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| [ House Amendment 002 ] |
90_HB1262
765 ILCS 605/18 from Ch. 30, par. 318
Amends provisions of the Condominium Property Act
setting forth requirements for condominium bylaws. Provides
that the bylaws shall require all unit owners to obtain and
maintain liability insurance covering all liability incurred
in connection with their ownership of a unit in a minimum
amount of $100,000; that the insurance shall cover liability
incurred by the tenant of a unit owner; and that any
mortgage entered into by a unit owner on or after the
effective date of this amendatory Act for which an escrow
account is established for the tax payments or any other
payments shall contain a requirement that, for as long as
the escrow account exists, the cost of the insurance must be
paid by the unit owner for deposit into the escrow account
and that the premiums for the insurance must be paid to the
insurance company from the payments made by the unit owner
into the escrow account.
LRB9004163WHmg
LRB9004163WHmg
1 AN ACT to amend the Condominium Property Act by changing
2 Section 18.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Condominium Property Act is amended by
6 changing Section 18 as follows:
7 (765 ILCS 605/18) (from Ch. 30, par. 318)
8 Sec. 18. Contents of bylaws. The bylaws shall provide
9 for at least the following:
10 (a) (1) The election from among the unit owners of a
11 board of managers, the number of persons constituting
12 such board, and that the terms of at least one-third of
13 the members of the board shall expire annually and that
14 all members of the board shall be elected at large. If
15 there are multiple owners of a single unit, only one of
16 the multiple owners shall be eligible to serve as a
17 member of the board at any one time.
18 (2) the powers and duties of the board;
19 (3) the compensation, if any, of the members of the
20 board;
21 (4) the method of removal from office of members of
22 the board;
23 (5) that the board may engage the services of a
24 manager or managing agent;
25 (6) that each unit owner shall receive, at least 30
26 days prior to the adoption thereof by the board of
27 managers, a copy of the proposed annual budget together
28 with an indication of which portions are intended for
29 reserves, capital expenditures or repairs or payment of
30 real estate taxes;
31 (7) that the board of managers shall annually
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1 supply to all unit owners an itemized accounting of the
2 common expenses for the preceding year actually incurred
3 or paid, together with an indication of which portions
4 were for reserves, capital expenditures or repairs or
5 payment of real estate taxes and with a tabulation of the
6 amounts collected pursuant to the budget or assessment,
7 and showing the net excess or deficit of income over
8 expenditures plus reserves;
9 (8) (i) that each unit owner shall receive notice,
10 in the same manner as is provided in this Act for
11 membership meetings, of any meeting of the board of
12 managers concerning the adoption of the proposed annual
13 budget and regular assessments pursuant thereto or to
14 adopt a separate (special) assessment, (ii) that except
15 as provided in subsection (iv) below, if an adopted
16 budget or any separate assessment adopted by the board
17 would result in the sum of all regular and separate
18 assessments payable in the current fiscal year exceeding
19 115% of the sum of all regular and separate assessments
20 payable during the preceding fiscal year, the board of
21 managers, upon written petition by unit owners with 20
22 percent of the votes of the association delivered to the
23 board within 14 days of the board action, shall call a
24 meeting of the unit owners within 30 days of the date of
25 delivery of the petition to consider the budget or
26 separate assessment; unless a majority of the total votes
27 of the unit owners are cast at the meeting to reject the
28 budget or separate assessment, it is ratified, (iii) that
29 any common expense not set forth in the budget or any
30 increase in assessments over the amount adopted in the
31 budget shall be separately assessed against all unit
32 owners, (iv) that separate assessments for expenditures
33 relating to emergencies or mandated by law may be adopted
34 by the board of managers without being subject to unit
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1 owner approval or the provisions of item (ii) above or
2 item (v) below. As used herein, "emergency" means an
3 immediate danger to the structural integrity of the
4 common elements or to the life, health, safety or
5 property of the unit owners, (v) that assessments for
6 additions and alterations to the common elements or to
7 association-owned property not included in the adopted
8 annual budget, shall be separately assessed and are
9 subject to approval of two-thirds of the total votes of
10 all unit owners, (vi) that the board of managers may
11 adopt separate assessments payable over more than one
12 fiscal year. With respect to multi-year assessments not
