NEW CHICAGO ORDINANCE DETERS OWNERS FROM ENTERING INTO SHORT-TERM AND VACATION LEASES IN VIOLATION OF COMMUNITY ASSOCIATION GOVERNING DOCUMENTS

Many, if not most, community association declarations prohibit owners from leasing their units for transient or hotel purposes.  While these types of restrictions have historically been uncontroversial and infrequently violated, the increasing popularity of peer-to-peer rental services such as AirBnB, VRBO, and HomeAway are quickly changing this.  These services make short-term and vacation leasing by owner very convenient and in turn created enforcement and administrative nightmares for community association boards of directors.

On June 22, 2016, the Chicago City Council passed an ordinance further regulating short-term and vacation leasing, including adding additional registration requirements for owners within community associations leasing looking to lease their units for short-term or vacation purposes.  A link to the text of the ordinance is contained here, and below is an outline of some of the changes that significantly affect community associations:

 The ordinance:

  1. Allows community associations to submit an affidavit stating that short-term and vacation leasing is prohibited within the community association. This affidavit can attest that the prohibition was established be either 1) a vote of the Board (i.e., an amendment to the rules and regulations) or 2) a restrictive covenant contained in the association’s declaration or bylaws.  Upon receipt of this affidavit, the commissioner must maintain a “Prohibited Buildings List,” which shall be posted on the City of Chicago’s website.  In the event a community association is included on this “Prohibited Buildings List,” an owner cannot obtain a license to lease his or her unit for short-term or vacation purposes.

(While it has long been our opinion that most community associations have the right to restrict leasing via a board adopted rule (see Apple II Condominium Association v. Worth Bank & Trust Co.) this provision would appear to be the City of Chicago’s recognition that short-term and vacation leasing can be prohibited by a community association’s board of directors, not soley through a restriction approved by the members.  While this acknowledgement by the City of Chicago is far from an absolute guarantee that a courts will uphold short-term and vacation leasing restrictions adopted via rule, it certainly aids a community association’s efforts to defend such a rule’s validity and enforceability.)

  1. Provides limits on the number of units within a community association building that can be leased for short-term or vacation purposes. In community association buildings with two (2) to four (4) units, only one unit per building can be rented.  In community association buildings with more than five (5) units, short-term and vacation rental leases will be limited to either six (6) units or one-quarter (1/4) of the total number of units, whichever is less.
  1. Requires that any owner seeking to list his or her unit as a short-term or vacation rental first register with the City of Chicago and pay a licensing fee. Further, this application requires the owner to attest that the 1) community association has not adopted prohibitions of vacation rentals, and that that 2) the leasing limits (discussed above) have not been reached.
  1. Prohibits on-line platform companies (i.e., Airbnb, VRBO, HomeAway, etc.) from permitting advertisements of units ineligible to be leased for short-term or vacation purposes, including, advertisements for those units within a community association on the City of Chicago’s “Prohibited Building List.” Further, the ordinance provides penalties for on-line platform companies failing to comply this prohibition on advertising ineligible units.
  1. To ensure compliance, the ordinance establishes certain penalties for those violating the ordinance., including fines of $1,500 to $3,000 per offense, with each day that a violation exists treated as a separate and distinct offense. More egregious violations, such as criminal activity or public nuisance, will be subject to a fines of $2,500 to $5,000 per offense.

The passage of this ordinance is definitely good news for community associations struggling with owners leasing units in violation of short-term and vacation leasing restrictions, as it unquestionably discourages such violations.  That being said, the restrictions created by this ordinance are only enforceable by the City of Chicago, and therefore its effectiveness will be completely dependent upon the City of Chicago’s willingness, and ability, to enforce its provisions.  While community associations located within the City of Chicago which prohibit short-term and vacation leasing should certainly take the necessary steps to be included on the City of Chicago’s “Prohibited Building List,” ultimate enforcement may still fall at the hands of the board.

