Under the Illinois Condominium Property Act, the board of directors of a condominium association owes unit owners a fiduciary duty and must carry out a specific set of statutory obligations that govern how it meets, keeps records, budgets, insures the property, enforces rules, and collects money. Those obligations apply whether the board was appointed by a developer or elected by owners, and a board member who ignores them can face personal liability alongside claims against the association.1Illinois General Assembly. Illinois Code 765 ILCS 605/18.4 – Powers and Duties of Board of Managers
The Fiduciary Standard
Section 18.4 of the Act says board members must exercise the care required of a fiduciary of the unit owners. In practice, that means every decision should put the community’s interest ahead of any board member’s personal interest. A board member who steers a maintenance contract to a friend’s company has breached that duty even if the price looks fair.
The fiduciary standard is not just courtroom language. It sets the baseline for competence, loyalty, and transparency across every duty below. When a board underfunds reserves, lets insurance lapse, or retaliates against an owner who asked to see the books, fiduciary duty is what gives owners legal standing to challenge the board.
Open Meetings and Notice
Board meetings are open to every unit owner. The board may close a portion of a meeting for a limited list of reasons: pending or probable litigation, hiring or firing an employee or contractor, interviewing a candidate, discussing a specific owner’s rule violations or unpaid assessments, or consulting with the association’s attorney. Any actual vote on the matter still has to happen during the open portion of the meeting, where owners can watch.2Illinois General Assembly. Illinois Code 765 ILCS 605/18 – Contents of Bylaws
Notice of every board meeting must be posted in entranceways, elevators, or other visible locations in the building at least 48 hours in advance. Owners who have given the association written authorization for electronic communications must receive the same notice by email in the same window. Board members themselves are entitled to 48 hours’ notice unless they waive it.
Access to Association Records
Owners can inspect and copy association records, including the declaration and bylaws, meeting minutes, insurance policies, any reserve study, and financial books going back 10 fiscal years. To exercise the right, an owner submits a written request identifying the records sought. If the board does not make them available within 10 business days, the law treats that as a denial.3Illinois General Assembly. Illinois Code 765 ILCS 605/19 – Records of the Association Availability for Examination Slow-walking a records request is one of the easiest ways for a board to end up in court.
Budgets, Reserves, and the 115-Percent Review
The board prepares and adopts the annual budget, but owners have to see it first. Every owner must receive the proposed budget at least 25 days before adoption, with a clear breakdown of reserves, capital expenditures, repairs, and property taxes. Owners also get notice of the meeting at which the board will adopt it.
If an adopted budget or special assessment would push total assessments for the current fiscal year above 115 percent of what owners paid the prior year, owners holding 20 percent of the votes can petition within 21 days to call a meeting to review the increase. The board has to hold that meeting within 30 days, and the higher assessment stands unless a majority of all unit owner votes reject it. Emergency expenditures and those mandated by law are exempt from this review.
Reserves
Every budget adopted since July 1, 1990 must include reasonable reserves for capital expenditures and deferred maintenance of common elements. The Act does not pin down a dollar figure or percentage. Instead, the board must weigh repair and replacement costs of the components the association maintains, the estimated useful life of those components, expected return on invested reserves, any professional reserve study, the financial impact of assessment increases on owners, and the association’s ability to borrow.4Illinois General Assembly. Illinois Code 765 ILCS 605/9 – Sharing of Expenses Lien for Nonpayment
An association whose original governing documents contained no reserve requirement can waive the statutory reserve obligation by a two-thirds vote of all unit owners. The waiver has to be disclosed in the financial statements and highlighted in bold in any disclosure given to prospective buyers. Waiving reserves is a calculated bet: when a major repair hits an underfunded association, the board’s only option is a large special assessment.
Special Assessments
The board can adopt a special assessment without owner approval for most purposes. The main exception is spending on additions or alterations to common elements or association-owned property that were not in the annual budget, which requires approval from two-thirds of unit owners.5Illinois Department of Financial and Professional Regulation. How Is a Special Assessment Adopted Board-adopted special assessments still fall under the 115-percent review procedure above.
A related limit applies to common-element replacements. If a replacement project improves the original quality and the cost exceeds five percent of the annual budget, owners holding 20 percent of the votes can petition within 21 days to call a meeting to review the expenditure. The spending stands unless a majority of all votes reject it.
Insurance the Board Must Carry
The Act sets statutory floors, not recommendations. No insurer can issue or renew a policy for a condo association unless it includes all of the following:6Illinois General Assembly. Illinois Code 765 ILCS 605/12 – Insurance
- Property insurance on common elements and units (generally bare walls, floors, and ceilings) for special-form causes of loss at no less than full insurable replacement cost, plus demolition and increased-cost-of-construction coverage sufficient to rebuild to current codes. Those two coverages combined must equal at least 10 percent of each insured building’s value or $500,000, whichever is less.
- At least $1,000,000 in commercial general liability coverage protecting the board, the association, the management agent, their employees, and unit owners for claims tied to common elements.
