093_HB1584eng HB1584 Engrossed LRB093 03887 DRJ 03922 b 1 AN ACT in relation to property. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Condominium Property Act is amended by 5 changing Section 18 as follows: 6 (765 ILCS 605/18) (from Ch. 30, par. 318) 7 Sec. 18. Contents of bylaws. The bylaws shall provide 8 for at least the following: 9 (a) (1) The election from among the unit owners of a 10 board of managers, the number of persons constituting 11 such board, and that the terms of at least one-third of 12 the members of the board shall expire annually and that 13 all members of the board shall be elected at large. If 14 there are multiple owners of a single unit, only one of 15 the multiple owners shall be eligible to serve as a 16 member of the board at any one time. 17 (2) the powers and duties of the board; 18 (3) the compensation, if any, of the members of the 19 board; 20 (4) the method of removal from office of members of 21 the board; 22 (5) that the board may engage the services of a 23 manager or managing agent; 24 (6) that each unit owner shall receive, at least 30 25 days prior to the adoption thereof by the board of 26 managers, a copy of the proposed annual budget together 27 with an indication of which portions are intended for 28 reserves, capital expenditures or repairs or payment of 29 real estate taxes; 30 (7) that the board of managers shall annually 31 supply to all unit owners an itemized accounting of the HB1584 Engrossed -2- LRB093 03887 DRJ 03922 b 1 common expenses for the preceding year actually incurred 2 or paid, together with an indication of which portions 3 were for reserves, capital expenditures or repairs or 4 payment of real estate taxes and with a tabulation of the 5 amounts collected pursuant to the budget or assessment, 6 and showing the net excess or deficit of income over 7 expenditures plus reserves; 8 (8) (i) that each unit owner shall receive notice, 9 in the same manner as is provided in this Act for 10 membership meetings, of any meeting of the board of 11 managers concerning the adoption of the proposed annual 12 budget and regular assessments pursuant thereto or to 13 adopt a separate (special) assessment, (ii) that except 14 as provided in subsection (iv) below, if an adopted 15 budget or any separate assessment adopted by the board 16 would result in the sum of all regular and separate 17 assessments payable in the current fiscal year exceeding 18 115% of the sum of all regular and separate assessments 19 payable during the preceding fiscal year, the board of 20 managers, upon written petition by unit owners with 20 21 percent of the votes of the association delivered to the 22 board within 14 days of the board action, shall call a 23 meeting of the unit owners within 30 days of the date of 24 delivery of the petition to consider the budget or 25 separate assessment; unless a majority of the total votes 26 of the unit owners are cast at the meeting to reject the 27 budget or separate assessment, it is ratified, (iii) that 28 any common expense not set forth in the budget or any 29 increase in assessments over the amount adopted in the 30 budget shall be separately assessed against all unit 31 owners, (iv) that separate assessments for expenditures 32 relating to emergencies or mandated by law may be adopted 33 by the board of managers without being subject to unit 34 owner approval or the provisions of item (ii) above or HB1584 Engrossed -3- LRB093 03887 DRJ 03922 b 1 item (v) below. As used herein, "emergency" means an 2 immediate danger to the structural integrity of the 3 common elements or to the life, health, safety or 4 property of the unit owners, (v) that assessments for 5 additions and alterations to the common elements or to 6 association-owned property not included in the adopted 7 annual budget, shall be separately assessed and are 8 subject to approval of two-thirds of the total votes of 9 all unit owners, (vi) that the board of managers may 10 adopt separate assessments payable over more than one 11 fiscal year. With respect to multi-year assessments not 12 governed by items (iv) and (v), the entire amount of the 13 multi-year assessment shall be deemed considered and 14 authorized in the first fiscal year in which the 15 assessment is approved; 16 (9) that meetings of the board of managers shall be 17 open to any unit owner, except for the portion of any 18 meeting held (i) to discuss litigation when an action 19 against or on behalf of the particular association has 20 been filed and is pending in a court or administrative 21 tribunal, or when the board of managers finds that such 22 an action is probable or imminent, (ii) to consider 23 information regarding appointment, employment or 24 dismissal of an employee, or (iii) to discuss violations 25 of rules and regulations of the association or a unit 26 owner's unpaid share of common expenses; that any vote on 27 these matters shall be taken at a meeting or portion 28 thereof open to any unit owner; that any unit owner