13 governed by items (iv) and (v), the entire amount of the
14 multi-year assessment shall be deemed considered and
15 authorized in the first fiscal year in which the
16 assessment is approved;
17 (9) that meetings of the board of managers shall be
18 open to any unit owner, except for the portion of any
19 meeting held (i) to discuss litigation when an action
20 against or on behalf of the particular association has
21 been filed and is pending in a court or administrative
22 tribunal, or when the board of managers finds that such
23 an action is probable or imminent, (ii) to consider
24 information regarding appointment, employment or
25 dismissal of an employee, or (iii) to discuss violations
26 of rules and regulations of the association or a unit
27 owner's unpaid share of common expenses; that any vote on
28 these matters shall be taken at a meeting or portion
29 thereof open to any unit owner; that any unit owner may
30 record the proceedings at meetings or portions thereof
31 required to be open by this Act by tape, film or other
32 means; that the board may prescribe reasonable rules and
33 regulations to govern the right to make such recordings,
34 that notice of such meetings shall be mailed or delivered
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1 at least 48 hours prior thereto, unless a written waiver
2 of such notice is signed by the person or persons
3 entitled to such notice pursuant to the declaration,
4 bylaws, other condominium instrument, or provision of law
5 other than this subsection before the meeting is
6 convened, and that copies of notices of meetings of the
7 board of managers shall be posted in entranceways,
8 elevators, or other conspicuous places in the condominium
9 at least 48 hours prior to the meeting of the board of
10 managers except where there is no common entranceway for
11 7 or more units, the board of managers may designate one
12 or more locations in the proximity of these units where
13 the notices of meetings shall be posted;
14 (10) that the board shall meet at least 4 times
15 annually;
16 (11) that no member of the board or officer shall
17 be elected for a term of more than 2 years, but that
18 officers and board members may succeed themselves;
19 (12) the designation of an officer to mail and
20 receive all notices and execute amendments to condominium
21 instruments as provided for in this Act and in the
22 condominium instruments;
23 (13) the method of filling vacancies on the board
24 which shall include authority for the remaining members
25 of the board to fill the vacancy by two-thirds vote until
26 the next annual meeting of unit owners or for a period
27 terminating no later than 30 days following the filing of
28 a petition signed by unit owners holding 20% of the votes
29 of the association requesting a meeting of the unit
30 owners to fill the vacancy for the balance of the term,
31 and that a meeting of the unit owners shall be called for
32 purposes of filling a vacancy on the board no later than
33 30 days following the filing of a petition signed by unit
34 owners holding 20% of the votes of the association
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1 requesting such a meeting, and the method of filling
2 vacancies among the officers that shall include the
3 authority for the members of the board to fill the
4 vacancy for the unexpired portion of the term;
5 (14) what percentage of the board of managers, if
6 other than a majority, shall constitute a quorum;
7 (15) provisions concerning notice of board meetings
8 to members of the board;
9 (16) the board of managers may not enter into a
10 contract with a current board member or with a
11 corporation or partnership in which a board member or a
12 member of the board member's immediate family has 25% or
13 more interest, unless notice of intent to enter the
14 contract is given to unit owners within 20 days after a
15 decision is made to enter into the contract and the unit
16 owners are afforded an opportunity by filing a petition,
17 signed by 20% of the unit owners, for an election to
18 approve or disapprove the contract; such petition shall
19 be filed within 20 days after such notice and such
20 election shall be held within 30 days after filing the
21 petition; for purposes of this subsection, a board
22 member's immediate family means the board member's
23 spouse, parents, and children;
24 (17) that the board of managers may disseminate to
25 unit owners biographical and background information about
26 candidates for election to the board if (i) reasonable
27 efforts to identify all candidates are made and all
28 candidates are given an opportunity to include
29 biographical and background information in the
30 information to be disseminated; and (ii) the board does
31 not express a preference in favor of any candidate;
32 (18) any proxy distributed for board elections by
33 the board of managers gives unit owners the opportunity
34 to designate any person as the proxy holder, and gives
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1 the unit owner the opportunity to express a preference
2 for any of the known candidates for the board or to write
3 in a name;
