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As Illinois’ First District Appellate Court recently stated, “[c]ondominiums are creatures of statute and, thus, any action taken on behalf of the condominium must be authorized by statute.” Glazer v. Priv. Residences at Ontario Place Condo. Ass’n2022 IL App (1st) 210156, ¶ 22. Along those lines, [t]he affairs of condominium associations are controlled by the Condominium Property Act,and the administration of a condominium is governed by its declaration, board rules and regulations, and bylaws,” and the Condominium Property Act, 765 ILCS 605/1 et seq. delineates the general content of the declaration and bylaws.”  Id.  Imposing fines and enforcing rules and restrictions in an Illinois condo should be a straightforward task and a condo board should be able to rely on the Condominium Property Act, 765 ILCS 605/1 et seq, and the governing condominium instruments for guidance. This article will identify the general rules that apply to all condos s as well as some potential pitfalls for condo associations when imposing and enforcing fines, as seen in a few recent cases.

 

Imposing Condo Fines

Section 18.4(1) of Condominium Property Act, 765 ILCS 605/1 et seq., provides that one of the powers of the board of managers in an Illinois condo association is “after notice and an opportunity to be heard, to levy reasonable fines for violation of the declaration, by-laws, and rules and regulations of the association.” The Illinois Common Interest Community Association Act, 765 ILCS 160/1, et seq. (which covers many HOAs in Illinois) includes a similar provision in Section 1-30(g). 

As such, whenever a fine is being considered, a condo board should take a few steps. First, and foremost, the condominium instruments (including the declaration, bylaws, and rules and regulations) should be analyzed to confirm that the activity sought to be penalized or stopped is covered by those instruments. The condo board should also review the current state of Illinois law to make sure that the activity conducted by the unit owner is not protected under Illinois law. For example, in Boucher v. 111 E. Chestnut Condo. Ass’n, Inc., the First District Appellate Court held that a condo board’s attempt at fining a unit owner for “obnoxious and offensive activity” when he allegedly used vulgar communications towards employees of the condo association to voice concerns about how the condo was being run was improper because it infringed the unit owner’s protected freedom of speech. 2018 IL App (1st) 162233, ¶ 9, 117 N.E.3d 1123, 1129. The reason for the Court’s ruling is that Section 18.4(h) of Condominium Property Act, 765 ILCS 605/1 et seq., states that: 

[N]o rule or regulation may impair any rights guaranteed by the First Amendment to the Constitution of the United States or Section 4 of Article I of the Illinois Constitution including, but not limited to, the free exercise of religion, nor may any rules or regulations conflict with the provisions of this Act or the condominium instruments. No rule or regulation shall prohibit any reasonable accommodation for religious practices, including the attachment of religiously mandated objects to the front-door area of a condominium unit.

Second, the actual fine enforcement provisions in the condominium declaration and/or the bylaws should be thoroughly reviewed. If these fine enforcement provisions are not strictly followed, there is a good chance that a court will not uphold the imposition of a fine. As an aside, if the condo association has not adopted an explicit fine policy and/or fine schedule, it may be worth considering doing this to avoid questions about the amount of fines or the fine enforcement procedure after the fact. Counsel should be retained to assist in drafting this fine policy if this path is chosen. 

Third, a notice should be drafted and delivered to the condo unit owner that is in violation of condominium instruments identifying the “reasonable” fine sought to be levied for the violation. This notice should outline the process in those instruments to allow for the “opportunity to be heard,” which should be a hearing before the condo board. Again, it is critical that the process set by the condominium instruments is followed, and every opportunity provided to the condo unit owner to contest the alleged violation. Generally, it is suggested that the board provide the condo unit owner with a specific time to reach out to the condo board (or property management company) to identify if there is a dispute and to get a date and time for a hearing set, which in many cases, will be the next meeting of the condo board. As a matter of fact, Illinois’ Department of Financial and Professional Regulation has stated that this notice to the condo unit owner must contain at least the following four things: “(i) the substance of the violation; (ii) the right to be heard before the Board if the Owner contests the violation; (iii) the opportunity to cross-examine the witness who brought the violation to the attention of the Board or its agent or the person who saw the violation occur; and (iv) the right to be represented by an attorney at the hearing.”

