HB1681 95TH GENERAL ASSEMBLY

LRB095 03752 RAS 23781 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1681

Introduced 2/22/2007, by Rep. Elaine Nekritz - Angelo Saviano

SYNOPSIS AS INTRODUCED:

New Act
5 ILCS 80/4.28 new
765 ILCS 605/18.4	from Ch. 30, par. 318.4

Creates the Residential Unit Managers Licensure Act. Provides for the licensure of individuals who administer, for compensation, the coordination of financial, administrative, and maintenance duties for associations in which membership is a condition of ownership or shareholder interest of a unit in a residential condominium, cooperative, townhouse, villa, or other residential unit. Creates the Residential Unit Managers Advisory Board under the authority of the Department of Financial and Professional Regulation. Grants rulemaking authority to the Department. Preempts home rule. Amends the Regulatory Sunset Act to set a repeal date of January 1, 2018 for the Residential Unit Managers Licensure Act. Amends the Condominium Property Act to make a related change. Effective January 1, 2008.

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY

FISCAL NOTE ACT MAY APPLY

HOME RULE NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

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

Section 1. Short title. This Act may be cited as the Residential Unit Managers Licensure Act.

Section 5. Legislative intent. The intent of the General Assembly in enacting this statute is to protect the public interest by requiring that persons engaged in the practice of managing residential unit owners associations, as defined by this Act, be qualified and that a public authority competent to determine the qualifications of such managers be established.

Section 10. Definitions. In this Act:

"Board" means the Residential Unit Managers Advisory Board.

"Department" means the Department of Financial and Professional Regulation.

"Manager-in-training" means any individual who is training to become a residential unit manager and is under the supervision of a residential unit manager licensed under this Act. During the training period, a "manager-in-training" may not be licensed and may not have signatory authority on any unit owners association bank account. After a period of one year, a "manager-in-training" is required to be licensed under this Act.

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

"Secretary" means the Secretary of Financial and Professional Regulation.

"Unit owners association" means an association in which membership is a condition of ownership or shareholder interest of a unit in a residential condominium, cooperative, townhouse, villa, or other 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.

Section 15. License required.

(a) Beginning July 1, 2008, it is unlawful for a person to provide management services to unit owners associations in Illinois or to hold himself or herself out as a residential unit manager, unless he or she is licensed under this Act.

(b) Any person who violates any provision of this Act is, for the first offense, guilty of a business offense and shall be fined not less than $500 nor more than $2,5000. For a second or subsequent offense, the person is guilty of a Class A misdemeanor. Each day a violation continues constitutes a separate offense.

Section 20. Exemptions. Except as otherwise provided, the provisions of this Act do not apply to:

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

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

(3) Employees of a developer.

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

Section 25. Residential Unit Managers Advisory Board.

(a) There is created under the authority of the Department the Residential Unit Managers Advisory Board, which shall consist of 5 members appointed by the Secretary who are residents of this State. Two members of the Board shall be licensees under this Act, except that in the case of initial appointments, these Board members shall meet the requirements for licensure under this Act and shall have obtained licensure within 6 months after the effective date of this Act; 2 shall be members of a unit owners association; and one shall be a knowledgeable public member who is not licensed under this Act or any Act administered by the Department. The Board shall elect a chairperson and vice-chairperson.

(b) In making appointments, the Secretary shall consider the recommendations of members of the profession and statewide organizations representing unit owners associations.

(c) Members shall serve 4-year terms, except that of the initial appointments, one member shall serve for 2 years, 2 members for 3 years, and 2 members for 4 years. Members shall serve until their successors are appointed. No member shall serve for more than 2 successive terms. Appointments to fill vacancies shall be made in the same manner as the original appointments for the unexpired portion of the vacated term.

(d) A member of the Board may be removed for cause. A member subject to formal disciplinary proceedings shall disqualify himself or herself from all Board business until the charge is resolved. A member also shall disqualify himself or herself from any matter on which the member cannot act objectively.

