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.


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FISCAL NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning 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 adding Section 18.7 as follows:
 
6     (765 ILCS 605/18.7 new)
7     Sec. 18.7. Licensing of managers of community
8 associations.
9     (a) Legislative declaration. It is declared to be in the
10 best interest of the citizens of the State of Illinois and a
11 proper exercise of the police power of the State of Illinois to
12 provide for the regulation of managers of community
13 associations, who hold themselves out as possessing
14 professional qualifications as managers of community
15 associations and are, in fact, qualified to render management
16 services of a professional nature, and to provide for the
17 maintenance of high standards of professional conduct by those
18 licensed as managers of community associations. Because of the
19 customary reliance by the public, specifically the duly
20 appointed or elected governing body of common interest
21 community associations, upon the financial, supervisory, and
22 managerial services of persons purporting to possess expert
23 knowledge in the field of community association management and
24 as custodian of community association funds, it is further
25 declared to be in the best interest of Illinois citizens to
26 limit and restrict, under the circumstances set forth in this
27 Section, the issuance of licenses to community association
28 managers who have been certified to possess the necessary
29 knowledge in the relevant financial, managerial, and
30 supervisory services, or compliance with conditions
31 established by law or contract of persons so licensed.
32     (b) Definitions. As used in this Section, unless the

 

 

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1 context otherwise requires:
2         "License" means the license issued to a manager of
3     community associations for the State.
4         "License holder" means a person to whom a license has
5     been issued.
6         "Commission" means the Community Associations Manager
7     Regulatory Commission.
8         "Community association" means an association in which
9     membership is a condition of ownership or shareholder
10     interest of a unit in a condominium, cooperative,
11     townhouse, villa, or other residential unit that is part of
12     a residential development plan and that is authorized to
13     impose an assessment and other costs that may become a lien
14     on the unit or lot.
15         "Community association manager" means an individual
16     who administers for compensation the coordination of
17     financial, administrative, maintenance, or other duties
18     called for in the management contract, including
19     individuals who are direct employees of a community
20     association. A manager does not include support staff, such
21     as bookkeepers, administrative assistants, secretaries,
22     property inspectors, customer service representatives, or
23     managers in training.
24         "Manager in training" means any individual who is
25     training to become a manager and is under the supervision
26     of a license holder. During the training period, a manager
27     in training may not be licensed. A manager in training
28     shall not have signatory authority on any community
29     association bank account. Further, after a period of one
30     year, a manager in training is required to be licensed by
31     the State.
32     (c) License requirement. In order to provide community
33 association management services to community associations in
34 Illinois, individuals must possess a license issued by the
35 Community Association Manager Regulatory Commission.
36     (d) Community Association Manager Regulatory Commission.

 

 

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1         (1) The Community Association Manager Regulatory
2     Commission shall consist of 9 members appointed by the
3     Governor, with the advice and consent of the Senate, and
4     who shall have been residents of the State of Illinois for
5     5 years prior to the date of appointment.
6         (2) Seven members of the Commission shall be license
7     holders and residents of Illinois. Until the license
8     program has been established and grants licenses, these
9     members must hold the qualifications to be license holders.
10     Each of the remaining 2 members shall be a member who does
11     not hold a license and shall be an owner or shareholder of
12     a unit in a common interest community association at the
13     time of his or her appointment.
14         (3) Initially, 5 members shall serve for 5-year terms
15     and 4 members for 4-year terms. Thereafter, terms shall be
16     for 5 years. Upon expiration of his or her term of office,
17     a member shall serve until his or her successor is
18     appointed. Any vacancy occurring during a term shall be
19     filled by appointment by the Governor, with the advice and
20     consent of the Senate, for the unexpired term. The Governor
21     shall remove from the Commission any member whose license
22     has become void or has been revoked or suspended and may
23     remove any member of the Commission for neglect of duty,
24     misconduct, or incompetence.
25         (4) The presence of two-thirds of the full Commission
26     shall constitute a quorum for the transaction of business.
27     Action shall be taken only upon the majority vote of a
28     quorum, except regarding disciplinary actions which shall
29     require a unanimous vote of a quorum.
30         (5) The provisions of Illinois law concerning the
31     termination schedule for regulatory bodies of the State of
32     Illinois are applicable to the Commission created by this
33     Section.
34         (6) Any member of the Commission, any attorney
35     providing advice to the Commission, any person acting as a
36     consultant to the Commission, and any witness testifying in

