Condo Associations Must Adopt Written Policy for Resolving Complaints
The Condominium and Common Interest Community Ombudsperson Act, 765 ILCS 615/1, et seq., requires by January 1, 2019, all condominium associations and most common interest community associations (CICAs) to adopt a written policy for resolving complaints. Section 35 of the Ombudsperson Act, which mandates the adoption of this written policy, also requires that “[t]he association shall make the policy available to all unit owners upon request.” 765 ILCS 615/35(a).
The Ombudsperson Act and Written Policy for Resolving Complaints
Pursuant to §35 of the Ombudsperson Act, the written policy must include the following:
a sample form for a unit owner to make a written complaint to the association (The Ombudsperson Act requires “a written policy for resolving complaints made by unit owners.” Id. So, the sample form should not be limited to complaints against the association. These forms should be flexible for making complaints against the association itself, the board of directors, other unit owners or occupants, or management.);
a description of a process for delivering complaints to the association; and
the association’s timeline and process for making final determinations of complaints (The final determination must be, at least, (a) in writing, (b) made within 180 days after the association received the original complaint, and (c) marked conspicuously and clearly as “final.”).
As the March 2017 FLASHPOINTS Condominium Law article (available in the IICLE® Online Library to subscribers) noted, P.A. 99-776 (eff. Aug. 12, 2016), substantially stripped the Ombudsperson’s office of much of its original powers and duties, including enforcement mechanisms to impose penalties for not complying with the Ombudsperson Act. Nevertheless, an association’s board of directors does not want to be left vulnerable for accusations of not complying with legislative enactments. Therefore, it is suggested that the legislative mandate be satisfied, notwithstanding that the Ombudsperson no longer has enforcement powers and that the Ombudsperson Act contains a sunset provision whereby the Act is repealed effective July 1, 2022. 765 ILCS 615/70.
Section 40 of the Ombudsperson Act contemplates that beginning on July 1, 2020, the Ombudsperson may provide assistance to unit owners in resolving disputes with their associations for violations of the Condominium Property Act (Condominium Act), 765 ILCS 605/1, et seq., or Common Interest Community Association Act (CICA Act), 765 ILCS 160/1-1, et seq., if certain conditions are satisfied. However, P.A. 99-776 made the resolution assistance program conditional upon funding. Given the lack of funding that has surrounded the Ombudsperson’s office so far, it is not likely that the resolution assistance program will be implemented.
The Process To Adopt the Written Policy for Resolving Complaints
It is suggested here that the written policy for resolving complaints may be adopted without prior notice at a regular or special directors’ meeting. The Ombudsperson Act does not provide any guidance for adopting this written policy, and the controlling legislation for condominium associations and CICAs in Illinois presume certain corporate governance processes not explicitly set forth in these acts. Indeed, the sample policy issued by the Ombudsperson (see web link below) is drafted as a resolution rather than a rule or regulation.
Typically, a condominium association or CICA is controlled by (1) applicable legislation, including the Condominium Act, CICA Act, Ombudsperson Act, and General Not For Profit Corporation Act of 1986 (NFP Act), 805 ILCS 105/101.01, et seq., and (2) governance documents, including the condominium or homeowners’ declaration, bylaws (contained within or appended to the declaration), and rules and regulations. Violations of any of these governance acts or documents can result in fines against unit owners or liability imposed against the directors.
The Condominium Act, CICA Act, and NFP Act do not refer to written policies as governance or controlling documents. And the Ombudsperson Act does not refer to rules and regulations. Presumably, if the General Assembly contemplated that the required written policy for resolving complaints should be a rule or regulation, it would have made at least a passing reference of such.
Associations frequently adopt policies or practices that are never elevated to the status of a rule or regulation. Governing legislation does not refer to these policies and practices, but they are essential to the operation of any organization, including property owners’ associations.
Some may argue that any policy or practice of an association must be adopted as a rule or regulation. However, this argument presents an unrealistic standard of practice for any organization to conduct its business. On a regular basis, directors of corporations and organizations adopt resolutions at meetings which reflect policies of the corporation or organization. These policies are not elevated to the level of rules and regulations for which violations could result in penalties or liability.
