Homeowners’ Associations in Illinois must be organized as non-profit corporations and are subject to the state’s General Not For Profit Corporation Act of 1986. In addition to nonprofit law, the Common Interest Community Association Act (765 ILCS 160) was created to provide more detailed regulations for the management and powers of Common Interest Communities (HOA).
The Common Interest Community Association Act does not apply to CICs that are filed as non-profit organizations with less than 10 units, or that collect less than $100,000 in annual budgeted assessments. Exempt communities may elect to be covered by the act with a majority vote from all members.
Homeowners Association’s Rights and Responsibilities
The primary purpose of an HOA is to protect property values and maintain community common elements. To cover the cost of managing a community, the homeowners’ association has the right to collect regular assessments from community members for maintenance and community upkeep.
Additional special assessments may be collected in the case of an emergency. According to the Common Interest Community Association Act, an emergency is defined as “a danger or a compromise of the structural integrity of common areas or any of the common facilities of the Common Interest Community.” This can also be extended to a situation that involves “a danger to life, health, or safety of the membership.” These special assessments do not require approval from homeowners. Any non-emergency assessments for the addition or alteration of common elements that are not included in the annual budget must be approved by a majority of the association members.
Fines may be given to homeowners for violations of the community regulations. The board must provide written notice and a reasonable opportunity for the homeowner to state their case before enforcing any fines.
The HOA can place liens on property in the event of account delinquency. In extreme cases, the board of directors can foreclose on the property despite on-time mortgage payments. It is even possible for the board to evict tenants and rent out a unit to make up for overdue assessments.
The board of directors can create and amend the community Covenants, Conditions, and Restrictions (CC&R). All community declarations must be recorded with the government. In the event of an amendment to the CC&R, the amendment must be recorded to be valid.
Association members must meet at least annually, and the board of directors must meet at least four times per year if not more frequent as described by the community declaration. Minutes must be recorded at all meetings and made available to association members. Members have the right to attend all board meetings except during closed executive sessions discussing sensitive matters. Attendance of 20% of the voting power constitutes a quorum. Notice of association meetings must be given at least 10 days before a meeting but no more than 30 days, and at least 48 hours’ notice must be given for meetings of the board of directors.
It is the responsibility of the board of directors to maintain detailed financial records and make them available to association members along with meeting minutes, and board voting records. If the board fails to provide community documents within 30 days upon request, they may be charged for all reasonable attorney and legal fees.
If a common interest community contains more than 30 units, it is the responsibility of the board to provide and maintain fidelity insurance to cover any persons who control association funds.
The HOA may establish and maintain a system of master metering of public utilities. They may also collect utility payments from homeowners consistent with the Tenant Utility Payment Disclosure Act.
Homeowners have the power to elect and remove members of the board of directors. Elections must be held at least every two years if not more frequently as described by the community Covenants, Conditions, and Restrictions (CC&R). A board member can be removed for any reason with a 2/3 vote. Term limits for the board of directors must not exceed four years.
Association members have the right to attend all board meetings and must be allowed a reasonable time to speak. Association meetings must take place at least annually if not more frequently. Special meetings may be called by the board president, 25% of the board of directors, or with a 20% vote by association members. Elections can also take place at association meetings.
The annual budget must be sent to association members at least 30 days, but no more than 60 days, before adoption. If annual assessments make up more than 115% of the proposed budget, homeowners may call a special meeting with a 20% vote to discuss budgetary changes.
Homeowners have the right to view all community documents including bylaws, CC&Rs, financial records, board voting records, and meeting minutes.
The right to fly the American Flag and/or military flag is granted to all homeowners. The board of directors may regulate the location and size of the flags but may not prohibit the installation of a flagpole or display of a flag altogether.
Illinois Common Interest Community Association Act
To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at email@example.com.