Public Act 93-0243

HB1584 Enrolled                      LRB093 03887 DRJ 03922 b

    AN ACT in relation to property.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.  The  Condominium  Property Act is amended by
changing Section 18 as follows:

    (765 ILCS 605/18) (from Ch. 30, par. 318)
    Sec. 18. Contents of bylaws.  The  bylaws  shall  provide
for at least the following:

    (a) (1)  The  election  from  among  the unit owners of a
    board of managers, the  number  of  persons  constituting
    such  board,  and that the terms of at least one-third of
    the members of the board shall expire annually  and  that
    all  members  of  the board shall be elected at large. If
    there are multiple owners of a single unit, only  one  of
    the  multiple  owners  shall  be  eligible  to serve as a
    member of the board at any one time.
         (2)  the powers and duties of the board;
         (3)  the compensation, if any, of the members of the
    board;
         (4)  the method of removal from office of members of
    the board;
         (5)  that the board may engage  the  services  of  a
    manager or managing agent;
         (6)  that each unit owner shall receive, at least 30
    days  prior  to  the  adoption  thereof  by  the board of
    managers, a copy of the proposed annual  budget  together
    with  an  indication  of  which portions are intended for
    reserves, capital expenditures or repairs or  payment  of
    real estate taxes;
         (7)  that  the  board  of  managers  shall  annually
    supply  to  all unit owners an itemized accounting of the
    common expenses for the preceding year actually  incurred
    or  paid,  together  with an indication of which portions
    were for reserves, capital  expenditures  or  repairs  or
    payment of real estate taxes and with a tabulation of the
    amounts  collected  pursuant to the budget or assessment,
    and showing the net excess  or  deficit  of  income  over
    expenditures plus reserves;
         (8) (i)  that  each unit owner shall receive notice,
    in the same  manner  as  is  provided  in  this  Act  for
    membership  meetings,  of  any  meeting  of  the board of
    managers concerning the adoption of the  proposed  annual
    budget  and  regular  assessments  pursuant thereto or to
    adopt a separate (special) assessment, (ii)  that  except
    as  provided  in  subsection  (iv)  below,  if an adopted
    budget or any separate assessment adopted  by  the  board
    would  result  in  the  sum  of  all regular and separate
    assessments payable in the current fiscal year  exceeding
    115%  of  the sum of all regular and separate assessments
    payable during the preceding fiscal year,  the  board  of
    managers,  upon  written  petition by unit owners with 20
    percent of the votes of the association delivered to  the
    board  within  14  days of the board action, shall call a
    meeting of the unit owners within 30 days of the date  of
    delivery  of  the  petition  to  consider  the  budget or
    separate assessment; unless a majority of the total votes
    of the unit owners are cast at the meeting to reject  the
    budget or separate assessment, it is ratified, (iii) that
    any  common  expense  not  set forth in the budget or any
    increase in assessments over the amount  adopted  in  the
    budget  shall  be  separately  assessed  against all unit
    owners, (iv) that separate assessments  for  expenditures
    relating to emergencies or mandated by law may be adopted
    by  the  board  of managers without being subject to unit
    owner approval or the provisions of item  (ii)  above  or
    item  (v)  below.   As  used herein, "emergency" means an
    immediate danger  to  the  structural  integrity  of  the
    common  elements  or  to  the  life,  health,  safety  or
    property  of  the  unit  owners, (v) that assessments for
    additions and alterations to the common  elements  or  to
    association-owned  property  not  included in the adopted
    annual budget,  shall  be  separately  assessed  and  are
    subject  to  approval of two-thirds of the total votes of
    all unit owners, (vi) that  the  board  of  managers  may
    adopt  separate  assessments  payable  over more than one
    fiscal year.  With respect to multi-year assessments  not
    governed  by items (iv) and (v), the entire amount of the
    multi-year assessment  shall  be  deemed  considered  and
    authorized   in  the  first  fiscal  year  in  which  the
    assessment is approved;
         (9)  that meetings of the board of managers shall be
    open to any unit owner, except for  the  portion  of  any
    meeting  held  (i)  to  discuss litigation when an action
    against or on behalf of the  particular  association  has
    been  filed  and  is pending in a court or administrative
    tribunal, or when the board of managers finds  that  such
    an  action  is  probable  or  imminent,  (ii) to consider
    information   regarding   appointment,   employment    or
    dismissal  of an employee, or (iii) to discuss violations