(e) The members of the Board shall each receive as compensation a reasonable sum as determined by the Secretary for each day actually engaged in the duties of the office and each member shall receive reimbursement as set by the Governor's Travel Control Board for all legitimate and necessary expenses incurred in attending the meetings of the Board.

(f) A majority of the Board members currently appointed constitutes a quorum. A vacancy in the membership of the Board does not impair the right of a quorum to exercise all of the rights and perform all of the duties of the Board.

(g) Board members are not liable for their acts, omissions, decisions, or other conduct in connection with their duties on the Board, except those determined to be willful, wanton, or intentional misconduct.

(h) The Secretary may consider the recommendations of the Board in establishing guidelines for professional conduct, the conduct of formal disciplinary proceedings brought under this Act, and the qualifications of applicants. Notice of proposed rulemaking shall be transmitted to the Board and the Department shall review the response of the Board and any recommendations made in the response. The Department, at any time, may seek the expert advice and knowledge of the Board on any matter relating to the administration or enforcement of this Act.

Section 30. Qualifications.

(a) An applicant for licensure as a residential unit manager must meet the following requirements:

(1) be a citizen of the United States;

(2) have attained the age of 2l;

(3) never have been convicted of a felony; and

(4) have either:

(A) passed an examination covering the fundamentals of community association management, including the Condominium Property Act, the General Not-for-Profit Corporation Act of 1986, and any other laws the Department deems appropriate as it relates to residential unit management; or

(B) furnished evidence satisfactory to the Department establishing, by experience or education, that the applicant is qualified to hold a license; and

(5) have met any additional requirements established by the Department.

(b) Any individual who has been employed in the management of unit owners associations in Illinois for a period of at least 5 years immediately prior to the effective date of this Act shall be deemed qualified and exempt from the examination requirement set forth in this Act.

Section 35. License expiration; renewal; restoration; reinstatement.

(a) Licenses issued under this Act shall expire every 4 years on a date established by the Department and may be renewed upon the payment of a renewal fee established by the Department.

(b) A licensee may have an expired license restored within one year after the date of its expiration by making written application to the Department for restoration and paying a restoration fee.

(c) If a person fails to have his or her license restored within the one-year period set forth in subsection (b) of this Section, the person may reinstate the license within 4 years after the date of expiration by making written application to the Department for reinstatement, paying a fee, and providing proof to the Department of his or her continued professional competence.

(d) If a person fails to have his or her license reinstated within the 4-year period set forth in subsection (c) of this Section, the person may not be reinstated unless he or she fulfills and meets the requirements and conditions required of an applicant applying for initial licensure, which requirements shall include retaking and successfully completing the licensing examination.

(e) Any person who performs residential unit management services with an expired license shall be practicing in violation of this Act and shall be subject to the sanctions authorized by this Act. The Department may refuse to reactivate or reinstate any expired license for conduct that constitutes a violation of any provision of this Act.

Section 40. Fidelity bonds; segregation of accounts. A licensee or the management firm with which the licensee is employed may not solely and exclusively have access to and disburse the funds of a unit owners association unless all of the following conditions apply:

(1) There is a fidelity bond in place.

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

(3) The fidelity bond covers the licensee and all partners, officers, and employees of the management firm with whom the licensee is employed during the term of the bond as well as the association officers, secretaries, and employees of each unit owners association serviced.

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

(5) The unit owners association secures and pays for the bond.

Section 45. Standing. Only the duly appointed or elected governing body of a unit owners association based upon a duly adopted resolution shall have standing to file a compliant before the Department.

Section 50. Defamation. Notwithstanding any other provision of law, it is not a defense in any defamation suit brought by a residential unit manager or management firm that the residential unit manager or management firm is deemed a public or limited public figure.

