98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB1457

 

Introduced 2/6/2013, by Sen. William R. Haine

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/12  from Ch. 30, par. 312
765 ILCS 605/18  from Ch. 30, par. 318

    Amends the Condominium Property Act. Provides that certain insurance policies must be in a total amount of not less than the full insurable replacement cost or guaranteed replacement cost (current law does not contain "or guaranteed replacement cost") of the insured property, less deductibles, but including coverage for the increased costs of construction due to building code requirements of a minimum amount of 5% of the total building (blanket) limit (current law does not contain "a minimum amount of 5% of the total building (blanket) limit"), at the time the insurance is purchased and at each renewal date. Provides that certain associations must include the managing agent and employees who control or disburse funds of the association as additional insureds. Provides that, with exceptions, only policies issued by carriers who meet certain ratings benchmarks are permitted. Prohibits certain types of policies. Provides that the maximum deductible amount that unit owners can be required to pay is $5,000. Provides that certain contractors and vendors must provide certificates of insurance, which among other requirements, carry a commercial liability limit of at least $1,000,000 and provide a workers' compensation policy, even if the insured is self-employed with no additional employees. Provides that an association with 6 (instead of 30) or more units shall obtain and maintain fidelity insurance covering persons who control or disburse 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.


LRB098 08609 HEP 38727 b

 

 

A BILL FOR

 

SB1457LRB098 08609 HEP 38727 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 Sections 12 and 18 as follows:
 
6    (765 ILCS 605/12)  (from Ch. 30, par. 312)
7    Sec. 12. Insurance.
8    (a) Required coverage. No policy of insurance shall be
9issued or delivered to a condominium association, and no policy
10of insurance issued to a condominium association shall be
11renewed, unless the insurance coverage under the policy
12includes the following:
13        (1) Property insurance. Property insurance (i) on the
14    common elements and the units, including the limited common
15    elements and except as otherwise determined by the board of
16    managers, the bare walls, floors, and ceilings of the unit,
17    (ii) providing coverage for special form causes of loss,
18    and (iii) in a total amount of not less than the full
19    insurable replacement cost or guaranteed replacement cost
20    of the insured property, less deductibles, but including
21    coverage for the increased costs of construction due to
22    building code requirements of a minimum amount of 5% of the
23    total building (blanket) limit, at the time the insurance

 

 

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1    is purchased and at each renewal date.
2        (2) General liability insurance. Commercial general
3    liability insurance against claims and liabilities arising
4    in connection with the ownership, existence, use, or
5    management of the property in a minimum amount of
6    $1,000,000, or a greater amount deemed sufficient in the
7    judgment of the board, insuring the board, the association,
8    the management agent, and their respective employees and
9    agents and all persons acting as agents. The developer must
10    be included as an additional insured in its capacity as a
11    unit owner, manager, board member, or officer. The unit
12    owners must be included as additional insured parties but
13    only for claims and liabilities arising in connection with
14    the ownership, existence, use, or management of the common
15    elements. The insurance must cover claims of one or more
16    insured parties against other insured parties.
17        (3) Fidelity bond; directors and officers coverage.
18            (A) An association with 6 or more dwelling units
19        must obtain and maintain a fidelity bond covering
20        persons, including the managing agent and its
21        employees who control or disburse funds of the
22        association as additional insureds, for the maximum
23        amount of coverage available to protect funds in the
24        custody or control of the association, plus the
25        association reserve fund.
26            (B) All management companies that are responsible

 

 

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1        for the funds held or administered by the association
2        must be covered by a fidelity bond for the maximum
3        amount of coverage available to protect those funds.
4        The association has standing to make a loss claim
5        against the bond of the managing agent as a party
6        covered under the bond.
7            (C) For purposes of paragraphs (A) and (B), the
8        fidelity bond must be in the full amount of association
9        funds and reserves in the custody of the association or
10        the management company.
11            (D) The board of directors must obtain directors
12        and officers liability coverage at a level deemed
13        reasonable by the board, if not otherwise established
14        by the declaration or bylaws. Directors and officers
15        liability coverage must extend to all contracts and
16        other actions taken by the board in their official
17        capacity as directors and officers, but this coverage
18        shall exclude actions for which the directors are not
19        entitled to indemnification under the General Not For
20        Profit Corporation Act of 1986 or the declaration and
21        bylaws of the association.
22    Only admitted insurance carriers with a rating of B+ or
23higher by A.M. Best Company, Inc., or a comparable rating
24issued by a rating agency designated as a Nationally Recognized
25Statistical Rating Organization by the United States
26Securities and Exchange Commission, are permitted, unless 3