If you or your community association within the City of Chicago are interested in this topic, please contact me to set up a review of your current governing documents and outline the necessary steps to allow your community association to take full advantage of this ordinance.  I can be reached at ben@keaycostello.com or 630-690-6446 x 11.

 

LEASING RESTRICTIONS AFTER STOBE v. 842-848 WEST BRADLEY PLACE CONDOMINIUM ASSOCIATION

Recently, on February 3, 2016, the Illinois First District Appellate Court, Third Division, issued a ruling in the case of Stobe v. 842-848 West Bradley Place Condominium Association (2016 IL App (1st) 141427) pertaining to certain leasing restrictions within condominium associations.  At this time, this case is binding on all condominium associations within the First Appellate District (e.g. those within Cook County, Illinois) and could be viewed as persuasive as to associations located elsewhere in Illinois.  This Article is a summary of the Stobe case.

Summary of Stobe case

In Stobe, the plaintiff owners purchased a condominium unit within the defendant condominium association for purposes of renting out the unit.  The association’s declaration did not contain any express right of owners to lease their units, but rather included restrictions on owners leasing their units such that no units could be leased for transient or hotel purposes or for terms of less than six (6) months.  The article in the association’s declaration pertaining to leasing did not include a specific right of the association board to adopt further rules pertaining to leasing.  The association’s declaration and bylaws did contain elsewhere general language regarding the board’s ability to adopt rules and some specific language regarding the board’s ability to adopt rules pertaining to other types of restrictions.

The plaintiffs in Stobe purchased their condominium unit in late 2005, and then the association board adopted rules in July 2010 that placed a cap on the number of units that could be leased at any given time of thirty percent (30%).  In 2012, the association sought to enforce its leasing cap and evict the plaintiffs’ tenants which prompted the plaintiffs to file a lawsuit against the association declaring the board adopted leasing cap invalid.

The court in Stobe decided that the board adopted rule placing a cap on leasing was invalid because it conflicted with the association’s declaration.  While the association’s declaration did not contain an express right for owners to lease their units, the court determined that owners did have a right to lease their units because the association’s declaration contained certain restrictions related to leasing (i.e. the prohibition on leasing for transient or hotel purposes or for less than six (6) months) and these restrictions would be meaningless if owners did not have the right to lease their units.  Thus, the court reasoned that because the association’s declaration granted owners the right to lease their units, a board adopted rule could not take away this right.

Additionally, the court focused on the fact that elsewhere in the association’s declaration where restrictions were enumerated there was express language included that the board could adopt rules related to those particular restrictions, but there was not similar language in the article of the declaration that included the leasing restrictions.  Thus, the court held that because “the declaration has spoken on the matter of leasing, any augmentation or diminution of plaintiffs’ right to lease their unit must be accomplished through an amendment to the declaration, not a rule promulgated by the Board.”

For the past couple of decades, the seminal case in Illinois regarding leasing restrictions adopted by associations has been Apple II Condominium Ass’n v. Worth Bank & Trust Co., 277 Ill.App.3d 345 (1995).  For our summary of this case, please visit our website at (http://www.keaycostello.com/board-operations/the-return-of-leasing-and-restrictions-at-associations).  The Stobe court discussed the Apple II case but found it inapplicable because Apple II addressed a leasing restriction adopted by an amendment to a declaration as opposed to a leasing restriction adopted by a board which, in the Stobe court’s determination, conflicted with the association’s declaration.  While the Apple II court discussed the possibility of a board adopting leasing restrictions, the Stobe court found this discussion non-binding on it since Apple II did not actually involve a leasing restriction adopted by a board rule.

The Stobe court also discussed the case of Board of Directors of 175 East Delaware Place Homeowners Ass’n v. Hinojosa, 287 Ill.App.3d 886 (1997), which dealt with a board adopted rule prohibiting owners from having additional dogs.  The Stobe court reasoned that the Hinojosa case did not apply because in Hinojosa the association’s declaration did not contain any language related to dog ownership and therefore the board’s rule to prohibit new dogs did not conflict with any language within the declaration.

