FAMILIES FIRST CORONAVIRUS RESPONSE ACT BULLETIN

By: Mohit Mehta

The Families First Coronavirus Response Act (FFCRA) was signed into public law on March 18, 2020, as a way to legislate duties, rights and responsibilities in the public and private sector while the nation carries on through the COVID-19 pandemic. As employers are forced to close businesses and employees take medical leaves of absence from work, the FFCRA lays out employer and employee duties and responsibilities in the “Emergency Family and Medical Leave Expansion Act” (EFMLEA) and the “Emergency Paid Sick Leave Act” (EPSLA). The EFMLEA expands the scope of the Family and Medical Leave Act of 1993 (FMLA), where employees may take 12 weeks of leave for medical reasons due to the COVID-19 pandemic without risk of losing their job. The EPSLA grants employees 2 weeks of paid sick leave due to the COVID-19 pandemic, regardless of the length of their employment.

REQUIREMENTS AND DUTIES UNDER THE EFMLEA

Overview of Legislation:

Small businesses and organizations with fewer than 50 employees are exempt from the requirements of the EFMLEA when the imposition of such requirements would jeopardize the viability of the business. Additionally, the provisions in the EFMLEA apply only to employees employed for at least 30 calendar days by the employer from whom leave is requested, and employers with 50 or more employees for each working day during the last 20 workweeks. The EFMLEA expands on the Family and Medical Leave Act of 1993 (FMLA), which lays the groundwork for which employees may take leave from their employment for up to 12 weeks (or 26 weeks in the case of them being a servicemember) if they are need of medical care, or to care for a family member that is in need of medical care, without the risk of the employee losing their job. The EFMLEA expands the FMLA, where employees are able to take 12 (or 26) weeks of leave from employment without the risk of losing their job, if they are required to do so under the new federal, state, and local rules in connection with the COVID-19 pandemic. Accordingly, the employee may take the 12 weeks given under the FMLA to recover or help their child recover from the COVID-19 pandemic (if schools and child-care centers are closed due to the new federal, state, and local rules in connection with the COVID-19 pandemic), without the risk of losing their job, under the new provisions in the EFMLEA. Furthermore, the employee can elect to include accrued vacation days, sick days, and personal days for the first 10 days of leave under the EFMLEA; after the 10 day period, the employer shall provide paid leave for the employee. However the amount of money that employers are to pay employees is not to exceed $200 per day and a $10,000 maximum.

Employer and Employee Duties:

Employees must give notice as is practicable to employers when medical leave is foreseeable. If the employee’s position is taken when the employee comes back to work, the employer must make every reasonable effort to restore the employee to a position equivalent to the position the employee held prior to taking leave. If the restoration fails, the employer must contact the employee if an equivalent position opens up within one year.

REQUIREMENTS AND DUTIES UNDER THE EPSLA

Overview of Legislation:

The EPSLA applies to any employer in the private sector with under 500 employees. Under the provisions of the EPSLA, employers must give their employees paid sick leave under the Act regardless of how long the employee has been employed by the employer. Additionally, employers may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time granted in the EPSLA. The EPSLA specifically lists that employers are required to give employees paid sick leave only to the extent that the employee is unable to work (or work remotely) because:

  • The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to an order as described in numeral (1) or has been advised as described in numeral (2);
  • The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions;
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Accordingly, full time employees are entitled to 80 hours of paid sick leave and part-time employees are entitled to a leave amount equal to the number of hours the employee works over a 2-week period. Once an employee comes back to work, the employee is afforded no more sick leave under the Act. Lastly, employers are required under the FFCRA to post a copy of the language used in the Act at work; “model language” that satisfies this requirement can be found below:

https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

Paid Sick Leave Calculation:

The EPSLA lists two payment restrictions for employers based on the reason the employee takes leave. For reasons 1-3 above, paid sick time is not to exceed $511/day and a maximum of $5110 total; for reasons 4-6 above, paid sick time is not to exceed $200/day and a maximum of $2,000 total. Additionally, when employees are taking paid sick leave for reasons 4, 5, and 6, their compensation will be 2/3 of their regular rate of pay. For part-time employees or employees with varying schedules, employers should calculate the employee’s paid sick leave hours to a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type. If the employee did not work during the last 6 months, paid sick leave should be based on a reasonable expectation on the number of hours per day the employee typically works.