    of rules and regulations of the  association  or  a  unit
    owner's unpaid share of common expenses; that any vote on
    these  matters  shall  be  taken  at a meeting or portion
    thereof open to any unit owner; that any unit  owner  may
    record  the  proceedings  at meetings or portions thereof
    required to be open by this Act by tape,  film  or  other
    means;  that the board may prescribe reasonable rules and
    regulations to govern the right to make such  recordings,
    that notice of such meetings shall be mailed or delivered
    at  least 48 hours prior thereto, unless a written waiver
    of  such notice  is  signed  by  the  person  or  persons
    entitled  to  such  notice  pursuant  to the declaration,
    bylaws, other condominium instrument, or provision of law
    other  than  this  subsection  before  the   meeting   is
    convened,  and  that copies of notices of meetings of the
    board  of  managers  shall  be  posted  in  entranceways,
    elevators, or other conspicuous places in the condominium
    at least 48 hours prior to the meeting of  the  board  of
    managers  except where there is no common entranceway for
    7 or more units, the board of managers may designate  one
    or  more  locations in the proximity of these units where
    the notices of meetings shall be posted;
         (10)  that the board shall meet  at  least  4  times
    annually;
         (11)  that  no  member of the board or officer shall
    be elected for a term of more  than  2  years,  but  that
    officers and board members may succeed themselves;
         (12)  the  designation  of  an  officer  to mail and
    receive all notices and execute amendments to condominium
    instruments as provided  for  in  this  Act  and  in  the
    condominium instruments;
         (13)  the  method  of filling vacancies on the board
    which shall include authority for the  remaining  members
    of the board to fill the vacancy by two-thirds vote until
    the  next  annual  meeting of unit owners or for a period
    terminating no later than 30 days following the filing of
    a petition signed by unit owners holding 20% of the votes
    of the association  requesting  a  meeting  of  the  unit
    owners  to  fill the vacancy for the balance of the term,
    and that a meeting of the unit owners shall be called for
    purposes of filling a vacancy on the board no later  than
    30 days following the filing of a petition signed by unit
    owners  holding  20%  of  the  votes  of  the association
    requesting such a meeting,  and  the  method  of  filling
    vacancies  among  the  officers  that  shall  include the
    authority for the  members  of  the  board  to  fill  the
    vacancy for the unexpired portion of the term;
         (14)  what  percentage  of the board of managers, if
    other than a majority, shall constitute a quorum;
         (15)  provisions concerning notice of board meetings
    to members of the board;
         (16)  the board of managers may  not  enter  into  a
    contract   with   a   current  board  member  or  with  a
    corporation or partnership in which a board member  or  a
    member  of the board member's immediate family has 25% or
    more interest, unless  notice  of  intent  to  enter  the
    contract  is  given to unit owners within 20 days after a
    decision is made to enter into the contract and the  unit
    owners  are afforded an opportunity by filing a petition,
    signed by 20% of the unit  owners,  for  an  election  to
    approve  or  disapprove the contract; such petition shall
    be filed within  20  days  after  such  notice  and  such
    election  shall  be  held within 30 days after filing the
    petition;  for  purposes  of  this  subsection,  a  board
    member's  immediate  family  means  the  board   member's
    spouse, parents, and children;
         (17)  that  the board of managers may disseminate to
    unit owners biographical and background information about
    candidates for election to the board  if  (i)  reasonable
    efforts  to  identify  all  candidates  are  made and all
    candidates  are   given   an   opportunity   to   include
    biographical    and   background   information   in   the
    information to be disseminated; and (ii) the  board  does
    not express a preference in favor of any candidate;
         (18)  any  proxy  distributed for board elections by
    the board of managers gives unit owners  the  opportunity
    to  designate  any  person as the proxy holder, and gives
    the unit owner the opportunity to  express  a  preference
    for any of the known candidates for the board or to write
    in a name;
         (19)  that special meetings of the board of managers
    can  be  called by the president or 25% of the members of
    the board; and
         (20)  that the board of managers may  establish  and
    maintain  a  system  of master metering of public utility
    services and collect payments  in  connection  therewith,
    subject to the requirements of the Tenant Utility Payment
    Disclosure Act.

