Q: I am an individual in the market to purchase a condominium in Chicago. Do you have any advice on the information I should be requesting to review from the condominium association or seller to understand the condition of the building physically and financially?
A: Pursuant to Section 22.1 of the Condominium Act, purchasers of condominium units in Illinois are entitled to a disclosure from the association that contains information about the unit and the building. The 22.1 disclosure includes a statement of the existence of any liens (that includes unpaid assessments), a statement of capital expenditures anticipated by the condominium association within the current and succeeding two fiscal years, a statement on the amount of the reserve replacement fund and if any portion of the fund is earmarked for a specific project, a statement of the financial condition of the condominium association for the last fiscal year, a statement of the status of any pending lawsuits or judgments in which the condominium association is a party as well as a handful of other disclosure statements.
Additionally, Section 19 of the Condominium Act allows current unit owners to obtain copies of board meeting minutes for up to the proceeding seven years and a copy of the reserve study. Thus, purchasers should request from the seller a copy of board meeting minutes for at least a handful of the preceding years and a copy of the reserve study to review the physical condition of the building and what types of issues and spending are being discussed and approved at board meetings.
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Q: I am an owner in a townhome common interest community association for the last 30 years and served on the board for 15 of those years. Over the last decade, I have observed deterioration of the property and the failure of the board to enforce the rules and regulations. Owner complaints about noise, disturbances, and common area facility administration issues go unanswered. I am too old to go door-to-door to obtain proxies for the next board election, so what can a group of owners do to change the board composition?
A: A refusal by a board of directors to enforce the governing documents, including maintaining the property appropriately or enforcing rules and regulations, will amount to a breach of fiduciary duty if the facts warrant and would subject individual board members and the association to possible litigation. However, given the time and expense of litigation, dissatisfied owners focusing on electing new board members who share a philosophy of improving the community is a more cost-effective path.
Collecting proxies of other owners who share the view that new board members should be elected is a logical path to implement change. If going door-to-door to solicit proxies from owners for the next annual meeting to elect directors is not practical, the solution would be to mail a cover letter explaining why certain candidates should be elected with a blank proxy form designating a specific proxyholder for owners to execute and return to the proxyholder to vote on the owners’ behalf for the candidates they choose.
Q: I am a board member of a residential cooperative and learned from the Condo Advisor column last month that transfers of shares in a residential cooperative are now required to be reported to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) in certain circumstances. I recently heard that a court ruling in a federal court may have affected the implementation of this new FinCEN rule. Is the reporting requirement of the new FinCEN rule still in effect?
A. Effective March 1, 2026, FinCEN did implement a new rule (31 C.F.R. § 1031.320) requiring reporting to FinCEN of certain residential real estate transfers to (i) entities such as trusts, LLCs, corporations, etc. (ii) that are not financed (i.e., no mortgage or other qualifying institutional loan secured by the property). However, on March 19, 2026, the U.S. District Court for the Eastern District of Texas entered an order vacating FinCEN’s new rule, which is likely to be appealed by the government.
Thus, at this time, compliance with the reporting requirements of the new FinCEN statute is on hold until such time as an appellate court may reverse the U.S. District Court decision.
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