Early in summer 2019, City of Chicago Alderman Brendan Reilly (42nd Ward) introduced a proposal to add a new section to Chapter 13-72 of Chicago’s Municipal Code to increase the percentage of unit owners required to sell and “deconvert” an entire condominium property in Chicago to 85% of the total unit ownership. Remember, “deconversion” means the transition from a condominium building with multiple owners to rental apartments generally owned by one (1) single entity. The increase to 85% effectively makes such bulk sales and deconversions of condo buildings more difficult to achieve.
The amendment (and increase to 85% approval) is effective as of October 16, 2019. Section 13-72-085 of the Chicago Municipal Code will require a condominium association to have 85% unit owner approval to sell the entire property (unless a greater percentage is required by the declaration or bylaws).
As most of our readers know, sales of entire condo buildings (deconversions) were previously governed exclusively by Section 15 of the Illinois Condominium Property Act, which states that condo associations with only two (2) units require 51% approval to sell, condos with three (3) units require 66 2/3%, and four (4) or more units require 75%. Effective October 16, 2019, the percentage required will increase to 85% regardless of the number of units for Chicago condos.
Again, this increase to 85% impacts only those condominium associations located within the City of Chicago. For the time being (and at the time this Legal Tips was drafted in October 2019), condominium associations outside of Chicago but within State of Illinois must continue to adhere to Section 15 of the Illinois Condominium Property Act.
Contact Altus Legal with questions on how this ordinance will impact your association.