Homeowner Associations and Cooperatives
Legal Services
Penland & Hartwell, LLC has developed an experienced and sophisticated practice dedicated specifically to common interest properties and cooperatives. As part of its dedication to providing full and complete legal services to condominium associations, homeowner associations, and cooperatives, Penland & Hartwell provides the following legal services:
Administration, Management and Governance
- Projects for Maintenance, Repairs, Replacements, Additions and Alterations to Common elements
- Annual Meetings and Elections
- Special Assessments
- Labor and Employment Law
- Corporate Formation and Related Matters
- Interpretation and Legal Opinions Regarding Association Documents and Statutes
- Insurance Review and Interpretation
- Collections
Document Review and Preparation
- Condominium and Homeowner Association Declaration, Bylaws, Rules, Restated, Declarations, Amendments
- Cooperative Proprietary Leases Bylaws, Rules, Amendments, Restated Documents
- Easements, License Agreements
- Commercial and Residential Leases
- Construction, Service, Management, Cable, Independent Contractor and other Contracts
Financial Transactions
Litigation
- Claims against Developers, Warrantors, or Contractors
- Enforcement of Declarations, Bylaws, Rules and Regulations, and Covenants
- Municipal and Building Code Violations
- Administrative Claims (Discrimination, ADA, Fair Housing...etc.)
- Injunctions or Other Special Remedies
- Collection Actions
- Other General Litigation (related to common interest properties)
- Alternative Dispute Resolution
- Appellate Practice
Penland & Hartwell counsels boards of directors on the proper administration and operation of their associations. Just as directors of other corporations, association directors have a fiduciary responsibility to operate in a businesslike manner. To meet that responsibility, directors rely on Penland & Hartwell to aid them in handling the numerous duties discussed below.
Administration, Management, and Governance
Projects for Maintenance, Repairs, Replacements, Additions and Alterations to Common Elements
Penland & Hartwell advises associations on the numerous issues that arise in connection with a project. The cost and characterization of a project, financing, spending limitations, budget increases, special assessments, review of engineering, architectural and construction contracts and other issues which may require owner approval contracts.
Annual Meetings and Elections
Penland & Hartwell assists associations in promptly resolving issues that frequently arise during annual meetings and elections concerning the provisions of declarations, bylaws, rules and the ICPA*. These issues often include interpretation of notice requirements, qualifications of candidates, distribution of election materials, ballots, proxies, secret ballot procedures, tabulation of the votes, cumulative voting, inspection of ballots and director terms.
Special Assessments
Penland & Hartwell advises associations regarding the detailed ICPA* procedures regarding special assessments. In addition to counseling associations on the requirements set forth in the ICPA* and condominium documents, the Firm assists associations in obtaining financing and complying with the documentation requirements of lenders that finance association projects.
Labor and Employment Law
The Firm counsels associations on preventing, resolving and defending labor and employment issues. This can become quite complicated since associations are held to the same standards as any other employer and must comply with federal, state and local employment laws and in some circumstances must abide by union contracts.
Corporate Formation and Related Matters
Penland & Hartwell provides corporate services related to the formation, maintenance, or reinstatement of corporate status for condominium associations, homeowners associations, and cooperatives.
Interpretation and Legal Opinions Regarding Association Documents and Statutes
The Firm advises associations on the interpretation and application of their governing documents (i.e., declaration, bylaws, and rules and regulations) and certain statutes (e.g., ICPA* and the Not-For-Profit Act*). In addition to interpreting the documents as they relate to a specific situation, the Firm advises clients when provisions and procedures in their documents are inconsistent with the ICPA*.
Insurance Review and Interpretation
Penland & Hartwell represents associations in regard to insurance issues including review, analysis, interpretation, negotiation, and enforcement. See, Insurance Review and Interpretation.
Collections
Penland & Hartwell represents associations in all areas of collections including demand letters, evictions, foreclosures and bankruptcies. See, Collection Actions.
Document Review and Preparation
Condominium and Homeowner Association Declaration, Bylaws, Rules, Restated Declarations, Amendments
Although associations may adopt rules to aid in the administration of the property, property rights cannot be altered without an amendment to the declaration. Penland & Hartwell counsels associations by providing alternative provisions that are tailored to its needs and by preparing the amendments for owner approval. Directors have a duty to know the law and administer the association in conformance with the current law. Over the years, the law that governs associations has changed significantly and we have prepared numerous amended and restated declarations that assist boards in complying with these changes.
Cooperative Proprietary Leases, Bylaws, Rules, Amendments, Restated Documents
Penland & Hartwell advises cooperatives and prepares amendments and restated documents that assist directors in meeting the changing needs of their properties.
Easements, License Agreements
Penland & Hartwell assists directors and associations in matters that require the review or preparation of easement and license agreements. Issues concerning neighboring properties, dedication of streets, the combination of units and cable agreements are examples of the issues that arise in connection with these agreements.