Section 55. Disciplinary action. The Department may refuse to issue or renew, or may revoke, suspend, place on probation, reprimand, or take other disciplinary action as the Department deems appropriate, including the issuance of fines not to exceed $2,500 for each violation, with regard to any license for any one or both of the following:

(1) the commission of a felony or offense involving moral turpitude or unprofessional conduct. "Unprofessional conduct" includes violating the guidelines of professional conduct established by the Department or any provision of this Act.

(2) the failure to cooperate with the Department in the investigation of a complaint, including without limitation, failure to produce any document, book, or record, including financial records in the possession or control of the residential unit manager after the Department requests production of that document, book, or record.

Section 60. Fees; deposit of fees. The Department shall, by rule, establish a schedule of fees for the administration and enforcement of this Act. These fees shall be nonrefundable.

All of the fees and fines collected under this Act shall be deposited into the General Professions Dedicated Fund. The moneys deposited into the General Professions Dedicated Fund under this Section must be used by the Department, as appropriate, for the ordinary and contingent expenses of the Department. Moneys deposited in the General Professions Dedicated Fund under this Section may be invested and reinvested, with all earnings received from these investments being deposited into that Fund and used for the same purposes as the fees and fines deposited into that Fund.

Section 65. Change of information. If a licensee changes his or her name, address, or employment from that which appears on the current license, the licensee shall notify the Department of the change within 30 days after it occurs.

Section 70. Powers and duties of Department.

(a) The Department shall exercise the powers and duties prescribed by the Civil Administrative Code of Illinois and shall exercise all other powers and duties set forth in this Act.

(b) The Secretary shall, pursuant to recommendations of the Board, prescribe forms to be issued for the administration and enforcement of this Act and establish guidelines for professional conduct for licensees under this Act.

Section 75. Rulemaking. The Department shall adopt rules necessary for the administration and enforcement of this Act, including rules concerning standards for licensure, professional conduct, the imposition of fees, and recommendations for any disciplinary action. The Department shall consult with the Board prior to adopting any rule. Proposed rules shall be transmitted, prior to publication in the Illinois Register to the Board, and the Department shall review the Board's recommendations and shall notify the Board with any explanation of any deviations from the Board's recommendations.

Section 80. Violations; injunction; cease and desist order.

(a) If any person violates the provisions of this Act, the Secretary may, in the name of the People of the State of Illinois, through the Attorney General, petition for an order enjoining the violation or for an order enforcing compliance with this Act. Upon the filing of a verified petition, the court with appropriate jurisdiction may issue a temporary restraining order without notice or bond and may preliminarily and permanently enjoin the violation. If it is established that the person has violated or is violating the injunction, the court may punish the offender for contempt of court. Proceedings under this Section are in addition to all other remedies and penalties provided by this Act.

(b) If any person holds himself or herself out as being a licensed residential unit manager under this Act and is not licensed to do so, then any licensed residential unit manager, interested party, or any person injured thereby may petition for relief as provided in subsection (a) of this Section.

(c) Whenever, in the opinion of the Department, a person violates any provision of this Act, the Department may issue a rule to show cause why an order to cease and desist should not be entered against that person. The rule shall clearly set forth the grounds relied upon by the Department and shall allow at least 7 days from the date of the rule to file an answer satisfactory to the Department. Failure to answer to the satisfaction of the Department shall cause an order to cease and desist to be issued.

Section 85. Investigations; notice and hearing. The Department may investigate the actions of any applicant or any person holding or claiming to hold a license. The Department shall, before revoking, suspending, placing on probation, reprimanding, or taking any other disciplinary action under the provisions of this Act, at least 30 days prior to the date set for the hearing, (i) notify the accused, in writing, of any charges made and the time and place for the hearing on the charges, (ii) direct him or her to file a written answer to the charges with the Department under oath within 20 days after service of the notice, and (iii) inform the accused that, if he or she fails to answer, default will be taken against him or her or that his or her license may be suspended, revoked, or placed on probationary status or other disciplinary action may be taken with regard to the license, including limiting the scope, nature, or extent of his or her practice, as the Department may deem proper. In case the person, after receiving notice, fails to file an answer, his or her license may, in the discretion of the Department, be suspended, revoked, or placed on probationary status or the Department may take whatever disciplinary action it deems proper, including limiting the scope, nature, or extent of the person's practice or imposing a fine, without a hearing, if the act or acts charged constitute sufficient grounds for such action under this Act. The written notice may be served by personal delivery or certified mail to the address specified by the accused in his or her last notification to the Department.

