It has been several years since the Palm II case caused chaos in the Illinois association world, and several board members still seem to be lax on following corporate formalities.  So, here is a refresher on the law.

Condominium and homeowner association are not-for-profit corporations that are required to act through their board via the formalities provided by Illinois law and the Association’s governing documents. However, oftentimes in a rush to get things done, board members fail to follow the formalities and thus put the entire board at risk of breaching their fiduciary duties.

In Palm II, the Illinois Appellate Court held that a quorum of board members should not engage in private discussions of board matters. Private meetings of board members or workshops/email exchanges between members are considered “conducting board business.” And are improper outside of a duly-noticed open board meeting.

Board members should consider delegating more authority to their property managers or simply hold open meetings more often to comply with Illinois law.

Read more, here.



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