97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2954

 

Introduced 2/1/2012, by Sen. Pamela J. Althoff

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/9  from Ch. 30, par. 309

    Amends the Condominium Property Act. Provides that the condominium instruments may provide an alternative formula for assessment of common expenses that are specifically enumerated in the condominium instruments if use of the alternative formula is approved by a three-fifths vote of the owners.


LRB097 14771 AJO 59796 b

 

 

A BILL FOR

 

SB2954LRB097 14771 AJO 59796 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Condominium Property Act is amended by
5changing Section 9 as follows:
 
6    (765 ILCS 605/9)  (from Ch. 30, par. 309)
7    Sec. 9. Sharing of expenses - Lien for nonpayment.
8    (a) All common expenses incurred or accrued prior to the
9first conveyance of a unit shall be paid by the developer, and
10during this period no common expense assessment shall be
11payable to the association. It shall be the duty of each unit
12owner including the developer to pay his proportionate share of
13the common expenses commencing with the first conveyance. The
14proportionate share shall be in the same ratio as his
15percentage of ownership in the common elements set forth in the
16declaration.
17    (a-5) The condominium instruments may provide an
18alternative formula for assessment of common expenses that are
19specifically enumerated in the condominium instruments if use
20of the alternative formula is approved by a three-fifths vote
21of the owners.
22    (b) The condominium instruments may provide that common
23expenses for insurance premiums be assessed on a basis

 

 

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1reflecting increased charges for coverage on certain units.
2    (c) Budget and reserves.
3        (1) The board of managers shall prepare and distribute
4    to all unit owners a detailed proposed annual budget,
5    setting forth with particularity all anticipated common
6    expenses by category as well as all anticipated assessments
7    and other income. The initial budget and common expense
8    assessment based thereon shall be adopted prior to the
9    conveyance of any unit. The budget shall also set forth
10    each unit owner's proposed common expense assessment.
11        (2) All budgets adopted by a board of managers on or
12    after July 1, 1990 shall provide for reasonable reserves
13    for capital expenditures and deferred maintenance for
14    repair or replacement of the common elements. To determine
15    the amount of reserves appropriate for an association, the
16    board of managers shall take into consideration the
17    following: (i) the repair and replacement cost, and the
18    estimated useful life, of the property which the
19    association is obligated to maintain, including but not
20    limited to structural and mechanical components, surfaces
21    of the buildings and common elements, and energy systems
22    and equipment; (ii) the current and anticipated return on
23    investment of association funds; (iii) any independent
24    professional reserve study which the association may
25    obtain; (iv) the financial impact on unit owners, and the
26    market value of the condominium units, of any assessment

 

 

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1    increase needed to fund reserves; and (v) the ability of
2    the association to obtain financing or refinancing.
3        (3) Notwithstanding the provisions of this subsection
4    (c), an association without a reserve requirement in its
5    condominium instruments may elect to waive in whole or in
6    part the reserve requirements of this Section by a vote of
7    2/3 of the total votes of the association. Any association
8    having elected under this paragraph (3) to waive the
9    provisions of subsection (c) may by a vote of 2/3 of the
10    total votes of the association elect to again be governed
11    by the requirements of subsection (c).
12        (4) In the event that an association elects to waive
13    all or part of the reserve requirements of this Section,
14    that fact must be disclosed after the meeting at which the
15    waiver occurs by the association in the financial
16    statements of the association and, highlighted in bold
17    print, in the response to any request of a prospective
18    purchaser for the information prescribed under Section
19    22.1; and no member of the board of managers or the
20    managing agent of the association shall be liable, and no
21    cause of action may be brought for damages against these
22    parties, for the lack or inadequacy of reserve funds in the
23    association budget.
24    (d) (Blank).
25    (e) The condominium instruments may provide for the
26assessment, in connection with expenditures for the limited

 

 

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1common elements, of only those units to which the limited
2common elements are assigned.
3    (f) Payment of any assessment shall be in amounts and at
4times determined by the board of managers.
5    (g) Lien.
6        (1) If any unit owner shall fail or refuse to make any
7    payment of the common expenses or the amount of any unpaid
8    fine when due, the amount thereof together with any
9    interest, late charges, reasonable attorney fees incurred
10    enforcing the covenants of the condominium instruments,
11    rules and regulations of the board of managers, or any
12    applicable statute or ordinance, and costs of collections
13    shall constitute a lien on the interest of the unit owner
14    in the property prior to all other liens and encumbrances,
15    recorded or unrecorded, except only (a) taxes, special
16    assessments and special taxes theretofore or thereafter
17    levied by any political subdivision or municipal
18    corporation of this State and other State or federal taxes
19    which by law are a lien on the interest of the unit owner
20    prior to preexisting recorded encumbrances thereon and (b)
21    encumbrances on the interest of the unit owner recorded
22    prior to the date of such failure or refusal which by law
23    would be a lien thereon prior to subsequently recorded
24    encumbrances. Any action brought to extinguish the lien of
25    the association shall include the association as a party.
26        (2) With respect to encumbrances executed prior to