may 29 record the proceedings at meetings or portions thereof 30 required to be open by this Act by tape, film or other 31 means; that the board may prescribe reasonable rules and 32 regulations to govern the right to make such recordings, 33 that notice of such meetings shall be mailed or delivered 34 at least 48 hours prior thereto, unless a written waiver HB1584 Engrossed -4- LRB093 03887 DRJ 03922 b 1 of such notice is signed by the person or persons 2 entitled to such notice pursuant to the declaration, 3 bylaws, other condominium instrument, or provision of law 4 other than this subsection before the meeting is 5 convened, and that copies of notices of meetings of the 6 board of managers shall be posted in entranceways, 7 elevators, or other conspicuous places in the condominium 8 at least 48 hours prior to the meeting of the board of 9 managers except where there is no common entranceway for 10 7 or more units, the board of managers may designate one 11 or more locations in the proximity of these units where 12 the notices of meetings shall be posted; 13 (10) that the board shall meet at least 4 times 14 annually; 15 (11) that no member of the board or officer shall 16 be elected for a term of more than 2 years, but that 17 officers and board members may succeed themselves; 18 (12) the designation of an officer to mail and 19 receive all notices and execute amendments to condominium 20 instruments as provided for in this Act and in the 21 condominium instruments; 22 (13) the method of filling vacancies on the board 23 which shall include authority for the remaining members 24 of the board to fill the vacancy by two-thirds vote until 25 the next annual meeting of unit owners or for a period 26 terminating no later than 30 days following the filing of 27 a petition signed by unit owners holding 20% of the votes 28 of the association requesting a meeting of the unit 29 owners to fill the vacancy for the balance of the term, 30 and that a meeting of the unit owners shall be called for 31 purposes of filling a vacancy on the board no later than 32 30 days following the filing of a petition signed by unit 33 owners holding 20% of the votes of the association 34 requesting such a meeting, and the method of filling HB1584 Engrossed -5- LRB093 03887 DRJ 03922 b 1 vacancies among the officers that shall include the 2 authority for the members of the board to fill the 3 vacancy for the unexpired portion of the term; 4 (14) what percentage of the board of managers, if 5 other than a majority, shall constitute a quorum; 6 (15) provisions concerning notice of board meetings 7 to members of the board; 8 (16) the board of managers may not enter into a 9 contract with a current board member or with a 10 corporation or partnership in which a board member or a 11 member of the board member's immediate family has 25% or 12 more interest, unless notice of intent to enter the 13 contract is given to unit owners within 20 days after a 14 decision is made to enter into the contract and the unit 15 owners are afforded an opportunity by filing a petition, 16 signed by 20% of the unit owners, for an election to 17 approve or disapprove the contract; such petition shall 18 be filed within 20 days after such notice and such 19 election shall be held within 30 days after filing the 20 petition; for purposes of this subsection, a board 21 member's immediate family means the board member's 22 spouse, parents, and children; 23 (17) that the board of managers may disseminate to 24 unit owners biographical and background information about 25 candidates for election to the board if (i) reasonable 26 efforts to identify all candidates are made and all 27 candidates are given an opportunity to include 28 biographical and background information in the 29 information to be disseminated; and (ii) the board does 30 not express a preference in favor of any candidate; 31 (18) any proxy distributed for board elections by 32 the board of managers gives unit owners the opportunity 33 to designate any person as the proxy holder, and gives 34 the unit owner the opportunity to express a preference HB1584 Engrossed -6- LRB093 03887 DRJ 03922 b 1 for any of the known candidates for the board or to write 2 in a name; 3 (19) that special meetings of the board of managers 4 can be called by the president or 25% of the members of 5 the board; and 6 (20) that the board of managers may establish and 7 maintain a system of master metering of public utility 8 services and collect payments in connection therewith, 9 subject to the requirements of the Tenant Utility Payment 10 Disclosure Act. 11 (b) (1) What percentage of the unit owners, if other 12 than 20%, shall constitute a quorum provided that, for 13 condominiums with 20 or more units, the percentage of 14 unit owners constituting a quorum shall be 20% unless the 15 unit owners holding a majority of the percentage interest 16 in the association provide for a higher percentage; 17 (2) that the association shall have one class of 18 