If you any questions regarding the foregoing please contact our office to discuss.   Remember this portion of the recent federal legislation addresses leave taken due to one of the enumerated reasons and not due to lack of work or closure of a business. 

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 client or any other individual or entity should rely on this article as a basis for any action or actions without confirming the advice.  If you would like legal advice regarding any of the topics discussed in this article and/or recommended procedures for your entity or business going forward, please contact our office. 

 

DOES YOUR ASSOCIATION NEED AN ENERGY POLICY STATEMENT?

In the recent months, a handful of Association clients have required assistance with homeowners requesting for the installation of solar collector systems (i.e. solar panels) on roofs. Under the Homeowners’ Energy Policy Statement Act (“Act”) (765 ILCS 165/ eq. seq), condominium, homeowner, and common interest community associations are provided certain rights, but must also comply with some restrictions.

An Association’s governing documents cannot prohibit, or have the effect of prohibiting, the installation of solar energy systems within the community.  However, the Association can draft an “Energy Policy Statement” on the installation and use of solar collector systems to inform the homeowners with its policy on such installation and use. Although the Act labels this a “policy,” pursuant to Section 20 of the Act, the policy must be made a part of the declaration. Therefore, an amendment to the Association’s Declaration is required. This amendment does not require a homeowners’ vote.

Other important provisions of the Act that Associations should be aware of are: (1) the Association’s timeline to adopt its “energy policy statement”; and (2) the consequences of violating the Act.

(1)    Unlike the recent Condominium and Common Interest Community Ombudsperson Act, an association is not required to have its energy policy statement in effect by a specific date. Only upon a homeowner’s application for the installation of a solar energy system, or request for an energy policy statement, is the association required to amend its declaration to include the energy policy statement. From the date of such application or request, the association has one hundred and twenty (120) days to prepare the policy statement and amend its declaration accordingly. At such time, the policy must include the location, design and architectural requirements of the solar energy systems, and whether the association will permit wind energy collection, rain water collection and composting systems, and if so, the location, design, and architectural requirements of those systems. If an association only wishes to permit a solar collector system such as solar panels, the association should deny the installation of any wind energy collection, rain water collection and composting systems. This can be revised at a later date through an amendment.

(2)   If the association violates any provision of the Act, the association is liable to the homeowner/applicant/requestor for any actual and/or consequential damages such homeowner incurred. Further, if any litigation arising as a result of this Act, the prevailing party is entitled to its attorney’s fees and costs.

 

If your association needs an energy policy statement or your association has any questions concerning the Homeowners’ Energy Policy Statement Act, please contact Keay & Costello, P.C. for assistance.

 

 

 

DEADLINE APPROACHING FOR OMBUDSPERSON ACT – JANUARY 1, 2019

As stated in our “The Ombudsperson: 2016 Amendments and Updates” article, by Governor Rauner’s signing of Public Act 99-0776, several changes were made to the Condominium and Common Interest Community Ombudsperson Act (“Act”).

One of those changes requires all associations to adopt a written dispute resolution policy. Pursuant to the Act, all associations, including master associations, that are subject to the Condominium Property Act must adopt a policy. Similarly, any association subject to the Common Interest Community Association Act must adopt a policy.  However, associations exempt for the Common Interest Community Association Act do not need to adopt this policy.

The policy must be adopted on or before January 1, 2019 and the effective date of the policy must be no later than January 1, 2019. Any association established after January 1, 2019 shall have 180 days from date of establishment to adopt its written dispute resolution policy.

The policy is for resolving complaints submitted by the owners of the association. The policy must include a sample form for owners to submit their complaints, provide a description on how owners can submit the complaint to the association, provide a description of how the association will make its determination of the complaint, and how and when the association’s final determination for the complaint shall be given.

If your association has questions about whether it is required to adopt one of these written policies, the written policy itself, or would like assistance in preparing a written policy, 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. 

