To paraphrase the Declaration of Independence, all men and women are created equal with certain inalienable rights, including life, liberty, and the pursuit of happiness. That may not be the case if you live in a condominium, co-op or HOA, however. Unlike a private home, living in a ‘common interest community’ represents a commitment to cooperative living – and along with that commitment come rules and regulations that just don’t come up in a single-family setting. So, if you own a free-standing, detached house and have a disagreement with a landscaper, let’s say, you can feel free to place a large sign on your front lawn that warns your neighbors not to do business with him or her. That won’t fly in a HOA.
Owners’ Rights vs. Association Rights
According to Sima Kirsch, an attorney in Chicago specializing in condo, co-op and HOA law, “When talking about rights in an association environment, the answer for each is controlled by the enabling statutes of the various entity forms and their individual operating documents. An owner has whatever rights are permitted in the documents, as well as other local, state and federal statutes. In a condo, one owns an undivided interest in property held in common with other owners, in addition to a separate interest in their own unit outright, in fee simple. Owners share the rights set out in the declaration, bylaws, rules and regulations. Any other form of ownership...are likewise controlled by whatever statute they are enabled under.”
“With rare exception,” Kirsch continues, “condominium owners are invested with the following rights:
Full and free use of their own unit, except in very limited cases (e.g. some states/municipalities have statutes forbidding tobacco and/or other types of smoking, and others draft rules around gun ownership. Some associations have established proscriptions against these activities, or their emanation from one unit and spillover into another.) Illinois has both statutes.
Community use of the whole of the common elements, except as limited by, or where a particular use or activity is in violation of any law or the association’s operating documents and policies and procedures and rules and regulations.
Full or partially shared use of common elements or limited common elements (LCEs) depending on how LCE is granted, it could be deeded or assigned, or natural by construction design (such as shared patios/balconies/roof decks).”
Kristofer D. Kasten, an attorney specializing in condo, co-op and HOA law with Michael C. Kim & Associates in Chicago, says that “The basic rights in both condos and co-ops are your right to vote, electing the board and voting on amendments to bylaws.” There are differences between the two forms of ownership, however. Kasten explains that condominiums in Illinois are governed by the state’s Condominium Act, but co-ops are governed by their own established documents. There is no Illinois state statute that specifically governs them. They can be held as profit or non-profit entities, and he even has a few that are held as trusts.
One major difference between a co-op and a condo or HOA is that “in a co-op, the board can determine whether someone’s tenancy is desirable, and [if they determine that it isn’t], can vote to terminate that tenancy. That shareholder can, in some cases, depending on the proprietary lease, appeal to other members of the co-op and the other members could vote as to whether the tenant should be terminated or not. There is no comparable situation in a condominium. The only way to terminate a condo unit owner’s rights is generally a forced sale, a lien foreclosure, or conduct so aggressive it warrants a forced sale through litigation.”
What About the First Amendment?
Condominiums, co-ops and HOAs are controlled by their governing documents; bylaws and Declarations of Condominium, which are governed by state statutes. Co-ops are slightly different, as they fall under the Uniform Commercial Code, as the owner holds shares in the corporation that owns the building, and receives a proprietary lease that entitles them to occupy their apartment. First Amendment rights are guaranteed with respect to ‘state actions’ – not co-op or condo board actions. In other words, the State of Florida may not deprive you of your constitutional right to say what you please, but condo, co-op and HOA boards and associations are commercial entities which are not subject to those regulations, except in cases of the violation of laws such as the Fair Housing Act or consumer protection legislation. Of course, this does not mean that boards and associations can do whatever they want, or simply silence a resident whose opinion they happen to disagree with – but it does mean that your board is within its rights to insist that you remove the sign on your front lawn listing the shortcomings of your landscaper.
Kasten suggests an interesting explanation of what happens when you become a member of a condominium, co-op or HOA. “When you go to law school and you learn about property rights, professors talk about a ‘bundle of sticks.’ When you buy into a community association, by virtue of the covenants, you are agreeing to give up some those sticks. You are agreeing to abide by the bylaws. Rules generally will be found to be enforceable if they are found in the declaration of those bylaws.”
While residents do in a sense sign away their rights when they purchase and agree to abide by their community bylaws, they are protected. Kirsch notes, “The freedoms granted in the Constitution under the First Amendment are protections against federal government interference in public places and are regulated by law. The Fourteenth Amendment made the First Amendment applicable to the States. Nonetheless, some states have enacted legislation controlling these issue in private establishments. In the absence of a specific statute to the contrary, a board is granted authority to create policies and procedures, rules and regulations that regulate living at the association.”
