What constitutes “proper purpose” under Section 19 of the Illinois Condominium Property Act (Section 1-30 under the Illinois Common Interest Community Association Act)? Could “proper purpose” not be open to interpretation and cause problems for a Board if they did not allow for inspection? What happens if a Board simply responds that the owner’s reason is not a “proper purpose” and denies inspection to the owner?

Section 19 of the Illinois Condominium Property Act (“ICPA”) outlines the obligations of a condominium association with respect to record keeping and record production. For common interest communities (HOAs), the controlling statute is found in Section 1-30 of the recently enacted Illinois Common Interest Community Act (“ICICA”).

Section 19 (e) of the ICPA states that “any member of an association shall have the right to inspect, examine, and make copies of the records described in subdivisions (6), (7), (8), and (9) of subsection (a) of this Section, in person or by agent, at any reasonable time or times but only for a proper purpose ….” (emphasis added). Reference to a “proper purpose” is also made in Section 1-30(i)(1) of the ICICA as a prerequisite to receipt of certain records. Unfortunately, nowhere does the ICPA or the ICICA spell out or give guidance as to how to define a proper purpose.

Though case law, too, provides little precedent on this issue, the court in the case of Taghert v. Wesley did deliver an opinion that decided whether an association member had stated a proper purpose in requesting certain records from the association. Taghert v. Wesley , 343 Ill.App.3d 1140 (1st Dist. 2003). In making its determination, the court first acknowledged that “[t]here is a veritable dearth of case law in the state of Illinois interpreting section 19 of the Condominium Property Act and its provision directing the inspection of documents.” Id. at 1145-46. Then, recognizing a condominium association as a not for profit corporation and the fact that the original ICPA records requirements provisions were derived from the Illinois Not For Profit Corporation Act, it looked to a line of case law which has addressed the question of what amounts to a “proper purpose” in the context of corporate records requests.

The Taghert ruling and the line of cases the court cited and relied upon tell us that a proper purpose is one that is based in good faith, and not for vexatious or speculative reasons or unlawful in character. It must be a purpose which seeks to protect the interests of the association. Where fear of misconduct or mismanagement is the basis given for the records request, that fear need not be proven. Rather, the requesting party must simply show that his or her fear is based in good faith. Though the burden of establishing a proper purpose does fall on the requesting party, once that proper purpose has been shown to exist, presuming all other requirements have been met, an association cannot withhold the records.

There is still much room for debate as to whether a proper purpose is established in a request for records. Though the case law does provide guidance, it also clearly shows that the answer involves a case by case factual analysis of whether or not the requesting party is acting in good faith. Where the line is drawn between speculation and good faith, however, may still not necessarily be easy to establish. Association boards and their counsel should carefully consider this issue when it arises because failure to provide the requested records in a timely fashion when a proper purpose has been stated may subject the association to significant costs, including the attorneys fees of the requesting member should he or she prevail in litigation.

Contributed by James Erwin of Erwin & Associates, LLC 

ACTHA will be presenting a seminar similar to this on “Homeowners Rights & Responsibilities” on October 1st at their North Expo.  For more information on ACTHA’s North Expo and other educational programs, click here.

Is there any legal action that an association board can take in regard to a hoarder?

Hoarding attracts rodents and other pests which could cause damage to other units.  The Illinois Condominium Property Act grants the board the right to adopt rules and regulations.  The association can then fine unit owners for failure to abide by such rules.  The board should have a rule in place which states that unit owners must keep their units in a manner which does not interfere with other units including, but not limited to, maintenance of the unit from horders and trash which might attract rodents or pests.  In addition, pursuant to Section 18.4 of the Illinois Condominium Act, the board has the power to have access to each unit to prevent damage to the common elements or to other units.  If necessary, the board can enter these units for the purpose of pest control.  Further, if the hoarding causes the spread of pests, bed bugs, or rodents, the board can assess the cost of pest control for other units to the offending unit owner.  Any fines or assessments can be enforced in court.

Contributed by Ebony Lucas of Peace of Mind Properties

Can you provide our Association with some guidance as to what happens when two owners have a dispute — one makes a complaint and the other owner denies the action that caused the complaint?

Board members of all associations are well served to follow the old adage, “Proof is in the Pudding” when faced with deciding unit-to-unit disputes and decisions about filing suit. Most board members are familiar with the dilemma: Silent Sue from Unit 1A files nineteen complaints that Loud Larry from Unit 2A above her creates unreasonably loud levels of noise at all hours of the day and night. Silent Sue demands that the Board take action against Loud Larry or face severe repercussions, including a suit against the Board for Breach of Fiduciary Duty. What should the Board do, if anything?

Getting involved in such a dispute can divide a community and create larger problems if not properly handled. A board is not obligated to umpire this type of dispute, but most boards feel duty-bound to take action. If the Board decides to proceed, it must do so with caution.

Its investigation must begin by gathering as much evidence as possible. Most Association’s rules and regulations contain violation complaint forms that should be completed each time an alleged incident occurs. In Silent Sue’s case, she would include the date, time, length and her best possible description of the noise. Silent Sue may also consider keeping a detailed log of the disruptions and recording the noise, if feasible.

The Board should compile and review any formal complaints in conjunction with any other evidence Silent Sue may present. Following its review of such evidence, the Board should hold a hearing to allow both parties an opportunity to present their version of the facts.

Following the hearing the board should consider the parties testimony in combination with the evidence presented and make its decision. If the stories differ greatly, which is likely the case, the Board should carefully evaluate the evidence. While the testimony of Loud Larry and Silent Sue may differ, the evidence typically contains the truth.

Utilizing the motto, “Proof is in the Pudding”, can also assist Boards faced with deciding whether to file suit against habitual rule violators.

Before filing suit, take a long hard look at the evidence to support the alleged rule violation. Photographs, formal violation complaints, receipts, meeting minutes, video recordings, logs, account ledgers, and other written documents should clearly demonstrate the violation of a rule to justify proceeding with legal action.

Boards that closely follow the saying “Proof is in the Pudding” remain impartial and perform due diligence before proceeding with legal action. Board impartiality and due diligence help minimize legal exposure and maximize Board effectiveness.

Contributed by Michael Shifrin of Kovitz Shifrin Nesbit