    (b) (1)  What  percentage  of  the  unit owners, if other
    than 20%, shall constitute a quorum  provided  that,  for
    condominiums  with  20  or  more units, the percentage of
    unit owners constituting a quorum shall be 20% unless the
    unit owners holding a majority of the percentage interest
    in the association provide for a higher percentage;
         (2)  that the association shall have  one  class  of
    membership;
         (3)  that  the members shall hold an annual meeting,
    one of the purposes of which shall be to elect members of
    the board of managers;
         (4)  the method of  calling  meetings  of  the  unit
    owners;
         (5)  that  special  meetings  of  the members can be
    called by the president, board of managers, or by 20%  of
    unit owners;
         (6)  that  written  notice of any membership meeting
    shall be mailed or delivered giving members no less  than
    10 and no more than 30 days notice of the time, place and
    purpose of such meeting;
         (7)  that voting shall be on a percentage basis, and
    that  the  percentage vote to which each unit is entitled
    is the percentage interest of the undivided ownership  of
    the  common  elements  appurtenant thereto, provided that
    the bylaws may provide for approval  by  unit  owners  in
    connection with matters where the requisite approval on a
    percentage  basis  is  not  specified in this Act, on the
    basis of one vote per unit;
         (8)  that, where there is more than one owner  of  a
    unit,  if only one of the multiple owners is present at a
    meeting of the association, he is entitled  to  cast  all
    the votes allocated to that unit, if more than one of the
    multiple  owners are present, the votes allocated to that
    unit may be cast only in accordance with the agreement of
    a majority in interest of the multiple owners, unless the
    declaration expressly provides otherwise, that  there  is
    majority agreement if any one of the multiple owners cast
    the  votes  allocated  to that unit without protest being
    made promptly to the person presiding over the meeting by
    any of the other owners of the unit;
         (9)(A)  that  unless the Articles  of  Incorporation
    or  the  bylaws otherwise provide, and except as provided
    in subparagraph (B) of this paragraph (9)  in  connection
    with  board  elections,  a  unit  owner may vote by proxy
    executed in writing by the unit  owner  or  by  his  duly
    authorized  attorney  in  fact;  that  the proxy shall be
    invalid after 11 months from the date of  its  execution,
    unless  otherwise  provided  in  the  proxy, and that the
    every proxy must bear the date of execution  and,  unless
    the  condominium  instruments or the written proxy itself
    provide otherwise, is invalid after 11  months  from  the
    date of its execution;
         (B)  that if a rule adopted at least 120 days before
    a board election or the declaration or bylaws provide for
    balloting  as  set  forth in this subsection, unit owners
    may not vote by proxy in board elections,  but  may  vote
    only  (i)  by  submitting an association-issued ballot in
    person at the election meeting or (ii) by  submitting  an
    association-issued  ballot  to  the  association  or  its
    designated  agent  by  mail  or  other  means of delivery
    specified in the declaration, bylaws, or rule;  that  the
    ballots  shall be mailed or otherwise distributed to unit
    owners not less than 10 and not more than 30 days  before
    the  election  meeting,  and  the  board  shall give unit
    owners not less than 21 days' prior written notice of the
    deadline for inclusion  of  a  candidate's  name  on  the
    ballots;  that  the deadline shall be no more than 7 days
    before the ballots are mailed or otherwise distributed to
    unit owners; that every  such  ballot  must  include  the
    names  of  all candidates who have given the board or its
    authorized agent timely written notice of their candidacy
    and  must  give  the  person  casting  the   ballot   the
    opportunity  to  cast votes for candidates whose names do
    not appear on the ballot; that a ballot received  by  the
    association  or  its  designated agent after the close of
    voting shall not  be  counted;  that  a  unit  owner  who
    submits  a  ballot  by  mail  or  other means of delivery
    specified in the declaration, bylaws, or rule may request
    and cast a ballot in person at the election meeting,  and
    thereby void any ballot previously submitted by that unit
    owner;
         (C)  that  if a written petition by unit owners with
    at least 20% of the votes of the association is delivered
    to the board within 14 days after the board's approval of
    a rule adopted  pursuant  to  subparagraph  (B)  of  this
    paragraph (9), the board shall call a meeting of the unit
    owners  within  30 days after the date of delivery of the
    petition; that unless a majority of the  total  votes  of
    the  unit  owners  are  cast at the meeting to reject the
    rule, the rule is ratified;
         (10)  that the association may, upon adoption of the
    appropriate rules  by  the  board  of  managers,  conduct
    elections  by  secret ballot whereby the voting ballot is
    marked only with the percentage interest for the unit and
    the vote itself, provided that the  board  further  adopt
    rules  to  verify  the status of the unit owner issuing a
    proxy or casting a ballot; and further, that a  candidate
    for election to the board of managers or such candidate's
    representative  shall have the right to be present at the
    counting of ballots at such election;
         (11)  that in the event of a resale of a condominium
    unit the purchaser of a unit from a seller other than the
    developer  pursuant  to  an  installment   contract   for
    purchase  shall during such times as he or she resides in
    the unit be counted  toward  a  quorum  for  purposes  of
    election  of  members  of  the  board  of managers at any
    meeting  of  the  unit  owners  called  for  purposes  of
    electing members of the board, shall have  the  right  to
    vote for the election of members of the board of managers
    and  to  be elected to and serve on the board of managers
    unless the seller expressly retains in writing any or all
    of such rights.  In no event may the seller and purchaser
    both be counted toward a quorum, be permitted to vote for
    a particular office or be elected and serve on the board.