 

 

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1     a proceeding authorized under this Act, excluding the party
2     making the complaint, is immune from liability in any civil
3     action brought against him or her for acts occurring while
4     acting in his or her capacity as a commissioner,
5     consultant, or witness, if the individual was acting in
6     good faith within the scope of his or her respective
7     capacity, made a reasonable effort to obtain the facts of
8     the matter as to which he or she acted, and acted in the
9     reasonable belief that the action taken by him or her was
10     warranted by the facts.
11     (e) Powers and duties of Commission. The Commission has the
12 power and duty to:
13         (1) Elect annually from among its members a chairperson
14     and prescribe the duties of that office.
15         (2) Make such rules and regulations, not inconsistent
16     with the laws of the State of Illinois, as may be necessary
17     for the orderly conduct of its affairs and for the
18     administration of this Act, except that no disciplinary
19     action shall be taken without affording due process and in
20     conformity with the rules of civil and or criminal evidence
21     of the State of Illinois.
22         (3) Enforce rules of professional conduct for
23     community managers.
24         (4) Develop appropriate administrative enforcement
25     procedures for violations of the rules of professional
26     conduct.
27         (5) Prescribe forms for and receive applications for
28     licenses and grant licenses and reinstatements.
29         (6) Approve examinations to be given to applicants.
30         (7) Issue licenses and renewals as provided in this
31     Section.
32         (8) Impose disciplinary actions in the manner
33     prescribed in this Section.
34         (9) Maintain a record of all licenses, suspensions, and
35     revocations, and of its own proceedings.
36         (10) Collect all fees prescribed by this Section.

 

 

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1         (11) Make rules consistent with this Act to determine
2     the criteria to be included in the State examination and to
3     administer or cause to be administered the State
4     examination.
5         (12) Administer this Section, including the power to
6     hire necessary staff.
7     (f) Disciplinary action. A community manager is subject to
8 disciplinary action if the community manager commits any of the
9 following:
10         (1) A felony or offense involving moral turpitude or
11     unprofessional conduct. "Unprofessional conduct" means
12     violating the provisions of an order of this Commission, an
13     agreement with the Commission, or this Act.
14         (2) Fails to cooperate with the Commission in the
15     investigation of a complaint, including without
16     limitation, failure to produce any document, book, or
17     record in the possession or control of the community
18     manager after the Commission requests production of that
19     document, book, or record in the course of an investigation
20     of a complaint.
21         (3) Disciplinary action taken by the Commission may
22     consist of one or more of the following:
23             (i) revocation or suspension of license;
24             (ii) refusal to renew or reinstate license;
25             (iii) placement of the community manager on
26         probation for a reasonable period of time;
27             (iv) issuance of reprimand or censure to the
28         community managers; and
29             (v) impose a reasonable fine not to exceed $2,500.
30     (g) Fees.
31         (1) A fee not to exceed $100, as determined by the
32     Commission, shall be paid for each application made to the
33     Commission, whether the application is for examination or
34     reexamination or for issuance, renewal, reactivation, or
35     reinstatement of a license, or any other application
36     requiring formal action or consideration by the

 

 

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1     Commission.
2         (2) All fees shall be paid to the Commission or its
3     authorized representative and are to be paid by the
4     applicant in advance of examination dates or of any action
5     by the Commission.
6         (3) To further support the funding of the Commission
7     and the administration of this license program, all
8     community associations registered as Illinois
9     not-for-profit corporations shall pay an annual fee to the
10     Commission of $1 per unit per year with a minimum of $50
11     for a community association.
12         (4) Fees shall not increase more than the increase in
13     the Midwest Area all items all urban Consumer Price Index.
14     (h) Disposition of fees. All fees shall be transmitted to
15 the State Treasurer, for deposit into the Community Manager
16 License Fund, a special fund in the State treasury established
17 to support the license program pursuant to Illinois laws, and
18 the General Assembly shall make annual appropriations from the
19 Fund for the expenditures of the Commission incurred in the
20 performance of its duties under this Act, which expenditures
21 shall be made out of those appropriations upon vouchers and
22 warrants drawn pursuant to law.
23     (i) Requirements. Before applying to take the State license
24 examination, an individual must meet these requirements:
25         (1) shall have attained the age of 21 and be a citizen
26     of the United States;
27         (2) shall not be a convicted felon; and
28         (3) shall either (i) pass an exam covering the
29     fundamentals of community association management,
30     including the Illinois Condominium Property Act, the
31     Illinois Not-for-Profit Corporation Act, and any other
32     laws the Commission deems appropriate as it relates to
33     community association management; or (ii) furnish evidence
34     satisfactory to the Commission establishing, by experience
35     or education, that the individual is qualified to hold a
36     license.

