Statutory Changes to Board Executive Sessions Taking Effect in 2017
Public Act 099-0567 was signed into law by Governor Rauner on July 15, 2016. This Public Act made a few significant changes to both the Illinois Condominium Property Act (765 ILCS 605/1 et. seq. and herein referred to as the “Condo Act”) and the Illinois Common Interest Community Association Act (765 ILCS 160/1-1 et. seq. and herein referred to as the “CICAA”) related to the closed portion of board meetings, often referred to as the executive session portion of board meetings. These changes will take effect on January 1, 2017.
Currently, Section 18(a)(9) of the Condo Act provides that those matters which can be discussed by a board of a condominium association within executive session are limited to discussion of litigation, either then pending or that the board finds to be probable or imminent, discussion of the appointment, employment or dismissal of an employee, the violation of the association’s rules and an owner’s unpaid assessments. Similarly, Section 1-40(b)(5) of the CICAA currently contains these same limits on what can be discussed within executive session by a board of a common interest community association subject to CICAA, with the addition of permitting a board to consider third party contracts within executive session as well.
Beginning January 1, 2017, Section 18(a)(9) of the Condo Act, as amended by Public Act 099-0567, will permit the board of a condominium association to meet in executive session for the following matters:
(1) Discussion of litigation that is either pending or that the board finds to be probable or imminent;
(2) Discussion of the appointment, employment, engagement or dismissal of an employee, independent contractor, agent or other provider of goods and services;
(3) To interview a potential employee, independent contractor, agent or other provider of goods and services;
(4) Discussion of violations of the association’s rules and regulations;
(5) Discussion of an owner’s unpaid assessments; and
(6) To consult with the association’s attorney.
So, for condominium associations, this new language creates the right of a board to discuss within executive session matters related to retaining or dismissing contractors and agents, such as property management companies, landscape contractors, maintenance contractors, etc., and not just employees of the association as the Condo Act currently provides. This new language also permits the board to interview potential employees, property management companies and other contractors outside of an open meeting. Additionally, the changes grant a board the specific right to have discussions with the association’s attorney outside of an open meeting.
Furthermore, the changes that will take effect on January 1, 2017 will also permit a board executive session to take place during an open board meeting, which is already permitted, but also separately outside of an open board meeting. Thus, if a board solely wants to engage in those types of discussions that may take place during executive session, as of January 1, 2017 it will no longer be necessary to call an open board meeting, with all required notice of same provided to owners, and then call the open board meeting to order and then immediately adjourn into executive session, which is what is required now if a board solely wants to hold an executive session.
However, as a reminder, all votes of the board must take place at an open board meeting, notice of which has been provided to the owners. This requirement is not changed by Public Act 099-0567, so all of the additional matters which may as of January 1, 2017 be discussed within executive session by a board still need to be voted upon by the board at an open board meeting. Therefore, if a board elects to forego an open board meeting and hold just an executive session without notice to owners, as boards will be permitted to do beginning on January 1, 2017, no votes of the board will be able to be taken at such executive sessions. If a board wants to vote on a matter that is discussed at an executive session, it will then either need to call a subsequent open board meeting with the required notice, or else continue to hold executive sessions during a portion of open board meetings as is currently required.
Beginning January 1, 2017, Section 1-40(b)(5) of the CICAA will also include all of the items listed above for condominium associations which may then be discussed within executive session, and will also still include the ability of a board of a common interest community association subject to CICAA to discuss third party contracts within executive session. As with condominium association boards, the board of common interest community associations subject to CICAA will also, beginning on January 1, 2017, be able to meet in executive session that is held separate from an open meeting. However, all votes by such association boards will still need to be taken at an open board meeting with the required notice provided to owners.
Therefore, as of January 1, 2017, Public Act 099-0567 will give boards of associations subject to either the Condo Act or CICAA several additional topics that they may discuss within an executive board session. Moreover, these boards will also have the option of meeting for purposes of discussing matters that may be discussed within executive session without the requirement of holding an open board meeting with notice to owners. This should provide such boards greater flexibility to meet to discuss such items and potentially result in a cost savings for those associations who have previously been holding open meetings, and incurring the costs of providing notice for same, solely for the purpose of then adjourning into executive session. Additionally, the new changes expressly provide that a board may meet and have discussions with the association’s legal counsel during executive session, which eliminates a potential grey area under the current open meeting language within the Condo Act and CICAA. However, these new changes do not give boards the right to hold general “workshops” on all matters that the board may want to discuss; rather, the items that may be discussed by the board outside of an open portion of board meetings are limited to only those items that will specifically be included within the Condo Act and CICAA as amended by Public Act 099-0567, as outlined above. Board discussion of items not specifically included within these statutes, as amended, must continue to be held at open board meetings.
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.
July 22, 2016