Section 90. Record of proceedings; transcript. The Department, at its expense, shall preserve a record of all proceedings at the formal hearing of any case. The notice of hearing, the complaint, all other documents in the nature of pleadings, written motions filed in the proceedings, the transcript of testimony, the report of the hearing officer, and orders of the Department shall be in the record of such proceeding. The Department shall furnish a transcript of the record to any person interested in the hearing upon payment of the fee required under Section 2105-115 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

Section 95. Subpoenas; depositions; oaths. The Department has the power to subpoena and to bring before it any person and to take testimony either orally or by deposition or both, with the same fees and mileage and in the same manner as prescribed in civil cases in the courts of this State. The Secretary and the designated hearing officer has the power to administer oaths to witnesses at any hearing that the Department is authorized to conduct and any other oaths authorized in any Act administered by the Department.

Section 100. Compelling testimony. Any court, upon application of the Department, a designated hearing officer, or the applicant or licensee against whom proceedings under this Act are pending, may enter an order requiring the attendance of witnesses and their testimony and the production of documents, papers, files, books, and records in connection with any hearing or investigation. The court may compel obedience to its order by proceedings for contempt.

Section 105. Findings and recommendations. At the conclusion of the hearing, the hearing officer shall present to the Secretary a written report of its findings of fact, conclusions of law, and recommendations. The report shall contain a finding as to whether the licensee violated this Act or failed to comply with the conditions required in this Act. The hearing officer shall specify the nature of the violation or failure to comply and shall make its recommendations to the Secretary. The report of findings of fact, conclusions of law, and recommendations of the hearing officer shall be the basis for the Department's order for refusal or for the granting of the license. If the Secretary disagrees with the recommendations of the hearing officer, the Secretary may issue an order in contravention of the hearing officer's recommendations. The finding is not admissible in evidence against the person in a criminal prosecution brought for a violation of this Act, but the hearing and findings are not a bar to a criminal prosecution brought for a violation of this Act.

Section 110. Secretary; rehearing. Whenever the Secretary believes justice has not been done in the revocation, suspension, or refusal to issue or renew a license or the discipline of a licensee, he or she may order a rehearing.

Section 115. Appointment of a hearing officer. The Secretary has the authority to appoint an attorney licensed to practice law in the State of Illinois to serve as the hearing officer in any action for refusal to issue or renew a license or permit or to discipline a licensee. The hearing officer has full authority to conduct the hearing. The hearing officer shall report his or her findings of fact, conclusions of law, and recommendations to the Secretary.

Section 120. Order or certified copy; prima facie proof. An order or certified copy thereof, over the seal of the Department and purporting to be signed by the Secretary, is prima facie proof that:

(1) the signature is the genuine signature of the Secretary; and

(2) the Secretary is duly appointed and qualified.

Section 125. Restoration of suspended or revoked license.

At any time after the suspension or revocation of a license, the Department may restore it to the licensee, unless after an investigation and hearing the Secretary determines that restoration is not in the public interest.

Section 130. Surrender of license. Upon the revocation or suspension of a license, the licensee shall immediately surrender his or her license to the Department. If the licensee fails to do so, the Department has the right to seize the license.

Section 135. Summary suspension of license. The Secretary may summarily suspend the license of a residential unit manager without a hearing, simultaneously with the institution of proceedings for a hearing provided for in the provisions of this Act, if the Secretary finds that evidence in the possession of the Secretary indicates that the continuation of practice by the residential unit manager would constitute an imminent danger to the public. In the event that the Secretary summarily suspends the license of an individual without a hearing, a hearing must be held within 30 days after the suspension has occurred.

