Public Act 097-0535
 
SB1972 EnrolledLRB097 10092 AJO 50271 b

    AN ACT concerning civil law.
 
    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 18.5 as follows:
 
    (765 ILCS 605/18.5)  (from Ch. 30, par. 318.5)
    Sec. 18.5. Master Associations.
    (a) If the declaration, other condominium instrument, or
other duly recorded covenants provide that any of the powers of
the unit owners associations are to be exercised by or may be
delegated to a nonprofit corporation or unincorporated
association that exercises those or other powers on behalf of
one or more condominiums, or for the benefit of the unit owners
of one or more condominiums, such corporation or association
shall be a master association.
    (b) There shall be included in the declaration, other
condominium instruments, or other duly recorded covenants
establishing the powers and duties of the master association
the provisions set forth in subsections (c) through (h).
    In interpreting subsections (c) through (h), the courts
should interpret these provisions so that they are interpreted
consistently with the similar parallel provisions found in
other parts of this Act.
    (c) Meetings and finances.
        (1) Each unit owner of a condominium subject to the
    authority of the board of the master association shall
    receive, at least 30 days prior to the adoption thereof by
    the board of the master association, a copy of the proposed
    annual budget.
        (2) The board of the master association shall annually
    supply to all unit owners of condominiums subject to the
    authority of the board of the master association an
    itemized accounting of the common expenses for the
    preceding year actually incurred or paid, together 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.
        (3) Each unit owner of a condominium subject to the
    authority of the board of the master association shall
    receive written notice mailed or delivered no less than 10
    and no more than 30 days prior to any meeting of the board
    of the master association concerning the adoption of the
    proposed annual budget or any increase in the budget, or
    establishment of an assessment.
        (4) Meetings of the board of the master association
    shall be open to any unit owner in a condominium subject to
    the authority of the board of the master association,
    except for the portion of any meeting held:
            (A) to discuss litigation when an action against or
        on behalf of the particular master association has been
        filed and is pending in a court or administrative
        tribunal, or when the board of the master association
        finds that such an action is probable or imminent,
            (B) to consider information regarding appointment,
        employment or dismissal of an employee, or
            (C) to discuss violations of rules and regulations
        of the master association or unpaid common expenses
        owed to the master association.
    Any vote on these matters shall be taken at a meeting or
    portion thereof open to any unit owner of a condominium
    subject to the authority of the master association.
        Any unit owner may record the proceedings at meetings
    required to be open by this Act by tape, film or other
    means; the board may prescribe reasonable rules and
    regulations to govern the right to make such recordings.
    Notice of meetings shall be mailed or delivered at least 48
    hours prior thereto, unless a written waiver of such notice
    is signed by the persons entitled to notice before the
    meeting is convened. Copies of notices of meetings of the
    board of the master association 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 the master association. Where there is no
    common entranceway for 7 or more units, the board of the
    master association may designate one or more locations in
    the proximity of these units where the notices of meetings
    shall be posted.
        (5) If the declaration provides for election by unit
    owners of members of the board of directors in the event of
    a resale of a unit in the master association, 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
    directors at any meeting of the unit owners called for
    purposes of electing members of the board, and shall have
    the right to vote for the election of members of the board
    of directors and to be elected to and serve on the board of
    directors unless the seller expressly retains in writing
    any or all of those 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
    contract shall be made available to the association or its
    agents. For purposes of this subsection, "installment
    contract" shall have the same meaning as set forth in
    subsection (e) of Section 1 of the Dwelling Unit
    Installment Contract Act.
        (6) The board of the master association shall have the
    authority to establish and maintain a system of master
    metering of public utility services and to collect payments
    in connection therewith, subject to the requirements of the
    Tenant Utility Payment Disclosure Act.
        (7) The board of the master association or a common
    interest community association shall have the power, after
    notice and an opportunity to be heard, to levy and collect
    reasonable fines from members for violations of the
    declaration, bylaws, and rules and regulations of the
    master association or the common interest community
    association. Nothing contained in this subdivision (7)
    shall give rise to a statutory lien for unpaid fines.