4 (19) that special meetings of the board of managers
5 can be called by the president or 25% of the members of
6 the board; and
7 (20) that the board of managers may establish and
8 maintain a system of master metering of public utility
9 services and collect payments in connection therewith,
10 subject to the requirements of the Tenant Utility Payment
11 Disclosure Act.
12 (b) (1) What percentage of the unit owners, if other
13 than 20%, shall constitute a quorum provided that, for
14 condominiums with 20 or more units, the percentage of
15 unit owners constituting a quorum shall be 20% unless the
16 unit owners holding a majority of the percentage interest
17 in the association provide for a higher percentage;
18 (2) that the association shall have one class of
19 membership;
20 (3) that the members shall hold an annual meeting,
21 one of the purposes of which shall be to elect members of
22 the board of managers;
23 (4) the method of calling meetings of the unit
24 owners;
25 (5) that special meetings of the members can be
26 called by the president, board of managers, or by 20% of
27 unit owners;
28 (6) that written notice of any membership meeting
29 shall be mailed or delivered giving members no less than
30 10 and no more than 30 days notice of the time, place and
31 purpose of such meeting;
32 (7) that voting shall be on a percentage basis, and
33 that the percentage vote to which each unit is entitled
34 is the percentage interest of the undivided ownership of
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1 the common elements appurtenant thereto, provided that
2 the bylaws may provide for approval by unit owners in
3 connection with matters where the requisite approval on a
4 percentage basis is not specified in this Act, on the
5 basis of one vote per unit;
6 (8) that, where there is more than one owner of a
7 unit, if only one of the multiple owners is present at a
8 meeting of the association, he is entitled to cast all
9 the votes allocated to that unit, if more than one of the
10 multiple owners are present, the votes allocated to that
11 unit may be cast only in accordance with the agreement of
12 a majority in interest of the multiple owners, unless the
13 declaration expressly provides otherwise, that there is
14 majority agreement if any one of the multiple owners cast
15 the votes allocated to that unit without protest being
16 made promptly to the person presiding over the meeting by
17 any of the other owners of the unit;
18 (9) that unless the Articles of Incorporation or
19 the bylaws otherwise provide, a unit owner may vote by
20 proxy executed in writing by the unit owner or by his
21 duly authorized attorney in fact; that the proxy shall be
22 invalid after 11 months from the date of its execution,
23 unless otherwise provided in the proxy, and that every
24 proxy must bear the date of execution;
25 (10) that the association may, upon adoption of the
26 appropriate rules by the board of managers, conduct
27 elections by secret ballot whereby the voting ballot is
28 marked only with the percentage interest for the unit and
29 the vote itself, provided that the board further adopt
30 rules to verify the status of the unit owner issuing a
31 proxy or casting a ballot; and further, that a candidate
32 for election to the board of managers or such candidate's
33 representative shall have the right to be present at the
34 counting of ballots at such election;
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1 (11) that in the event of a resale of a condominium
2 unit the purchaser of a unit from a seller other than the
3 developer pursuant to an installment contract for
4 purchase shall during such times as he or she resides in
5 the unit be counted toward a quorum for purposes of
6 election of members of the board of managers at any
7 meeting of the unit owners called for purposes of
8 electing members of the board, shall have the right to
9 vote for the election of members of the board of managers
10 and to be elected to and serve on the board of managers
11 unless the seller expressly retains in writing any or all
12 of such rights. In no event may the seller and purchaser
13 both be counted toward a quorum, be permitted to vote for
14 a particular office or be elected and serve on the board.
