The Illinois Condominium Property Act (765 ILCS 605) serves as the cornerstone legislation for all condominium associations in Illinois. Whether you're a board member, unit owner, or property manager in Chicago or the North Shore suburbs, understanding this act is crucial for proper governance and compliance.
Since its enactment in 1963 and through numerous amendments, the Act has evolved to address modern challenges facing condominium communities, from virtual meetings to electric vehicle charging stations. With 18+ years managing Chicago and North Shore condominiums, we've helped countless boards navigate these complex legal requirements.
Understanding the Illinois Condominium Property Act
The Illinois Condominium Property Act establishes the legal framework for creating, managing, and governing condominium associations throughout the state. This comprehensive law covers everything from formation requirements to daily operational procedures, ensuring both boards and owners understand their rights and responsibilities.
For Chicago and North Shore condominiums, the Act provides:
- Clear guidelines for board governance and decision-making
- Protection for unit owner rights and interests
- Financial management requirements and transparency standards
- Dispute resolution procedures and enforcement mechanisms
- Amendment procedures for declarations and bylaws
Key Components of the Act
Formation and Declaration Requirements
The Act establishes specific requirements for creating a condominium association. Every condominium must have a declaration recorded with the county recorder that includes:
📋 Declaration Requirements
Board of Directors Powers and Duties
Under Section 18.4 of the Act, condominium boards have extensive powers and responsibilities. Understanding these is critical for effective governance:
Board Powers Include:
- Assessment Collection: Authority to levy and collect regular and special assessments
- Budget Preparation: Requirement to prepare annual budgets with proper reserves
- Rule Enforcement: Power to adopt and enforce reasonable rules and regulations
- Contract Authority: Ability to enter into contracts for maintenance and improvements
- Fine Imposition: Authority to impose fines for violations (with proper notice and hearing)
- Borrowing Power: Ability to borrow money for association purposes
- Insurance Purchase: Duty to maintain adequate insurance for common elements
- Legal Action: Authority to pursue legal remedies on behalf of the association
Unit Owner Rights and Protections
The Act provides numerous protections for unit owners, ensuring transparency and fair treatment:
- Record Access (Section 19): Right to inspect association books, records, and meeting minutes within reasonable business hours
- Meeting Participation: Right to attend all board meetings except properly convened executive sessions
- Election Rights: Equal voting rights based on percentage ownership for board elections and major decisions
- Due Process: Right to notice and opportunity for hearing before fines or penalties are imposed
- Reasonable Accommodations: Protection for disability-related modifications under fair housing laws
- Financial Transparency: Right to receive annual budgets and financial statements
Voting Requirements and Quorum Rules
The Act establishes different voting thresholds for various association actions, and understanding these is crucial for proper governance:
🗳️ Voting Thresholds
Quorum Requirements
The Act specifies minimum participation levels for valid meetings:
- Board Meetings: Majority of board members (can be modified by bylaws but not less than 1/3)
- Owner Meetings: 20% of unit owners for first attempt
- Adjourned Meetings: 10% for subsequent attempts if properly noticed
- Special Provisions: Some associations may have higher requirements in their declarations
Financial Management Requirements
Budget and Reserve Requirements
Section 9 of the Act mandates specific financial practices that associations must follow:
⚠️ Mandatory Financial Requirements:
- Annual Budget: Must be prepared and distributed to owners at least 30 days before adoption
- Reserve Studies: Required every 3 years for associations with 100+ units (recommended for all)
- Reserve Funding: Minimum 10% of budget must go to reserves unless waived by owner vote
- Financial Statements: Annual financial reports must be provided to all unit owners
- Insurance Disclosure: Budget must clearly show insurance premium allocations
Assessment Collection Powers
The Act provides associations with strong collection tools to ensure financial stability:
- Late Fees: Up to $25 or 10% of assessment (whichever is greater)
- Lien Rights: Automatic lien for unpaid assessments from due date
- Foreclosure Authority: Right to foreclose after 90 days delinquency
- Attorney Fees: Recovery of collection costs including reasonable attorney fees
- Payment Priority: Associations have priority over most other creditors
Recent Amendments and Updates (2023-2025)
🆕 Important 2024-2025 Changes:
- Virtual Meeting Authorization: Permanent allowance for virtual board and owner meetings with proper notice and participation procedures
- Electric Vehicle Charging: New provisions protecting owner rights to install EV charging stations at their expense
- Emergency Powers: Expanded board authority during declared emergencies to protect property and residents
- Electronic Voting: Clarified rules for electronic voting, proxies, and digital signatures
- Smoking Restrictions: Enhanced authority for associations to regulate smoking in units and common areas
- Short-Term Rental Controls: Strengthened ability to restrict or regulate short-term rentals
Common Violations and Compliance Issues
Based on our experience managing 50+ condominium associations in Chicago and the North Shore, these are the most common compliance failures:
- Improper Meeting Notice: Failing to provide required 48-hour notice for board meetings or 10-30 day notice for owner meetings
- Closed Session Violations: Discussing non-permitted topics in executive session or excluding owners improperly
- Record Access Denial: Improperly restricting owner access to association records or charging excessive fees
- Budget Timeline Violations: Not providing 30-day notice before budget adoption or failing to hold required budget meetings
- Election Irregularities: Failing to follow proper nomination, balloting, and vote counting procedures
- Due Process Failures: Imposing fines without proper notice and hearing opportunities
- Reserve Fund Misuse: Using reserve funds for operating expenses without proper authorization
Need Help with Compliance?