But, says Kasten, “With respect to condominiums, the Illinois Condominium Property Act actually contains a provision that expressly states that boards cannot adopt rules and regulations that would violate a unit owner’s First Amendment rights. It brings into a private organization First Amendment rights which prohibit government from interfering with free speech.”
“In Illinois” however, points out Kirsch, “and many states, if the board finds that regulating or banning a particular activity serves a need or purpose set out in the governing documents of the association (the right to peaceful use of home, restrictions on the right to access confidential and sensitive information, forbidding individual dissemination of information), the board may enact what it believes necessary. Rules come under a four-prong court test for validity of the rule. Amendments on the other hand – unless ridiculously egregious in its violation of a particular right – will be upheld.”
There is a national debate as to whether freedoms guaranteed by the First Amendment of the U.S. Constitution apply with respect to private land use covenants. According to Kasten, “An association cannot prohibit political signs outright. They can still regulate the manner, place and time that the signs are permitted with regards to First Amendment rights, but the board’s abilities to enact these rules are limited. For instance, they can set limits on when signs can go up – say 60 days before an election – and when they must come down – say, two days afterward.”
Kirsch supports this argument. “Displaying of the flag, political signage, freedom of assembly, may be regulated by a board, except where contrary law exists. Again, if occurring in the privacy of the residence, it is protected unless it would spill over to common areas. Considering the complexion of every association is different, the operating documents of each form of association will remain constant, while its content and the rules and policies may vary.”
In today’s data-saturated world, everyone is concerned about the status of their private information. Kasten points out that privacy protection “is driven by certain provisions of the Illinois Condominium Act, specifically to state what kind of information and documents owners are entitled to. There is a general or reasonable expectation of privacy versus some other statute that might apply to a given situation.”
Kirsch further illuminates this point and process: “Depending on the form of ownership, information a board may disclose or not disclose is set by law and then generally adopted as part of the operating documents of any such association. In Illinois, 765 ILCS 605/19 sets out the rules regarding distribution of information; what shall be distributed, what may be withheld and under what circumstances it must be released.”
Within the City of Chicago, says Kirsch, “Chicago Condo Ordinance,13-72-080, Examination of records by unit owners provides that ‘No person shall fail to allow unit owners to inspect the books and records of account for the condominium association’s current and 10 immediately preceding fiscal years, including but not limited to itemized and detailed records of all receipts and expenditures, within thirty business days of the time written request for examination of the records is received.’” Clearly, owners are doubly protected in the Windy City.
Enforcement and Appeals
Enforcement of rules and regulations can result in many unpleasant situations, including the levying of fines, suspension of rights, or ultimately, lawsuits. “Litigation is an option,” says Kasten. “Sometimes arbitration is provided.” Kirsch adds that “In Illinois, an owner in violation may be stopped from counting toward a quorum, although the right to vote may not be restricted. Also, as long as appropriate rules are in place, a board member in violation of its documents can be removed from the board or lose the right to run for the board. Enforcement takes many forms and as long as there is an overriding community need, and protected rights are not affected, a board has the right to remove or restrict rights or privileges, or exact fines.”
Unfortunately, from the owner’s side, the most decisive route to fighting a board rule, regulation or decision is usually litigation. Kirsch mentions an interesting case she knows of. “I personally know the family that was sued in Bloch v. Frischholz, a landmark 2008 case in Illinois involving freedom of religion and a board’s removal of a religious icon from an owner’s doorpost. Religious law directs orthodox Jews to affix a sign [called a mezuzah] to the doorpost of their homes. This particular board, pursuant to a house rule forbidding the placement of objects near, by, on the front doorway [of units] removed the Bloch’s mezuzah during mourning services for the husband. This case ushered the eventual amendment of section 18.4 (h) of the Act cited previously.”
One legal option unique to Illinois law, says Kasten, is an eviction in a community association. “The most common collection action in Illinois is an eviction action. We are the only jurisdiction that allows associations to evict a unit owner in order to get possession of a unit so that they may rent out the unit to recover unpaid assessments. Once the arrearage has been paid back, the unit owner has the ability to get possession of the unit, which he/she still owns, unlike in a foreclosure.”
So, as in all aspects of life, when it comes to your own condo, co-op, or HOA, it’s crucial that you know your rights. They may be more complicated than you think.
AJ Sidransky is a novelist and staff writer for The Chicagoland Cooperator.