A group of unit owners in my building formed a committee in reaction to some rules the board had made. We are worried we might get into a lawsuit with the board, and we want to know if the association’s insurance would cover us against this kind of liability, should we decide to go through with suing the board for rules that were not enforced equitably. Would building insurance cover us (the committee) for litigation fees if we went up against the board?

—Cracking Down on Rule Breakers

A “More and more frequently unit owners are suing their associations over a multitude of issues including: wrongful collection actions; damage to units because of water infiltration through the common elements; discrimination for disparate enforcement of the association’s covenants and rules and regulations; levying of special assessments; and numerous other issues,” says David C. Hartwell, founding partner at the law firm of Penland & Hartwell, LLC. in Chicago.

“Typically these lawsuits allege a breach of fiduciary duty against the board collectively, and/or individual board members. The question is whether a unit owner lawsuit precludes the individual who is suing from running for the board or continuing to serve on the board. In both instances the answer is no.”

“Pursuant to Section 18.4 of the Illinois Condominium Property Act (“Act”), the board of managers is vested with the authority to administer the association, including but not limited to providing for the operation, care, upkeep, maintenance, replacements and improvements of the common elements.

“Additionally, the board establishes the budget, collects unpaid assessments, enacts and enforces rules and regulations, hires and terminates employees and keeps association records. In accordance with this section of the Act, 'the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.'

“Illinois common law dictates that each individual’s fiduciary obligation is separate and distinct. Therefore, if a board member is potentially acting inconsistent with this duty, they may be subject to a lawsuit individually, whether by another owner or co-board member.

“Section 18 of the Act prescribes that the only qualification for running for or serving on the board is that the person be a unit owner. There are no other qualifications, or for the purpose of this discussion, disqualifications for running or serving on the board.

“In cases where board members are deeply divided over the course of board administration or troubled by actions of certain board members, a lawsuit by a unit owner (including a board member) may ensue to challenge such action. One could even argue that if a board member believes the majority of the board or certain individuals are taking actions which are potentially in breach of their fiduciary duty to the ownership, that it is their fiduciary obligation to challenge such actions, including but not limited to filing a lawsuit.

“During elections, when a unit owner who is suing the board or certain directors, runs to get on the board, he or she is either portrayed as being proactive for positive change, or as a detriment for potentially harming the association. As with all elections, campaigning and politicking usually determines the success or failure of and individual’s election.”