In a recent case, an Illinois court found that a condo unit owner was not given a reasonable opportunity to be heard to contest a fine in the case of Bd. of Directors of Winnitt Park Condo. Ass’n v. Bourdage, 2021 IL App (1st) 192536, ¶ 44. In Bourdage, the condo unit owner was alleged to have been in violation of the condo bylaws because she was “harassing, defaming and using profanity and confrontational words against certain unit owners and service professionals as well as threatening violence.” After sending notice with dates for a hearing at 6:30 p.m., the condo unit owner identified that she could not attend the hearing because she worked until 7:00 p.m. The condo board then unilaterally set a date for a hearing and did not tell the condo unit owner that it was specifically for her fine hearing. Assuming her fine hearing was on the agenda, the condo unit owner said she could not attend because she had a prescheduled vacation that day. Instead of picking a date and time that would accommodate the condo unit owner’s schedule, the condo board went forward with the fine hearing and the condo unit owner did not participate. After the imposition of a fine and a subsequent eviction action started, the Court held that the eviction action filed after the imposition of the fine was improper: 

[I]t is clear that Bourdage was in frequent communication with the board with respect to the scheduling of the hearing and repeatedly flagged that the time proposed for the hearing conflicted with her work hours and scheduled vacation. The scheduling of the hearing should not have been a take-it-or-leave-it proposition, especially where the notice provided to Bourdage as to scheduling expressly provided that reasonable accommodations would be made if requested in a timely manner. Instead, the board ignored Bourdage’s conflicts as to the proposed dates, scheduled a different date altogether—at a time that they already knew caused a conflict with Bourdage’s work hours and scheduled vacation—and gave Bourdage only the general notice provided to all other unit owners, despite the fact that it was her actions that were under review. The board then proceeded with the meeting despite knowing that Bourdage was unable to attend. We agree with the trial court that the board’s actions here in no way provided Bourdage with “notice and an opportunity to be heard” as required by the Condominium Property Act. Accordingly, the board did not properly impose the fine that served as the basis of the eviction action, and the trial court appropriately declined to enter an eviction order.

This case shows the importance of the condo board working with the condo unit owner to make sure that the unit owner is given this opportunity to participate before the imposition of a fine.

It is also important that any fine hearing be conducted appropriately and fairly. For example, Illinois courts have held that the failure of a board to provide all material evidence to the unit owner will make a fine unenforceable. See, e.g., Westgate Townhome Ass’n v. Kirsch 2021 IL App (2d) 200373-U, ¶ 23 (failure to turn over video of owner’s dog urinating on lawn of another owner deprived owner of opportunity to respond to the evidence); Boucher (board refused to provide video of an incident and all documentation and information related to the allegedly violative behavior). The courts in both Kirsch and Boucher additionally stated that “[w]hen investigating charges of misconduct against a unit owner, the duty of candor imposes on board unit owners an obligation of full, fair, complete, and timely disclosure of material facts.” In many instances, having an attorney at a fine hearing is helpful to guide the condo board through the process and make sure that the hearing is conducted properly. 

 

Conclusion

The decision to levy a fine against a unit owner in a condo association is one that should not be taken lightly by a condo board, and the aforementioned steps for imposing and enforcing fines should be followed precisely. The notice given to the condo unit owner must comply with the condo declaration, bylaws, rules, regulations, and Illinois law, and the condo unit owner must be given a reasonable opportunity to contest the fine before it is entered. If these steps are not properly followed, the condo association could end up with an unenforceable fine and, eventually, thousands of dollars in attorneys’ fees in litigation over whether the fine was imposed correctly. The experienced attorneys at Hirzel Law can assist the condo board through this entire process.

Adam Toosley is a member at Hirzel Law, PLC and focuses his practice on real estate litigation, zoning and land use, construction, and financial services litigation. Over the course of his career, he has represented property owners, landlords, condominium associations, lenders and all parties in the construction chain, handling all aspects of real estate-related disputes, including construction defect cases, payment and landlord-tenant disputes as well as real estate foreclosures, mechanic’s lien cases and fraud and business tort claims in state and federal court as well as in mediations and arbitrations throughout the United States. He is licensed in both Michigan and Illinois. He can be reached at (312) 646-2770or at atoosley@hirzellaw.com. 

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