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Subject: Il Condo Act and HOA
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GaryM
(Illinois)

Posts:9


08/14/2007 11:51 AM  
I am a homeowner in a development that is still under developer control (6 years now). Many things were very fishy and I began educating myself for the past year, this forum being a major resource. I have just begun to get hints that the Ill Condo Act only applies in part to HOA's.
Can anyone give me a difinitive answer on what applies and what does not. I thought we had the developer on many violations but now am quite puzzled.
DaneC
(California)

Posts:210


08/14/2007 1:13 PM  
This applies to Condominiums -

PROPERTY
(765 ILCS 605/) Condominium Property Act.

(765 ILCS 605/1) (from Ch. 30, par. 301)
Sec. 1. Short title.
This Act shall be known and may be cited as the "Condominium Property Act."


This applies to a Homeowner Association -

BUSINESS ORGANIZATIONS
(805 ILCS 105/) General Not For Profit Corporation Act of 1986.

(805 ILCS 105/Art. 3 heading)
ARTICLE 3. PURPOSES AND POWERS

(805 ILCS 105/103.05) (from Ch. 32, par. 103.05)
Sec. 103.05. Purposes and authority of corporations; particular purposes; exemptions.
(a) Not‑for‑profit corporations may be organized under this Act for any one or more of the following or similar purposes:

(9) Social.
(23) Ownership and operation of water supply facilities for drinking and general domestic use on a mutual or cooperative basis.
(24) Ownership or administration of residential property on a cooperative basis.
(25) Administration and operation of property owned on a condominium basis or by a homeowner association.

Perhaps you could contact your title company for further information.
GaryM
(Illinois)

Posts:9


08/15/2007 4:29 AM  
Thanks for reply.
Are you saying that the IL condo act has no bearing on an HOA?; because other sources mention SEC 18.5 on Master Assoc. Applies?
BonnieE
(Illinois)

Posts:331


08/15/2007 1:46 PM  
Gary – both the IL Condo Act and IL Not for Profit Act apply to HOAs. The IL Condo Act can also apply to single family homes if they are part of a Master HOA. For example, our property consists of 2 condo HOAs (I have a condo in one of them) - and - one Master HOA which includes both condo HOAs and the single family HOs. As a result I belong to two HOAs. See section 18.3 of IL Condo Act re unit owners associations. Also see your HOA’s Declaration for clarification.

You state you “ thought we had the developer on many violations but now am quite puzzled.” Could you provide some clarification on this? What violations do you think the developer has committed? -Bonnie
GaryM
(Illinois)

Posts:9


08/17/2007 4:28 AM  
Thanks for your input

Developer has consistently muddled the distinctions between:
a) Construction Company
b) Development Corporation
c) Homeowner Association & its Board.
(All run by the same individual)

2. Developer Has mingled funds of Association with the Developer Corp.
We pay our assessment to developer corp.

3. The Clubhouse is owned by Developer but Assoc. funds go to its maintenance.

4. Developer has Failed for 6 years:
a) To Submit Annual Budget,
b) To give itemized financial accounting of preceding year,
c) To give notice of Quarterly Board Meetings,
d) To pay Assessments on Lots owned by Developer,
e) To create and fund a Reserve Fund,
f) To call meeting to elect Homeowner Board after 3 years,
g) To properly notify Homeowners of Amended Declaration,
In short: Has failed the Association in his fiduciary duty to exercise the utmost good faith and not to further his own interests.

The biggest problem is member ignorance and apathy.

At 6 years we are still only about 33% sold.

DavidT1
(Florida)

Posts:51


08/17/2007 5:13 AM  
Posted By GaryM on 08/17/2007 4:28 AM
Thanks for your input

Developer has consistently muddled the distinctions between:
a) Construction Company
b) Development Corporation
c) Homeowner Association & its Board.
(All run by the same individual)

2. Developer Has mingled funds of Association with the Developer Corp.
We pay our assessment to developer corp.

3. The Clubhouse is owned by Developer but Assoc. funds go to its maintenance.

4. Developer has Failed for 6 years:
a) To Submit Annual Budget,
b) To give itemized financial accounting of preceding year,
c) To give notice of Quarterly Board Meetings,
d) To pay Assessments on Lots owned by Developer,
e) To create and fund a Reserve Fund,
f) To call meeting to elect Homeowner Board after 3 years,
g) To properly notify Homeowners of Amended Declaration,
In short: Has failed the Association in his fiduciary duty to exercise the utmost good faith and not to further his own interests.

The biggest problem is member ignorance and apathy.

At 6 years we are still only about 33% sold.





I would call 6 years a bit of apathy.


A developer likely doesn't have to find a reserve. the purpse of the reserve is so that there is an assurance that the association has money to fix things in a timely manner. A developer has deep pockets, so that concern isn't there. If he's failed to submit any budgets, how are your maintenance fees set? There has to be a budget to set your fees, unless your fees haven't gone up in 6 years, in which case you should shut your trap and lay low.

Fiduciary duty is an elastic concept. Things are different for a developer, as their interests are to sell units and thats well understood. Take your list of violations and spend enough money to buy 1 hour of an HOA attorney's time. It might be a goldmine for you. Or at least it might clue you in on what things you should be investigating. Suing developers is a big deal. Its a lot easier to sue a bunch of clueless board members.
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