Much like corporations and charity organizations, condos, co-ops and HOAs across the nation are helmed by groups of residents who volunteer to serve their communities, and who are elected to their post by their neighbors. This is of course the case across Chicagoland, where talented individuals of every description regularly volunteer for board positions in hopes of serving their communities.
While many of these folks are either currently working in or have perhaps retired from successful, demanding careers, there are many situations in which an HOA's board of directors may need an expert’s advice in law, finance, or corporate administration. Illinois state laws and association laws in particular, vary from other states as well. This overall lack of specific experience or knowledge may lead a perfectly well-meaning board to make a decision with serious legal ramifications, putting the board at risk for lawsuits both within and outside the community.
Avoiding Legal Blunders
What is the best way for a board to avoid a legal foul when deciding on a course of action for the community? Founding Partner David Hartwell of the law firm of Penland & Hartwell LLC in Chicago recommends a few things. “First of all, board members should be compelled to read their declaration and bylaws all the way through at least once,” he says.
“Understanding what the rules of the road are is going to be extremely helpful in not making bad decisions. A lot of times what happens is boards get an idea in their head, and they get married to that idea. And when they find out that trying to make that thing happen is inconsistent with the bylaws or Illinois state law, they still try to push it through in some way. Illinois state law says that adhering to your fiduciary duty as a board member is closely adhering to the governing documents of the association.”
Lawyers say that ignorance of the law is no excuse. “The best way to avoid a legal mistake is to be in contact with your attorney and have a discussion about every nonstandard or ordinary action not taken,” says Marshall N. Dickler, a principal with the law firm of Dickler, Kahn, Slowikowski & Zavell, Ltd. in Arlington Heights. “Maybe even discuss ordinary activities that have contracts and renewals.”