Section 140. Administrative review; venue.

(a) All final administrative decisions of the Department are subject to judicial review pursuant to the Administrative Review Law and its rules. The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure.

(b) Proceedings for judicial review shall be commenced in the circuit court of the county in which the party applying for review resides, but if the party is not a resident of Illinois, the venue shall be in Sangamon County.

Section 145. Certification of record; costs. The Department shall not be required to certify any record to the court, to file an answer in court, or to otherwise appear in any court in a judicial review proceeding, unless there is filed in the court, with the complaint, a receipt from the Department acknowledging payment of the costs of furnishing and certifying the record. Failure on the part of the plaintiff to file the receipt in court is grounds for dismissal of the action.

Section 150. Violations. Unless otherwise specified, any person found to have violated any provision of this Act is guilty of a Class A misdemeanor.

Section 155. Illinois Administrative Procedure Act; application. The Illinois Administrative Procedure Act is hereby expressly adopted and incorporated in this Act as if all of the provisions of such Act were included in this Act, except that the provisions of paragraph (d) of Section 10-65 of the Illinois Administrative Procedure Act, which provides that at hearings the license holder has the right to show compliance with all lawful requirements for retention, continuation, or renewal of the certificate, is specifically excluded. For the purpose of this Act the notice required under Section 10-25 of the Illinois Administrative Procedure Act is deemed sufficient when mailed to the last known address of a party.

Section 160. Home rule. Pursuant to paragraph (h) of Section 6 of Article VII of the Illinois Constitution of 1970 the power to regulate the licensing of residential unit managers shall, except as may otherwise be provided within and pursuant to the provisions of this Act, be exercised by the State and may not be exercised by any unit of local government, including home rule units.

Section 990. The Regulatory Sunset Act is amended by adding Section 4.28 as follows:

(5 ILCS 80/4.28 new)

Sec. 4.28. Act repealed on January 1, 2018. The following Act is repealed on January 1, 2018:

The Residential Unit Managers Licensure Act.

Section 995. The Condominium Property Act is amended by changing Section 18.4 as follows:

(765 ILCS 605/18.4) (from Ch. 30, par. 318.4)

Sec. 18.4. Powers and Duties of Board of Managers. The board of managers shall exercise for the association all powers, duties and authority vested in the association by law or the condominium instruments except for such powers, duties and authority reserved by law to the members of the association. The powers and duties of the board of managers shall include, but shall not be limited to, the following:

(a) To provide for the operation, care, upkeep, maintenance, replacement and improvement of the common elements. Nothing in this subsection (a) shall be deemed to invalidate any provision in a condominium instrument placing limits on expenditures for the common elements, provided, that such limits shall not be applicable to expenditures for repair, replacement, or restoration of existing portions of the common elements. The term "repair, replacement or restoration" means expenditures to deteriorated or damaged portions of the property related to the existing decorating, facilities, or structural or mechanical components, interior or exterior surfaces, or energy systems and equipment with the functional equivalent of the original portions of such areas. Replacement of the common elements may result in an improvement over the original quality of such elements or facilities; provided that, unless the improvement is mandated by law or is an emergency as defined in item (iv) of subparagraph (8) of paragraph (a) of Section 18, if the improvement results in a proposed expenditure exceeding 5% of the annual budget, the board of managers, upon written petition by unit owners with 20% of the votes of the association delivered to the board within 14 days of the board action to approve the expenditure, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the expenditure. Unless a majority of the total votes of the unit owners are cast at the meeting to reject the expenditure, it is ratified.

(b) To prepare, adopt and distribute the annual budget for the property.

(c) To levy and expend assessments.

(d) To collect assessments from unit owners.

(e) To provide for the employment and dismissal of the personnel necessary or advisable for the maintenance and operation of the common elements; however, as to the employment of an association manager, the board of managers shall do so in compliance with the provisions of the Residential Unit Managers Licensure Act.

(f) To obtain adequate and appropriate kinds of insurance.