Going Forward

For some associations, the Stobe case provides clear guidance going forward.  For other associations, though, the Stobe case potentially raises more questions than it does provide answers.

For those associations that have any language or restrictions related to leasing within their declaration, if the articles/sections related to leasing do not have language specifically permitting the board to adopt rules related to leasing, the Stobe case would indicate that the boards for these associations are not permitted to adopt any rules or regulations related to leasing.  Any further restrictions related to leasing would need to be adopted through an amendment to the association’s declaration.

For those associations that have language or restrictions related to leasing within their declaration, if the articles/sections related to leasing do have language specifically permitting the board to adopt rules related to leasing, the Stobe case would indicate that the boards for these associations could adopt additional rules and regulations related to leasing as long as such rules and regulations do not conflict with the terms of the declaration.

On the other hand, if an association’s declaration contains no language related to leasing, the Stobe decision would seem to indicate that associations could adopt leasing restrictions through either a declaration amendment or through rules adopted by the board as further discussed in the Apple II case.

Additionally, the Stobe case raises questions regarding whether the court’s ruling could extend beyond just leasing restrictions.  For example, if an association’s declaration contains restrictions on a particular topic (such as pets, recreational activities, parking, storage of items, etc.), and does not contain language within such sections specifically providing that the board may adopt rules on these particular topics, the Stobe decision raises the question of whether or not the board would be able to adopt any rules on such topics.  The Stobe case solely dealt with leasing restrictions, so it cannot conclusively be applied to other types of restrictions at this point, but this does nevertheless put associations on notice that future courts could expand the reasoning from Stobe to other types of restrictions besides leasing restrictions.

As we did before the Stobe case was decided, our firm continues to highly recommend that any association seeking to adopt restrictions on leasing do so through an amendment to the declaration as opposed to a rule adopted by the board.  If your association is considering adopting restrictions on leasing, or already has such restrictions in place and would like them reviewed, please feel free to contact our office and one of our attorneys would be happy to assist you.

 

This article is being provided for informational purposes only.  This article does not constitute legal advice on the part of Keay & Costello, P.C. or any of its attorneys.  No association, board member or any other individual or entity should rely on this article as a basis for any action or actions.  If you would like legal advice regarding any of the topics discussed in this article and/or recommended procedures for your association going forward, please contact our office. 

 

 

SUMMER FUN AT THE COMMUNITY POOL: DO WE REALLY NEED TO THINK ABOUT THE FAIR HOUSING ACT?

Spring is finally here and Memorial Day, the unofficial kick-off to summer, is just around the corner. The lead up to Memorial Day usually means two things for community associations: 1.Time to get the pool ready, and 2. Owners who would like to be able to use the pool this summer will find a way to pay their assessments. As the pool season approaches, a discussion of the current state of the Fair Housing Act and the Fair Housing Amendments Act of 1998 is important as these statutes directly impact how an association may regulate the use of its pool and other clubhouse facilities.

The Federal Fair Housing Act prohibits discrimination in connection with residential dwellings against individuals on the basis of their race, color, sex and national origin. The Fair Housing Amendments Act of 1988 went further, and prohibited discrimination on the basis of handicap and familial status. Many of the Fair Housing provisions do not apply to community associations, but community associations are subject to the jurisdiction of the Fair Housing statues to the extent the statutes prohibit discrimination in the provision of services or facilities with respect to residential dwellings. It is this language that subjects community association common areas, clubhouses and swimming pools to Fair Housing governance.