For example, the Condominium Act empowers the board of directors “to adopt and amend rules and regulations covering the details of the operation and use of the property.” 765 ILCS 605/18.4(h). However, the process for a condominium association to adopt a rule or regulation requires 10 to 30 days’ notice to unit owners of a unit owners’ meeting with a copy of the proposed rule or regulation at which the proposed rule or regulation is to be discussed. Id. However, the proposed rule or regulation must be adopted by the board of directors, not the unit owners, so a separate directors’ meeting must be called and noticed (this directors’ meeting is typically held immediately after the unit owners’ meeting) for the purpose of considering the proposed rule or regulation. All people would probably agree this is a time-consuming process for getting business accomplished on a regular basis.
Parliamentary rules of procedure, usually referred to as Robert’s Rules, provide guidance. Section 67 in various editions of Robert’s Rules of Order discusses the existence of four classes of rules for governance of an organization. At the highest level of the hierarchy of rules is the organization’s constitution, which can be likened to the association’s articles of incorporation and the declaration. Next follows the organization’s bylaws. Section 101.80 of the NFP Act defines “bylaws” as “the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.” 805 ILCS 105/101.80. The third descending tier of rules according to Robert’s Rules is “rules of order,” which are defined as rules relating to the transaction of business in meetings and the duties of officers. Finally, the fourth level of Robert’s Rules is “standing rules,” which are rules adopted without previous notice by majority vote at meetings. These standing rules can be suspended, amended, or repealed at any time at a meeting, without prior notice, by a majority vote.
Practical considerations compel the conclusion that condominium associations and CICAs, like all organizations, have the power to adopt written policies that are not elevated to the status of bylaws or rules and regulations. Both of the latter sets of rules require time-consuming, costly processes for adoption. Therefore, unless legislative action is undertaken or a court determines otherwise, the written policy for resolving complaints may be adopted by a majority vote of the directors at a regular directors’ meeting or a special directors’ meeting called for such purpose.
Sample Forms of Complaints and a Written Policy Provision
The Ombudsperson’s website provides a sample fillable PDF complaint form and written policy for resolving complaints, accessible under the link to publications on the lower right side of the primary webpage: www.idfpr.com/ccico.
The following is the author’s sample written policy for resolving complaints. This sample policy is broader than the minimum legislative mandate and contemplates being used by both unit owners and the association.
Condominium Association Policy for Resolving Complaints
If someone is believed to be in violation of any of the provisions of the Association’s Declaration, Bylaws, or Rules and Regulations, a signed, written complaint must be submitted by the person complaining (“Complainant”), whether a unit owner, the manager, or a member of the board of directors (“Board”). It is suggested that the Complainant use a written complaint form prescribed by the Board, but the complaint may be made in any format, so long as it is in writing and specifies:
Who is making the complaint and how he or she should be reached in writing, electronically, and by telephone;
The allegedly wrongful conduct and who is accused of such conduct;
Specific facts, including to the extent applicable, locations, dates and times of any incidents being the subject of the complaint;
Identification of any witnesses, to the extent applicable, of the wrongful conduct;
The provisions of the Declaration, Bylaws, or Rules or Regulations that complainant believes were violated; and
Any documents or references (e.g., URLs of websites) supporting the complaint.
Unit Owners are responsible for the conduct of their occupants or guests so long as those persons are on the condominium property.
This policy and the procedures described herein are not applicable to any unit owners’ alleged violation of the Association’s Declaration, Bylaws, or Rules or Regulations relating to the failure to pay an assessment, charge, or fine. Additionally, the procedures described herein shall not apply to any alleged violation that is or becomes the subject of litigation prior to a final determination being issued pursuant to these procedures.
The Association’s manager or attorney may issue a complaint against any unit owner for non-monetary violations. Similarly, an association’s manager or attorney may supplement a complaint made by a unit owner, and such supplement shall become part of the complaint.