Our experienced team ensures your association complies with all provisions of the Illinois Condominium Property Act. We handle governance, financial management, and legal compliance for 50+ associations.
Schedule Compliance ReviewSpecial Provisions for Chicago Condominiums
Condominiums in Chicago must comply with additional city ordinances beyond the state Act:
🏙️ Chicago-Specific Requirements
Insurance Requirements Under the Act
Master Policy Requirements
Section 12 of the Act mandates specific insurance coverage that associations must maintain:
- Property Insurance: Full replacement cost coverage for common elements and units as originally built
- General Liability: Minimum $1 million per occurrence (higher recommended for larger associations)
- Directors & Officers (D&O): Protection for board members against personal liability
- Fidelity Bond: Coverage equal to 3 months assessments plus reserves
- Workers Compensation: Required if association has employees
- Umbrella Coverage: Additional liability protection recommended for larger associations
Unit Owner Insurance Responsibilities
Individual owners must maintain their own insurance coverage:
- HO-6 coverage for personal property and unit improvements
- Loss assessment coverage for special assessments (minimum $50,000 recommended)
- Personal liability protection
- Additional living expense coverage
Dispute Resolution and Legal Remedies
Internal Dispute Resolution
The Act encourages resolution through internal procedures before litigation:
- Written complaint procedures with defined response timelines
- Board hearings with due process protections
- Alternative dispute resolution including mediation and arbitration
- Internal appeals processes for board decisions
Legal Action Options
When internal resolution fails, the Act provides various legal remedies:
- Injunctive Relief: Court orders to stop or compel specific actions
- Mandamus Actions: Force board to perform required duties
- Damages: Recovery for financial harm from Act violations
- Attorney Fees: Potential recovery for prevailing parties in some cases
Professional Management and the Act
The Act recognizes the role of professional property managers in association governance:
Property Manager Authority
- Act as agent for the board within defined management agreement limits
- Collect assessments and maintain association finances
- Enforce rules with board authorization
- Maintain records and provide required notices
- Coordinate maintenance and repairs
- Assist with meeting preparation and minutes
Management Company Requirements
Professional Management Must:
- Maintain Community Association Manager license through IDFPR
- Carry adequate professional liability insurance
- Provide financial transparency with regular reporting
- Comply with all provisions of the Act
- Maintain separate accounts for each association
- Provide fidelity bond coverage
Frequently Asked Questions
Q: Can a board make decisions without a meeting under the Illinois Condominium Property Act?
A: No, except for emergency situations specifically defined in the Act. All board decisions must be made at properly noticed meetings where owners have the right to observe the decision-making process. Email votes or informal decisions are not valid.
Q: What percentage of owners can call a special meeting?
A: Under Section 18.1, owners holding 20% of the votes can petition for a special meeting. The board must call the meeting within 30 days of receiving a valid petition with proper signatures and stated purpose.
Q: Are condominium boards required to have reserve funds?
A: Yes, Section 9(c) requires associations to budget for "reasonable reserves" for capital expenditures and deferred maintenance. Generally, this means at least 10% of the budget, though owners can vote to waive this requirement annually.
Q: Can unit owners sue board members individually?
A: Board members are generally protected by the business judgment rule when acting in good faith within their authority. However, they can be held personally liable for gross negligence, willful misconduct, or actions outside their authority. D&O insurance provides additional protection.
Q: How long must associations keep records?
A: The Act requires maintaining financial records for at least 7 years. Meeting minutes, contracts, and correspondence should also be kept for 7 years. Permanent records include the declaration, bylaws, and amendments.
Q: Can associations restrict rentals?
A: Yes, if authorized by the declaration. Associations can impose reasonable rental restrictions including minimum lease terms, tenant screening requirements, and caps on the percentage of rental units, subject to fair housing laws.
Expert Guidance on Illinois Condominium Law
With 18+ years managing Chicago and North Shore condominiums, Manage369 ensures full compliance with the Illinois Condominium Property Act. Our expert team handles all legal requirements, from board governance to financial management.
Schedule a ConsultationOr call us directly at (847) 652-2338
Resources and Additional Information
Official Resources
- Full text of 765 ILCS 605 - Illinois General Assembly website
- Illinois Department of Financial and Professional Regulation (IDFPR)
- Community Associations Institute (CAI) - Illinois Chapter
- Chicago Department of Buildings - Condominium Resources
Related Articles
- HOA Board Responsibilities in Illinois
- Property Management Costs Guide
- Seasonal Maintenance Calendar
Disclaimer
This guide provides general information about the Illinois Condominium Property Act and should not be considered legal advice. For specific legal questions, consult with a qualified attorney specializing in condominium law. Laws and regulations are subject to change, and this guide reflects the Act as of January 2025.