(g) To own, convey, encumber, lease, and otherwise deal with units conveyed to or purchased by it.

(h) To adopt and amend rules and regulations covering the details of the operation and use of the property, after a meeting of the unit owners called for the specific purpose of discussing the proposed rules and regulations. Notice of the meeting shall contain the full text of the proposed rules and regulations, and the meeting shall conform to the requirements of Section 18(b) of this Act, except that no quorum is required at the meeting of the unit owners unless the declaration, bylaws or other condominium instrument expressly provides to the contrary. However, no rule or regulation may impair any rights guaranteed by the First Amendment to the Constitution of the United States or Section 4 of Article I of the Illinois Constitution including, but not limited to, the free exercise of religion, nor may any rules or regulations conflict with the provisions of this Act or the condominium instruments. No rule or regulation shall prohibit any reasonable accommodation for religious practices, including the attachment of religiously mandated objects to the front-door area of a condominium unit.

(i) To keep detailed, accurate records of the receipts and expenditures affecting the use and operation of the property.

(j) To have access to each unit from time to time as may be necessary for the maintenance, repair or replacement of any common elements or for making emergency repairs necessary to prevent damage to the common elements or to other units.

(k) To pay real property taxes, special assessments, and any other special taxes or charges of the State of Illinois or of any political subdivision thereof, or other lawful taxing or assessing body, which are authorized by law to be assessed and levied upon the real property of the condominium.

(l) To impose charges for late payment of a unit owner's proportionate share of the common expenses, or any other expenses lawfully agreed upon, and after notice and an opportunity to be heard, to levy reasonable fines for violation of the declaration, by-laws, and rules and regulations of the association.

(m) Unless the condominium instruments expressly provide to the contrary, by a majority vote of the entire board of managers, to assign the right of the association to future income from common expenses or other sources, and to mortgage or pledge substantially all of the remaining assets of the association.

(n) To record the dedication of a portion of the common elements to a public body for use as, or in connection with, a street or utility where authorized by the unit owners under the provisions of Section 14.2.

(o) To record the granting of an easement for the laying of cable television cable where authorized by the unit owners under the provisions of Section 14.3; to obtain, if available and determined by the board to be in the best interests of the association, cable television service for all of the units of the condominium on a bulk identical service and equal cost per unit basis; and to assess and recover the expense as a common expense and, if so determined by the board, to assess each and every unit on the same equal cost per unit basis.

(p) To seek relief on behalf of all unit owners when authorized pursuant to subsection (c) of Section 10 from or in connection with the assessment or levying of real property taxes, special assessments, and any other special taxes or changes of the State of Illinois or of any political subdivision thereof or of any lawful taxing or assessing body.

(q) To reasonably accommodate the needs of a handicapped unit owner as required by the federal Civil Rights Act of 1968, the Human Rights Act and any applicable local ordinances in the exercise of its powers with respect to the use of common elements or approval of modifications in an individual unit.

(r) To accept service of a notice of claim for purposes of the Mechanics Lien Act on behalf of each respective member of the Unit Owners' Association with respect to improvements performed pursuant to any contract entered into by the Board of Managers or any contract entered into prior to the recording of the condominium declaration pursuant to this Act, for a property containing more than 8 units, and to distribute the notice to the unit owners within 7 days of the acceptance of the service by the Board of Managers. The service shall be effective as if each individual unit owner had been served individually with notice.

In the performance of their duties, the officers and members of the board, whether appointed by the developer or elected by the unit owners, shall exercise the care required of a fiduciary of the unit owners.

The collection of assessments from unit owners by an association, board of managers or their duly authorized agents shall not be considered acts constituting a collection agency for purposes of the Collection Agency Act.

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 that fails to contain the provisions required by this Section shall be deemed to incorporate such provisions by operation of law.

(Source: P.A. 94-384, eff. 1-1-06; 94-729, eff. 1-1-07.)

Section 999. Effective date. This Act takes effect January 1, 2008.