 

TIME TO UPDATE RULES AND REGULATIONS REGARDING

CONDOMINIUM ASSOCIATION RECORD REQUESTS AND USES FOR COMMERCIAL PURPOSES

With the adoption of Public Act 100-0292, which will take effect on January 1, 2018, several significant changes will take place with respect to the rights of owners within condominium associations to inspect and copy records of a condominium association as outlined in the Condominium Property Act (765 ILCS 605/19).  One significant change that will occur is that owners will be entitled to obtain from their condominium association the e-mail addresses and telephone numbers of their fellow owners, in addition to those owners’ names and addresses.  Accordingly, it is important for condominium association boards to review their procedures for handling such requests.

An owner requesting the names, addresses, e-mail addresses and telephone numbers of their fellow owners, as well as requesting to see copies of ballots and proxies from recent owner votes, may only make such a request for a purpose that relates to the association.  To help make sure that owners are not requesting this information for purposes unrelated to the association, Section 19(e) of the Condominium Property Act provides that a condominium association may require an owner requesting this information to certify in writing that the information contained in the records will not be used by the owner for any commercial purpose or any other purpose that does not relate to the association.  Additionally, condominium association boards of directors are authorized to establish and impose a fine against any owner that makes a false certification.

Therefore, in anticipation of these statutory changes that will take effect on January 1, 2018, condominium association boards may want to consider taking a couple of steps before then.  The first step a condominium association board should consider taking is establishing a standard written certification form they will require any owner requesting the aforementioned information to fill out.

The second step a condominium association board should consider is adopting a fine structure that they will impose on any owner that make a false certification and uses the information provided by the condominium association for commercial purposes or other purposes unrelated to the association.  While the Condominium Property Act permits an association board to fine owners for making such a false certification, in order to impose a fine a board must first take the steps necessary to vote to establish and adopt a fine for this purpose.  While the statutory changes will not take effect until January 1, 2018, boards can act now to put a fine structure in place prior to January 1, 2018.

If your condominium association has questions about the changes that will take effect on January 1, 2018 and/or would like assistance in preparing a certification form and/or fine structure as outlined in this article, 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. 

 

THE OMBUDSPERSON:  2016 AMENDMENTS AND UPDATE

On August 12, 2016 Governor Rauner signed Public Act 99-0776 which makes several significant changes to the original Ombudsperson Act.  This article will provide quick highlights of certain changes contained in P.A. 99-0776.

Registration of Community Associations

Critical to all associations, the requirement that all common interest communities and condominium associations register with the Department of Financial and Professional Regulations has been removed.  No registration is required.

Association Internal Dispute Resolution Policies

All associations subject to the Condominium Property Act and the Common Interest Community Association Act must adopt their own policies for resolving complaints made by owners no later than January 1, 2019.  The original bill required the policies to be in place by January 1, 2017 so associations have been afforded two additional years to develop these policies.  The Act current provides that these policies must include a form on which an owner may make the complaint, a description of the process by which the complaint must be submitted, the timeline in which the Association will resolve the complaint, and the requirement that the Association make its “final” decision within 180 days.

The Current Role of the Ombudsperson

No later than July 1, 2017, the ombudsperson is to begin offering training, outreach and educational materials to the public and it may also offer courses related to the management and operation of community associations, the Condominium Property Act and the Common Interest Community Association Act.  The ombudsperson is to also offer a toll-free number for contact and inquiry purposes in addition to providing information regarding alternative dispute resolution providers (arbitrators, mediators) and methods available to communities and their members.  The ombudsperson does not have authority to consider any matters involving claims under the Illinois Human Rights Act or that are properly brought before the Department of Human Rights or the Illinois Human Rights Commission.  The amendments to the Act provide that certain information reported to the Ombudsperson is not be subject to certain Freedom of Information Act requests.

Reporting to the General Assembly

The Department of Financial and Professional Regulation is required to provide its first written report of the ombudsperson’s activities to the General Assembly no later than July 1, 2018 and beginning in 2019, annual reports of the office’s activity are to be filed no later than October 1st. It is expected that the General Assembly and administration will use these reports to evaluate the proper, future role of the ombudsperson.

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.