 

 

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1     For purposes of this Act, any individual who has practiced
2 management of community associations in the State of Illinois
3 for a period of at least 5 years as of the effective date of
4 this amendatory Act of the 94th General Assembly shall be
5 deemed to be qualified and exempt from the requirements of the
6 examination.
7     (j) License; issuance; renewal; reactivation;
8 reinstatement.
9         (1) A license shall be granted by the Commission to any
10     applicant:
11             (i) who has completed the requirements of
12         subsection (i); and
13             (ii) who further meets the requirements of this
14         Section.
15         (2) All licenses shall expire every 4 years on a date
16     established by the Commission, but may be renewed upon the
17     payment of the renewal fee authorized by the Commission.
18         (3) Any person may reactivate an expired license within
19     a one-year grace period after the date of its expiration by
20     making written application for reactivation and paying a
21     reactivation fee imposed by the Commission.
22         (4) If a person fails to reactivate his or her license
23     within the one-year grace period specified in subparagraph
24     (3), the person may reinstate the license within 4 years
25     after the date of the expiration of the grace period by
26     making written application for reinstatement, paying a
27     reinstatement fee, and providing proof to the Commission of
28     his or her continued professional competence as required by
29     the Commission. Thereafter, a person shall not be
30     reinstated unless he or she fulfills and meets the
31     requirements and conditions required of an applicant
32     applying for the issuance of an original license, which
33     requirements shall include retaking and passing the State
34     license examination.
35         (5) Any person who performs community association
36     management services after the expiration of his or her

 

 

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1     license shall be practicing in violation of this Act and
2     shall be subject to the sanctions authorized by this Act.
3     The Commission may refuse to reactivate or reinstate any
4     expired license for conduct that constitutes a violation of
5     any provision of this Act.
6     (k) Fidelity bonds and segregation of accounts.
7         (1) A license holder or the firm with whom the license
8     holder is employed shall not solely and exclusively have
9     access to and disburse funds of a community association
10     unless:
11             (i) There is a fidelity bond in place.
12             (ii) The fidelity bond is in an amount not less
13         than all moneys of that association.
14             (iii) The fidelity bond covers the license holder
15         and all partners, officers, and employees of the firm
16         with whom the license holder is employed during the
17         term of the bond as well as the association officers,
18         directors, and employees of each community association
19         they service.
20             (iv) The insurance company issuing the bond may not
21         cancel or refuse to renew the bond without giving not
22         less than 10 day's prior written notice.
23             (v) The association shall secure and pay for the
24         bond.
25         (2) A license holder who provides community
26     association management services for more than one
27     community association shall maintain separate, segregated
28     accounts for each community association. The funds shall
29     not, in any event, be commingled with the license holder's
30     or firm's funds or with the funds of any other community
31     association. The maintenance of these accounts by the
32     license holder shall be custodial, and such accounts shall
33     be in the name of the respective community association.
34     (l) Exempt persons. Except as otherwise provided, this
35 Section does not apply to:
36         (1) A licensed attorney acting solely as an incident to

 

 

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1     the practice of law.
2         (2) Any person acting as a receiver, trustee in
3     bankruptcy, administrator, executor, or guardian acting
4     under a court order or under the authority of a will or of
5     a trust instrument.
6         (3) Employees of a developer and an affiliated
7     management company of a developer.
8         (4) Managers of commercial or other non-residential
9     condominiums.
10     (m) Standing. Only the duly appointed or elected governing
11 body of a common interest community association based upon a
12 duly adopted resolution shall have standing to file a complaint
13 before the Commission.
14     (n) Defamation. Notwithstanding anything to the contrary
15 in this Section, it shall not be a defense in any defamation
16 suit brought by a manager or management company that a manger
17 or management company is deemed a public or limited public
18 figure.
 
19     Section 95. The State Finance Act is amended by adding
20 Section 5.663 as follows:
 
21     (30 ILCS 105/5.663 new)
22     Sec. 5.663. The Community Manager License Fund.
 
23     Section 99. Effective date. This Act takes effect upon
24 becoming law.