Articles Posted in HOA and Condo Board Officer and Director Defense

In the case of “State Auto Property & Casualty Insurance Co. v. Bell & Arthur Condominium Association”, it was held that the insurer did not have a duty under Illinois law to defend the association, directors, and officers in an action regarding alleged defamation per se and property damage, as these alleged offenses occurred outside the policy period.

Regarding the duties of condominium associations, the “Westfield Insurance Company v. National Decorating Service, Inc.” case noted that under the Illinois Condominium Property Act, a condominium association may act in a representative capacity on behalf of its unit owners. However, the Act limits such representation to matters involving the common elements or more than one unit. This limitation precludes the Association from pursuing a legal remedy for damage caused to the individual unit owners’ furniture. Thus, these allegations were insufficient to invoke the insurer’s duty to defend.

The case of “Palm v. 2800 Lake Shore Drive Condominium Ass’n” highlighted that the Condominium Property Act regulates the creation and operation of Illinois condominium associations. The Act also defines “meeting of board of managers” and provides certain requirements for an association’s bylaws.

In “Truck Ins. Exchange v. Cassady”, the Condo Association sued the Developer and the officers for alleged construction defects. The court also discussed the insurance policy period about the claims.

The “Davis v. Dyson” case confirmed that unit owners in a condominium association could bring a derivative breach of fiduciary duty action against former directors. In contrast, the “Poulet” case found that causes of action for conversion and common law constructive fraud relating to an association’s account belong exclusively to that association, leaving unit owners with limited legal recourse.

In sum, the recent developments in Illinois law highlight the importance of insurance coverage periods in determining the duty to defend, restrictions on the representative capacities of condominium associations, the right of unit owners to bring lawsuits, and compliance with regulations under the Illinois Condominium Property Act. Continue reading ›

In the dynamic landscape of condominium and homeowners’ associations (HOAs), board officers and directors are tasked with making crucial decisions to maintain the welfare of their communities. However, there are times when disputes arise, leading association members or condo owners to bring legal action against these leaders. At Lubin Austermuehle — the Business Litigators, we concentrate on defending condominium and HOA board officers and directors facing lawsuits under Illinois law. In this blog post, we will explore the unique legal challenges in Illinois and our legal team’s indispensable roles in safeguarding these community leaders.

Understanding Illinois Condo & HOA Governance

Illinois, like many states, has a comprehensive set of laws and regulations governing condominiums and homeowners’ associations. These laws define the roles and responsibilities of board officers and directors, as well as the rights and obligations of association members or condo owners. Compliance with these laws is essential to maintaining the harmony and functionality of these communities.

Common Legal Issues Faced by Board Officers and Directors in Illinois

Board officers and directors in Illinois can find themselves entangled in various legal disputes, including:

  1. Breach of Fiduciary Duty: Board members owe a fiduciary duty to the association members or condo owners. Allegations of mismanagement, conflicts of interest, or self-dealing can lead to claims of breaching this duty.
  2. Failure to Enforce Declarations and Bylaws: Ensuring the consistent enforcement of community rules and regulations is a crucial responsibility of board members. Failure to do so can result in legal actions by residents who believe their rights have been violated.
  3. Financial Mismanagement: Improper handling of association funds, budgetary issues, or a lack of transparency in financial matters can lead to allegations of financial mismanagement and legal consequences.
  4. Discrimination and Fair Housing Act Violations: Board officers must ensure that all residents are treated fairly and in compliance with fair housing laws. Allegations of discrimination can result in legal action under both state and federal laws.
  5. Contract Disputes: Board officers and directors often enter into contracts for services and maintenance. Disputes can arise if one party feels that the terms of the contract have not been fulfilled.

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