DISPLAY OF AMERICAN FLAG and MILITARY FLAG BY OWNERS

An issue that comes up every now and again in associations is the display of flags by owners. Some association declarations contain complete prohibitions on the display of any flags by owners, while other declarations may be wholly silent on the issue of flags. Fortunately for associations, there is statutory guidance regarding the display of some of the most commonly displayed types of flags, namely the American flag and military flags. The display of other types of flags is not addressed by this article, and will likely depend upon the specific terms of a particular association’s declaration.

For condominium associations, the Illinois Condominium Property Act (765 ILCS 605/18.6(a) and referred to as “Condo Act”) provides, and for associations subject to the Illinois Common Interest Community Association Act (765 ILCS 160/1-70(a) and referred to as “CICAA”) that act provides, that regardless of what other language may be within an association’s declaration, bylaws or rules, the association board “may not prohibit the display of the American flag or a military flag, or both, on or within the limited common areas and facilities of a unit owner or on the immediately adjacent exterior of the building in which the unit of a unit owner is located.” However, while a board may not prohibit the display of the American flag or a military flag by an owner, it may “adopt reasonable rules and regulations, consistent with Sections 4 through 10 of Chapter 1 of Title 4 of the United States Code, regarding the placement and manner of display of the American flag” and “may adopt reasonable rules and regulations regarding the placement and manner of display of a military flag.” Thus, owners within associations governed by either of these statutes are given the right to display an American flag and military flag, but the board may adopt reasonable rules and regulations regarding how such flags are displayed and placed.

Similarly, for any homeowner, property owner or townhome association that is incorporated as an Illinois Not-For-Profit Corporation, the Illinois Not-For-Profit Corporation Act (805 ILCS 105/103.30(a) and referred to as “NFP Act”) contains language permitting owners in such associations, regardless of what language may be contained in the applicable declaration, bylaws or rules of the association, to display the American flag and military flag on the owner’s property. The manner and placement in which such flags may be displayed by owners can be regulated by the Board through reasonable rules and regulations.

In addition to granting owners within associations the right to display the American flag and military flag, the aforementioned statutes also grant owners the right to install flagpoles for the display of the American flag and a military flag. Both the Condo Act (765 ILCS 605/18.6(a)) and the CICAA (765 ILCS 160/1-70(a)) provide that an association board “may not prohibit the installation of a flagpole for the display of the American flag or a military flag, or both, on or within the limited common areas and facilities of a unit owner or on the immediately adjacent exterior of the building in which the unit of a unit owner is located, but a board may adopt reasonable rules and regulations regarding the location and size of flagpoles.” Likewise, the NFP Act (805 ILCS 105/103.30(a)) states that a property owner, townhome or homeowner association that is incorporated as an Illinois Not-For-Profit Corporation may not prohibit the installation of a flagpole by an owner for the purpose of displaying the American flag and a military flag, but the association may adopt reasonable rules and regulations regarding the size and location of such flagpoles. Therefore, each of these statutes grant owners the rights to install flagpoles for the purpose of displaying the American flag and a military flag, but an association may regulate the size and location of such flag poles.

With respect to what flags are covered by the aforementioned statutes, the “American flag” is the flag of the United States of America. As for what constitutes a “military flag”, this means “a flag of any branch of the United States armed forces or the Illinois National Guard” according to the Condo Act (765 ILCS 605/18.6(b)), the CICAA (765 ILCS 160/1-70(b)), and the NFP Act (805 ILCS 105/103.30(b)).

Going into more detail as to what constitutes a “flag”, each of the aforementioned statutes provides that for purposes of this right granted to owners, a flag includes any American flag or military flag “made of fabric, cloth, or paper displayed from a staff or flagpole or in a window, but…does not include a depiction or emblem of [the American flag or a military flag] made of lights, paint, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component.” (765 ILCS 605/18.6(b), 765 ILCS 160/1-70(b), and 805 ILCS 105/103.30(b)). So, in short, the right is granted to owners to display actual flags, but not necessarily a decorative depiction of an American flag or military flag painted onto a building or otherwise created out of materials not typically thought of as a “flag”.