        (8) Other than attorney's fees, no fees pertaining to
    the collection of a unit owner's financial obligation to
    the Association, including fees charged by a manager or
    managing agent, shall be added to and deemed a part of an
    owner's respective share of the common expenses unless: (i)
    the managing agent fees relate to the costs to collect
    common expenses for the Association; (ii) the fees are set
    forth in a contract between the managing agent and the
    Association; and (iii) the authority to add the management
    fees to an owner's respective share of the common expenses
    is specifically stated in the declaration or bylaws of the
    Association.
    (d) Records.
        (1) The board of the master association shall maintain
    the following records of the association and make them
    available for examination and copying at convenient hours
    of weekdays by any unit owners in a condominium subject to
    the authority of the board or their mortgagees and their
    duly authorized agents or attorneys:
            (i) Copies of the recorded declaration, other
        condominium instruments, other duly recorded covenants
        and bylaws and any amendments, articles of
        incorporation of the master association, annual
        reports and any rules and regulations adopted by the
        master association or its board shall be available.
        Prior to the organization of the master association,
        the developer shall maintain and make available the
        records set forth in this subdivision (d)(1) for
        examination and copying.
            (ii) Detailed and accurate records in
        chronological order of the receipts and expenditures
        affecting the common areas, specifying and itemizing
        the maintenance and repair expenses of the common areas
        and any other expenses incurred, and copies of all
        contracts, leases, or other agreements entered into by
        the master association, shall be maintained.
            (iii) The minutes of all meetings of the master
        association and the board of the master association
        shall be maintained for not less than 7 years.
            (iv) Ballots and proxies related thereto, if any,
        for any election held for the board of the master
        association and for any other matters voted on by the
        unit owners shall be maintained for not less than one
        year.
            (v) Such other records of the master association as
        are available for inspection by members of a
        not-for-profit corporation pursuant to Section 107.75
        of the General Not For Profit Corporation Act of 1986
        shall be maintained.
            (vi) With respect to units owned by a land trust,
        if a trustee designates in writing a person to cast
        votes on behalf of the unit owner, the designation
        shall remain in effect until a subsequent document is
        filed with the association.
        (2) Where a request for records under this subsection
    is made in writing to the board of managers or its agent,
    failure to provide the requested record or to respond
    within 30 days shall be deemed a denial by the board of
    directors.
        (3) A reasonable fee may be charged by the master
    association or its board for the cost of copying.
        (4) If the board of directors fails to provide records
    properly requested under subdivision (d)(1) within the
    time period provided in subdivision (d)(2), the unit owner
    may seek appropriate relief, including an award of
    attorney's fees and costs.
    (e) The board of directors shall have standing and capacity
to act in a representative capacity in relation to matters
involving the common areas of the master association or more
than one unit, on behalf of the unit owners as their interests
may appear.
    (f) Administration of property prior to election of the
initial board of directors.
        (1) Until the election, by the unit owners or the
    boards of managers of the underlying condominium
    associations, of the initial board of directors of a master
    association whose declaration is recorded on or after
    August 10, 1990, the same rights, titles, powers,
    privileges, trusts, duties and obligations that are vested
    in or imposed upon the board of directors by this Act or in
    the declaration or other duly recorded covenant shall be
    held and performed by the developer.
        (2) The election of the initial board of directors of a
    master association whose declaration is recorded on or
    after August 10, 1990, by the unit owners or the boards of
    managers of the underlying condominium associations, shall
    be held not later than 60 days after the conveyance by the
    developer of 75% of the units, or 3 years after the
    recording of the declaration, whichever is earlier. The
    developer shall give at least 21 days notice of the meeting
    to elect the initial board of directors and shall upon
    request provide to any unit owner, within 3 working days of
    the request, the names, addresses, and weighted vote of
    each unit owner entitled to vote at the meeting. Any unit
    owner shall upon receipt of the request be provided with
    the same information, within 10 days of the request, with
    respect to each subsequent meeting to elect members of the
    board of directors.