    Satisfactory evidence of the installment contact shall be
    made available to the association  or  its  agents.   For
    purposes  of this subsection, "installment contact" shall
    have the same meaning as set forth in Section  1  (e)  of
    "An   Act  relating  to  installment  contracts  to  sell
    dwelling  structures",  approved  August  11,  1967,   as
    amended;
         (12)  the  method  by  which  matters subject to the
    approval of unit owners set forth in this Act, or in  the
    condominium  instruments,  will  be submitted to the unit
    owners at special membership  meetings  called  for  such
    purposes; and
         (13)  that  matters  subject to the affirmative vote
    of not less than 2/3 of the votes of  unit  owners  at  a
    meeting  duly called for that purpose, shall include, but
    not be limited to:
              (i)  merger    or    consolidation    of    the
         association;
              (ii)  sale,   lease,   exchange,    or    other
         disposition  (excluding  the  mortgage or pledge) of
         all, or substantially all of the property and assets
         of the association; and
              (iii)  the purchase or sale of land or of units
         on behalf of all unit owners.
    (c)  Election of a president  from  among  the  board  of
managers, who shall preside over the meetings of the board of
managers and of the unit owners.
    (d)  Election  of  a  secretary  from  among the board of
managers, who shall keep the minutes of all meetings  of  the
board  of  managers  and of the unit owners and who shall, in
general, perform all the duties incident  to  the  office  of
secretary.
    (e)  Election  of  a  treasurer  from  among the board of
managers, who shall keep the financial records and  books  of
account.
    (f)  Maintenance,  repair  and  replacement of the common
elements and  payments  therefor,  including  the  method  of
approving payment vouchers.
    (g)  An  association  with  30 or more units shall obtain
and maintain fidelity insurance covering persons who  control
or  disburse  funds of the association for the maximum amount
of coverage available to protect  funds  in  the  custody  or
control of the association plus the association reserve fund.
All  management companies which are responsible for the funds
held or administered by the association  shall  maintain  and
furnish  to  the  association a fidelity bond for the maximum

amount of coverage available to protect funds in the  custody
of the management company at any time.  The association shall
bear  the  cost  of the fidelity insurance and fidelity bond,
unless otherwise provided by contract between the association
and a management  company.   The  association  shall  be  the
direct  obligee  of  any  such  fidelity  bond.  A management
company holding reserve funds of an association shall at  all
times  maintain  a  separate  account  for  each association,
provided, however, that for investment purposes, the Board of
Managers of an association may authorize a management company
to maintain the  association's  reserve  funds  in  a  single
interest   bearing   account  with  similar  funds  of  other
associations.  The management  company  shall  at  all  times
maintain  records  identifying all moneys of each association
in such investment account. The management company  may  hold
all  operating  funds  of  associations which it manages in a
single operating account but  shall  at  all  times  maintain
records  identifying  all  moneys of each association in such
operating account. Such operating and reserve funds  held  by
the  management  company  for  the  association  shall not be
subject to attachment  by  any  creditor  of  the  management
company.