In summary, owners within associations are reserved the right by statute to display the American flag and a military flag, and to install flagpoles for the display of such flags. However, association boards may adopt reasonable rules and regulations regarding the display and placement of these flags, and the size and location of flagpoles. With respect to any rules and regulations adopted regarding the display of the American flag, these should be consistent with the United States Code provisions regarding the display of the American flag. The United States Code contains a number of detailed provisions regarding the display of the American flag which I have not included in this article for the sake of brevity. An association considering adopting restrictions on the display of the American flag and military flags would be prudent to consult with its attorney regarding what types of restrictions might be considered reasonable as well as what restrictions would be consistent with the United States Code. If your association is considering adopting restrictions on the display of the American flag and military flags, 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.

 

THE DISH ON SATELLITE DISHES AND TELEVISION ANTENNAS IN ASSOCIATIONS

A frequent topic that arises in all types of associations is the placement of satellite dishes and television (“TV”) antennas by owners. Many associations simply have in place a blanket requirement prohibiting owners from installing these items without the prior approval of the board. While such prior approval requirements are common, and typically enforceable, for most exterior additions and changes in associations, federal law governs what types of restrictions associations may place on satellite dishes and TV antennas.

Specifically, the federal Telecommunications Act of 1996 empowered the Federal Communications Commission (“FCC”) to adopt rules regarding what types of restrictions associations may place on satellite dishes and TV antennas, which prompted the FCC to adopt the Over-the-Air Reception Devices (“OTARD”) rule, which has been in place since 1996 and amended several times since then. This rule applies for all TV antennas designed to receive local channels and all satellite dishes that are one (1) meter in diameter or less.

In general, the OTARD rule prohibits restrictions adopted by associations that: 1) unreasonably delay or prevent the installation, maintenance or use of a satellite dish or TV antenna; 2) unreasonably increases the cost of installation, maintenance or use of a satellite dish or TV antenna; or 3) preclude reception by an owner of an acceptable quality signal from a satellite dish or TV antenna.

The OTARD rule does not necessarily apply to all areas governed by an association, however. Specifically, the OTARD rule does not apply to common areas owned by an association or to common elements owned collectively by owners within a condominium association, except in areas where an owner has the exclusive use and control of the area. Therefore, in a townhome or homeowner association community, an association’s rules related to satellite dishes and TV antennas on the common area would not be restricted by the OTARD rule. In a condominium association, the association’s rules related to satellite dishes and TV antennas on the common elements would not be restricted by the OTARD rule. But, the OTARD rule restrictions would apply for any areas an owner owns (such as the owner’s home or townhome in a homeowner or townhome community) or that the owner has exclusive use and control over (such as a balcony or patio in many condominium associations). Restrictions related to these portions of the property must not conflict with the OTARD rule. Any association with a question about whether or not an area is, or is not, subject to the OTARD rule should consult with the association’s attorney as this will likely be dictated by the association’s particular governing documents.

With respect to an association that wishes to require prior approval by the board before an owner installs a satellite dish or TV antenna, the FCC has ruled that such prior approval requirements are generally not enforceable unless the prior approval is required for a legitimate, written, safety or historical preservation purpose. If an association establishes a prior approval requirement and asserts this is for a safety and/or historical preservation purpose, if challenged the burden will be on the association to prove that its requirement does not violate the OTARD rule.

Now almost twenty (20) years old, the OTARD rule has been the subject of a number of FCC rulings. Fortunately for association boards and property managers, the FCC has established a summary guide related to this rule with some frequently asked questions that are quite informative. These can be found at https://www.fcc.gov/guides/over-air-reception-devices-rule.

While the FCC guide and frequently asked questions can offer a good summary and outline on a number of topics related to association restrictions on satellite dishes and TV antennas, an association would be prudent to consult with its attorney regarding how to draft restrictions within a declaration and/or rules and regulations governing satellite dishes and TV antennas in the association’s community. If your association is considering adopting restrictions on satellite dishes and antennas, or already has these in place and would like them reviewed for any conflicts with the OTARD rule, 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.