membership; 19 (3) that the members shall hold an annual meeting, 20 one of the purposes of which shall be to elect members of 21 the board of managers; 22 (4) the method of calling meetings of the unit 23 owners; 24 (5) that special meetings of the members can be 25 called by the president, board of managers, or by 20% of 26 unit owners; 27 (6) that written notice of any membership meeting 28 shall be mailed or delivered giving members no less than 29 10 and no more than 30 days notice of the time, place and 30 purpose of such meeting; 31 (7) that voting shall be on a percentage basis, and 32 that the percentage vote to which each unit is entitled 33 is the percentage interest of the undivided ownership of 34 the common elements appurtenant thereto, provided that HB1584 Engrossed -7- LRB093 03887 DRJ 03922 b 1 the bylaws may provide for approval by unit owners in 2 connection with matters where the requisite approval on a 3 percentage basis is not specified in this Act, on the 4 basis of one vote per unit; 5 (8) that, where there is more than one owner of a 6 unit, if only one of the multiple owners is present at a 7 meeting of the association, he is entitled to cast all 8 the votes allocated to that unit, if more than one of the 9 multiple owners are present, the votes allocated to that 10 unit may be cast only in accordance with the agreement of 11 a majority in interest of the multiple owners, unless the 12 declaration expressly provides otherwise, that there is 13 majority agreement if any one of the multiple owners cast 14 the votes allocated to that unit without protest being 15 made promptly to the person presiding over the meeting by 16 any of the other owners of the unit; 17 (9)(A) that unless the Articles of Incorporation 18 or the bylaws otherwise provide, and except as provided 19 in subparagraph (B) of this paragraph (9) in connection 20 with board elections, a unit owner may vote by proxy 21 executed in writing by the unit owner or by his duly 22 authorized attorney in fact;that the proxy shall be23invalid after 11 months from the date of its execution,24unless otherwise provided in the proxy, andthat the 25everyproxy must bear the date of execution and, unless 26 the condominium instruments or the written proxy itself 27 provide otherwise, is invalid after 11 months from the 28 date of its execution; 29 (B) that if a rule adopted at least 120 days before 30 a board election or the declaration or bylaws provide for 31 balloting as set forth in this subsection, unit owners 32 may not vote by proxy in board elections, but may vote 33 only (i) by submitting an association-issued ballot in 34 person at the election meeting or (ii) by submitting an HB1584 Engrossed -8- LRB093 03887 DRJ 03922 b 1 association-issued ballot to the association or its 2 designated agent by mail or other means of delivery 3 specified in the declaration, bylaws, or rule; that the 4 ballots shall be mailed or otherwise distributed to unit 5 owners not less than 10 and not more than 30 days before 6 the election meeting, and the board shall give unit 7 owners not less than 21 days' prior written notice of the 8 deadline for inclusion of a candidate's name on the 9 ballots; that the deadline shall be no more than 7 days 10 before the ballots are mailed or otherwise distributed to 11 unit owners; that every such ballot must include the 12 names of all candidates who have given the board or its 13 authorized agent timely written notice of their candidacy 14 and must give the person casting the ballot the 15 opportunity to cast votes for candidates whose names do 16 not appear on the ballot; that a ballot received by the 17 association or its designated agent after the close of 18 voting shall not be counted; that a unit owner who 19 submits a ballot by mail or other means of delivery 20 specified in the declaration, bylaws, or rule may request 21 and cast a ballot in person at the election meeting, and 22 thereby void any ballot previously submitted by that unit 23 owner; 24 (C) that if a written petition by unit owners with 25 at least 20% of the votes of the association is delivered 26 to the board within 14 days after the board's approval of 27 a rule adopted pursuant to subparagraph (B) of this 28 paragraph (9), the board shall call a meeting of the unit 29 owners within 30 days after the date of delivery of the 30 petition; that unless a majority of the total votes of 31 the unit owners are cast at the meeting to reject the 32 rule, the rule is ratified; 33 (10) that the association may, upon adoption of the 34 appropriate rules by the board of managers, conduct HB1584 Engrossed -9- LRB093 03887 DRJ 03922 b 1 elections by secret ballot whereby the voting ballot is 2 marked only with the percentage interest for the unit and 3 the vote itself, provided that the board further adopt 4 rules to verify the status of the unit owner issuing a 5 proxy or casting a ballot; and further, that a candidate 6 for election to the board of managers or such candidate's 7 