Board Thumbs Nose at State Lawmakers

  • Posted: January 27, 2018

thumb noseAs reported here last August, Illinois recently took a HUGE step forward with regard to condo governance. Fast forward a few months: our Board has managed to TOTALLY screw it up. So par for the course at 111 East Chestnut Condominium Association. Under the direction of part-time 111 resident and suburban dentist Anthony Milazzo, the Board is thumbing its nose at State Lawmakers, and setting us up for another raft of lawsuits.

By way of background, this last Spring, with overwhelming bipartisan support, the General Assembly passed HB0198. Last August, Rauner signed it into law. And on January 1, Public Act 1000-0292 went into effect.

But our Milazzo-led 7-member amateur Board, who insist they know better than 166 State Legislators and the Governor, was not about to allow the law’s core democratic ideal stand. In short order, at 111 the law’s been vacated.

A PREDISPOSITION TO OBFUSCATE

Condo’s breed dictators.  It’s what they do.  And dictatorships race to control and protect their power.  But the Illinois Condominium Property Act is designed specifically to frustrate that tendency. The Act is designed to foster democracy and transparency to the benefit of owners. But that’s just not how the 111 East Chestnut Board rolls.

Public Act 100-0292 meaningfully broadens homeowner rights in two essential ways: It gives greater access to information; And it levels the playing field of how owners might communicate amongst themselves, with how board members communicate to them.

And that’s where the powers-that-be and their agents – agents owners ironically pay for – drew a bold red line. With the help of our Sudler Property Management and law firm Kovitz Shifrin Nesbit, our board implemented a strategy to quickly nullify the new law in three simple ways: corrupt what it was obligated to produce; make it hard to get; and then threaten those who use it with stiff arbitrary fines.

1) In December our property manager Sara Rudnik sent out an email solicitation asking homeowners for their contact information, i.e. email addresses.  Forget the fact that management already had homeowner contact information and an electronic distribution list. The initiative was an effort to create an “Official” Homeowner List, i.e. a second set of books.
2) Then the board ultra vires provided those requesting the list, a threatening acknowledgment form where one would have to agree to put themselves in jeopardy for using the list (Of note: the form was authored by KSN attorney David Savitt).
3) And now the Board is expediting new rules to empower themselves to assign arbitrary fines for whatever they might consider improper use. They’ve notified owners that on February 8, the requisite Special Homeowner Meeting will be held to discuss and ratify the rule.  (Of note: It’s at 10:30 am to ensure no one will show).

So typical.

WELL BEYOND WHAT THE LAW PERMITS

State Rep. André Thapedi, Chairman of Judiciary Civil Law Committee and Chief Sponsor of HB0189, personally reached out to provide 111’s Board with a detailed explanation of what lawmakers had intended.

With regard to their acknowledgment and certification form, he underscored that it “goes beyond what the statute contemplates.”   Thapedi said, “Based upon ACTHA and CAI’s objections to possible commercial misuse of owner lists, Rep. Mike Halpin proposed a provision that was incorporated in Section 19(e) allowing an Association to adopt a rule, as follows: ‘The board of managers or authorized agent of the association may require the member to certify in writing that the information contained in the records obtained by the member will not be used by the member for any commercial purpose or for any purpose that does not relate to the association. The board of managers of the association may impose a fine in accordance with item (l) of Section 18.4 upon any person who makes a false certification.’”

Rep. Thapedi went on to note that Section 19(d-5) of the Act defines “commercial purpose” as “the use of any part of a record or records described in subdivisions (7) and (8) of subsection (a) of this Section, or information derived from such records, in any form for sale, resale, or solicitation or advertisement for sales or services.” Thapedi said, “I believe that 111 East Chestnut goes well beyond what is permitted by Section 19(e), which is limited to fines or rules that prohibit owner lists to be used for ‘any commercial purpose or for any purpose that does not relate to the association.’”

PARTICULARLY TROUBLING

Thapedi pointed out to the Board with particularity what he called “particularly troubling” about their initiative.

“Further, the undersigned unit owner hereby certifies that the information contained in the records obtained by the unit owner will not be used to advance any disparaging, threatening, or harassing communications to anyone. This shall include, but not be limited to, hate speech, the solicitation or advertising of goods or services, and campaign, political, or fundraising related communications.”

Thapedi warned the Board about its prohibition of “disparaging” communication and the prohibitions of “campaign” and “political” uses.  Thapedi said: “This is contrary to what was contemplated at the time the legislation was drafted. During the Committee hearing, it was specifically discussed that the unit owner lists, which were sometimes referred to as ‘voter lists,’ would be used by those campaigning for positions on the association board and to otherwise disseminate information to unit owners relating to the association. Dissemination of information logically includes information that is critical or perhaps even disparaging of a board, board members, budgets, expenditures, property managers, or the manner in which the association is operated.”

Thapedi also noted that this initiative by the 111 Board violates Section 18.4(h) of the Act which expressly states that: “…no rule or regulation may impair any rights guaranteed by the First Amendment to the Constitution of the United States or Section 4 of Article I of the Illinois Constitution including, but not limited to, the free exercise of religion, nor may any rules or regulations conflict with the provisions of this Act or the condominium instruments.”

Thapedi said: “In this instance, the proposed 111 East Chestnut Condo Rule violates First Amendment speech rights, specifically political speech, and it also conflicts with Section 19(e) which ONLY authorizes imposition of fines for owners who misuse a list ‘for any commercial purpose or for any purpose that does not relate to the association.’”

A SIMPLE SOLUTION TO THE PERCEIVED ISSUE OF PRIVACY

The Board’s position is that they’re protecting privacy. That’s a ruse. Let alone just how public one’s email is today and how privacy in the Internet Age is an illusion, there is a very simple solution.

Florida Statutes section 718.111 provides that email addresses in the custody of an association are official records. The statute also provides that owners are not permitted to access these email addresses unless the owners waived confidentiality by consenting to receive electronic notice in lieu of mailed notice. In other words, if the owner consents to receive electronic official notice instead of snail mail, the owner waives the confidentiality of the email address and owners and candidates are entitled to those email addresses. If the owner does not consent to receive official electronic notice, then the email addresses are confidential and should not be provided to any candidate for campaign purposes.

Florida solves the problem and it’s easily implemented, i.e. opt-in; opt-out.  But at the January 11 Board Meeting, when proposed by a homeowner, the Board flatly rejected the idea. They then subsequently rejected Rep. Thapedi’s counsel, as well.

PREDICTABLE CONSEQUENCES

Owners and potential investors should be prepared for 111 home values to again take a hit with another raft of lawsuits. And that says nothing about the general issue of who wants to hand over there most significant investment to an entrenched amateur board that’s bound and determined to negate their rights.

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EDITOR’S NOTE:  Helluva business model for Kovitz Shifrin Nesbit.

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