Senate Bill 1374 Signed Into Law: Developers’ Loophole Closed

On July 14, 2015, Governor Rauner signed Senate Bill 1374 (Public Act 99-0041), which was sponsored by Senator Mike Hastings and Representative Kelly Burke, and authored by Douglas Sury of Keay & Costello, P.C., as a member of the Association of Condominium, Townhouse and Homeowners Association’s (ACTHA) Legislative Action Committee. The bill closed a loophole that was being exploited by developers when establishing non-condominium communities. Over the past couple of years, Doug had seen a number of new townhome communities formed by developers not as not-for-profit corporations, but rather as limited liability companies. Forming associations as limited liability companies allowed developers to avoid subjecting their communities to the governance of the Common Interest Community Association Act (CICAA) and the mandatory turnover provisions found within Section 1-50(b). A plain reading of CICAA appears to only subject communities formed as not-for-profit corporations to its governance. Since the newly formed communities were not subject to CICAA, a developer could record a declaration that allowed it to retain control of the board and the association’s finances for whatever time period it deemed appropriate. That is no longer the case, as now associations formed as not-for-profit corporations and limited liability companies are subject to CICAA and its mandatory turnover provisions. In addition to amending CICAA, Senate Bill 1374 amended portions of the Forcible Entry and Detainer Act to clarify that common interest communities formed as limited liability companies may use the Forcible Act to collect unpaid assessments.

Public Act 99-0041 is effective immediately and a link to the entirety of the Public Act is below. Doug would like to extend his thanks to Senator Hastings, Representative Burke, ACTHA, ACTHA’s lobbyist John Carr and the Illinois Chapter of CAI for their hard work and support of this bill that will have a significant impact for all newly-formed common interest communities.

 http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=099-0041

 

 THE RETURN OF LEASING AND RESTRICTIONS AT ASOCIATIONS

As Illinois and the rest of the nation recovers from the crash of the residential real estate market, the issue of leasing restrictions has, again, arisen. Many associations having survived the onslaught of foreclosures are awaking to realize that the formerly owner occupied properties are quickly being bought up by groups of investors. Sometimes this has occurred over a number of years, but for some associations it seems like it happened overnight. Associations may quickly see the number of rental properties in their communities go from a comfortable five to ten percent, to a painful or problematic thirty percent.

The increase in rental units can be concerning to community associations for a myriad of reasons. When such concerns arise, boards and the owners have choices when it comes to who may occupy individual living units. The first choice to be made is whether leasing of units should be restricted in any fashion. If the answer to that question is yes, there are several leasing restriction options available for consideration. Whether an association chooses to allow leasing or not, it is important for boards and the owners to know their rights with respect to enacting leasing restrictions.

When an association decides to enact a leasing prohibition, either outright, with a grandfather clause or a cap, the association must determine whether to include such prohibition or restriction as a rule or by an amendment to the declaration containing a restrictive covenant. The difference between a rule and a covenant could determine the enforceability of the prohibition/restriction. In Illinois the seminal case on leasing restrictions is Apple II Condominium Association v. Worth Bank and Trust Co., 277 Ill.App.3d 345 (1st Dist. 1995).

The unit owners in Apple II were investment owners who purchased their property at a time when the association had no leasing restrictions. However, the appellate court stated that “neither the fact that there were no restrictions on the property when the [complaining unit owners] purchased their unit nor the fact that the [complaining unit owners] purchased the property for investment purposes is relevant.” Additionally, the court in Apple II acknowledged that while leasing restrictions put in place by rule are legal, courts will employ a greater level of scrutiny since the rule was adopted solely by a board and not the owners.

Once an association determines that a leasing amendment restriction would be beneficial to their community, a decision must be made as to the nature and extent of such a restriction. Does the association want to completely ban leasing of all units? Does the association want to limit leasing only to those units that are leased as of the time the amendment is passed? Does the association want to allow all current owners the opportunity to lease their units but prevent any subsequent purchasers from being able to enter into leases? Does the association want to impose a percentage cap?   Each of these decisions need to be carefully considered and properly documented in the language of any proposed amendment.

If a board and the owners at an association decide that restricting leasing of units would be beneficial to the association, the board should take several steps. First, the board should consult the association’s governing documents and review what they say about leasing. The next step the board and the owners must determine is the nature and extent of leasing restriction to be enacted. Finally, the best approach is for the board to propose an amendment to the governing documents and then have the proposed amendment voted on by the owners. While there are several options available to the board and the owners, it is up to the board and the owners to decide which leasing restriction best suits their community before it’s too late.