 

 

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1    August 30, 1984 or encumbrances executed subsequent to
2    August 30, 1984 which are neither bonafide first mortgages
3    nor trust deeds and which encumbrances contain a statement
4    of a mailing address in the State of Illinois where notice
5    may be mailed to the encumbrancer thereunder, if and
6    whenever and as often as the manager or board of managers
7    shall send, by United States certified or registered mail,
8    return receipt requested, to any such encumbrancer at the
9    mailing address set forth in the recorded encumbrance a
10    statement of the amounts and due dates of the unpaid common
11    expenses with respect to the encumbered unit, then, unless
12    otherwise provided in the declaration or bylaws, the prior
13    recorded encumbrance shall be subject to the lien of all
14    unpaid common expenses with respect to the unit which
15    become due and payable within a period of 90 days after the
16    date of mailing of each such notice.
17        (3) The purchaser of a condominium unit at a judicial
18    foreclosure sale, or a mortgagee who receives title to a
19    unit by deed in lieu of foreclosure or judgment by common
20    law strict foreclosure or otherwise takes possession
21    pursuant to court order under the Illinois Mortgage
22    Foreclosure Law, shall have the duty to pay the unit's
23    proportionate share of the common expenses for the unit
24    assessed from and after the first day of the month after
25    the date of the judicial foreclosure sale, delivery of the
26    deed in lieu of foreclosure, entry of a judgment in common

 

 

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1    law strict foreclosure, or taking of possession pursuant to
2    such court order. Such payment confirms the extinguishment
3    of any lien created pursuant to paragraph (1) or (2) of
4    this subsection (g) by virtue of the failure or refusal of
5    a prior unit owner to make payment of common expenses,
6    where the judicial foreclosure sale has been confirmed by
7    order of the court, a deed in lieu thereof has been
8    accepted by the lender, or a consent judgment has been
9    entered by the court.
10        (4) The purchaser of a condominium unit at a judicial
11    foreclosure sale, other than a mortgagee, who takes
12    possession of a condominium unit pursuant to a court order
13    or a purchaser who acquires title from a mortgagee shall
14    have the duty to pay the proportionate share, if any, of
15    the common expenses for the unit which would have become
16    due in the absence of any assessment acceleration during
17    the 6 months immediately preceding institution of an action
18    to enforce the collection of assessments, and which remain
19    unpaid by the owner during whose possession the assessments
20    accrued. If the outstanding assessments are paid at any
21    time during any action to enforce the collection of
22    assessments, the purchaser shall have no obligation to pay
23    any assessments which accrued before he or she acquired
24    title.
25        (5) The notice of sale of a condominium unit under
26    subsection (c) of Section 15-1507 of the Code of Civil

 

 

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1    Procedure shall state that the purchaser of the unit other
2    than a mortgagee shall pay the assessments and the legal
3    fees required by subdivisions (g)(1) and (g)(4) of Section
4    9 of this Act. The statement of assessment account issued
5    by the association to a unit owner under subsection (i) of
6    Section 18 of this Act, and the disclosure statement issued
7    to a prospective purchaser under Section 22.1 of this Act,
8    shall state the amount of the assessments and the legal
9    fees, if any, required by subdivisions (g)(1) and (g)(4) of
10    Section 9 of this Act.
11    (h) A lien for common expenses shall be in favor of the
12members of the board of managers and their successors in office
13and shall be for the benefit of all other unit owners. Notice
14of the lien may be recorded by the board of managers, or if the
15developer is the manager or has a majority of seats on the
16board of managers and the manager or board of managers fails to
17do so, any unit owner may record notice of the lien. Upon the
18recording of such notice the lien may be foreclosed by an
19action brought in the name of the board of managers in the same
20manner as a mortgage of real property.
21    (i) Unless otherwise provided in the declaration, the
22members of the board of managers and their successors in
23office, acting on behalf of the other unit owners, shall have
24the power to bid on the interest so foreclosed at the
25foreclosure sale, and to acquire and hold, lease, mortgage and
26convey it.

 

 

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1    (j) Any encumbrancer may from time to time request in
2writing a written statement from the manager or board of
3managers setting forth the unpaid common expenses with respect
4to the unit covered by his encumbrance. Unless the request is
5complied with within 20 days, all unpaid common expenses which
6become due prior to the date of the making of such request
7shall be subordinate to the lien of the encumbrance. Any
8encumbrancer holding a lien on a unit may pay any unpaid common
9expenses payable with respect to the unit, and upon payment the
10encumbrancer shall have a lien on the unit for the amounts paid
11at the same rank as the lien of his encumbrance.
12    (k) Nothing in Public Act 83-1271 is intended to change the
13lien priorities of any encumbrance created prior to August 30,
141984.
15(Source: P.A. 94-1049, eff. 1-1-07.)