    For  the  purpose of this subsection a management company
shall be defined as a person,  partnership,  corporation,  or
other legal entity entitled to transact business on behalf of
others,  acting on behalf of or as an agent for a unit owner,
unit owners or association of unit owners for the purpose  of
carrying   out   the   duties,  responsibilities,  and  other
obligations necessary  for  the  day  to  day  operation  and
management of any property subject to this Act.  For purposes
of  this  subsection, the term "fiduciary insurance coverage"
shall be defined as both a fidelity bond  and  directors  and
officers  liability  coverage,  the fidelity bond in the full
amount of association funds  and  association  reserves  that
will  be in the custody of the association, and the directors
and officers liability  coverage  at  a  level  as  shall  be
determined  to be reasonable by the board of managers, if not
otherwise established by the declaration or by laws.
    Until  one  year  after  the  effective  date   of   this
amendatory  Act  of  1985,  if  a condominium association has
reserves plus assessments in excess of  $250,000  and  cannot
reasonably  obtain  100%  fidelity  bond  coverage  for  such
amount,  then  it  must  obtain  a  fidelity bond coverage of
$250,000.
    (h)  Method  of  estimating  the  amount  of  the  annual
budget, and the manner of assessing and collecting  from  the
unit   owners  their  respective  shares  of  such  estimated
expenses, and of any other expenses lawfully agreed upon.
    (i)  That upon 10 days notice to the manager or board  of
managers  and  payment  of  a  reasonable fee, any unit owner
shall be furnished a statement of his account  setting  forth
the amount of any unpaid assessments or other charges due and
owing from such owner.
    (j)  Designation  and  removal of personnel necessary for
the  maintenance,  repair  and  replacement  of  the   common
elements.
    (k)  Such restrictions on and requirements respecting the
use  and  maintenance  of the units and the use of the common
elements, not set forth in the declaration, as  are  designed
to  prevent  unreasonable  interference with the use of their
respective units and of the common elements  by  the  several
unit owners.
    (l)  Method  of  adopting  and of amending administrative
rules and regulations governing the operation and use of  the
common elements.
    (m)  The  percentage of votes required to modify or amend
the bylaws, but each one of the particulars set forth in this
section shall always be embodied in the bylaws.
    (n) (i)  The provisions of  this  Act,  the  declaration,
bylaws,   other   condominium   instruments,  and  rules  and
regulations that relate to the use of the individual unit  or
the common elements shall be applicable to any person leasing
a  unit  and  shall be deemed to be incorporated in any lease
executed or renewed on or after the effective  date  of  this
amendatory Act of 1984. (ii) With regard to any lease entered
into  subsequent to the effective date of this amendatory Act
of 1989, the unit owner leasing the unit shall deliver a copy
of the signed lease to the board or if the lease is  oral,  a
memorandum of the lease, not later than the date of occupancy
or 10 days after the lease is signed, whichever occurs first.
In  addition  to  any  other  remedies,  by  filing an action
jointly against the tenant and the unit owner, an association
may seek to enjoin a tenant from occupying a unit or seek  to
evict a tenant under the provisions of Article IX of the Code
of  Civil Procedure for failure of the lessor-owner to comply
with the leasing requirements prescribed by this  Section  or
by  the  declaration,  bylaws, and rules and regulations. The
board of managers may proceed directly against a  tenant,  at
law  or  in  equity, or under the provisions of Article IX of
the Code of Civil Procedure, for any other breach  by  tenant
of any covenants, rules, regulations or bylaws.
    (o)  The  association  shall have no authority to forbear
the payment of assessments by any unit owner.
    (p)  That when 30% or fewer  of  the  units,  by  number,
possess  over  50%  in  the  aggregate  of  the  votes in the
association, any percentage vote of members specified  herein
or in the condominium instruments shall require the specified
percentage  by  number  of units rather than by percentage of
interest in the common elements allocated to units that would
otherwise be applicable.
    (q)  That  a  unit  owner  may  not   assign,   delegate,
transfer,  surrender,  or avoid the duties, responsibilities,
and  liabilities  of  a  unit  owner  under  this  Act,   the
condominium  instruments, or the rules and regulations of the
Association;  and  that   such   an   attempted   assignment,
delegation, transfer, surrender, or avoidance shall be deemed
void.
    The  provisions  of  this  Section  are applicable to all
condominium instruments recorded under this Act.  Any portion
of  a  condominium  instrument  which   contains   provisions
contrary  to these provisions shall be void as against public
policy and ineffective.  Any such instrument which  fails  to
contain  the  provisions  required  by  this Section shall be
deemed to incorporate such provisions by operation of law.
(Source: P.A. 88-135; 88-417; 88-626,  eff.  9-9-94;  88-670,
eff. 12-2-94; 89-41, eff. 6-23-95.)