Illinois Appellate Court Decision Demonstrates Illinois Condominium Associations Must Follow Strict Legal Procedures for Board Meetings, Voting, and Governance

Illinois Appellate Court Decision Demonstrates Illinois Condominium Associations Must Follow Strict Legal Procedures for Board Meetings, Voting, and Governance

Illinois condominium boards often overlook minor procedural details—until a lawsuit forces costly reversals. A recent Illinois appellate court case underscores why compliance with governing documents is critical to avoid legal trouble. In Gunnison Commons, LLC v. Alvarez, 2024 IL App (1st) 232176 (2024), an Illinois appellate court reinforced the importance of following condominium declaration requirements when amending governing documents and approving major transactions, such as the sale of an entire building. This case serves as a wake-up call for condo boards: failure to follow procedural requirements can lead to major financial and legal consequences. This article will discuss the Illinois appellate court’s decision in Gunnison Commons and provide practical guidance to condominium associations to ensure compliance under Illinois law and the association’s governing documents.

Background

Gunnison Commons, LLC (“Gunnison Commons”) owned 31 of the 32 units in a Chicago condominium building, giving it control over 96.4% of the votes in the condominium association. The remaining unit was owned by the defendants, Jorge and Juan Alvarez, who collectively held 3.6% of the votes.

In December 2019, Gunnison Commons initiated two special meetings of unit owners, during which:

1. 1. 1. The condominium declaration was purportedly amended to lower the voting threshold for selling the building from 100% to 85%.
      2. A contract for the sale of the entire building was approved under the amended declaration.

Defendants did not attend these meetings and challenged the validity of the meetings. The Defendants argued that they had not received proper notice, and that the declaration required unanimous consent to amend voting requirements for a sale of the entire building. The circuit court ruled in favor of the Defendants.

The Appellate Court’s Key Findings

The appellate court affirmed the lower court’s ruling in favor of the defendants, emphasizing the following critical points:

1. Failure to Provide Proper Notice Rendered the Meeting and Votes Invalid

Under the condominium’s declaration, notices of meetings had to be sent via registered or certified mail and addressed to each individual unit owner entitled to vote. Specifically, Section 5.5 and Section 13.3 of the Declaration stated, in relevant part, as follows:

5.5. Notices of Meetings. Except as otherwise provided herein, notices of meetings of the Voting Members required to be given herein may be delivered either personally or by mail to the persons entitled to vote thereat, addressed to each such persons at the address given by him to the Board for the purpose of service of such notice, or to the Unit of the Unit Owner with respect to which such voting right appertains if no address have been given to the Board.

13.3. Manner of Giving Notices. Notices provided for in this Declaration and in the Act shall be in writing and shall be addressed to the Board or Association, or any Unit Owner, as the case may be, at the Unit address of any member of the Board or any Unit Owner, as the case may be, or at such other address as herein provided. Any Unit Owner may designate a different address or addresses for notices to him by giving written notice of his change of address to the Board or Association. Notices addressed as above shall be deemed delivered when mailed by United States registered or certified mail or when delivered in person with written acknowledgment of the receipt thereof, or, if addressed to a Unit Owner, when deposited in his mailbox at such address as he may have designated pursuant hereto, or if he has not so designated, in the Building or at the door of his Unit in the Building.

The notices sent by Gunnison Commons for the December 2019 meetings:

• • Were addressed generically to “All Unit Owners” rather than the individual defendants; and
  • Were sent via regular mail rather than certified or registered mail.

Given that the notices did not comply with the requirements set forth under the association’s declaration, the court found that the votes taken at these meetings were void, as proper notice had not been given to all unit owners.

2. Amendment of Voting Requirements Without Unanimous Consent Was Invalid

The condominium declaration explicitly required 100% approval for any amendment affecting voting rights. Gunnison Commons’ attempt to lower the approval threshold for a building sale from 100% to 85% violated this provision. As a result, the appellate court held that the attempted amendment was deemed invalid, and the subsequent vote approving the sale was also void.

3. The Board President Was Not Eligible to Serve

The manager of Gunnison Commons, Eloy Burciaga, had acted as the condominium association’s board president and executed the declaration amendment and sales contract. However, the declaration required that board members must reside in the building. Since Burciaga did not live on the property, the court ruled that he was not qualified to serve as president, and any actions he took in that capacity were invalid.

Practical Tips for Illinois Condominium Associations

This case underscores several important legal principles for condominium associations:

1. Condominium Associations Must Strictly Comply with the Notice Requirements under the Declaration

It is vital that condominium associations strictly comply with the notice requirements that are outlined in the association’s declaration. Although the Illinois Condominium Property Act (765 ILCS 605/1 et seq) sets forth various notice requirements for member and board meetings. However, the association’s declaration may set forth more formal notice requirements provided that such notice requirements are not inconsistent. Accordingly, the association must follow the declaration’s notice requirements when preparing notices for member and board meetings. Failure to provide proper notice may result in the invalidation of decisions that are made at the member and board meetings.

2. Governing Document Amendments Must Follow Proper Procedures

Condominium declarations often have strict requirements for amending key provisions, particularly those related to voting rights and property sales. If an amendment requires unanimous consent, any attempt to pass it with a lower threshold will likely be struck down in court. Associations should carefully review their governing documents and consult with legal counsel to determine the voting threshold necessary for an amendment before attempting to amend their governing documents.

3. Board Members Must Meet Eligibility Requirements

If a condominium declaration imposes eligibility requirements on board members—such as residency requirements—those provisions must be followed. An individual who does not meet the requirements cannot lawfully act on behalf of the association, and any actions they take may be subject to legal challenge. Associations must confirm that all board members meet the requirements provided for in the governing documents as an invalid board could delegitimize certain board actions.

4. Courts Will Enforce Voting Rights Protections in Declarations

Many condominium declarations include provisions that protect minority unit owners from having their rights unilaterally altered by majority owners. Courts in Illinois have consistently upheld these protections, ensuring that majority owners cannot override voting rights requirements for their benefit. Accordingly, an association that is considering selling the building, amending voting requirements, or making other major decisions should consult legal counsel to ensure compliance with the association’s governing documents as most governing documents will provide protections for minority unit owners.

What Should Illinois Condominium Boards Do Next?

1. Conduct an audit of notice procedures

Condominium boards should review notice forms that are sent to the association’s members with their management company or legal counsel to ensure the forms comply with Illinois law and the association’s declaration.

2. Review the association’s voting requirements under the declaration

Before an election or an amendment, condominium boards should review the voting requirements under the association’s declaration with legal counsel to ensure the association is complying with its governing documents

3. Ensure all board members meet eligibility requirements

Condominium boards should confirm each board member satisfies the eligibility requirements that are outlined in the association’s declaration.

Conclusion

The Illinois appellate court’s decision in Gunnison Commons reminds associations to follow their governing documents. The court’s decision in Gunnison Commons highlights the following:

1. 1. 1. Condominium associations must properly notice all owner and board meetings;
      2. Condominium associations must confirm the requisite voting threshold before adopting an amendment; and
      3. Condominium associations must confirm all board members meet the requirements to serve on the board.

Failure to follow any of the aforementioned principles can lead to the invalidation of certain amendments and board decisions. Accordingly, condominium associations should consult with legal counsel to ensure compliance with their governing documents before adopting an amendment or holding a meeting.

Is your condominium association board following the law? The attorneys at Hirzel Law, PLC are experienced condominium attorneys who can advise condominium associations concerning document amendments and other general counsel needs. Contact us today at 312-552-7669 or jfernando@hirzellaw.com.