15 Satisfactory evidence of the installment contact shall be
16 made available to the association or its agents. For
17 purposes of this subsection, "installment contact" shall
18 have the same meaning as set forth in Section 1 (e) of
19 "An Act relating to installment contracts to sell
20 dwelling structures", approved August 11, 1967, as
21 amended;
22 (12) the method by which matters subject to the
23 approval of unit owners set forth in this Act, or in the
24 condominium instruments, will be submitted to the unit
25 owners at special membership meetings called for such
26 purposes; and
27 (13) that matters subject to the affirmative vote
28 of not less than 2/3 of the votes of unit owners at a
29 meeting duly called for that purpose, shall include, but
30 not be limited to:
31 (i) merger or consolidation of the
32 association;
33 (ii) sale, lease, exchange, or other
34 disposition (excluding the mortgage or pledge) of
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1 all, or substantially all of the property and assets
2 of the association; and
3 (iii) the purchase or sale of land or of units
4 on behalf of all unit owners.
5 (c) Election of a president from among the board of
6 managers, who shall preside over the meetings of the board of
7 managers and of the unit owners.
8 (d) Election of a secretary from among the board of
9 managers, who shall keep the minutes of all meetings of the
10 board of managers and of the unit owners and who shall, in
11 general, perform all the duties incident to the office of
12 secretary.
13 (e) Election of a treasurer from among the board of
14 managers, who shall keep the financial records and books of
15 account.
16 (f) Maintenance, repair and replacement of the common
17 elements and payments therefor, including the method of
18 approving payment vouchers.
19 (g) An association with 30 or more units shall obtain
20 and maintain fidelity insurance covering persons who control
21 or disburse funds of the association for the maximum amount
22 of coverage available to protect funds in the custody or
23 control of the association plus the association reserve fund.
24 All management companies which are responsible for the funds
25 held or administered by the association shall maintain and
26 furnish to the association a fidelity bond for the maximum
27 amount of coverage available to protect funds in the custody
28 of the management company at any time. The association shall
29 bear the cost of the fidelity insurance and fidelity bond,
30 unless otherwise provided by contract between the association
31 and a management company. The association shall be the
32 direct obligee of any such fidelity bond. A management
33 company holding reserve funds of an association shall at all
34 times maintain a separate account for each association,
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1 provided, however, that for investment purposes, the Board of
2 Managers of an association may authorize a management company
3 to maintain the association's reserve funds in a single
4 interest bearing account with similar funds of other
5 associations. The management company shall at all times
6 maintain records identifying all moneys of each association
7 in such investment account. The management company may hold
8 all operating funds of associations which it manages in a
9 single operating account but shall at all times maintain
10 records identifying all moneys of each association in such
11 operating account. Such operating and reserve funds held by
12 the management company for the association shall not be
13 subject to attachment by any creditor of the management
14 company.
15 For the purpose of this subsection a management company
16 shall be defined as a person, partnership, corporation, or
17 other legal entity entitled to transact business on behalf of
18 others, acting on behalf of or as an agent for a unit owner,
19 unit owners or association of unit owners for the purpose of
20 carrying out the duties, responsibilities, and other
21 obligations necessary for the day to day operation and
22 management of any property subject to this Act. For purposes
23 of this subsection, the term "fiduciary insurance coverage"
24 shall be defined as both a fidelity bond and directors and
25 officers liability coverage, the fidelity bond in the full
26 amount of association funds and association reserves that
27 will be in the custody of the association, and the directors
28 and officers liability coverage at a level as shall be
29 determined to be reasonable by the board of managers, if not
30 otherwise established by the declaration or by laws.
31 Until one year after the effective date of this
32 amendatory Act of 1985, if a condominium association has
33 reserves plus assessments in excess of $250,000 and cannot
34 reasonably obtain 100% fidelity bond coverage for such
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1 amount, then it must obtain a fidelity bond coverage of
2 $250,000.
3 (h) Method of estimating the amount of the annual
4 budget, and the manner of assessing and collecting from the
5 unit owners their respective shares of such estimated
6 expenses, and of any other expenses lawfully agreed upon.