representative shall have the right to be present at the 8 counting of ballots at such election; 9 (11) that in the event of a resale of a condominium 10 unit the purchaser of a unit from a seller other than the 11 developer pursuant to an installment contract for 12 purchase shall during such times as he or she resides in 13 the unit be counted toward a quorum for purposes of 14 election of members of the board of managers at any 15 meeting of the unit owners called for purposes of 16 electing members of the board, shall have the right to 17 vote for the election of members of the board of managers 18 and to be elected to and serve on the board of managers 19 unless the seller expressly retains in writing any or all 20 of such rights. In no event may the seller and purchaser 21 both be counted toward a quorum, be permitted to vote for 22 a particular office or be elected and serve on the board. 23 Satisfactory evidence of the installment contact shall be 24 made available to the association or its agents. For 25 purposes of this subsection, "installment contact" shall 26 have the same meaning as set forth in Section 1 (e) of 27 "An Act relating to installment contracts to sell 28 dwelling structures", approved August 11, 1967, as 29 amended; 30 (12) the method by which matters subject to the 31 approval of unit owners set forth in this Act, or in the 32 condominium instruments, will be submitted to the unit 33 owners at special membership meetings called for such 34 purposes; and HB1584 Engrossed -10- LRB093 03887 DRJ 03922 b 1 (13) that matters subject to the affirmative vote 2 of not less than 2/3 of the votes of unit owners at a 3 meeting duly called for that purpose, shall include, but 4 not be limited to: 5 (i) merger or consolidation of the 6 association; 7 (ii) sale, lease, exchange, or other 8 disposition (excluding the mortgage or pledge) of 9 all, or substantially all of the property and assets 10 of the association; and 11 (iii) the purchase or sale of land or of units 12 on behalf of all unit owners. 13 (c) Election of a president from among the board of 14 managers, who shall preside over the meetings of the board of 15 managers and of the unit owners. 16 (d) Election of a secretary from among the board of 17 managers, who shall keep the minutes of all meetings of the 18 board of managers and of the unit owners and who shall, in 19 general, perform all the duties incident to the office of 20 secretary. 21 (e) Election of a treasurer from among the board of 22 managers, who shall keep the financial records and books of 23 account. 24 (f) Maintenance, repair and replacement of the common 25 elements and payments therefor, including the method of 26 approving payment vouchers. 27 (g) An association with 30 or more units shall obtain 28 and maintain fidelity insurance covering persons who control 29 or disburse funds of the association for the maximum amount 30 of coverage available to protect funds in the custody or 31 control of the association plus the association reserve fund. 32 All management companies which are responsible for the funds 33 held or administered by the association shall maintain and 34 furnish to the association a fidelity bond for the maximum HB1584 Engrossed -11- LRB093 03887 DRJ 03922 b 1 amount of coverage available to protect funds in the custody 2 of the management company at any time. The association shall 3 bear the cost of the fidelity insurance and fidelity bond, 4 unless otherwise provided by contract between the association 5 and a management company. The association shall be the 6 direct obligee of any such fidelity bond. A management 7 company holding reserve funds of an association shall at all 8 times maintain a separate account for each association, 9 provided, however, that for investment purposes, the Board of 10 Managers of an association may authorize a management company 11 to maintain the association's reserve funds in a single 12 interest bearing account with similar funds of other 13 associations. The management company shall at all times 14 maintain records identifying all moneys of each association 15 in such investment account. The management company may hold 16 all operating funds of associations which it manages in a 17 single operating account but shall at all times maintain 18 records identifying all moneys of each association in such 19 operating account. Such operating and reserve funds held by 20 the management company for the association shall not be 21 subject to attachment by any creditor of the management 22 company. 