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resolutions and other association governance policies. Through said policies, the Board can provide the manager or delegated Board member a certain amount of authority to carry out day to day activities, which saving the major items, such as contracts, budget, etc., for the actual meetings.

These documents should be read and followed by the Board

What are the governing documents of the Association and applicable law?

Board members need to read and be aware of the terms of the Association’s governing documents and applicable law, such as the Illinois Condominium Property Act. In many Association’s governing documents, affirmative obligations are placed upon the Board, such as the obligation to have an audit every year, or to credit/charge the owners for any surplus/deficiency in the budget. The Board simply cannot ignore provisions that it doesn’t like or deems too burdensome to follow. The Board’s fiduciary duty includes compliance with the terms of these documents.

In order to be relied upon to protect a Board, this must be in writing and kept in the Association’s books and records

What are professional opinions?

In some instances, the provisions in the association’s governing documents do not make much sense. In other instances, they are outdated or otherwise invalid. The law does not require that the Board members be association experts and know how certain provisions are interpreted or overridden by applicable law. However, it does require that the Board surround itself with professionals, who are able to provide the Board with guidance. Becoming involved with CAI is a way for Board members to surround themselves with professionals, who can help guide an association. However, while the general information obtained at a seminar can be great, it is important to know that if the Board intends to rely on that advice to justify a certain course of action (especially when that advice is to ignore a provision of the association’s governing documents), the Board needs to have that opinion in writing in order to protect itself if its actions are contested in the future. The Palm decision reminds us of the importance of having opinions in writing and keeping those opinions on file.

Much has been stated about the Palm decision. While it may require some associations to modify its governance in the short term, these changes will help the association function like a well-run business in the long term.

14 | COMMON INTEREST® A Publication of CAI-Illinois Chapter B Ted Gross

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