Governor’s Vetoes Affect Community Associations

cai legal updates

SB 1344 (Sen. Haine). This bill would have amended Section 1-20 (d) of the Common Interest Community Association Act by providing that no action to incorporate a common interest community as a municipality shall commence until an instrument agreeing to incorporation has been signed by 51% of the members. Currently, the statute as written requires “two-thirds” of the members to agree to the municipal incorporation. On April 16, 2015 the bill passed the Senate with a vote of 47 in favor and 0 against. On May 21, 2015 the bill passed the House with a vote of 115 in favor, 0 against and 1 voting present. On August 13, 2015 Governor Rauner vetoed the bill, providing the following message:

Today I veto Senate Bill 1344 from the 99th General Assembly, which lowers the threshold required for common interest community associations to incorporate as municipalities.

Under current law, a common interest community association may initiate the process to incorporate as a municipality upon approval by two-thirds of its members. Senate Bill 1344 would lower that threshold from two-thirds to “51%” of the members.

The decision to incorporate as a municipality, which implicates a range of tax and local governance policies, should not be taken lightly. Illinois has almost 7,000 units of local government, more than any state in country. As such, we should maintain the higher threshold for initiating the incorporation process.

Click here to see the Bill Status of SB1344 99th General Assembly

HB2644 (Rep. Cassidy) This bill would have amended former Section 18.8 “Common Elements; rights of board” of the Illinois Condominium Property Act. This bill re-numbers the Section to 18.9 and substantively, it limits provisions in community instruments which can be considered void to those provisions which attempt to limit a board’s right under Section 9.1(b) to institute an action in court or otherwise compel arbitration or mediation prior to court. The bill clarifies that all provisions in governing documents limiting or restricting a board’s right to act are not necessarily void against public policy. Additionally, this bill removes subsection (b) which provided that a provision in a declaration which would otherwise be void and ineffective may be enforced if it is approved by a vote of not less than 75% of the unit owners. On March 19, 2015 the bill passed the House with a vote of 63 in favor and 50 against and 1 voting present. On May 21, 2015 the bill passed the Senate with 54 voting in favor and 0 against, with 1 voting present. On August 13, 2015 Governor Rauner vetoed the bill, providing the following message:

Today I veto House Bill 2644 from the 99th General Assembly, which would limit the rights of condominium owners.

Current law permits condominium owners, acting by approval of 75% of unit owners, to limit or restrict certain rights of their board with respect to disputes and legal actions. This bill would remove that right and automatically void any contrary provision in a condominium instrument. This bill is an unnecessary restriction on the rights of condominium owners with respect to their property.

Click here to view the status of Bill Status of HB2644 99th General Assembly

CAI will continue to monitor the bills during the remaining legislative sessions.

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