        (3) If the initial board of directors of a master
    association whose declaration is recorded on or after
    August 10, 1990 is not elected by the unit owners or the
    members of the underlying condominium association board of
    managers at the time established in subdivision (f)(2), the
    developer shall continue in office for a period of 30 days,
    whereupon written notice of his resignation shall be sent
    to all of the unit owners or members of the underlying
    condominium board of managers entitled to vote at an
    election for members of the board of directors.
        (4) Within 60 days following the election of a majority
    of the board of directors, other than the developer, by
    unit owners, the developer shall deliver to the board of
    directors:
            (i) All original documents as recorded or filed
        pertaining to the property, its administration, and
        the association, such as the declaration, articles of
        incorporation, other instruments, annual reports,
        minutes, rules and regulations, and contracts, leases,
        or other agreements entered into by the association. If
        any original documents are unavailable, a copy may be
        provided if certified by affidavit of the developer, or
        an officer or agent of the developer, as being a
        complete copy of the actual document recorded or filed.
            (ii) A detailed accounting by the developer,
        setting forth the source and nature of receipts and
        expenditures in connection with the management,
        maintenance and operation of the property, copies of
        all insurance policies, and a list of any loans or
        advances to the association which are outstanding.
            (iii) Association funds, which shall have been at
        all times segregated from any other moneys of the
        developer.
            (iv) A schedule of all real or personal property,
        equipment and fixtures belonging to the association,
        including documents transferring the property,
        warranties, if any, for all real and personal property
        and equipment, deeds, title insurance policies, and
        all tax bills.
            (v) A list of all litigation, administrative
        action and arbitrations involving the association, any
        notices of governmental bodies involving actions taken
        or which may be taken concerning the association,
        engineering and architectural drawings and
        specifications as approved by any governmental
        authority, all other documents filed with any other
        governmental authority, all governmental certificates,
        correspondence involving enforcement of any
        association requirements, copies of any documents
        relating to disputes involving unit owners, and
        originals of all documents relating to everything
        listed in this subparagraph.
            (vi) If the developer fails to fully comply with
        this paragraph (4) within the 60 days provided and
        fails to fully comply within 10 days of written demand
        mailed by registered or certified mail to his or her
        last known address, the board may bring an action to
        compel compliance with this paragraph (4). If the court
        finds that any of the required deliveries were not made
        within the required period, the board shall be entitled
        to recover its reasonable attorneys' fees and costs
        incurred from and after the date of expiration of the
        10 day demand.
        (5) With respect to any master association whose
    declaration is recorded on or after August 10, 1990, any
    contract, lease, or other agreement made prior to the
    election of a majority of the board of directors other than
    the developer by or on behalf of unit owners or underlying
    condominium associations, the association or the board of
    directors, which extends for a period of more than 2 years
    from the recording of the declaration, shall be subject to
    cancellation by more than 1/2 of the votes of the unit
    owners, other than the developer, cast at a special meeting
    of members called for that purpose during a period of 90
    days prior to the expiration of the 2 year period if the
    board of managers is elected by the unit owners, otherwise
    by more than 1/2 of the underlying condominium board of
    managers. At least 60 days prior to the expiration of the 2
    year period, the board of directors, or, if the board is
    still under developer control, then the board of managers
    or the developer shall send notice to every unit owner or
    underlying condominium board of managers, notifying them
    of this provision, of what contracts, leases and other
    agreements are affected, and of the procedure for calling a
    meeting of the unit owners or for action by the underlying
    condominium board of managers for the purpose of acting to
    terminate such contracts, leases or other agreements.
    During the 90 day period the other party to the contract,
    lease, or other agreement shall also have the right of
    cancellation.
