If the board believes it will replace the leaky roof in the next few years, disclose it. The language of ILCPA is clear – the legislature wanted associations to disclose what they anticipate will occur, not merely what they have formally approved. We are hitting this point hard because it’s such a common misperception – the belief that since the board has not yet formally approved a project there is no requirement to disclose it in the 22.1 form is false and exposes the association to liability. “Anticipated” is NOT the same as “Approved.” This is true even if the projects have not been formally “approved.”
The short answer is if the board reasonably believes that a large-scale capital project on the roof or elevator improvement will take place within the current or following two (2) fiscal years, then yes, those projects are “anticipated” and should be disclosed in the 22.1 disclosure, along with an estimate of the cost of the work. Must the board include an elevator modernization project in the capital expenditure disclosure?
#22.1 disclosure form pdf full
This assumption is entirely incorrect and is a recipe of litigation against an association.Īs an example, what if the board has merely mentioned or discussed, during a meeting, that the roof is leaking and needs repair and, quite possibly, full replacement? Does that mean the board “anticipates” a new roof? Or what if it’s a well-known fact in the building that the elevators are in lousy shape and breakdown often.
Many boards and managers assume that they need only provide capital improvement projects that have been “approved” by the board. What counts as “anticipated” is challenging to identify and creates confusion. In our experience, one particular disclosure manages to get boards and managers in a twist nearly every time and is by far the one that most frequently results in litigation against the association for providing inaccurate or incomplete information – Section 22.1(a)(3) of the ILCPA, which requires “a statement of any capital expenditures anticipated by the unit owner’s association within the current or succeeding two fiscal years.” The “upon demand” component of that last sentence is critical: the unit owner must demand the disclosures before the association’s duty to provide them is triggered.
One of the critical roles for the association to play in the transaction is compliance with Section 22.1 of the Illinois Condominium Property Act (“ILCPA”), which requires the board to answer nine (9) key questions about the association upon demand by a current unit owner (typically the seller). Condos are bought and sold every day in Illinois.
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