 

 

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1admitted carriers have declined the risk for the association,
2in which case an association shall utilize the excess surplus
3lines to secure insurance coverage.
4    (a-5) Prohibited policies. The following types of
5insurance policies are not permitted:
6        (1) a policy covering multiple unaffiliated
7    condominium buildings or projects; and
8        (2) self-insurance arrangements whereby the unit
9    owners are self-insured or have banded together with other
10    unaffiliated associations to self-insure all of the
11    general and limited common elements of the various
12    associations.
13    (b) Contiguous units; improvements and betterments. The
14insurance maintained under subdivision (a)(1) must include the
15units, the limited common elements except as otherwise
16determined by the board of managers, and the common elements.
17The insurance need not cover improvements and betterments to
18the units installed by unit owners, but if improvements and
19betterments are covered, any increased cost may be assessed by
20the association against the units affected.
21    Common elements include fixtures located within the
22unfinished interior surfaces of the perimeter walls, floors,
23and ceilings of the individual units initially installed by the
24developer. Common elements exclude floor, wall, and ceiling
25coverings. "Improvements and betterments" means all
26decorating, fixtures, and furnishings installed or added to and

 

 

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1located within the boundaries of the unit, including electrical
2fixtures, appliances, air conditioning and heating equipment,
3water heaters, or built-in cabinets installed by unit owners.
4    (c) Deductibles. The board of directors of the association
5may, in the case of a claim for damage to a unit or the common
6elements, (i) pay the deductible amount as a common expense,
7(ii) after notice and an opportunity for a hearing, assess the
8deductible amount against the owners who caused the damage or
9from whose units the damage or cause of loss originated, or
10(iii) require the unit owners of the units affected to pay the
11deductible amount, not to exceed $5,000.
12    (d) Other coverages. The declaration may require the
13association to carry any other insurance, including workers
14compensation, employment practices, environmental hazards, and
15equipment breakdown, the board of directors considers
16appropriate to protect the association, the unit owners, or
17officers, directors, or agents of the association.
18    (e) Insured parties; waiver of subrogation. Insurance
19policies carried pursuant to subsections (a) and (b) must
20include each of the following provisions:
21        (1) Each unit owner and secured party is an insured
22    person under the policy with respect to liability arising
23    out of the unit owner's interest in the common elements or
24    membership in the association.
25        (2) The insurer waives its right to subrogation under
26    the policy against any unit owner of the condominium or

 

 

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1    members of the unit owner's household and against the
2    association and members of the board of directors.
3        (3) The unit owner waives his or her right to
4    subrogation under the association policy against the
5    association and the board of directors.
6    (f) Primary insurance. If at the time of a loss under the
7policy there is other insurance in the name of a unit owner
8covering the same property covered by the policy, the
9association's policy is primary insurance.
10    (g) Adjustment of losses; distribution of proceeds. Any
11loss covered by the property policy under subdivision (a)(1)
12must be adjusted by and with the association. The insurance
13proceeds for that loss must be payable to the association, or
14to an insurance trustee designated by the association for that
15purpose. The insurance trustee or the association must hold any
16insurance proceeds in trust for unit owners and secured parties
17as their interests may appear. The proceeds must be disbursed
18first for the repair or restoration of the damaged common
19elements, the bare walls, ceilings, and floors of the units,
20and then to any improvements and betterments the association
21may insure. Unit owners are not entitled to receive any portion
22of the proceeds unless there is a surplus of proceeds after the
23common elements and units have been completely repaired or
24restored or the association has been terminated as trustee.
25    (h) Mandatory unit owner coverage. The board of directors
26may, under the declaration and bylaws or by rule, require

 

 

