominium boards can make use of “acceptable technological means” of participating and acting in meetings that are provided by law in the Condominium Property Act.
In Illinois, these meetings must be “open to any unit owner,” with a specific list of exceptions based on the subject matter to be discussed, notes the Bulletin.
Conference calls or video conferencing tools are a socially distant way for boards to comply, indicates Patrick T. Costello, a shareholder at Keay & Costello P.C. in Wheaton, who co-chaired the Community Association Institute (CAI)’s Illinois legislation committee in 2014 when the organization helped draft the electronic voting bill allowing condo boards to function remotely. According to Costello, “I think the concept under both the Condominium Property Act and under the Palm II case is that unit owners must be able to attend and watch the board conduct its business."
A statement from IDFPR confirmed that virtual condo board meetings are acceptable as long as the board gives proper notice of a meeting—typically 48 hours in advance by mail or posting that includes “specific, detailed instructions on how unit owners can attend ... in a virtual manner,” notes the Bulletin.
2. The Condo Act provides for boards to take emergency action in situations defined as “an immediate danger to the structural integrity of the common elements or to the life, health, safety, or property of the unit owners.”
A dangerous, contagious pathogen certainly creates a health risk, notes the Bulletin.
As long as the board ratifies the action at a subsequent open meeting and notifies owners about its actions within a week of the emergency, “[f]or the most part, most practitioners would say you could follow that using the general emergency doctrine,” says condo attorney Michael C. Kim of Michael C. Kim & Associates.
3. Special precautions to limit viral exposure and protect vulnerable residents should be taken in condo communities.
According to the IDFPR statement, “Considering the fact that numerous associations, especially in Chicago and other large cities, have populations larger than those in some Illinois municipalities, associations may want to emphasize the particular importance of sheltering in place and practicing responsible social distancing. Associations are also developing or updating lists of older residents and those otherwise at greater risk of susceptibility to COVID-19 in order to inform first responders should that be necessary.”
The IDFPR has observed that most associations have ramped up cleaning measures, are encouraging or requiring residents to cover their faces when in common areas, have closed shared amenities like pools, gyms, and party rooms, and are limiting the number of riders in elevators at one time.
Kim tells the Bulletin that boards face the same standards as always: a fiduciary duty to operate the association in a prudent manner, and a duty of care not to engage in foreseeably harmful conduct. They cannot, however, be expected to guarantee people’s personal safety, he says.
4. Assessments and amenity fees cannot be reduced or eliminated in response to hardship.
“The Condominium Property Act specifically prohibits boards from forbearing the collection of assessments,” says the IDFPR, “but it’s probably wise for them to consult with their attorneys to determine whether reasonable payment plans that are uniformly applied and will not cause harm to the financial stability of the association can be developed.”
Boards do have the option to suspend or waive late fees, Costello indicates to the Bulletin, but anything that limits cash flow creates its own management headaches and can disrupt or impede an association’s ability to meet its expenses. A condo association is a not-for-profit organization, not a landlord or commercial property owner, notes Costello. “It becomes really difficult for an association to allow people to not pay assessments for months on months,” he says.
While courts currently aren’t hearing eviction cases, the Bulletin notes that collection actions can still be filed to start the process. Refunds for fees for amenities or clubhouse facilities that have been closed or restricted due to COVID-19 are also unlikely. Costello points out that “The expenses still generally exist for that period of time,” even if nobody’s allowed in.
Kim says associations can consider drawing on lines of credit or delaying spending to reduce cash demand in the months ahead, but “[t]hey’re not getting any bailouts from governments,” he tells the Bulletin. The full article can be found here: https://www.chicagolawbulletin.com/condo-board-responsibilities-under-pandemic-20200430