SB1651 97TH GENERAL ASSEMBLY

LRB097 08355 AJO 48482 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1651

Introduced 2/9/2011, by Sen. A. J. Wilhelmi

SYNOPSIS AS INTRODUCED:

765 ILCS 160/1-15
765 ILCS 160/1-25
765 ILCS 160/1-35
765 ILCS 160/1-40
765 ILCS 160/1-45
765 ILCS 160/1-55
765 ILCS 160/1-75

Amends the Common Interest Community Association Act. Provides that the Act applies to all common interest communities in this State, except as specifically stated. Provides that portions of a declaration or the by-laws of a common interest community association that are inconsistent with the Act are void as against public policy. Deletes provision that states community instruments should be interpreted consistently with the Act's definitions, unless the context otherwise requires. Deletes provision that states that all provisions of a declaration, bylaws, and other community instruments are severable. Deletes provision stating that the terms of at least one-third of the board members expire annually and that board members are elected at large. Exempts master associations from the provision that states that two-thirds of the unit owners may remove a board member at a special meeting. Deletes exception that allows community instruments to require a quorum other than 20% of the unit owners. Exempts master associations from the finance provisions of the Act that concern separate assessments. Deletes provisions that exempted certain common interest community associations (those which: are not permitted, under their governing documents, to use litigation or arbitration to collect assessments or fines; have 10 units or less; or have annual budgeted assessments of $50,000 or less) from provisions in the Act pertaining to board meeting frequency, meeting notices, meeting procedures, and fidelity insurance. Makes other changes.

A BILL FOR

AN ACT concerning civil law.

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

Section 5. The Common Interest Community Association Act is amended by changing Sections 1-15, 1-25, 1-35, 1-40, 1-45, 1-55, and 1-75 as follows:

(765 ILCS 160/1-15)

Sec. 1-15. Construction, interpretation, and validity of community instruments.

(a) Except to the extent otherwise provided in another Section of this Act, the provisions of this Act are applicable to all common interest communities in this State. Any provisions of the declaration or of the by-laws of a common interest community that contain provisions inconsistent with this Act are void as against public policy and ineffective by the declaration or other community instruments, the terms defined in Section 1-5 of this Act shall be deemed to have the meaning specified therein unless the context otherwise requires.

(b) (Blank). All provisions of the declaration, bylaws, and other community instruments are severable.

(c) A provision in the declaration limiting ownership, rental, or occupancy of a unit to a person 55 years of age or older shall be valid and deemed not to be in violation of Article 3 of the Illinois Human Rights Act provided that the person or the immediate family of a person owning, renting, or lawfully occupying such unit prior to the recording of the initial declaration shall not be deemed to be in violation of such age restriction so long as they continue to own or reside in such unit.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-25)

Sec. 1-25. Board of managers, board of directors, duties, elections, and voting.

(a) There shall be an election of the board of managers or board of directors from among the unit owners of a common interest community association.

(b) (Blank). The terms of at least one-third of the members of the board shall expire annually and all members of the board shall be elected at large.

(c) The members of the board shall serve without compensation, unless the community instruments indicate otherwise.

(d) No member of the board or officer shall be elected for a term of more than 3 years, but officers and board members may succeed themselves.

(e) If there is a vacancy on the board, the remaining members of the board may fill the vacancy by a two-thirds vote of the remaining board members until the next annual meeting of unit owners or until unit owners holding 20% of the votes of the association request a meeting of the unit owners to fill the vacancy for the balance of the term. A meeting of the unit owners shall be called for purposes of filling a vacancy on the board no later than 30 days following the filing of a petition signed by unit owners holding 20% of the votes of the association requesting such a meeting.

(f) There shall be an election of a:

(1) president from among the members of the board, who shall preside over the meetings of the board and of the unit owners;

(2) secretary from among the members of the board, who shall keep the minutes of all meetings of the board and of the unit owners and who shall, in general, perform all the duties incident to the office of secretary; and

(3) treasurer from among the members of the board, who shall keep the financial records and books of account.