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1condominium unit owners to obtain insurance covering their
2personal liability and compensatory (but not consequential)
3damages to another unit caused by the negligence of the owner
4or his or her guests, residents, or invitees, or regardless of
5any negligence originating from the unit. The personal
6liability of a unit owner or association member must include
7the deductible of the owner whose unit was damaged, any damage
8not covered by insurance required by this subsection, as well
9as the decorating, painting, wall and floor coverings, trim,
10appliances, equipment, and other furnishings.
11    If the unit owner does not purchase or produce evidence of
12insurance requested by the board, the directors may purchase
13the insurance coverage and charge the premium cost back to the
14unit owner. In no event is the board liable to any person
15either with regard to its decision not to purchase the
16insurance, or with regard to the timing of its purchase of the
17insurance or the amounts or types of coverages obtained.
18    (i) Certificates of insurance. Contractors and vendors
19(except public utilities) doing business with a condominium
20association under contracts exceeding $10,000 per year must
21provide certificates of insurance naming the association, its
22board of directors, and its managing agent as additional
23insured parties, carrying a commercial liability limit of at
24least $1,000,000, and providing a workers' compensation
25policy, even if the insured is self-employed with no additional
26employees.

 

 

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1    (j) Non-residential condominiums. The provisions of this
2Section may be varied or waived in the case of a condominium
3community in which all units are restricted to nonresidential
4use.
5    (k) Settlement of claims. Any insurer defending a liability
6claim against a condominium association must notify the
7association of the terms of the settlement no less than 10 days
8before settling the claim. The association may not veto the
9settlement unless otherwise provided by contract or statute.
10(Source: P.A. 92-518, eff. 6-1-02.)
 
11    (765 ILCS 605/18)  (from Ch. 30, par. 318)
12    Sec. 18. Contents of bylaws. The bylaws shall provide for
13at least the following:
14    (a) (1) The election from among the unit owners of a board
15    of managers, the number of persons constituting such board,
16    and that the terms of at least one-third of the members of
17    the board shall expire annually and that all members of the
18    board shall be elected at large. If there are multiple
19    owners of a single unit, only one of the multiple owners
20    shall be eligible to serve as a member of the board at any
21    one time.
22        (2) the powers and duties of the board;
23        (3) the compensation, if any, of the members of the
24    board;
25        (4) the method of removal from office of members of the

 

 

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1    board;
2        (5) that the board may engage the services of a manager
3    or managing agent;
4        (6) that each unit owner shall receive, at least 30
5    days prior to the adoption thereof by the board of
6    managers, a copy of the proposed annual budget together
7    with an indication of which portions are intended for
8    reserves, capital expenditures or repairs or payment of
9    real estate taxes;
10        (7) that the board of managers shall annually supply to
11    all unit owners an itemized accounting of the common
12    expenses for the preceding year actually incurred or paid,
13    together with an indication of which portions were for
14    reserves, capital expenditures or repairs or payment of
15    real estate taxes and with a tabulation of the amounts
16    collected pursuant to the budget or assessment, and showing
17    the net excess or deficit of income over expenditures plus
18    reserves;
19        (8) (i) that each unit owner shall receive notice, in
20    the same manner as is provided in this Act for membership
21    meetings, of any meeting of the board of managers
22    concerning the adoption of the proposed annual budget and
23    regular assessments pursuant thereto or to adopt a separate
24    (special) assessment, (ii) that except as provided in
25    subsection (iv) below, if an adopted budget or any separate
26    assessment adopted by the board would result in the sum of

 

 

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1    all regular and separate assessments payable in the current
2    fiscal year exceeding 115% of the sum of all regular and
3    separate assessments payable during the preceding fiscal
4    year, the board of managers, upon written petition by unit
5    owners with 20 percent of the votes of the association
6    delivered to the board within 14 days of the board action,
7    shall call a meeting of the unit owners within 30 days of
8    the date of delivery of the petition to consider the budget
9    or separate assessment; unless a majority of the total
10    votes of the unit owners are cast at the meeting to reject
11    the budget or separate assessment, it is ratified, (iii)
12    that any common expense not set forth in the budget or any
13    increase in assessments over the amount adopted in the
14    budget shall be separately assessed against all unit
15    owners, (iv) that separate assessments for expenditures
16    relating to emergencies or mandated by law may be adopted
17    by the board of managers without being subject to unit
18    owner approval or the provisions of item (ii) above or item
19    (v) below. As used herein, "emergency" means an immediate
20    danger to the structural integrity of the common elements
21    or to the life, health, safety or property of the unit
22    owners, (v) that assessments for additions and alterations
23    to the common elements or to association-owned property not
24    included in the adopted annual budget, shall be separately
25    assessed and are subject to approval of two-thirds of the
26    total votes of all unit owners, (vi) that the board of