A copy of the complaint and any supporting evidence shall be delivered to the manager at his or her office by first class mail, personal delivery, overnight delivery, or acceptable technological means. In the absence of a manager, the complaint shall be delivered, by the same means as delivery would be to a manager, to the Association’s secretary, unless the complaint is against the Association’s secretary, in which event it shall be provided to all the directors, including the secretary. Within ten (10) business days of receipt of a written complaint, the manager or secretary shall provide a copy of the complaint to (a) each director and (b) the person charged with the violation (“Respondent”), with copies of supporting documents.
If the Respondent wishes to respond in writing to the complaint, he or she should send a response to the manager or secretary, addressing the allegations in the complaint or any reasons the complaint should not be heard, within ten (10) business days of actual receipt of the complaint, or any extension of time granted by the manager or secretary to respond. The manager and secretary shall provide copies of the response to all directors. The response should include any relevant documents available to support the response.
Based upon the allegations and response, the Board, at a regular or special meeting, may vote to take no further action or to issue a warning to the Respondent to not commit the wrongful act or a similar act again. If the complaint solely alleges the violation of rules and regulations, the Board’s discussion may be in a closed session. Otherwise, it must be in open session.
If the Board determines the Complaint warrants further hearing or may result in a fine or other penalty or proscription against the Respondent, then the Board shall refer the matter to the manager or a specific director to arrange a hearing location, date, and time within thirty (30) days that is mutually acceptable to the Complainant and the Respondent. If either the Complainant or Respondent fail to cooperate or act reasonable in accepting a location, date, or time for hearing, the person appointed by the Board shall have final authority to set the location, date, and time of the hearing and provide written notice of such. The Board, specific directors, or a committee of unit owners (the majority of which shall be directors) composed for such purposes shall be appointed to hear the complaint. If the complaint is lodged against all or a majority of directors, then, to the extent practical, other unit owners, not being directors, shall be appointed to hear the complaint. If the complaint is directed against the manager or against a policy or practice of the Association, and does not lend itself to resolution by hearing, the Board may adopt another process or take such other action as it deems acceptable to consider the complaint fairly, including but not limited to appointing independent directors or unit owners to investigate or assess the complaint and make recommendations to the Board for resolution.
All parties shall have a right to be represented by counsel or to represent himself or herself at the hearing of the complaint, to present witnesses or written evidence (even if this evidence included documents not attached to the complaint or response) at the hearing, and to receive minutes of the hearing and copies of all evidence at the hearing. To the extent practical, the hearing shall follow the customary process by which complaints are judicially considered, with the Complainant presenting his or her case initially, followed by the Respondent’s case, and a brief rebuttal by Complainant. The hearing panel shall exercise reasonable discretion in conducting the hearing. Rules of evidence, while generally applicable, should be relaxed for the purposes of allowing the admission of documents and testimony, including hearsay, without strict foundational requirements being met. The hearing panel shall take into account the trustworthiness and reliability of the evidence presented where it is submitted without stipulation or is hearsay in nature. If the Complainant fails to appear at the hearing, then the complaint shall be dismissed for want of prosecution, unless the association or other persons have joined the complaint. If the Respondent fails to appear at the hearing, the hearing may proceed with evidence presented and considered against Respondent.
If the hearing panel consists of persons other than the entire Board, then the hearing panel shall make specific recommendations for resolution to the Board. The Board shall make all final determinations of resolution of complaints, including, but not limited to implementing fines or other penalties against unit owners found to be in violation of applicable law or the Association’s Declaration, Bylaws, or Rules and Regulations. A written final determination, conspicuously marked as “final determination” shall be issued by the Board, which may be incorporated into the minutes of a Directors’ meeting. A final determination against a unit owner may pass through all or a portion of the Association’s legal costs as part of the penalty assessed against the Respondent.
The Board may shorten the time periods provided for herein where the complaint or alleged violations are recurring or circumstances exist requiring urgent action or a shorter period of time for resolution. Additionally, the Board may consider repeated complaints by the Complainant or a history of frivolous complaints made by the Complainant in how it proceeds in considering whether to hold a hearing.
The time for resolution of a complaint shall take longer than 180 days from the date of receipt of the complaint by the manager or secretary.
For more information on Condominium Law, see Condominium Law (Illinois) — 2016 Edition. Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.