Illinois Do new state laws supersede old covenants?

State and local laws always override covenants unless the law specifically defers to the covenants. I have never heard of minimum dollar limitation for placing a lien, but am not specifically familiar with IL laws. Most HOA liens are way lower than $100k and associations do sometimes foreclose on fairly small amounts owed.

Where is your $100k understanding coming from? Is this based on something you've seen in your state laws?

HOAs generally work with an attorney on collection and foreclosures, and that would be the right person to direct this question to.

I agree with Douglas that HOAs generally foreclose for far less than $100K. Even if the HOA included unpaid fines along with unpaid assessments, it would take *years* to get to that level. And many states also prohibit foreclosure for unpaid fines, which would make reaching the $100K level take even longer unless the HOA's assessments were stratospheric.

(Note: a late fee is maybe/probably considered an assessment, not a fine. Fines are usually imposed for violations of the CC&Rs, damage to the property, and things of that nature.)

Something isn't adding up here - a limit like this would essentially take foreclosure off the table for most HOAa.

A few more responses were posted while I was writing my last one.

Per your posting: 1) you are organized under the corporate statute. 2) your annual budget is under 100K. Based on this info, and my very brief reading of the statute, the statute does not apply.

That said, it is typical for the Covenants (aka deed restrictions) to specify that assessments are a continuing lien on the property.

The simple answer is - as long as assessments are paid on time, there should be no worry of late charges or liens being perfected.

I probably didn't word any of this correctly, I apologize.

I can't find the link to what the other homeowner found, and neither can he, but he has a printed copy that states if less than $100k in dues (assessments) are collected per year, that it falls under the Non for Profit Corporation Act of Illinois and the same abilities to place liens on people's homes for not paying, or to fine them for late payment are not allowed. This developer has never taken care of our community properly, and 100% takes our money and does whatever he wants with it. We have already retained an attorney (on our own dime!!) to finally take control away from him. But we are in a holding pattern until it's "our turn" and we are trying to find any and all info we can while waiting. We wanted to verify this info in case it takes us awhile, to legally take over the HOA. Luckily our covenants are written in such a way that we can, now that the residents are the majority of lot owners. Thankfully! But we also know this guy is a wild card and will likely make this as difficult as he can for us - but none of us have any intention of ever giving him a single hard earned penny again.

Oh the stories I could tell you all...we are prisoners in our own neighborhood.

Holly,

-- This Illinois statute section is probably the one of which you are thinking:

(765 ILCS 160/1-75)
Sec. 1-75. Exemptions for small common interest communities.
(a) A common interest community association organized under the General Not for Profit Corporation Act of 1986 and having either (i) 10 units or less or (ii) annual budgeted assessments of $100,000 or less shall be exempt from this Act unless the association affirmatively elects to be covered by this Act by a majority of its directors or members.

-- However, your HOA's covenants are contractual terms. Per the covenants, it's almost guaranteed that the developer has the right to collect assessments and place liens for non-payment. Also if your covenants speak of fines, then the developer has the right to assess fines for violations.

-- As for the developer failing to use the assessments for HOA expenses, you would have to post the specific evidence for this.

-- For now, I will say that few HOA members nationwide understand what a reserve fund is. It's entirely possible the developer is putting money into the reserve fund, and owners have zero understanding of how that money will in fact be used for HOA expenses down the road, as infrastructure and amenities age.

-- I think the best thing you can do is post here the exact wording, from the covenants, about what is required for the developer to turn over control to the owners.

Oops; I see TimB4 found the statute section before I did. Pardon my repetition of the statute section.

HollyB2, I am going to take your last post to be saying you do not know what a reserve fund is; you do not wish to quote the covenant on turnover (from developer to owners); and you have strong suspicions but no hard proof of anything as of this writing. So I am glad your group is working with an attorney. He/she will work on getting the hard proof (if any) and identifying what, if any, statute sections and covenant violations exist. The attorney will educate you all and as needed, the developer too.