Communities must be aware that appellate courts that have been asked to decide Fair Housing cases challenging the validity of pool rules have found that the following commonly-adopted rules violate the Act:

• Adult-only swim times
• Restricting children to one pool when a community may have more than one pool
• Age restrictions for gaining entry to, and use of, a pool
• Requiring supervision of swimmers under a certain age
• Requiring children under a certain age be accompanied by a parent or guardian

If a community has adopted any of the above rules, or if a community has adopted comprehensive rules relating to the use its common areas and facilities, it should seek an opinion from its attorney as to their validity and enforceability in light of the Fair Housing laws. These statutes are being construed liberally by appellate courts across the country and a community does not want to find itself engaged in federal litigation over its pool rules. Not only is such litigation extremely time consuming, the potential penalties for engaging in a discriminatory practice, whether intentional or unintentional, can be substantial.

RULES AND REGULATIONS:
HOW ARE THEY CREATED? HOW ARE THEY ENFORCED?

I. What are they?

While the adoption of rules and regulations is not required of any community association in Illinois, most find it advantageous to do so. As compared to the declaration, which creates/establishes the condominium or common interest community, and the bylaws, which deal primarily with the obligations and duties of the board and governance of the community, the rules and regulations provide an opportunity to govern the details, operation and day-to-day living at the entire property.

II. How do rules and regulations differ from the declaration and bylaws?

A. Declaration

With respect to condominium associations, Section 4 of the Illinois Condominium Property Act (the “ICPA”) requires that certain provisions be included in each condominium declaration. Some of these provisions are:

a. the legal description of the property;
b. legal description of each unit;
c. the name of the condominium association;
d. the name of the city and county in which the condominium is located;
e. the percentage of ownership in the common elements assigned to each unit, and;
f. a description of the common and limited common elements. (765 ILCS 605/4)

The declaration for each an association must also be recorded in the county in which the community is located. The recording of the declaration informs the public that the common interest community has been created and that all property within the community is subject to its provisions, covenants and restrictions.

B. Bylaws.

The Illinois Condominium Property Act sets forth certain provisions that must be included in each set of bylaws for condominium associations. Some of these provisions are:

a. the procedures for the election of a board of managers;
b. the powers and duties of the board;
c. the mechanism for removal of board members;
d. notice requirements to the owners regarding adoption of the association’s annual budget;
e. the mechanism for filling vacancies on the board;
f. maintenance, repair and replacement of the common elements and the method of payment therefore, and;
g. the mechanism for calling special meetings

The bylaws for an association prescribe the operations and dealings of the board, which is the governing authority for the community. The bylaws also play an important role by establishing the rules for payments made in conjunction with the maintenance, repair and replacement of the common elements.

C. Rules and Regulations.

Unlike the declaration and bylaws, an association’s rules and regulations are not required to include any particular provisions. As stated in the introduction, there is no requirement that an association, be it condominium, townhome or other, adopt rules and regulations at all. But there are a number of day-to-day concerns of individual owners, and the community as a whole, that are not typically included in declarations and/or bylaws and must therefore be addressed and codified in a separate document. That document is a set of rules and regulations.

III. What types of provisions are appropriate for inclusion in a set of rules and regulations?

The specific needs and concerns of a community truly dictate what provisions would be appropriately included in a set of rules and regulations. For illustrative purposes, the following areas of concern are routinely addressed by way of rule:

A. parking;
B. storage of personal items;
C. exterior appearance of units/homes (architectural controls);
D. disposal of refuse;
E. use and enjoyment of common areas;
F. appearance and use of limited common areas;
G. landscaping on individual lots;
H. use and storage of play equipment;
I. pets, and;
J. satellite dishes/over-the-air reception devices.

IV. Procedures and considerations for creating, adopting and enforcing rules and regulations.

A. Creation.

One of the first questions a community should ask, and answer, prior to adopting certain rules is whether or not the proposed rule is necessary. If the item of concern is already addressed in either the association’s declaration or bylaws, the additional rule may be superfluous. Further, if the declaration and/or bylaws specifically address the issue at hand, the association may not change the language contained in the declaration and/or bylaws by adopting a rule. Any rule that is contrary or in conflict with a similar provision in the declaration and/or bylaws will be invalid and unenforceable. The only way to modify, alter or overturn a provision in the declaration and/or bylaws is to amend that specific document. The declaration and/or bylaws may not be amended, modified or rescinded by passage of a rule. If, however, the declaration and/or bylaws contain no provisions addressing the association’s specific concern, adopting a rule to govern the desired conduct is appropriate. Lastly, the rule adopted by the community may not conflict with statutory law.

