Legal Requirements for Adding Property to an Illinois Condominium
In Illinois, a developer can reserve the right to add property to a condominium at the time of the recording of the original declaration. This is an important right in that it allows a developer to make a decision about how many buildings and units to add based on several factors, including the market over the course of many years. This can sometimes be referred to as “phasing,” because the developer may include multiple “phases” in the condominium project. However, to add property to an Illinois condominium, there are specific steps that must be followed and strict time limits for this reservation. This article will outline these requirements and this issue may be important for those who buy a new construction condominium because the condominium in which one purchases now may look drastically different when the entire condominium project is completed (or not).
The Condominium Property Act defines an “Add-on Condominium” as “property to which additional property may be added in accordance with condominium instruments and this Act.” Adding property to a condominium has been an available option for a developer since the 1970s and Section 25 of the Act governs the process (765 ILCS 605/25).
If a developer reserves the right to add additional property to a condominium, the percentage interest for each unit owner in the common elements will have to be reallocated. The mechanism for doing so is to record an amended plat with the local recorder of deeds’ office along with an amendment to the declaration. Unlike most amendments, the developer will not have to seek approval of the other unit owners so long as the developer complies with Section 25 of the Condominium Property Act.
What are the Requirements for an Add-on Condominium?
First of all, not all condominiums are add-on condominiums. To constitute an add-on condominium, the recorded declaration must contain an explicit reservation of the right to add property to the condominium in favor of the developer. That recorded declaration must also contain:
- a statement as to how the percentage interests, voting rights and liability for common elements will be reallocated upon an addition to the condominium;
- a legal description of the land that may be added;
- a time limit of 10 years from the date the declaration is recorded;
- a statement as to whether there are any parameters for the addition of the land, including a sequence of particular portions of the project to be added and any limitations on the location of certain improvements on the additional land;
- a statement of the maximum number of units that can be added to the condominium
- a statement of the extent to which structures, improvements, buildings and units will be compatible with the configuration of the property in relation to density, use, construction and architectural style; and
- any plat or site plans or other graphic material which the developer may wish to set forth in order to supplement or explain the information provided.
If the declaration contains all these items, then the condominium is considered an “Add-on Condominium,” and for a period of 10 years after the declaration is recorded, the developer has the right to add additional property to that condominium. If the developer does so elect, the developer has an easement over all the common elements of the condominium to make improvements on the additional property for “doing what is reasonably necessary.” The Condominium Property Act is clear that the developer is not obligated to add this additional property, and any amendment recorded by the developer related to the additional land must be limited to just adding this property and cannot make other changes.
The concept of adding property to a condominium is not unique to Illinois but can provide for anxiety for a condominium association (or unit owners buying a condominium) who do not know what the “final” condominium may look like after the expiration of the 10 year period. The Condominium Property Act also does not require that the additional units all be constructed in that 10 year period, and the association must be turned over by the developer before the expiration of a 3 year period after the declaration is recorded. Therefore, there exists a possibility in Add-on Condominiums that the association is left with a series of unknowns that may not be answered for over 7 years.
There have been no reported decisions in Illinois wherein a developer and an association litigated over the right to add property to a condominium pursuant to Section 25 of the Condominium Property Act. There is very little gray area. If the developer wishes to make the condominium an add-on condominium, that right is absolute for a period of 10 years if the aforementioned provisions are included in the declaration. Whenever a unit owner buys a new condominium, it is important to see how much time has elapsed since the declaration was recorded and then, to check to see if this reservation is included (assuming that it was recorded less than 10 years before the purchase). Similarly, whenever an association is turned over from a developer to a group of unit owners, this should be investigated because, as said above, the right to add more property to the condominium in favor of the developer may continue for more than 7 years after the turnover.
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.