- For associations with six or more units, a fidelity bond covering anyone who controls or disburses association funds, equal to the full amount of association funds and reserves. Management companies handling association money must carry their own fidelity bond as well.
- Directors and officers liability coverage at a level the board deems reasonable, if it is not already built into the fidelity bond.
Letting coverage drop below these levels violates the Act and exposes every owner to potentially catastrophic risk. The master policy generally covers only the building structure and common areas; interior finishes, personal property, and personal liability need a separate unit owner policy.
Adopting Rules and Imposing Fines
The board can adopt rules governing how owners and residents use the property, but only after holding a meeting of unit owners specifically called to discuss the proposed rules. A board that skips this step risks having its rules struck down when challenged.
When enforcing rules, the board can levy reasonable fines and charge late fees on unpaid assessments, but only after giving the owner written notice of the alleged violation and an opportunity to be heard.7FindLaw. Illinois Code 765 ILCS 605/18.4 – Powers and Duties of Board of Managers “Reasonable” is the operative word. A $10,000 fine for a first-time parking violation would not survive a challenge. Fines should be proportional and consistent with how similar violations have been handled before. Selective enforcement, where one owner is fined for conduct the board ignores elsewhere, is one of the fastest paths to litigation.
Collecting Delinquent Assessments
When a unit owner falls behind on assessments or fines, the unpaid amount plus interest, late charges, and reasonable attorney fees becomes a lien on the unit. That lien takes priority over almost everything except government taxes and mortgages or other encumbrances recorded before the delinquency arose. It attaches automatically, so the board does not need to record a separate lien document.
Beyond the lien, the board can pursue an eviction action against a delinquent owner or tenant under the Code of Civil Procedure. Attorney fees the association incurs in enforcing the governing documents or collecting unpaid assessments are added to the owner’s balance. Collection-related fees charged by a management company can only be passed to the owner if the management contract spells them out and the declaration or bylaws specifically authorize the practice.8Illinois Department of Financial and Professional Regulation. Illinois Condominium Property Act – Section 9.2 Other Remedies
Fair Housing Compliance
Federal law overlays the Act. The Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, and disability.9Office of the Law Revision Counsel. 42 USC 3604 – Discrimination in the Sale or Rental of Housing and Other Prohibited Practices For a condo board, that means no rules disproportionately targeting families with children, no refusing reasonable accommodations for a resident with a disability, and no policies enforced differently based on any protected characteristic.
Disability accommodations are where boards most often stumble. The board must allow reasonable modifications at the resident’s expense (grab bars, for example) and make reasonable accommodations in rules and policies. The most common request is an emotional support animal in a no-pet building. Under HUD guidance, the board cannot demand a specific certification or registration (no federal ESA registry exists), cannot impose breed restrictions on assistance animals without objective evidence of a safety threat from the specific animal, and cannot require the animal to have any particular training.10U.S. Department of Housing and Urban Development. Housing Discrimination Under the Fair Housing Act If the disability is not obvious, the board can request documentation from a licensed healthcare provider confirming that the resident has a disability and that the animal provides a therapeutic benefit related to it. Denying a legitimate request exposes the association to a fair housing complaint and substantial damages.
Using a Licensed Manager
Illinois requires anyone providing community association management services for compensation to hold a license issued by the Department of Financial and Professional Regulation. Applicants must complete at least 20 hours of approved coursework and pass a state-authorized exam. Unlicensed management is a Class A misdemeanor.
Board members and officers who manage without compensation do not need a license. Associations with 10 or fewer units can use unlicensed managers. Licensed attorneys acting within their legal practice and court-appointed receivers or trustees are also exempt.11Illinois Department of Financial and Professional Regulation. Community Association Manager Licensing and Disciplinary Act Management firms must also be licensed and must employ at least one licensed community association manager as a designated manager. When hiring a management company, the board should verify both the firm’s license and the individual manager’s license through the Department’s online lookup.
Board Composition and Elections
Every board member must be a unit owner. If a unit has multiple owners, only one can serve on the board at any given time. Members are elected at large by the unit owners, terms cannot exceed two years, and re-election is unlimited. At least one-third of the seats must come up every year so the entire board never turns over at once.
If a seat opens mid-term, the remaining members can fill it by a two-thirds vote, and that appointment lasts until the next annual meeting. Owners holding 20 percent of the votes can petition to call a special meeting to fill the vacancy themselves, and the board must hold that meeting within 30 days of receiving the petition.
Voting at owner meetings generally runs on a percentage-of-ownership basis tied to each unit’s share of the common elements, though the bylaws can allow one-vote-per-unit on matters where the Act does not set a required threshold. Written proxies are permitted and expire after 11 months unless the governing documents or the proxy itself sets a different period. For board elections, any proxy the board distributes must let the owner designate any person as proxy holder and express a preference among known candidates or write in a name. For associations with 20 or more units, the default quorum at owner meetings is 20 percent, unless a majority of owners by percentage interest adopt a higher threshold. Smaller associations set their own quorum in the bylaws. The bylaws also must include a method for removing a board member from office.