by: Ryan M. Gailey &
Kristine Pihl Youman
Are you a part of a Condominium Association (“Association”) looking to explore different options regarding what types of buyers and renters may become residents? For some Associations, it may be desirable to establish restrictions regarding the age of residents across the Association, or the number and familial relationship of occupants within each unit. An Association looking to amend its existing declarations and bylaws will want to ensure that it does so pursuant to the Condominium Property Act of Illinois (the “Act”). For newly formed Associations wishing to cater to older residents, there may be more flexibility to limit owners or renters based on age, provided an initial declaration has not been filed.
In addition to protections provided to various protected classes under Federal law, Associations located in Illinois must comply with protections granted by the Illinois Human Rights Act. Specifically, Article 3 of the Illinois Human Rights Act prohibits owners from refusing to engage in a real estate transaction due to “familial status”. “Familial status” means “one or more individuals (who have not attained the age of 18 years) being domiciled with: (1) a parent or person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody, with the written permission of such parent or other person.” The practical effect of this restriction is that most Associations cannot refuse to restrict existing owners from selling or renting a condominium unit to individuals falling under the above definition for families.
However, the Act carries a separate distinction for newly forming Associations which are established from the onset as intended to be more geared towards senior living. Pursuant to Section 4.1(c) of the Act, “A provision in the initial declaration limiting ownership, rental or occupancy of a condominium unit to a person 55 years of age or older shall be valid and deemed not to be in violation of Article 3 of the Illinois Human Rights Act.” For existing Associations that have not carried such status since their initial declaration, this exception is not available. Simply put, an Association may restrict occupancy based on age if it does so from its inception.
Further, relating to newly formed Associations seeking to cater to older residents, Article 3-106(I) of the Illinois Human Rights Act has specific conditions for “housing for older persons” where owners can refuse to engage in a real estate transaction due to “familial status” for housing “intended for, and solely occupied by, persons 62 of age or older;” or “intended and operated for occupancy by persons 55 years of age or older” and (a) “at least 80% of the occupied units are occupied by at least one person who is 55 years of age or older”; (b) “the housing facility or community publishes and adheres to policies and procedures that demonstrate the intent required under” the statute; and (c) “the housing facility or community complies with rules adopted by the Department for verification of occupancy” as set forth in the statute.
There may be additional restrictions established by local counties and municipalities that impact and define the number and familial relationship of occupants in a given Association, depending on location. Contact HolmstromKennedyPC to learn more about ensuring that your Association’s efforts are in compliance with the Condominium Property Act of Illinois and other relevant laws. Our Real Estate practice group has experienced attorneys that regularly offer counsel to Associations with regard to statutory and administrative regulations impacting their organization.
Kristine Youman is a member of the firm and practices in the Corporate & Business Law Group. Kristine has significant experience in business mergers, acquisitions, divestitures and joint ventures.