 

 

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1    managers may adopt separate assessments payable over more
2    than one fiscal year. With respect to multi-year
3    assessments not governed by items (iv) and (v), the entire
4    amount of the multi-year assessment shall be deemed
5    considered and authorized in the first fiscal year in which
6    the assessment is approved;
7        (9) that meetings of the board of managers shall be
8    open to any unit owner, except for the portion of any
9    meeting held (i) to discuss litigation when an action
10    against or on behalf of the particular association has been
11    filed and is pending in a court or administrative tribunal,
12    or when the board of managers finds that such an action is
13    probable or imminent, (ii) to consider information
14    regarding appointment, employment or dismissal of an
15    employee, or (iii) to discuss violations of rules and
16    regulations of the association or a unit owner's unpaid
17    share of common expenses; that any vote on these matters
18    shall be taken at a meeting or portion thereof open to any
19    unit owner; that any unit owner may record the proceedings
20    at meetings or portions thereof required to be open by this
21    Act by tape, film or other means; that the board may
22    prescribe reasonable rules and regulations to govern the
23    right to make such recordings, that notice of such meetings
24    shall be mailed or delivered at least 48 hours prior
25    thereto, unless a written waiver of such notice is signed
26    by the person or persons entitled to such notice pursuant

 

 

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1    to the declaration, bylaws, other condominium instrument,
2    or provision of law other than this subsection before the
3    meeting is convened, and that copies of notices of meetings
4    of the board of managers shall be posted in entranceways,
5    elevators, or other conspicuous places in the condominium
6    at least 48 hours prior to the meeting of the board of
7    managers except where there is no common entranceway for 7
8    or more units, the board of managers may designate one or
9    more locations in the proximity of these units where the
10    notices of meetings shall be posted;
11        (10) that the board shall meet at least 4 times
12    annually;
13        (11) that no member of the board or officer shall be
14    elected for a term of more than 2 years, but that officers
15    and board members may succeed themselves;
16        (12) the designation of an officer to mail and receive
17    all notices and execute amendments to condominium
18    instruments as provided for in this Act and in the
19    condominium instruments;
20        (13) the method of filling vacancies on the board which
21    shall include authority for the remaining members of the
22    board to fill the vacancy by two-thirds vote until the next
23    annual meeting of unit owners or for a period terminating
24    no later than 30 days following the filing of a petition
25    signed by unit owners holding 20% of the votes of the
26    association requesting a meeting of the unit owners to fill

 

 

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1    the vacancy for the balance of the term, and that a meeting
2    of the unit owners shall be called for purposes of filling
3    a vacancy on the board no later than 30 days following the
4    filing of a petition signed by unit owners holding 20% of
5    the votes of the association requesting such a meeting, and
6    the method of filling vacancies among the officers that
7    shall include the authority for the members of the board to
8    fill the vacancy for the unexpired portion of the term;
9        (14) what percentage of the board of managers, if other
10    than a majority, shall constitute a quorum;
11        (15) provisions concerning notice of board meetings to
12    members of the board;
13        (16) the board of managers may not enter into a
14    contract with a current board member or with a corporation
15    or partnership in which a board member or a member of the
16    board member's immediate family has 25% or more interest,
17    unless notice of intent to enter the contract is given to
18    unit owners within 20 days after a decision is made to
19    enter into the contract and the unit owners are afforded an
20    opportunity by filing a petition, signed by 20% of the unit
21    owners, for an election to approve or disapprove the
22    contract; such petition shall be filed within 20 days after
23    such notice and such election shall be held within 30 days
24    after filing the petition; for purposes of this subsection,
25    a board member's immediate family means the board member's
26    spouse, parents, and children;

 

 

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1        (17) that the board of managers may disseminate to unit
2    owners biographical and background information about
3    candidates for election to the board if (i) reasonable
4    efforts to identify all candidates are made and all
5    candidates are given an opportunity to include
6    biographical and background information in the information
7    to be disseminated; and (ii) the board does not express a
8    preference in favor of any candidate;
9        (18) any proxy distributed for board elections by the
10    board of managers gives unit owners the opportunity to
11    designate any person as the proxy holder, and gives the
12    unit owner the opportunity to express a preference for any
13    of the known candidates for the board or to write in a
14    name;
15        (19) that special meetings of the board of managers can
16    be called by the president or 25% of the members of the
17    board; and
18        (20) that the board of managers may establish and
19    maintain a system of master metering of public utility
20    services and collect payments in connection therewith,
21    subject to the requirements of the Tenant Utility Payment
22    Disclosure Act.
23    (b) (1) What percentage of the unit owners, if other than
24    20%, shall constitute a quorum provided that, for
25    condominiums with 20 or more units, the percentage of unit
26    owners constituting a quorum shall be 20% unless the unit