Other than determining whether a proposed rule conflicts with the law or the association’s declaration and/or bylaws, the most important consideration when drafting a rule is to avoid vagueness. If an owner does not know what he or she is permitted or prohibited from doing, the association will have a difficult time enforcing the rule. Therefore, all rules should be drafted as narrowly as possible to avoid any “gray areas” or confusion.

B. Adoption.

For common interest communities, there are no specific statutory procedures to be followed for adopting rules and regulations. For those communities, the declaration and bylaws must be consulted to determine the appropriate process. Should the governing documents be silent, the discussion below with respect to condominium associations and the procedures to be employed would be appropriate for all such communities. The procedures for adoption are significant as if an owner challenges a rule, a court will be called upon to determine: 1) whether the rule is enforceable and 2) whether the owner violated the rule. The association must follow its own procedures established by its governing documents or, for condominium associations, those procedures established by the ICPA. Should those procedures not be followed, then the rule is not likely to be enforceable. Attention to procedure is of critical importance to assure the enforceability of an association’s rules.

For a condominium association, section 18.4 of the ICPA governs the procedures condominium associations must employ when seeking to adopt or amend rules and regulations. First, once the board has developed the rule or rules it seeks to adopt, the same should be prepared in written form, suitable for distribution to the owners. Section 18.4(h) of the ICPA requires that all owners be given the full text of the proposed rules along with the notice of the meeting at which discussion of the rules will take place. Notice of such a meeting, which must include a copy of the full text of the proposed rule or rules, is to be delivered to the owners not more than 30 and not less than 10 days prior to its scheduled date. Voting on whether to adopt or amend rules and regulations is within the specific purview of the board. Once the meeting to discuss the rules has been held, the board, by majority vote, will determine whether the rules are adopted.

C. Enforcement.

The two concepts that all communities seeking to enforce its rules and regulations must be cognizant of are uniformity and reasonableness. It is imperative that an association, when enforcing a specific rule, does so equally and without prejudice as to all owners. This is true whether an owner is delinquent in his or her assessment payments, is a chronic violator of the rules, or is one of your friends. All owners must be viewed and treated the same when evaluating a violation of the rules and regulations.

As for reasonableness, this is a difficult concept to define. How can a board make a determination as to whether a rule or regulation is reasonable? Obviously, there can be a myriad of opinions as to what rules an association should enact. Since a true and complete consensus on most rules is most likely unattainable, finding some common ground is the goal. If the association can develop a rule or set of rules that a majority of the owners can live with, while perhaps not agreeing with the specifics of each rule, that association is probably acting “reasonably.” When an association’s rules and regulations reflect that certain compromises and concessions concerning personal tastes and preferences must be made when living in a common interest community, reasonableness has probably been achieved.

a. Notices of violation.

It may seem obvious, but it is important to remember that an owner cannot be determined to have violated a rule without first being notified of the violation. While no specific form of notice is required, the owner should be informed of the rule he or she has allegedly violated, along with the time, date and location of the violation. The notice should also set forth whether the alleged violation is the first, second, etc. occurrence and the fine that could be levied in the event the board determines that the violation did in fact occur. The notice should also afford the owner an opportunity to request a hearing with the board. The association can handle this in a couple of different ways. First, the notice can set forth a specific date and time at which the owner is welcome to appear before the board and present facts supporting her contention that the violation did not occur or why any fine to be levied in conjunction with the violation is inappropriate. Alternatively, the association can merely inform the owner that he or she has the right to request a hearing before the board by notifying the association in writing of the request. As my discussion below will establish, the failure to provide an owner the opportunity for a hearing (i.e. some form of due process) prior to levying a fine could invalidate any such fine levied by the association. Section 18.4 (l) of the ICPA and Section 1-30 (g) of the CICAA require an association provide the owner with an opportunity to be heard. This means the hearing (or at least the opportunity) must come before the fine.

b. Hearing.