        (6) The statute of limitations for any actions in law
    or equity which the master association may bring shall not
    begin to run until the unit owners or underlying
    condominium board of managers have elected a majority of
    the members of the board of directors.
    (g) In the event of any resale of a unit in a master
association by a unit owner other than the developer, the owner
shall obtain from the board of directors and shall make
available for inspection to the prospective purchaser, upon
demand, the following:
        (1) A copy of the declaration, other instruments and
    any rules and regulations.
        (2) A statement of any liens, including a statement of
    the account of the unit setting forth the amounts of unpaid
    assessments and other charges due and owing.
        (3) A statement of any capital expenditures
    anticipated by the association within the current or
    succeeding 2 fiscal years.
        (4) A statement of the status and amount of any reserve
    for replacement fund and any portion of such fund earmarked
    for any specified project by the board of directors.
        (5) A copy of the statement of financial condition of
    the association for the last fiscal year for which such a
    statement is available.
        (6) A statement of the status of any pending suits or
    judgments in which the association is a party.
        (7) A statement setting forth what insurance coverage
    is provided for all unit owners by the association.
        (8) A statement that any improvements or alterations
    made to the unit, or any part of the common areas assigned
    thereto, by the prior unit owner are in good faith believed
    to be in compliance with the declaration of the master
    association.
    The principal officer of the unit owner's association or
such other officer as is specifically designated shall furnish
the above information when requested to do so in writing,
within 30 days of receiving the request.
    A reasonable fee covering the direct out-of-pocket cost of
copying and providing such information may be charged by the
association or its board of directors to the unit seller for
providing the information.
    (g-1) The purchaser of a unit of a common interest
community at a judicial foreclosure sale, other than a
mortgagee, who takes possession of a unit of a common interest
community pursuant to a court order or a purchaser who acquires
title from a mortgagee shall have the duty to pay the
proportionate share, if any, of the common expenses for the
unit that would have become due in the absence of any
assessment acceleration during the 6 months immediately
preceding institution of an action to enforce the collection of
assessments, and the court costs incurred by the association in
an action to enforce the collection and that remain unpaid by
the owner during whose possession the assessments accrued. If
the outstanding assessments and the court costs incurred by the
association in an action to enforce the collection are paid at
any time during any action to enforce the collection of
assessments, the purchaser shall have no obligation to pay any
assessments that accrued before he or she acquired title. The
notice of sale of a unit of a common interest community under
subsection (c) of Section 15-1507 of the Code of Civil
Procedure shall state that the purchaser of the unit other than
a mortgagee shall pay the assessments and court costs required
by this subsection (g-1).
    (h) Errors and omissions.
        (1) If there is an omission or error in the declaration
    or other instrument of the master association, the master
    association may correct the error or omission by an
    amendment to the declaration or other instrument, as may be
    required to conform it to this Act, to any other applicable
    statute, or to the declaration. The amendment shall be
    adopted by vote of two-thirds of the members of the board
    of directors or by a majority vote of the unit owners at a
    meeting called for that purpose, unless the Act or the
    declaration of the master association specifically
    provides for greater percentages or different procedures.
        (2) If, through a scrivener's error, a unit has not
    been designated as owning an appropriate undivided share of
    the common areas or does not bear an appropriate share of
    the common expenses, or if all of the common expenses or
    all of the common elements in the condominium have not been
    distributed in the declaration, so that the sum total of
    the shares of common areas which have been distributed or
    the sum total of the shares of the common expenses fail to
    equal 100%, or if it appears that more than 100% of the
    common elements or common expenses have been distributed,
    the error may be corrected by operation of law by filing an
    amendment to the declaration, approved by vote of
    two-thirds of the members of the board of directors or a
    majority vote of the unit owners at a meeting called for
    that purpose, which proportionately adjusts all percentage
    interests so that the total is equal to 100%, unless the
    declaration specifically provides for a different
    procedure or different percentage vote by the owners of the
    units and the owners of mortgages thereon affected by
    modification being made in the undivided interest in the
    common areas, the number of votes in the unit owners
    association or the liability for common expenses
    appertaining to the unit.