7 (i) That upon 10 days notice to the manager or board of
8 managers and payment of a reasonable fee, any unit owner
9 shall be furnished a statement of his account setting forth
10 the amount of any unpaid assessments or other charges due and
11 owing from such owner.
12 (j) Designation and removal of personnel necessary for
13 the maintenance, repair and replacement of the common
14 elements.
15 (k) Such restrictions on and requirements respecting the
16 use and maintenance of the units and the use of the common
17 elements, not set forth in the declaration, as are designed
18 to prevent unreasonable interference with the use of their
19 respective units and of the common elements by the several
20 unit owners.
21 (l) Method of adopting and of amending administrative
22 rules and regulations governing the operation and use of the
23 common elements.
24 (m) The percentage of votes required to modify or amend
25 the bylaws, but each one of the particulars set forth in this
26 section shall always be embodied in the bylaws.
27 (n) (i) The provisions of this Act, the declaration,
28 bylaws, other condominium instruments, and rules and
29 regulations that relate to the use of the individual unit or
30 the common elements shall be applicable to any person leasing
31 a unit and shall be deemed to be incorporated in any lease
32 executed or renewed on or after the effective date of this
33 amendatory Act of 1984. (ii) With regard to any lease entered
34 into subsequent to the effective date of this amendatory Act
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1 of 1989, the unit owner leasing the unit shall deliver a copy
2 of the signed lease to the board or if the lease is oral, a
3 memorandum of the lease, not later than the date of occupancy
4 or 10 days after the lease is signed, whichever occurs first.
5 In addition to any other remedies, by filing an action
6 jointly against the tenant and the unit owner, an association
7 may seek to enjoin a tenant from occupying a unit or seek to
8 evict a tenant under the provisions of Article IX of the Code
9 of Civil Procedure for failure of the lessor-owner to comply
10 with the leasing requirements prescribed by this Section or
11 by the declaration, bylaws, and rules and regulations. The
12 board of managers may proceed directly against a tenant, at
13 law or in equity, or under the provisions of Article IX of
14 the Code of Civil Procedure, for any other breach by tenant
15 of any covenants, rules, regulations or bylaws.
16 (o) The association shall have no authority to forbear
17 the payment of assessments by any unit owner.
18 (p) That when 30% or fewer of the units, by number,
19 possess over 50% in the aggregate of the votes in the
20 association, any percentage vote of members specified herein
21 or in the condominium instruments shall require the specified
22 percentage by number of units rather than by percentage of
23 interest in the common elements allocated to units that would
24 otherwise be applicable.
25 (q) That a unit owner may not assign, delegate,
26 transfer, surrender, or avoid the duties, responsibilities,
27 and liabilities of a unit owner under this Act, the
28 condominium instruments, or the rules and regulations of the
29 Association; and that such an attempted assignment,
30 delegation, transfer, surrender, or avoidance shall be deemed
31 void.
32 (r) That all unit owners must obtain and maintain
33 liability insurance covering all liability incurred in
34 connection with their ownership of a unit in a minimum
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1 amount of $100,000; that this liability insurance shall
2 cover liability incurred by the tenant of a unit owner; and
3 that any mortgage entered into by a unit owner on or after
4 the effective date of this amendatory Act of 1997 for which
5 an escrow account is established for tax payments or any
6 other payments shall contain a requirement that, for as long
7 as the escrow account exists, the cost of this liability
8 insurance must be paid by the unit owner for deposit into
9 the escrow account and that the premiums for this liability
10 insurance must be paid to the insurance company from the
11 payments made by the unit owner into the escrow account.
12 The provisions of this Section are applicable to all
13 condominium instruments recorded under this Act. Any portion
14 of a condominium instrument which contains provisions
15 contrary to these provisions shall be void as against public
16 policy and ineffective. Any such instrument which fails to
17 contain the provisions required by this Section shall be
18 deemed to incorporate such provisions by operation of law.
19 (Source: P.A. 88-135; 88-417; 88-626, eff. 9-9-94; 88-670,
20 eff. 12-2-94; 89-41, eff. 6-23-95.)