Law Offices of Barry Kreisler, P.C.
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Attorneys and Counselors At Law (773) 394-6400
Law Offices of Barry Kreisler, P.C.
Chicago Condominium Lawyers
Chicago New Condominium Association Attorneys
3001 W. Armitage Avenue
Chicago, IL 60647
(773) 394-6400, ext. 1
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When must a developer turn over control of a new Condominium Association to Unit Owners?
The developer is required to turn over control within sixty (60) days after the earlier of:
- the closing of the sale of units representing at least 75% of the percentage interests in the common elements; or
- three (3) years after the date of recording of the Condominium Declaration.
The time has passed for our developer to turn over control of our new Association to us, but he simply has not done so. What can we do?
The Illinois Condominium Act has a procedure where owners of at least 20% of the percentage interest in the common elements can petition the developer to call the first meeting of unit owners. If he then fails to do so in a timely manner, these unit owners can then call the first meeting themselves by proper notice to the other unit owners.
What are the developer's duties after the unit owners have elected their first board of managers?
Our new board has been elected. 60 days have passed. yet our developer has ignored our requests that he complete the turn over of documents and things. Now what do we do?
If you have not already done so, now is the time to consult an experienced new condominium association attorney. The Condominium Act provides that the Association may serve a demand that the developer comply with section 18.2 by certified mail, receipt requested. If the developer does not comply within 10 days, the Association can file suit to compel the turn over. The Condominium Act provides that the court shall order the developer to reimburse the Association for all attorney fees and court costs incurred in securing full compliance, after the time of service of this demand.
What are the developer's financial obligations to the new Association?
Beginning with the first day of the month after the first closing and for every month thereafter, the developer is required to pay assessments for every unsold unit. Further, all Association funds, including the assessments paid by the developer, must be kept in a segregated account, separate from other funds of the developer. Within 60 days after the initial meeting of unit owners, the developer must turn over all Association funds and a detailed accounting of Association funds to the board of managers of the new Association. It is very important that the Treasurer of the new Association or an accountant employed by the Association carefully review the accounting, as it it is not uncommon for expenses which should have been absorbed by the developer to have been paid with Association funds or for all of the assessments due for unsold units to not have been paid.
Does an Illinois Condominium Association have to be incorporated under the Illinois Not for Profit Corporation Act?
The Illinois Condominium Property Act states that a Condominium Association "may" be incorporated. However, it does not require incorporation. Thus, unless the recorded Condminium Declaration or Bylaws themselves specifically require incorporation, the Association may choose to operate as an unincorporated association.
It should be noted, however, that even if incorporation is not otherwise required, it is generally desirable. Incorporation provides clear protection of unit owner association members from personal liability for association contractual and tort liabilities. Further, at least in Chicago, incorporation can avoid problems if the Association property is ever cited for building code violations, as it is the City's practice that, where no not for profit corporation exists, the City names every individual owner in a code violation enforcment proceeding, rather than the Association.
