Condo Legislative Watch
by Sheldon Atovsky
Last issue, we published recent changes to condo law enacted by the City of Chicago. Here we continue with changes, again new in 2015, but in this case enacted by the State of Illinois. Haven’t seen what you’re looking for? Stay tuned for more to come in this continuing series on condo law.
Just a reminder that we are not legal beagles, so the language will be plainspoken.
House Bills HB4784 and HB5322, which became effective January 1 of this year, allow condominium associations to communicate with their members using email and other electronic communications. In addition, members may choose whether or not to allow their email addresses to be exchanged. Associations may allow members to vote in board elections and other elections. Board members may conduct business electronically. And signatures and approvals may be conveyed through electronic communication.
Proper procedures are needed to implement these changes, and they are not applicable to notices required in forcible entry, detainer cases, and foreclosure cases. The changes described are added to either or both the Illinois Condominium Property Act (ICPA) and to the Common Interest Community Association Act (CICAA).
This broadening of communication venues will be of enormous benefit to PTCA with regard to convenience, especially as the building already uses so much electronic communication. Tim Patricio estimates that “almost 80% of the management’s written communication with owners and residents is already electronic, and the office has undergone a massive effort to maintain email addresses for most residents. Allowing formal notices and association business at an ‘e-address’ is both practical and economical. This is a step into the 21st century.”
Senate Bill SB3014, effective June 1, 2015, requires that property insurance policies issued to condominium associations must, in addition to covering the full insurable replacement cost of the property, also include coverage for demolition costs and the increased costs of construction in an amount that will be no less than 10% of each insured building’s value or $500,000, whichever is less.
SB3014 also requires that condo associations’ liability coverage for its directors & officers include defense of non-monetary claims, breach of contract actions, and decisions related to placement or adequacy of insurance. Included are past, present and future board members; the managing agent; and employees of the board and managing agent.
Associations that choose to cover “improvements and betterments” in their insurance policies may pass on any increased cost to the affected units. (Improvements and betterments, as addressed in this bill, now refer to all additions, alterations or upgrades installed or purchased by a unit owner – not, as in past, only to structural changes made by unit owners that constitute alterations from the original builder’s specifications.)
Finally, SB3014 disallows condo associations from forced purchasing of liability insurance. This refers to a situation in which the association – because an owner does not purchase liability insurance despite being required to do so – buys that insurance and then charges back the cost to the unit owner.
This last change, relating to forced purchase of insurance, has already benefited PTCA as it has begun adjusting to this legislation. We used to average about 17 units per month without insurance. But by fining owners for not providing proof of liability insurance — $100 fine for the first month and double thereafter up to a maximum of $1000 per month – we have greatly reduced the number of units without that insurance and thus increased the number of unit owners protected.
Read this story at PTCondo.com and follow links to websites detailing this and additional recent condo legislation.