In the 19th Century Fyodor Dostoevsky novel Crime and Punishment, the protagonist Raskolnikov struggles with the moral consequences of his criminal acts. While most community association rule enforcement issues are not so dramatic, associations must both fulfill technical requirements and act reasonably when adopting and enforcing rules and regulations. The following is a summary of some of the legal and practical considerations associated with association rulemaking and rule enforcement.

Rulemaking Procedures

Subsection 18.4(h) of the Illinois Condominium Property Act (“Condominium Act”) provides that a condominium board has the authority to adopt and amend rules and regulations covering the details of the operation and use of the property, subject to certain procedural requirements. A condominium association must call a meeting of the unit owners for the specific purpose of discussing the proposed rules. Notice of the unit owners’ meeting must contain the full text of the proposed rules and be given to the unit owners not less than 10 and not more than 30 days prior to the meeting date. Unless the condominium instruments provide otherwise, no quorum of unit owners is required at the unit owners’ meeting. At a board meeting held sometime after the meeting of the unit owners, a board would then vote to adopt the rules. As a practical matter, the unit owners’ meeting and the board meeting typically are scheduled consecutively on the same day. Non- condominium common interest community associations

and master associations must follow the rulemaking procedures prescribed by their governing documents.

Rule Development Considerations First, the scope of the association’s rulemaking authority must be considered. For condominiums, the purpose of rules is to cover the details of the operation and use of the property. While the general function of rules for all types of community associations is similar, non- condominium common interest community associations and master associations must be especially attuned to the scope of rulemaking authority conferred by their governing documents. Some governing documents for non-condominium associations expressly empower boards to adopt rules regulating the use and operation of individually-owned lots, while other governing documents only discuss the adoption of rules relating to the common areas. In the 2013 decision in the case Ripsch v. Goose Lake Association, the Illinois Appellate Court (Third District) held that a common interest community association had the implied, inherent authority to adopt rules regulating the use of common areas, even when the covenants did not expressly grant such rulemaking authority.

Second, rules and regulations must be consistent with applicable legal authority. Examples of such legal authority include the Condominium Act, the Illinois General Not For Profit Corporation Act of 1986, the Illinois Common Interest Community Association Act (“CICAA”), federal, state and local fair housing laws and ordinances and applicable case

A Foundation for Convenience

Association Banking at FirstMerit Ryan has always kept his condo association on the right path. By partnering

with FirstMerit Bank, he’s conserved and managed reserve funds, made smart investments, and secured favorably structured loans to meet his condominium’s specific needs. With FirstMerit’s prompt decision-making, timely advice, and unrivaled strength and stability, Ryan and his association are creating a community that feels even more like home.

TO LEARN MORE, CONTACT: Martin I. Klauber, Senior Vice President, Association Banking Manager, at 847-223-7920 or martin.klauber@firstmerit.com.

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