How to Amend Your Illinois Condo Documents
There are many reasons why a condominium association may decide to amend its declaration or other governing instruments. For example, if the condominium association was recently transitioned to the unit owners from the developer, then an amendment may be to utilized to make sure that all of the protections for the association are included. This is especially true when the instruments may have been drafted to protect the developer to allow for ease in the sale of the units or if the instruments have conflicting or ambiguous provisions. Other times, the instruments were created so long ago that they do not take into account technological or other advances that could not have been foreseen at the time they were drafted (such as drone usage). Regardless of the reason, the Condominium Property Act (and the instruments themselves) contain specific requirements that must be followed, and this article will outline those requirements.
What Percentage of the Unit Owners Must Agree to Amend the Condominium Instruments?
“Condominiums 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’n, 2022 IL App (1st) 210156, ¶ 22. “The 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. The term “condominium instruments” as used in the Condominium Property Act refers to the declaration, the bylaws and the plat—all of which must be recorded at the creation of the condominium—along with any authorized and recorded amendments to any of those documents. Generally, these instruments will also provide that the board for the condominium association can create rules and regulations, but those are typically not included in the defined term “condominium instruments” because they are not recorded with the recorder of deeds.
General amendments to condominium instruments are governed by Section 27 of the Illinois Condominium Property Act, which states that an affirmative vote of 2/3 of voting unit owners must approve amendments, unless the condominium instruments provide for some other majority vote somewhere between 50% and 75%. Therefore, approval of any amendments will require somewhere between 50.1% and 75% of the unit owners voting depending on the language in those documents, and if it is not explicitly stated, then the 2/3 majority rule from Section 27 will control. Additionally, if the declaration or bylaws requires mortgagee consent for particular amendments, there is a mechanism for sending notice to those mortgagees in Section 27 of the Condominium Property Act as well. As an aside, the Common Interest Community Association Act (which governs many homeowners associations) does not have an amendment provision other than for scrivener’s errors or for banning leasing, so in that situation, the language of the declaration and bylaws will control. Importantly, amendments are not effective until they are recorded (Section 17 of the Condominium Property Act and Section 1-20 of the Common Interest Community Association Act) so even if they are passed, they cannot be enforced until recordation.
Section 18 of the Condominium Property Act states that three specific amendments require a 2/3 majority vote of unit owners voting regardless of what the language in the condominium instruments states. Those amendments that require this majority are the: (i) merger or consolidation of the association; (ii) sale, lease, exchange, or other disposition (excluding the mortgage or pledge) of all, or substantially all of the property and assets of the association; and (iii) the purchase or sale of land or of units on behalf of all unit owners.
Other amendment provisions that may also be important for your condominium association are:
- Transfers of limited common elements between unit owners can only occur by way of a recorded amendment to the condominium declaration signed by the owners impacted by the transfer, including any other unit owners who could have a right to use the limited common element that is being transferred (Section 26);
- The Board for the Association is given the power to pass and record amendments that simply correct errors in the documents, but this power cannot be used to impact any unit owners’ property rights, unless any such impacted unit owners consent to the amendment (Sections 27 and 28); and
- If units are subdivided or consolidated (assuming that such subdivision or consolidation is allowed by the condominium instruments), then an amendment can be passed by the Board (Section 31).
If a condominium association decides simply to create, or amend, rules and regulations that supplement pre-existing restrictions in the condominium bylaws, this would typically not need to go through the aforementioned unit owner approval process. However, this process should be done with the assistance of a community association attorney to confirm that the provisions of the operative documents and the Illinois Condominium Property Act or the Common Interest Community Association Act are followed, and if a vote is necessary, that the vote is conducted properly.
How Does the Association Obtain the Required Approvals?
The process for amending the condominium instruments is typically performed in a series of steps. Each situation is slightly different, and there is no guarantee that the unit owners will vote to amend the instruments, but it is our experience that following the script below will provide the best chance that the required unit owner buy-in to the proposed amendment will occur. The first thing to remember is that communication is key throughout the entire process. Unit owners will be more willing to agree to vote for an amendment if they feel like there is appropriate communication from the Board and that the Board is acting in a transparent manner.
First Step: In most instances, the first step in the process is for the Board to decide that the condominium instruments need to be amended at a meeting for any one or more of several reasons, including those identified at the beginning of this article.
Second Step: An attorney who knows community association law should be retained to review the current condominium instruments and identify any areas of concern and to propose amendments, either to specific provisions within the instruments or to the instruments as a whole. To streamline the process, the Board should identify specific areas of concern so that the attorney can focus her or his review on those areas. As part of this process, the attorney may be tasked with reviewing the rules and regulations and any filings with the State of Illinois as well.
Step Three: The attorney and the Board should discuss proposed amendments, and assuming agreement, the attorney will draft the proposed amendment or the updated draft of the condominium instruments as a whole. This can, and should, be a collaborative process because, as outlined above, depending on the nature of the amendment and the language of the condominium instruments, differing levels of consent may be required.
Step Four: After the Board votes to pass the proposed amendment, it should be circulated to the unit owners. Depending on the nature of the amendment, an information session with the unit owners may be in order so that any questions about the language of the amendment can be answered.
Step Five. Finalize the amendment and record it with the local recorder of deeds and circulate a copy of the recorded amendment.
Amending condominium instruments can initially seem like a daunting task, but if the above steps are followed, the reward to the association can be great and can avoid costly disputes in the future, especially if there are conflicting or ambiguous provisions in the documents that can be corrected by an amendment. When the process is initially contemplated, the retention of experienced attorneys, such as the ones at Hirzel Law, can make the process run more smoothly and reduce some of the stress and headaches that can come up in that process.
The attorneys of Hirzel Law, PLC focus their practice on condominium and homeowners association law in addition to real estate law. Our attorneys have extensive litigation and trial experience in state and federal courts involving commercial litigation issues and real estate matters. We stand by our clients, offering quality legal representation and promptly responding to our clients’ needs. Contact Hirzel Law online or call 312-552-7669 to learn how our Illinois attorneys can help.