Condominium Association Management Law

In the Illinois Condominium Property Act, Sec. 18.7 provides "STANDARDS FOR COMMUNITY ASSOCIATION MANAGERS", which includes:  

(c) Requirements. To perform services as a community association manager, an individual must meet these requirements:

(3) shall have a working knowledge of the fundamentals of community association management, including the Condominium Property Act, the Illinois Not-for-Profit Corporation Act, and any other laws pertaining to community association management; and

This paper is not intended to be a substitute for the legal advice from an attorney specializing in condominium law, but is a practical perspective from a professional property manager, to introduce board members and condominium owners to the basics of condominium law.

Fiduciary Duty 

The Illinois Condominium Property Act provides:

"In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners."

Being a board member is a serious responsibility.  The decisions board members make can affect the value of most unit owner's largest investment, as well as the safety and well being of residents and visitors to the association.  Thus board members "shall exercise the care required of a fiduciary of the unit owners".

Undivided Loyalty

In addition to a fiduciary duty, board members have a duty of undivided loyalty.  The loyalty is to the association -- not to ones personal interest, nor to friends in the association.  Rules must be enforced uniformly.   

Due diligence

  The duty of "care", includes due diligence.  Being a board member requires work.  There is case law, and articles by attorneys that would suggest that board members do not always have to make the right decision.  But they have to make their decision in the right way, which includes due diligence.

Business Judgment

  Board members have to make decisions using business judgement.

Hierarchy of Laws –

  A lot of times it is confusing to have to deal with so many legal documents, and if there is a conflict between the documents, which documents control.  Below is a general guideline for resolving differences, based on the general hierarchy:

Illinois Condominium Act

Declaration

By-Laws

Association Rules

This article was prepared by Enlan Condominium Management Company ( www.enlan.com ) to provide a practical overview of condominium association law, based only on the working knowledge of a property manager.  There are numerous articles available on-line, written by attorneys specializing in condominium law that deal with many of these issues in far greater depth, and from a more learned perspective.  This is not a substitute for legal advice in any particular situation.  

The Illinois Condominium Property Act is available from the State of Illinois website:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2200&ChapAct=765%26nbsp%3BILCS%26nbsp%3B605%2F&ChapterID=62&ChapterName=PROPERTY&ActName=Condominium+Property+Act