(g) If no election is held to elect board members within the time period specified in the bylaws, or within a reasonable amount of time thereafter not to exceed 90 days, then 20% of the unit owners may bring an action to compel compliance with the election requirements specified in the bylaws. If the court finds that an election was not held to elect members of the board within the required period due to the bad faith acts or omissions of the board of managers or the board of directors, the unit owners shall be entitled to recover their reasonable attorney's fees and costs from the association. If the relevant notice requirements have been met and an election is not held solely due to a lack of a quorum, then this subsection (g) does not apply.

(h) Where there is more than one owner of a unit, if only one of the multiple owners is present at a meeting of the association, he or she is entitled to cast all the votes allocated to that unit. A unit owner may vote:

(1) by proxy executed in writing by the unit owner or by his or her duly authorized attorney in fact, provided, however, that the proxy bears the date of execution. Unless the community instruments or the written proxy itself provide otherwise, proxies will not be valid for more than 11 months after the date of its execution; or

(2) by submitting an association-issued ballot in person at the election meeting; or

(3) by submitting an association-issued ballot to the association or its designated agent by mail or other means of delivery specified in the declaration or bylaws.

(i) The association may, upon adoption of the appropriate rules by the board, conduct elections by secret ballot whereby the voting ballot is marked only with the voting interest for the unit and the vote itself, provided that the association shall further adopt rules to verify the status of the unit owner issuing a proxy or casting a ballot. A candidate for election to the board or such candidate's representative shall have the right to be present at the counting of ballots at such election.

(j) 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 at any meeting of the unit owners called for purposes of electing members of the board, shall have the right to vote for the election of members of the common interest community association and to be elected to and serve on the board unless the seller expressly retains in writing any or all of such rights.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-35)

Sec. 1-35. Unit owner powers, duties, and obligations.

(a) The provisions of this Act, the declaration, bylaws, other community instruments, and rules and regulations that relate to the use of an individual unit or the common areas shall be applicable to any person leasing a unit and shall be deemed to be incorporated in any lease executed or renewed on or after the effective date of this Act. With regard to any lease entered into subsequent to the effective date of this Act, the unit owner leasing the unit shall deliver a copy of the signed lease to the association or if the lease is oral, a memorandum of the lease, not later than the date of occupancy or 10 days after the lease is signed, whichever occurs first.

(b) If there are multiple owners of a single unit, only one of the multiple owners shall be eligible to serve as a member of the board at any one time.

(c) Except for master associations, two-thirds Two-thirds of the unit owners may remove a board member as a director at a duty called special meeting of the unit owners.

(d) In the event of any resale of a unit in a common interest community association by a unit owner other than the developer, the board 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.

(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 association.

The principal officer of the board or such other officer as is specifically designated shall furnish the above information within 30 days after receiving a written request for such information.

A reasonable fee covering the direct out-of-pocket cost of copying and providing such information may be charged by the association or the board to the unit seller for providing the information.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-40)

Sec. 1-40. Meetings.

(a) Written notice of any membership meeting shall be mailed or delivered giving members no less than 10 and no more than 30 days notice of the time, place, and purpose of such meeting.

(b) Meetings.

(1) Twenty percent of the unit owners shall constitute a quorum, unless the community instruments indicate otherwise.

(2) The unit owners shall hold an annual meeting, one of the purposes of which shall be to elect members of the board of managers or board of directors of the common interest community association.

(3) Special meetings of the board may be called by the president or 25% of the members of the board. Special meetings of the unit owners may be called by the president, the board, or by 20% of unit owners.

(4) Except to the extent otherwise provided by this Act, the board shall give the unit owners notice of all board meetings at least 48 hours prior to the meeting by sending notice by mail, personal delivery, or by posting copies of notices of meetings in entranceways, elevators, or other conspicuous places in the common interest community at least 48 hours prior to the meeting except where there is no common entranceway for 7 or more units, the board may designate one or more locations in the proximity of these units where the notices of meetings shall be posted. The board shall give unit owners, by mail or personal delivery, notice of any board meeting concerning the adoption of (i) the proposed annual budget, (ii) regular assessments, or (iii) a separate or special assessment within 10 to 30 days prior to the meeting, unless otherwise provided in Section 1-45 (a) or any other provision of this Act.

