In Palm v. 2800 Lake Shore Drive Condominium Association (2013 IL 110505), Gary Palm, attorney and Emeritus of Law, University of Chicago Law School professor, sought production of his condominium association’s financial records pursuant to Chicago Municipal Code 13-72-080. The Association refused, claiming that the condo record requests in Illinois are governed by state statute (Condominium Property Act and General Not For Profit Corporation Act of 1986), rather than the City’s ordinance. The state statutes require that a unit owner state a proper purpose for obtaining association financial books and records, state that the association is only required to produce 10 years of records, and allow an association 30 days to gather and produce the records. However, requests made pursuant to the City's ordinance do not require a proper purpose be stated, there is no limitation on the years of the records, and the association must produce the documents within three business days.
The unit owner filed suit in January of 2000 seeking to inspect the documents he requested. After motion practice and the filing of amended complaints, the City of Chicago intervened in the lawsuit, alleging that the ordinance superseded the state statutes as a valid exercise of the City’s home-rule powers. In April 2001, the trial judge found in favor of the unit owner and ordered the Association to turn over the documents pursuant to the ordinance, finding that the ordinance was a valid exercise of the City’s home rule authority. In 2008, the trial judge again ruled in favor of the unit owner with respect to attorneys’ fees as the “prevailing party.” In 2010, the Illinois Appellate Court affirmed the trial judge’s decision, holding that that the records examination provisions of the ordinance supersede those of the state statutes and that the trial court did not abuse its discretion with respect to the amount of attorneys’ fees awarded.
The Illinois Supreme Court allowed the Association’s petition for leave to appeal and, on April 25, 2013, affirmed the Appellate Court and trial judge’s rulings.
The Association argued that the ordinance exceeds the City’s home rule authority because it conflicts with the statutory provisions and renders them unenforceable. In other words, that a municipality may not enact an ordinance that is less restrictive than a state statute.
The unit owner and the City countered that the General Assembly may limit home rule authority to regulate in a given field by expressly reserving that power for itself or prohibiting home rule units from exercising that power and neither has occurred.
After reviewing the current state of home rule law, the Illinois Supreme Court found that the conflict between the City’s ordinance and the state statutes did not render the ordinance invalid or beyond home rule power and, therefore, the City’s ordinance is a valid exercise of its home rule power: “The legislature has not specifically denied the City’s exercise of home rule power or required its exercise of that power to be consistent with statutory provisions. If the General Assembly wishes to deny or restrict the City’s home rule authority, it may enact a statute expressly providing for that action at its next session.”
Both condo associations and unit owners must not only know the board’s obligations and responsibilities as set forth in the by-laws and declarations, but those imposed by applicable local ordinances and statutes. Please check all applicable local ordinances and state statutes when considering requesting financial records from your condo association or responding to a request.