Can owners force an annual meeting?
Q: I live in a common interest community association. The annual meeting to elect board members was supposed to take place in June. Citing COVID, the board issued a notice to the owners indefinitely postponing the annual meeting. This was ridiculous, as we could have held the meeting outdoors at the property with plenty of room for everyone to spread out. Despite repeated inquiries from owners about the annual meeting, the board has still not scheduled it. The board has not given any further reasons for the postponement. However, one owner overheard a board member say the current board does not want to hold the election because they know they will all be replaced. Can the owners force the annual meeting?
A; This is governed by Section 1-25(g) of the Illinois Common Interest Community Association Act. If no election is held to elect board members within the time period specified in the bylaws, or within a reasonable amount of time thereafter not to exceed 90 days, then 20 percent of the members may bring an action to compel compliance with the election requirements specified in the bylaws or operating agreement. If the court finds that an election was not held to elect members of the board within the required period due to the bad faith acts or omissions of the board of directors, the members are entitled to recover their reasonable attorney's fees and costs from the association. Please note, however, that if the board issues the notice required for the annual meeting, and an election is not held solely due to a lack of a quorum, then this procedure is not applicable.
Q: A unit in our condominium was acquired by a purchaser in a tax sale. The declaration of condominium for the association has been amended to prohibit leasing of units. The tax purchaser of the unit has advised the board that he intends to lease the unit. He has stated that, as a tax purchaser, he is not subject to the lease restriction. Is that correct?
A: The tax purchaser of the unit is not correct. The tax purchaser acquired the unit subject to the lease restriction in the association's declaration. Section 11 of the Illinois Condominium Property Act addresses this matter.
That section states that in the event any person acquires a tax deed conveying the interest of any unit owner, the interest so acquired is subject to all the terms, provisions, covenants, conditions and limitations contained in the declaration, the plat, and the bylaws. As such, the lease restriction language of the declaration is in full force and effect against this tax purchaser of the unit.
Do note that the tax purchaser would acquire the unit free and clear of any assessments owed by the prior owner of the unit.
Q: I was on the board of my condominium, and now I am on the board of our common interest community association. I remember that the types of insurance the condominium association was requited to acquire was set out by the statute governing the condominium. Is there a similar statute that governs the types of insurance that our common interest community association must acquire?
A: Unlike the Illinois Condominium Property Act, the Common Interest Community Association Act does not include the same detailed requirements as to the types of insurance that the association must acquire. Other than fidelity insurance, the Common Interest Community Association Act does not address the issue.
As such, the types and amounts of insurance to be maintained by the common interest community association (and by individual owners of units) is going to be governed by the association's declaration and bylaws.
• 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.