(5) Meetings of the board shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the common interest community association finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment, or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner's unpaid share of common expenses. Any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner.

(6) The board must reserve a portion of the meeting of the board for comments by unit owners; provided, however, the duration and meeting order for the unit owner comment period is within the sole discretion of the board.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-45)

Sec. 1-45. Finances.

(a) Each unit owner shall receive, at least 30 days prior to the adoption thereof by the board, a copy of the proposed annual budget together with an indication of which portions are intended for reserves, capital expenditures or repairs or payment of real estate taxes.

(b) The board shall annually supply to all unit owners an itemized accounting of the common expenses for the preceding year actually incurred or paid, together with an indication of which portions were for reserves, capital expenditures or repairs or payment of real estate taxes and with a tabulation of the amounts collected pursuant to the budget or assessment, and showing the net excess or deficit of income over expenditures plus reserves.

(c) If an adopted budget or any separate assessment adopted by the board would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and separate assessments payable during the preceding fiscal year, the common interest community association, 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, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the budget or separate assessment; unless a majority of the total votes of the unit owners are cast at the meeting to reject the budget or separate assessment, it shall be deemed ratified.

(d) Any common expense not set forth in the budget or any increase in assessments over the amount adopted in the budget shall be separately assessed against all unit owners.

(e) Separate assessments for expenditures relating to emergencies or mandated by law may be adopted by the board without being subject to unit owner approval or the provisions of subsection (c) or (f) of this Section. As used herein, "emergency" means an immediate danger to the structural integrity of the common areas or to the life, health, safety, or property of the unit owners.

(f) Assessments for additions and alterations to the common areas or to association-owned property not included in the adopted annual budget, shall be separately assessed and are subject to approval of two-thirds of the total votes of all unit owners.

(g) The board may adopt separate assessments payable over more than one fiscal year. With respect to multi-year assessments not governed by subsections (e) and (f) of this Section, the entire amount of the multi-year assessment shall be deemed considered and authorized in the first fiscal year in which the assessment is approved.

(h) The board of a common interest community association shall have the authority to establish and maintain a system of master metering of public utility services to collect payments in conjunction therewith, subject to the requirements of the Tenant Utility Payment Disclosure Act.

(i) The provisions of subsections (c), (f), and (g) of this Section shall not apply to master associations.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-55)

Sec. 1-55. Fidelity insurance. An association with 30 or more units shall obtain and maintain fidelity insurance covering persons who control or disburse operating and reserve funds of the association for the maximum amount of coverage available to protect funds in the custody or control of the association plus the association reserve fund. All management companies which are responsible for the funds held or administered by the association shall maintain and furnish to the association a fidelity bond for the maximum amount of coverage available to protect funds in the custody of the management company at any time. The association shall bear the cost of the fidelity insurance and fidelity bond, unless otherwise provided by contract between the association and a management company.

(Source: P.A. 96-1400, eff. 7-29-10.)

(765 ILCS 160/1-75)

Sec. 1-75. Exemptions for small community interest communities.

(a) A common interest community association organized under the General Not for Profit Corporation Act of 1986 and having either (i) 10 units or less or (ii) annual budgeted assessments of $100,000 or less shall be exempt from this Act unless the association affirmatively elects to be covered by this Act by a majority of its directors and unit owners.

(b) (Blank). Common interest community associations which in their declaration, bylaws, or other governing documents provide that the association may not use the courts or an arbitration process to collect or enforce assessments, fines, or similar levies and common interest community associations (i) of 10 units or less or (ii) having annual budgeted assessments of $50,000 or less shall be exempt from subsection (a) of Section 1-30, subsections (a) and (b) of Section 1-40, and Section 1-55 but shall be required to provide notice of meetings to unit owners in a manner and at a time that will allow unit owners to participate in those meetings.

(Source: P.A. 96-1400, eff. 7-29-10.)