        (3) If an omission or error or a scrivener's error in
    the declaration or other instrument is corrected by vote of
    two-thirds of the members of the board of directors
    pursuant to the authority established in subdivisions
    (h)(1) or (h)(2) of this Section, the board, upon written
    petition by unit owners with 20% of the votes of the
    association or resolutions adopted by the board of managers
    or board of directors of the condominium and common
    interest community associations which select 20% of the
    members of the board of directors of the master
    association, whichever is applicable, received within 30
    days of the board action, shall call a meeting of the unit
    owners or the boards of the condominium and common interest
    community associations which select members of the board of
    directors of the master association within 30 days of the
    filing of the petition or receipt of the condominium and
    common interest community association resolution to
    consider the board action. Unless a majority of the votes
    of the unit owners of the association are cast at the
    meeting to reject the action, or board of managers or board
    of directors of condominium and common interest community
    associations which select over 50% of the members of the
    board of the master association adopt resolutions prior to
    the meeting rejecting the action of the board of directors
    of the master association, it is ratified whether or not a
    quorum is present.
        (4) The procedures for amendments set forth in this
    subsection (h) cannot be used if such an amendment would
    materially or adversely affect property rights of the unit
    owners unless the affected unit owners consent in writing.
    This Section does not restrict the powers of the
    association to otherwise amend the declaration, bylaws, or
    other condominium instruments, but authorizes a simple
    process of amendment requiring a lesser vote for the
    purpose of correcting defects, errors, or omissions when
    the property rights of the unit owners are not materially
    or adversely affected.
        (5) If there is an omission or error in the declaration
    or other instruments that may not be corrected by an
    amendment procedure set forth in subdivision (h)(1) or
    (h)(2) of this Section, then the circuit court in the
    county in which the master association is located shall
    have jurisdiction to hear a petition of one or more of the
    unit owners thereon or of the association, to correct the
    error or omission, and the action may be a class action.
    The court may require that one or more methods of
    correcting the error or omission be submitted to the unit
    owners to determine the most acceptable correction. All
    unit owners in the association must be joined as parties to
    the action. Service of process on owners may be by
    publication, but the plaintiff shall furnish all unit
    owners not personally served with process with copies of
    the petition and final judgment of the court by certified
    mail, return receipt requested, at their last known
    address.
        (6) Nothing contained in this Section shall be
    construed to invalidate any provision of a declaration
    authorizing the developer to amend an instrument prior to
    the latest date on which the initial membership meeting of
    the unit owners must be held, whether or not it has
    actually been held, to bring the instrument into compliance
    with the legal requirements of the Federal National
    Mortgage Association, the Federal Home Loan Mortgage
    Corporation, the Federal Housing Administration, the
    United States Veterans Administration or their respective
    successors and assigns.
    (i) The provisions of subsections (c) through (h) are
applicable to all declarations, other condominium instruments,
and other duly recorded covenants establishing the powers and
duties of the master association recorded under this Act. Any
portion of a declaration, other condominium instrument, or
other duly recorded covenant establishing the powers and duties
of a master association which contains provisions contrary to
the provisions of subsection (c) through (h) shall be void as
against public policy and ineffective. Any declaration, other
condominium instrument, or other duly recorded covenant
establishing the powers and duties of the master association
which fails to contain the provisions required by subsections
(c) through (h) shall be deemed to incorporate such provisions
by operation of law.
    (j) The provisions of subsections (c) through (h) are
applicable to all common interest community associations and
their unit owners for common interest community associations
which are subject to the provisions of Section 9-102(a)(8) of
the Code of Civil Procedure. For purposes of this subsection,
the terms "common interest community" and "unit owners" shall
have the same meaning as set forth in Section 9-102(c) of the
Code of Civil Procedure.
(Source: P.A. 96-1045, eff. 7-14-10.)