Once again, there is no set method for conducting hearings on violations of the rules and regulations. Minimally, the owner should be afforded an opportunity to tell his or her side of the story to the board. The owner should also be allowed to present witnesses on his or her behalf. There is no requirement that the person who reported the violation be present at the hearing or that the owner be provided an opportunity to question the reporting witness. Once the owner has presented his or her side of the story, no further process is required prior to the board making its ruling. Please note that Section 18.5(c)(4) of the ICPA and Section 1-40(b)(5) of the CICAA allow the board to conduct hearings on violations of the rules and regulations in closed, executive session. If the board conducts the hearing in executive session, the board must re-convene to the open portion of the meeting for voting on the alleged violation and fine.

Following the board’s determination, a letter should be sent to the owner setting forth the ruling, what fine (if any) has been levied against the owner’s account and if a fine has been levied, the amount of time the owner has to pay the fine before it is considered late.

c. Fines.

As indicated by the discussion above, the ICPA and the CICAA provide associations with the ability to levy fines against owners who fail to abide by the rules and regulations. Any fines so levied will be added to and become part of the owner’s common expense account with the association. In order for fines to be considered valid and levied properly, the consequences for failing to abide by the rules and regulations must be specifically spelled out. Failure to put the owners on notice that a violation of the rules and regulations may result in a monetary fine could result in the association’s inability to collect the fine.

Courts are generally reluctant to award substantial amounts to associations as a result of owner violations of the rules or other governing documents. Therefore, while a board may think that a $500.00 fine will compel owners to clean up after their pets, in all likelihood, if the owner does not pay and the association takes the owner to court, the fine will not be upheld. Simply put, fines are acceptable, but the amount of the fine cannot be greatly disproportionate to the offense and damage to the association/owners resulting therefrom. Acceptable fine structures usually start with either a written warning or a small fine (i.e. $25.00) upon the finding of a first violation. From the first fine forward, the association may adopt a graduated scale of fines for subsequent violations (i.e. $50.00 for the second violation, $100.00 for the third violation and $100.00 for each such subsequent violation of the same rule). Should an owner fail to pay any fines properly levied, the association may pursue the unpaid fines as it would unpaid assessments. Most governing documents also allow an association to recover the attorney’s fees and court costs it incurs in pursuing such an action.

Unfortunately many associations face difficulties when damages to common elements are discovered. Typically an association is compelled to bear the expenses of fixing or replacing the damaged common element. However, what if the damage is caused by a unit owner or associated with an individual unit? Most condominium declarations provide that the expenses incurred in repairing a common element damaged by a unit owner can be assessed against that owner or unit. A more unique question is encountered when the association cannot determine who caused the damage, yet the common element is either solely accessible by one unit or obviously under the control of a single unit.

One Association was faced with such a problem. The supporting members of a roof truss system had been removed in the attic space of a unit to seemingly create additional storage space. The roof trusses were defined as a common element but were accessible solely through the living space of a single unit. Due to safety concerns the Association notified the unit owner of the damage and requested that the trusses be repaired or replaced immediately. When he unit owner failed to undertake the repairs, the Association contracted to have the work performed. Following the repair of all the damaged roof trusses the Association assessed the unit owner’s account for the cost of repair. The unit owner refused to pay.

The Association instituted suit for reimbursement of the expenses for the repairs. The Association’s Declaration provided that all expenses incurred in repairing damage of common elements should be borne by the unit owner or unit causing such damage. Further, the Declaration provided that all covenants contained within the Declaration “run with the land,” meaning all impositions, obligations, and rights are transferred from owner to owner. While the Association could establish that the damage to the common elements was related solely to this unit, it could not determine or establish who removed the trusses or when they were removed. The Association argued that it need only prove the existence of the covenant and its breach to receive reimbursement. The current unit owners argued that they did not remove the trusses. The current owners contended that the Association should sue the prior unit owners who they contended had sold them the unit with the removed trusses.

