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Proposed Change To Condo Law Vetoed

Change to condo law vetoed

As they wrestle with disagreements over the state’s pension crisis and budget, Gov. Bruce Rauner and Illinois lawmakers also don’t see eye to eye over the state’s condominium law.

Rauner vetoed a bill last week whose sponsors said it would make it easier for condo owners to sue developers for shoddy construction. He said he opposed the bill because it would restrict owners’ rights.

Broadly at issue is how much power condo owners should have to run their buildings. A law that took effect last year allows owners to override rules requiring the approval of 75 percent of owners on virtually any decision.

POOR BUILDING

During the early 2000s housing boom, developers built thousands of condos in the city, many that turned out to be poorly built. Some had leaky windows while others had cracks in walls. But until the recent change in the state’s condo law, some condo associations faced a legal obstacle if they wanted to hold their developer accountable.

Encountering that hurdle “happens with some regularity in my district,” said State Rep. Kelly Cassidy (D-14th), who co-sponsored the legislation with State Sen. Heather Steans (D-7th) and whose north lakefront Chicago district includes the condo-dense neighborhoods Rogers Park, Edgewater and Andersonville.

Some associations where developers hold unsold condos, and thus have seats on the board, have adopted a rule saying 75 percent of unit owners in the building have to approve a lawsuit, according to Kristofer Kasten, a lawyer at Michael C. Kim Associates who is also on the Chicago Bar Association’s condominium subcommittee.

“When the developer owns a bunch of units, you can never get that 75 percent you need to approve” suing the developer, Kasten said.

PASSED HOUSE, SENATE

Under the measure passed last year, condo owners now can override the 75 percent rule though a simple majority vote. This year’s bill would have removed that power for votes on everything but lawsuits against developers, which was all that was originally intended, according to Cassidy.

The measure passed 63 to 50 in the Illinois House and unanimously in the Illinois Senate and was sent to Rauner June 19.

“This bill is pro-condo owners,” said Jeff Richman, a member of the condominium subcommittee of the Chicago Bar Association and a partner at law firm Bancroft Richman & Goldberg. The aim is to protect individual unit owners from being steamrolled by a board that can ignore its own 75 percent rule.

Cassidy said it “limits the power of (condo) association boards to act without the approval of their owners.”

‘UNNECESSARY RESTRICTION’

Rauner sees it differently. When he vetoed the bill Aug. 13, he wrote that it was “an unnecessary restriction on the rights of condominium owners with respect to their property.”

Rauner’s press secretary, Catherine Kelly, said the governor’s office had no comment beyond the veto statement.

State Rep. Ron Sandack (R-81st), who voted against the bill, saw it as taking away unit owners’ rights. “It was adding to the limitations on real property owners,” said Sandack, whose district covers parts of Bolingbrook, Downers Grove, Naperville and other southwestern suburbs.

Supporters of the bill “shouldn’t be surprised by the veto. There was no compelling case for further restricting a property owner’s rights,” Sandack said.

Cassidy, the bill’s sponsor, said she believed both sides were interested in protecting property owners’ rights, but that “it’s on me  that the governor’s office didn’t see that.” She said she plans to introduce a revamped bill in the General Assembly’s next session

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