SB2632 94TH GENERAL ASSEMBLY

LRB094 18806 AJO 54214 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2632

Introduced 1/20/2006, by Sen. John J. Cullerton

SYNOPSIS AS INTRODUCED:

765 ILCS 605/18.7 new
30 ILCS 105/5.663 new

Amends the Condominium Property Act. Requires licensing of managers of community associations. Creates the Community Association Manager Regulatory Commission, whose members are appointed by the Governor, to administer the licensing. Requires the payment of fees. Sets forth licensing requirements. Provides for discipline and other matters. Amends the State Finance Act to create a special fund. Effective July 1, 2008.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning 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 adding Section 18.7 as follows:

(765 ILCS 605/18.7 new)

Sec. 18.7. Licensing of managers of community associations.

(a) Legislative declaration. It is declared to be in the best interest of the citizens of the State of Illinois and a proper exercise of the police power of the State of Illinois to provide for the regulation of managers of community associations, who hold themselves out as possessing professional qualifications as managers of community associations and are, in fact, qualified to render management services of a professional nature, and to provide for the maintenance of high standards of professional conduct by those licensed as managers of community associations. Because of the customary reliance by the public, specifically the duly appointed or elected governing body of common interest community associations, upon the financial, supervisory, and managerial services of persons purporting to possess expert knowledge in the field of community association management and as custodian of community association funds, it is further declared to be in the best interest of Illinois citizens to limit and restrict, under the circumstances set forth in this Section, the issuance of licenses to community association managers who have been certified to possess the necessary knowledge in the relevant financial, managerial, and supervisory services, or compliance with conditions established by law or contract of persons so licensed.

(b) Definitions. As used in this Section, unless the context otherwise requires:

"License" means the license issued to a manager of community associations for the State.

"License holder" means a person to whom a license has been issued.

"Commission" means the Community Associations Manager Regulatory Commission.

"Community association" means an association in which membership is a condition of ownership or shareholder interest of a unit in a condominium, cooperative, townhouse, villa, or other residential unit that is part of a residential development plan and that is authorized to impose an assessment and other costs that may become a lien on the unit or lot.

"Community association manager" means an individual who administers for compensation the coordination of financial, administrative, maintenance, or other duties called for in the management contract, including individuals who are direct employees of a community association. A manager does not include support staff, such as bookkeepers, administrative assistants, secretaries, property inspectors, customer service representatives, or managers in training.

"Manager in training" means any individual who is training to become a manager and is under the supervision of a license holder. During the training period, a manager in training may not be licensed. A manager in training shall not have signatory authority on any community association bank account. Further, after a period of one year, a manager in training is required to be licensed by the State.

(c) License requirement. In order to provide community association management services to community associations in Illinois, individuals must possess a license issued by the Community Association Manager Regulatory Commission.

(d) Community Association Manager Regulatory Commission.

(1) The Community Association Manager Regulatory Commission shall consist of 9 members appointed by the Governor, with the advice and consent of the Senate, and who shall have been residents of the State of Illinois for 5 years prior to the date of appointment.

(2) Seven members of the Commission shall be license holders and residents of Illinois. Until the license program has been established and grants licenses, these members must hold the qualifications to be license holders. Each of the remaining 2 members shall be a member who does not hold a license and shall be an owner or shareholder of a unit in a common interest community association at the time of his or her appointment.

(3) Initially, 5 members shall serve for 5-year terms and 4 members for 4-year terms. Thereafter, terms shall be for 5 years. Upon expiration of his or her term of office, a member shall serve until his or her successor is appointed. Any vacancy occurring during a term shall be filled by appointment by the Governor, with the advice and consent of the Senate, for the unexpired term. The Governor shall remove from the Commission any member whose license has become void or has been revoked or suspended and may remove any member of the Commission for neglect of duty, misconduct, or incompetence.

(4) The presence of two-thirds of the full Commission shall constitute a quorum for the transaction of business. Action shall be taken only upon the majority vote of a quorum, except regarding disciplinary actions which shall require a unanimous vote of a quorum.

(5) The provisions of Illinois law concerning the termination schedule for regulatory bodies of the State of Illinois are applicable to the Commission created by this Section.

(6) Any member of the Commission, any attorney providing advice to the Commission, any person acting as a consultant to the Commission, and any witness testifying in a proceeding authorized under this Act, excluding the party making the complaint, is immune from liability in any civil action brought against him or her for acts occurring while acting in his or her capacity as a commissioner, consultant, or witness, if the individual was acting in good faith within the scope of his or her respective capacity, made a reasonable effort to obtain the facts of the matter as to which he or she acted, and acted in the reasonable belief that the action taken by him or her was warranted by the facts.

(e) Powers and duties of Commission. The Commission has the power and duty to:

(1) Elect annually from among its members a chairperson and prescribe the duties of that office.

(2) Make such rules and regulations, not inconsistent with the laws of the State of Illinois, as may be necessary for the orderly conduct of its affairs and for the administration of this Act, except that no disciplinary action shall be taken without affording due process and in conformity with the rules of civil and or criminal evidence of the State of Illinois.

(3) Enforce rules of professional conduct for community managers.

(4) Develop appropriate administrative enforcement procedures for violations of the rules of professional conduct.

(5) Prescribe forms for and receive applications for licenses and grant licenses and reinstatements.

(6) Approve examinations to be given to applicants.

(7) Issue licenses and renewals as provided in this Section.

(8) Impose disciplinary actions in the manner prescribed in this Section.

(9) Maintain a record of all licenses, suspensions, and revocations, and of its own proceedings.

(10) Collect all fees prescribed by this Section.

(11) Make rules consistent with this Act to determine the criteria to be included in the State examination and to administer or cause to be administered the State examination.

