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Answers from a Chicago, IL Attorney Regarding New Chicago Associations

Many members of new Chicago condominium associations have never owned a condominium before and certainly have not been involved in the sometimes bewildering process of turnover of control of the new association from the developer to the unit owners, leaving them with many unanswered questions.

Answers to some common questions about Illinois condominium association laws and regulations from our Chicago condominium attorneys are set out below. However, if this page leaves your questions unanswered or not fully answered, feel free to click here to contact one of our Chicago New Condominium Association Lawyers at any time for the answers to the questions and issues which face your New Chicago Condominium Association.

Question
When must a developer turn over control of a new Condominium Association to Unit Owners?

Answer

The developer is required to turn over control within sixty (60) days after the earlier of:

  • The closing of the sale of units representing at least 75% of the percentage interests in the common elements; or
  • Three (3) years after the date of recording of the Condominium Declaration.

Question
The time has passed for our developer to turn over control of our new Association to us, but he simply has not done so. What can we do?

Answer
The Illinois Condominium Act has a procedure where owners of at least 20% of the percentage interest in the common elements can petition the developer to call the first meeting of unit owners. If he then fails to do so in a timely manner, these unit owners can then call the first meeting themselves by proper notice to the other unit owners.

Question
What are the developer’s duties after the unit owners have elected their first board of managers?

Answer
Section 18.2 of the Illinois Condominium Act is very specific in requiring the developer to turn over all Association funds and an extensive list of documents and things to the new board within sixty (60) days after the date of election of the new board. Click here for a complete list of what must be turned over by the developer to the new Chicago Condominium Association under section 18.2.

Question
Our new board has been elected. 60 days have passed, yet our developer has ignored our requests that he complete the turnover of documents and things. Now what do we do?

Answer
If you have not already done so, now is the time to consult an experienced new condominium association attorney. The Condominium Act provides that the Association may serve a demand that the developer comply with section 18.2 by certified mail, receipt requested. If the developer does not comply within 10 days, the Association can file suit to compel the turn over. The Condominium Act provides that the court shall order the developer to reimburse the Association for all attorney fees and court costs incurred in securing full compliance, after the time of service of this demand.

Question
What are the developer’s financial obligations to the new Association?

Answer
Beginning with the first day of the month after the first closing and for every month thereafter, the developer is required to pay assessments for every unsold unit. Further, all Association funds, including the assessments paid by the developer, must be kept in a segregated account, separate from other funds of the developer. Within 60 days after the initial meeting of unit owners, the developer must turn over all Association funds and a detailed accounting of Association funds to the board of managers of the new Association. It is very important that the Treasurer of the new Association or an accountant employed by the Association carefully review the accounting, as it is not uncommon for expenses which should have been absorbed by the developer to have been paid with Association funds or for all of the assessments due for unsold units to not have been paid.

Question
Does an Illinois Condominium Association have to be incorporated under the Illinois Not for Profit Corporation Act?

Answer
The Illinois Condominium Property Act states that a Condominium Association “may” be incorporated. However, it does not require incorporation. Thus, unless the recorded Condominium Declaration or Bylaws themselves specifically require incorporation, the Association may choose to operate as an unincorporated association.

It should be noted, however, that even if incorporation is not otherwise required, it is generally desirable. Incorporation provides clear protection of unit owner association members from personal liability for association contractual and tort liabilities. Further, at least in Chicago, incorporation can avoid problems if the Association property is ever cited for building code violations, as it is the City’s practice that, where no not for profit corporation exists, the City names every individual owner in a code violation enforcement proceeding, rather than the Association.

If these questions and answers have not answered all of your questions regarding Illinois condominium association laws or condominium association turnover of control issues, feel free to click here to contact a New Condominium Association Law Attorney at Kreisler Law, P.C. at any time for more answers or for a consultation.

Important Condominium & Town Home Association Information on this Site:

I. Laws relating in General to Condominium & Town Home Associations (click on the topic for information):

  • For the entire text of the Illinois Condominium Property Act
  • For the text of the Chicago Condominium Ordinance
  • For the text of Provisions of the Illinois Forcible Entry and Detainer Act applicable to condominiums
  • For selected provisions of the Illinois Not for Profit Corporation Act applicable in general to Illinois Condominium Associations
  • For provisions of the Illinois Condominium Property Act specifically applicable to Condominium Association Meetings and Elections
  • For provisions of the Illinois Not for Profit Corporation Act specifically applicable to Condominium Association Meetings and Elections
  • For the entire text of the Illinois Common Interest Community Associations Act

II. General Information and Advice Regarding Condominium Association Operations (click on the topic for information):

  • Use of Evictions in Collection of past due condominium or townhome assessments, late charges and fines; for a published article on the subject by Barry Kreisler
  • For more information about the eviction services offered to Condominium and Townhouse Associations by the Law Offices of Barry Kreisler, P.C.
  • Condominium Association Meeting and Elections Procedures; for presentation made by Barry Kreisler to the Association of Condominium, Townhome and Homeowners Association Fall, 2009 Convention on this topic
  • Funding Multi-Year Condominium Association Special Assessment; for published answer by Barry Kreisler to “Question of the Month” in the November issue of the ACTHA NEWS

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