Commercial and Residential Leases
The Firm’s attorneys draft and review leases for commercial spaces and residential units owned by the association.
Construction, Service, Management, Cable, Independent Contractor and other Contracts
The Firm assists boards with sound legal advice that helps them exercise their best business judgment when entering into or terminating a contract. Our attorneys review “boilerplate contracts” submitted by vendors for services such as cable or satellite television, laundry facilities, maintenance services and professional management services to assure that they do not include terms that are unfavorable to the association and/or conflict with their declarations or bylaws.
Financial Transactions
Loan Document Preparation and Review
Increasingly, common interest properties enter into bank loans to finance repairs, replacements, or improvements to common areas. A cooperative may mortgage the property which it owns, condominium associations, however, do not hold title to real estate and cannot enter into a mortgage agreement. In order to finance association projects, banks offer loans that are collateralized by the future income stream from assessments. Penland & Hartwell advises associations in obtaining and documenting loans that comply with their declarations and preparing the loan opinions that are required by lenders.
Insurance Review and Interpretation
The ICPA* provides that the board must obtain property insurance for the full replacement cost of the units and the common elements including costs of construction due to building code requirements. The Board must also obtain general liability insurance, directors and officers’ liability coverage, property insurance and fidelity coverage for its managing agent as well as other forms of insurance that may be necessary for a particular property. Not only is insurance mandated by law, it is essential to the exercise of sound business judgment since a single instance of liability may be disastrous without adequate insurance. Penland & Hartwell represents associations by interpreting and enforcing insurance coverage when coverage or claims are disputed.
Real Estate Transactions
Penland & Hartwell represents associations in the purchase or sale of real estate, title issues, survey interpretation and other related matters as well as the review of disclosure statements, assessment statements and issues concerning the board’s exercise of a right of first refusal.
Litigation
The Firm has an experienced and sophisticated litigation practice at the trial and appellate court levels.
Collection Actions; Foreclosures and Bankruptcies
Pursuant to the association documents and Illinois law, Penland & Hartwell prepares demands and files suits for delinquent assessments and possession of a unit. In addition to obtaining a judgment for the unpaid assessments, the Firm’s attorneys petition the court to award attorneys fees’ and costs. Representation of association interests in foreclosure suits that are filed against unit owners and bankruptcy petitions that are filed by owners are among the collection-related services provided by Penland & Hartwell.
Prosecuting Claims against Developers, Warrantors, or Contractors
The Firm represents numerous associations, both small and large, in asserting claims against developers and related parties for defective workmanship and defective design problems, as well as the negligent and willful acts or omissions of the initial developer board of directors prior to turnover to the unit owners.
Enforcement of Declarations, Bylaws, Rules and Regulations, and Covenants
The Firm advises boards on the procedures to be followed to develop and implement well-working rules. Likewise, the Firm has significant experience representing associations in the enforcement of the rules and the covenants contained in their declarations and bylaws.
Municipal and Building Code Violations
The Firm assists associations in their compliance efforts with state, county, or municipal ordinances or programs, and represents them in enforcement actions before administrative agencies or in court, by obtaining dismissals, settlements, extensions, or mitigating fines.
Administrative Claims (Discrimination, ADA, Fair Housing...etc.)
Penland & Hartwell attorneys have extensive experience in the representation of associations that are named in administrative claims filed by unit owners and employees. These claims often seek significant damages and must be aggressively defended.
Injunctions or Other Special Remedies
When the regular rule enforcement procedures do not resolve a problem and the resident continues to act in a manner that violates the provisions of the association documents, Penland & Hartwell advises associations on methods that may be used to remedy the situation. Often these situations present a danger to the safety and welfare of residents or threaten the association’s physical structures. Generally these are non-monetary lawsuits which seek “special remedies” such as a court order that forces action rather than damages.
Other General Litigation (related to common interest properties)
The Firm represents associations when unexpected legal matters arise in relation to association property, a neighboring property, a unit owner, a tenant, or an employee, of the association. In both emergency and non-emergency matters, the Firm has the breadth of experience to efficiently address these issues expeditiously and expertly.
Alternative Dispute Resolution
Penland & Hartwell represents association in the mediation or arbitration of a dispute. Both mediation, which is a process that allows the disputants to reach a mutually acceptable agreement with the assistance of an impartial person, and arbitration, which settles disputes through an impartial third party or a panel of several impartial persons, require the association to have legal representation and the involvement of arbitrators or mediators who are experienced in condominium matters.
Appellate Practice
The Firm has a highly developed appellate practice before both Illinois State Appellate Courts and the Seventh Circuit Court of Appeals. Penland & Hartwell is on the forefront of creating law in favor of associations and cooperatives.
* Illinois Condominium Property Act, 765 ILCS 605/et seq. Illinois General Not-For-Profit Corporation Act, 805 ILCS 105/et seq.