23 For the purpose of this subsection a management company 24 shall be defined as a person, partnership, corporation, or 25 other legal entity entitled to transact business on behalf of 26 others, acting on behalf of or as an agent for a unit owner, 27 unit owners or association of unit owners for the purpose of 28 carrying out the duties, responsibilities, and other 29 obligations necessary for the day to day operation and 30 management of any property subject to this Act. For purposes 31 of this subsection, the term "fiduciary insurance coverage" 32 shall be defined as both a fidelity bond and directors and 33 officers liability coverage, the fidelity bond in the full 34 amount of association funds and association reserves that HB1584 Engrossed -12- LRB093 03887 DRJ 03922 b 1 will be in the custody of the association, and the directors 2 and officers liability coverage at a level as shall be 3 determined to be reasonable by the board of managers, if not 4 otherwise established by the declaration or by laws. 5 Until one year after the effective date of this 6 amendatory Act of 1985, if a condominium association has 7 reserves plus assessments in excess of $250,000 and cannot 8 reasonably obtain 100% fidelity bond coverage for such 9 amount, then it must obtain a fidelity bond coverage of 10 $250,000. 11 (h) Method of estimating the amount of the annual 12 budget, and the manner of assessing and collecting from the 13 unit owners their respective shares of such estimated 14 expenses, and of any other expenses lawfully agreed upon. 15 (i) That upon 10 days notice to the manager or board of 16 managers and payment of a reasonable fee, any unit owner 17 shall be furnished a statement of his account setting forth 18 the amount of any unpaid assessments or other charges due and 19 owing from such owner. 20 (j) Designation and removal of personnel necessary for 21 the maintenance, repair and replacement of the common 22 elements. 23 (k) Such restrictions on and requirements respecting the 24 use and maintenance of the units and the use of the common 25 elements, not set forth in the declaration, as are designed 26 to prevent unreasonable interference with the use of their 27 respective units and of the common elements by the several 28 unit owners. 29 (l) Method of adopting and of amending administrative 30 rules and regulations governing the operation and use of the 31 common elements. 32 (m) The percentage of votes required to modify or amend 33 the bylaws, but each one of the particulars set forth in this 34 section shall always be embodied in the bylaws. HB1584 Engrossed -13- LRB093 03887 DRJ 03922 b 1 (n) (i) The provisions of this Act, the declaration, 2 bylaws, other condominium instruments, and rules and 3 regulations that relate to the use of the individual unit or 4 the common elements shall be applicable to any person leasing 5 a unit and shall be deemed to be incorporated in any lease 6 executed or renewed on or after the effective date of this 7 amendatory Act of 1984. (ii) With regard to any lease entered 8 into subsequent to the effective date of this amendatory Act 9 of 1989, the unit owner leasing the unit shall deliver a copy 10 of the signed lease to the board or if the lease is oral, a 11 memorandum of the lease, not later than the date of occupancy 12 or 10 days after the lease is signed, whichever occurs first. 13 In addition to any other remedies, by filing an action 14 jointly against the tenant and the unit owner, an association 15 may seek to enjoin a tenant from occupying a unit or seek to 16 evict a tenant under the provisions of Article IX of the Code 17 of Civil Procedure for failure of the lessor-owner to comply 18 with the leasing requirements prescribed by this Section or 19 by the declaration, bylaws, and rules and regulations. The 20 board of managers may proceed directly against a tenant, at 21 law or in equity, or under the provisions of Article IX of 22 the Code of Civil Procedure, for any other breach by tenant 23 of any covenants, rules, regulations or bylaws. 24 (o) The association shall have no authority to forbear 25 the payment of assessments by any unit owner. 26 (p) That when 30% or fewer of the units, by number, 27 possess over 50% in the aggregate of the votes in the 28 association, any percentage vote of members specified herein 29 or in the condominium instruments shall require the specified 30 percentage by number of units rather than by percentage of 31 interest in the common elements allocated to units that would 32 otherwise be applicable. 33 (q) That a unit owner may not assign, delegate, 34 transfer, surrender, or avoid the duties, responsibilities, HB1584 Engrossed -14- LRB093 03887 DRJ 03922 b 1 and liabilities of a unit owner under this Act, the 2 condominium instruments, or the rules and regulations of the 3 Association; and that such an attempted assignment, 4 delegation, transfer, surrender, or avoidance shall be deemed 5 void. 6 The provisions of this Section are applicable to all 7 condominium instruments recorded under this Act. Any portion 8 of a condominium instrument which contains provisions 9 contrary to these provisions shall be void as against public 10 policy and ineffective. Any such instrument which fails to 11 contain the provisions required by this Section shall be 12 deemed to incorporate such provisions by operation of law. 13 (Source: P.A. 88-135; 88-417; 88-626, eff. 9-9-94; 88-670, 14 eff. 12-2-94; 89-41, eff. 6-23-95.)