 

 

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1    owners holding a majority of the percentage interest in the
2    association provide for a higher percentage, provided that
3    in voting on amendments to the association's bylaws, a unit
4    owner who is in arrears on the unit owner's regular or
5    separate assessments for 60 days or more, shall not be
6    counted for purposes of determining if a quorum is present,
7    but that unit owner retains the right to vote on amendments
8    to the association's bylaws;
9        (2) that the association shall have one class of
10    membership;
11        (3) that the members shall hold an annual meeting, one
12    of the purposes of which shall be to elect members of the
13    board of managers;
14        (4) the method of calling meetings of the unit owners;
15        (5) that special meetings of the members can be called
16    by the president, board of managers, or by 20% of unit
17    owners;
18        (6) that written notice of any membership meeting shall
19    be mailed or delivered giving members no less than 10 and
20    no more than 30 days notice of the time, place and purpose
21    of such meeting;
22        (7) that voting shall be on a percentage basis, and
23    that the percentage vote to which each unit is entitled is
24    the percentage interest of the undivided ownership of the
25    common elements appurtenant thereto, provided that the
26    bylaws may provide for approval by unit owners in

 

 

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1    connection with matters where the requisite approval on a
2    percentage basis is not specified in this Act, on the basis
3    of one vote per unit;
4        (8) that, where there is more than one owner of a unit,
5    if only one of the multiple owners is present at a meeting
6    of the association, he is entitled to cast all the votes
7    allocated to that unit, if more than one of the multiple
8    owners are present, the votes allocated to that unit may be
9    cast only in accordance with the agreement of a majority in
10    interest of the multiple owners, unless the declaration
11    expressly provides otherwise, that there is majority
12    agreement if any one of the multiple owners cast the votes
13    allocated to that unit without protest being made promptly
14    to the person presiding over the meeting by any of the
15    other owners of the unit;
16        (9)(A) that unless the Articles of Incorporation or the
17    bylaws otherwise provide, and except as provided in
18    subparagraph (B) of this paragraph (9) in connection with
19    board elections, a unit owner may vote by proxy executed in
20    writing by the unit owner or by his duly authorized
21    attorney in fact; that the proxy must bear the date of
22    execution and, unless the condominium instruments or the
23    written proxy itself provide otherwise, is invalid after 11
24    months from the date of its execution;
25        (B) that if a rule adopted at least 120 days before a
26    board election or the declaration or bylaws provide for

 

 

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1    balloting as set forth in this subsection, unit owners may
2    not vote by proxy in board elections, but may vote only (i)
3    by submitting an association-issued ballot in person at the
4    election meeting or (ii) by submitting an
5    association-issued ballot to the association or its
6    designated agent by mail or other means of delivery
7    specified in the declaration, bylaws, or rule; that the
8    ballots shall be mailed or otherwise distributed to unit
9    owners not less than 10 and not more than 30 days before
10    the election meeting, and the board shall give unit owners
11    not less than 21 days' prior written notice of the deadline
12    for inclusion of a candidate's name on the ballots; that
13    the deadline shall be no more than 7 days before the
14    ballots are mailed or otherwise distributed to unit owners;
15    that every such ballot must include the names of all
16    candidates who have given the board or its authorized agent
17    timely written notice of their candidacy and must give the
18    person casting the ballot the opportunity to cast votes for
19    candidates whose names do not appear on the ballot; that a
20    ballot received by the association or its designated agent
21    after the close of voting shall not be counted; that a unit
22    owner who submits a ballot by mail or other means of
23    delivery specified in the declaration, bylaws, or rule may
24    request and cast a ballot in person at the election
25    meeting, and thereby void any ballot previously submitted
26    by that unit owner;

 

 