The trial court determined that the Association could recoup its expenses from the current unit owner. The obligation to pay for repairs to the common elements, related solely to this unit, was an obligation of the current unit owner. Accordingly, a judgment for the entire amount of the repair work was awarded against the unit owner. Additionally, the trial court, in accordance with the Declaration, awarded attorneys fees in favor of the Association and against the unit owner.

The unit owner appealed the trial court’s decision to the appellate court. The appellate court affirmed the trial court’s ruling (in an unpublished opinion) and held in favor of the Association. On appeal the unit owner argued that the trial court, in effect, imposed strict liability without requiring the Association to establish that the current owners caused damage to the trusses. In response, the appellate court stated that “the existence of a covenant and the existence of a breach are the relevant issues in this type of case; once the covenant and breach are established, enforcement is entitled.”

This decision is particularly beneficial to associations in that it recognizes the mechanism of recovery for damage to common elements. Similarly, the decision stands for the proposition that new unit owners, by virtue of their ownership, assume all responsibilities and obligations which could have been assessed against the prior owners. If the prior owner damaged the association’s property within the unit, the new owner can be held responsible for the costs and expenses. Similarly if the prior unit owners had failed to pay all of their assessments, the new unit owner would be responsible for bringing the account current. Moreover, the association is not required to pick up the tab for the repair work merely because the unit may have been transferred since the damage was done.

Subsequent to the sale of the unit in the case described above, in 1991, the Illinois General Assembly passed a law which may have some impact on Associations and repairs or alterations to common elements. The statute, 765 ILCS 605/22.1(a), requires the Board of Managers to provide several statements when a unit owner, other than the developer, decides to sell his or her property. One of the required statements that the Board must make is that “any improvements or alterations made to the unit, or the limited common elements assigned thereto, by the prior unit owner are in good faith believed to be in compliance with the condominium instruments.” (765 ILCS 605/22.1(a)(8)). The burden is on the unit owner selling the unit to request these statements from the Board in writing. But after the request is made to the Board, the Board is required to furnish the statements to the unit owner within 30 days. The burden is then on the prospective purchaser of the unit to demand the Board’s statements from the seller to whom the Association provided the information.

With this in mind, it is important to note that the Board is not required to automatically provide a statement under 765 ILCS 605/22.1(a)(8) every time a unit is sold. Rather, the Board’s issuance of a statement is dependent upon several occurrences. First, the prospective purchaser of a unit must request a statement by the Board from the current unit owner. The current owner must then request the statement from the Board. If these two events occur, then the Board must provide the required statement to the current unit owner within 30 days. If either of these events do not occur, then the Board is not required to make a statement for that particular unit.

For each instance that the Board is requested to make a required statement, the Board should take certain steps to make sure that it complies with the Illinois Condominium Property Act when it makes the required statements. If the Board is making a statement regarding alterations or improvements, then it should make an inspection of the unit. In inspecting the unit, the Board should look for all alterations or improvements made in the unit and the limited common elements assigned to the unit. The Board should ascertain whether or not each alteration or improvement complies with the Association instruments. In its required statement, the Board should clearly identify each and every alteration or improvement in the unit or limited common element which the Board in good faith believes does not comply with the Association instruments.

Accordingly, as Ben Franklin once wrote, “[a]n ounce of prevention is worth a pound of cure.” If prospective buyers require that all the applicable disclosures under 765 ILCS 605/22.1 be complied with, the described situation could be avoided. Additionally, if an Association is making an affirmative representation about alterations or improvements, it should make sure that either no alterations have been made or that any alterations are in compliance with the governing documents. Otherwise, despite language in the declaration which may hold a unit owner responsible, the association, not the owner, would be responsible to repair or replace the damaged common elements.