I know what a reserve is. While I'm not well versed on all things HOA yet, I'm not a random keyboard warrior who is just mad about a little misunderstanding - but believe me when I say NOTHING in this neighborhood even needs a reserve, because there is nothing here but empty lots and a huge mess everywhere you look. Because he has never done anything out here. We are just trying to learn what we can, while we wait on our attorney to answer our questions and get things going for us. He has already looked over the info and said we do have a case. This was also after first consulting with a family member who is a recently retired attorney/local judge.

This guy is a federally convicted felon for insurance fraud, amongst other things I could list. This guy a criminal.

And he alone IS our so called HOA.
No board members.
No meetings.
No voting.
No records.
No accountability!

We have zero doubt on what he's actually doing. He also will not ever provide records on accounting or receipts when asked for them by homeowners. And believe me, we've asked. Step one with our attorney, sending certified letters requesting the last 7 years of all financial records & receipts to start the process.

General thoughts/observations:

* The problem here isn't which laws take precedence. It's that you've dealing with somebody who's willing to ignore them.

* Who hired the HOA attorney, the developer or the homeowners? If the developer is as bad as you say, I'd be wary of relying on information from an attorney that he hired. It may be OK, it may not be OK.

* The transition from developer to homeowner control can be bumpy for some associations, and many HOA attorneys deal with the transition as part of the services they offer. In this case I'd expect bumpy - you need an attorney that will protect the association's interests, not the developer's.

* About the $100K: the laws governing HOAs are usually consistent across the board. There occasionally are some exceptions to some portions of the law for very small community associations. Not sure that annual operating expenses of $100K would fall into the category of "very small", though.

* Small HOAs are more vulnerable than the larger ones to a few owners not paying assessments. It would make no sense to hamstring tiny associations even more by limiting their ability to collect delinquent assessments. Lawmakers occasionally do bone-headed things, but it's hard to see a justification for something like this.

it's too late in this particular case. but for others reading along who may be tempted to buy in a community that's under development: take a hard look at the developer before you sign anything. If the developer has no track record or his record is spotty, find your next home elsewhere. And once you do sign, keep your eyes open and be prepared to take action at the first sign of trouble - problems generally don't improve if they're ignored.

Best advice EVER - do your due diligence and research the community & developers, and what it's really like in any neighborhood you're looking to buy in.

We hired the attorney on our own (the residents) who will guide us and make sure we handle things correctly. Money wise, we're talking ONLY approx. $7k in dues annually up to 2.5 years ago. As of next year, it would be $15,400 ($350 per lot x 44 privately owned lots) Except he's also telling people he's raising the dues next year.

It makes total sense that a law like what we read about (and thought to understood as) not being able to place a lien on someone's home or fine them for non or late payment, would be detrimental to a small HOA community.

Residents in the past have consulted with an attorney and tried to address the issues, but the covenants were binding at that time. So the only real avenue anyone had, was put blinders on, send a check to this guy each year, and pray he sold the whole thing to someone who will do right by the subdivision. He is in his 70's and the whole development IS up for sale. He refused to negotiate 2.5 years ago with investors who wanted to buy it all, so they walked. 2 months later he went back to the builder who works with the investors and said he was willing to sell, but it was too late, they had moved on to another property. Sigh... We do know they are still interested, but it would be several years down the road, as they have one property with infrastructure just completed, and another that is still raw land.

The good thing is, our covenants state clearly that once 50% of lots are owned privately, we can form our own HOA, and we are just over 50% now. The attorney has already verified that for us. We fully expect this to be a challenging situation. But it's been challenging in so many ways already, and as the residents, we are ready to fight and work hard at this process.

I was just trying to find out is the new HOA laws superseded our 2006 dated/filed CC&R's - there wasn't a clear understanding, as several of us have been reading the laws in IL and are trying to gain as much understanding as possible.

Thank you for your time and help!

I have a basic question now - if I delete my account from here, will my name and/or posts still appear on this website?

I hear you all loud and clear in terms of speaking about the situation from our *opinions* on what is going on - I was in a dark negative place in my mind yesterday, after hours of reading & researching and thinking about everything we are up against. Obviously I've used no names in terms of WHO I'm speaking of. But perhaps it's best to have this conversation removed? Is that possible?

Thank you again for your help!