(12) Administer this Section, including the power to hire necessary staff.

(f) Disciplinary action. A community manager is subject to disciplinary action if the community manager commits any of the following:

(1) A felony or offense involving moral turpitude or unprofessional conduct. "Unprofessional conduct" means violating the provisions of an order of this Commission, an agreement with the Commission, or this Act.

(2) Fails to cooperate with the Commission in the investigation of a complaint, including without limitation, failure to produce any document, book, or record in the possession or control of the community manager after the Commission requests production of that document, book, or record in the course of an investigation of a complaint.

(3) Disciplinary action taken by the Commission may consist of one or more of the following:

(i) revocation or suspension of license;

(ii) refusal to renew or reinstate license;

(iii) placement of the community manager on probation for a reasonable period of time;

(iv) issuance of reprimand or censure to the community managers; and

(v) impose a reasonable fine not to exceed $2,500.

(g) Fees.

(1) A fee not to exceed $100, as determined by the Commission, shall be paid for each application made to the Commission, whether the application is for examination or reexamination or for issuance, renewal, reactivation, or reinstatement of a license, or any other application requiring formal action or consideration by the Commission.

(2) All fees shall be paid to the Commission or its authorized representative and are to be paid by the applicant in advance of examination dates or of any action by the Commission.

(3) To further support the funding of the Commission and the administration of this license program, all community associations registered as Illinois not-for-profit corporations shall pay an annual fee to the Commission of $1 per unit per year with a minimum of $50 for a community association.

(4) Fees shall not increase more than the increase in the Midwest Area all items all urban Consumer Price Index.

(h) Disposition of fees. All fees shall be transmitted to the State Treasurer, for deposit into the Community Manager License Fund, a special fund in the State treasury established to support the license program pursuant to Illinois laws, and the General Assembly shall make annual appropriations from the Fund for the expenditures of the Commission incurred in the performance of its duties under this Act, which expenditures shall be made out of those appropriations upon vouchers and warrants drawn pursuant to law.

(i) Requirements. Before applying to take the State license examination, an individual must meet these requirements:

(1) shall have attained the age of 21 and be a citizen of the United States;

(2) shall not be a convicted felon; and

(3) shall either (i) pass an exam covering the fundamentals of community association management, including the Illinois Condominium Property Act, the Illinois Not-for-Profit Corporation Act, and any other laws the Commission deems appropriate as it relates to community association management; or (ii) furnish evidence satisfactory to the Commission establishing, by experience or education, that the individual is qualified to hold a license.

For purposes of this Act, any individual who has practiced management of community associations in the State of Illinois for a period of at least 5 years as of the effective date of this amendatory Act of the 94th General Assembly shall be deemed to be qualified and exempt from the requirements of the examination.

(j) License; issuance; renewal; reactivation; reinstatement.

(1) A license shall be granted by the Commission to any applicant:

(i) who has completed the requirements of subsection (i); and

(ii) who further meets the requirements of this Section.

(2) All licenses shall expire every 4 years on a date established by the Commission, but may be renewed upon the payment of the renewal fee authorized by the Commission.

(3) Any person may reactivate an expired license within a one-year grace period after the date of its expiration by making written application for reactivation and paying a reactivation fee imposed by the Commission.

(4) If a person fails to reactivate his or her license within the one-year grace period specified in subparagraph (3), the person may reinstate the license within 4 years after the date of the expiration of the grace period by making written application for reinstatement, paying a reinstatement fee, and providing proof to the Commission of his or her continued professional competence as required by the Commission. Thereafter, a person shall not be reinstated unless he or she fulfills and meets the requirements and conditions required of an applicant applying for the issuance of an original license, which requirements shall include retaking and passing the State license examination.

(5) Any person who performs community association management services after the expiration of his or her license shall be practicing in violation of this Act and shall be subject to the sanctions authorized by this Act. The Commission may refuse to reactivate or reinstate any expired license for conduct that constitutes a violation of any provision of this Act.

(k) Fidelity bonds and segregation of accounts.

(1) A license holder or the firm with whom the license holder is employed shall not solely and exclusively have access to and disburse funds of a community association unless:

(i) There is a fidelity bond in place.

(ii) The fidelity bond is in an amount not less than all moneys of that association.

(iii) The fidelity bond covers the license holder and all partners, officers, and employees of the firm with whom the license holder is employed during the term of the bond as well as the association officers, directors, and employees of each community association they service.

(iv) The insurance company issuing the bond may not cancel or refuse to renew the bond without giving not less than 10 day's prior written notice.

(v) The association shall secure and pay for the bond.

(2) A license holder who provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association. The funds shall not, in any event, be commingled with the license holder's or firm's funds or with the funds of any other community association. The maintenance of these accounts by the license holder shall be custodial, and such accounts shall be in the name of the respective community association.

(l) Exempt persons. Except as otherwise provided, this Section does not apply to:

(1) A licensed attorney acting solely as an incident to the practice of law.

(2) Any person acting as a receiver, trustee in bankruptcy, administrator, executor, or guardian acting under a court order or under the authority of a will or of a trust instrument.

(3) Employees of a developer and an affiliated management company of a developer.

(4) Managers of commercial or other non-residential condominiums.

(m) Standing. Only the duly appointed or elected governing body of a common interest community association based upon a duly adopted resolution shall have standing to file a complaint before the Commission.

(n) Defamation. Notwithstanding anything to the contrary in this Section, it shall not be a defense in any defamation suit brought by a manager or management company that a manger or management company is deemed a public or limited public figure.

Section 95. The State Finance Act is amended by adding Section 5.663 as follows:

(30 ILCS 105/5.663 new)

Sec. 5.663. The Community Manager License Fund.

Section 99. Effective date. This Act takes effect upon becoming law.