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1        (C) that if a written petition by unit owners with at
2    least 20% of the votes of the association is delivered to
3    the board within 14 days after the board's approval of a
4    rule adopted pursuant to subparagraph (B) of this paragraph
5    (9), the board shall call a meeting of the unit owners
6    within 30 days after the date of delivery of the petition;
7    that unless a majority of the total votes of the unit
8    owners are cast at the meeting to reject the rule, the rule
9    is ratified;
10        (10) that the association may, upon adoption of the
11    appropriate rules by the board of managers, conduct
12    elections by secret ballot whereby the voting ballot is
13    marked only with the percentage interest for the unit and
14    the vote itself, provided that the board further adopt
15    rules to verify the status of the unit owner issuing a
16    proxy or casting a ballot; and further, that a candidate
17    for election to the board of managers or such candidate's
18    representative shall have the right to be present at the
19    counting of ballots at such election;
20        (11) that in the event of a resale of a condominium
21    unit the purchaser of a unit from a seller other than the
22    developer pursuant to an installment contract for purchase
23    shall during such times as he or she resides in the unit be
24    counted toward a quorum for purposes of election of members
25    of the board of managers at any meeting of the unit owners
26    called for purposes of electing members of the board, shall

 

 

SB1457- 19 -LRB098 08609 HEP 38727 b

1    have the right to vote for the election of members of the
2    board of managers and to be elected to and serve on the
3    board of managers unless the seller expressly retains in
4    writing any or all of such rights. In no event may the
5    seller and purchaser both be counted toward a quorum, be
6    permitted to vote for a particular office or be elected and
7    serve on the board. Satisfactory evidence of the
8    installment contact shall be made available to the
9    association or its agents. For purposes of this subsection,
10    "installment contact" shall have the same meaning as set
11    forth in Section 1 (e) of "An Act relating to installment
12    contracts to sell dwelling structures", approved August
13    11, 1967, as amended;
14        (12) the method by which matters subject to the
15    approval of unit owners set forth in this Act, or in the
16    condominium instruments, will be submitted to the unit
17    owners at special membership meetings called for such
18    purposes; and
19        (13) that matters subject to the affirmative vote of
20    not less than 2/3 of the votes of unit owners at a meeting
21    duly called for that purpose, shall include, but not be
22    limited to:
23            (i) merger or consolidation of the association;
24            (ii) sale, lease, exchange, or other disposition
25        (excluding the mortgage or pledge) of all, or
26        substantially all of the property and assets of the

 

 

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1        association; and
2            (iii) the purchase or sale of land or of units on
3        behalf of all unit owners.
4    (c) Election of a president from among the board of
5managers, who shall preside over the meetings of the board of
6managers and of the unit owners.
7    (d) Election of a secretary from among the board of
8managers, who shall keep the minutes of all meetings of the
9board of managers and of the unit owners and who shall, in
10general, perform all the duties incident to the office of
11secretary.
12    (e) Election of a treasurer from among the board of
13managers, who shall keep the financial records and books of
14account.
15    (f) Maintenance, repair and replacement of the common
16elements and payments therefor, including the method of
17approving payment vouchers.
18    (g) An association with 6 30 or more units shall obtain and
19maintain fidelity insurance covering persons who control or
20disburse funds of the association for the maximum amount of
21coverage available to protect funds in the custody or control
22of the association plus the association reserve fund. All
23management companies which are responsible for the funds held
24or administered by the association shall maintain and furnish
25to the association a fidelity bond for the maximum amount of
26coverage available to protect funds in the custody of the

 

 

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1management company at any time. The association shall bear the
2cost of the fidelity insurance and fidelity bond, unless
3otherwise provided by contract between the association and a
4management company. The association shall be the direct obligee
5of any such fidelity bond. A management company holding reserve
6funds of an association shall at all times maintain a separate
7account for each association, provided, however, that for
8investment purposes, the Board of Managers of an association
9may authorize a management company to maintain the
10association's reserve funds in a single interest bearing
11account with similar funds of other associations. The
12management company shall at all times maintain records
13identifying all moneys of each association in such investment
14account. The management company may hold all operating funds of
15associations which it manages in a single operating account but
16shall at all times maintain records identifying all moneys of
17each association in such operating account. Such operating and
18reserve funds held by the management company for the
19association shall not be subject to attachment by any creditor
20of the management company.
21    For the purpose of this subsection a management company
22shall be defined as a person, partnership, corporation, or
23other legal entity entitled to transact business on behalf of
24others, acting on behalf of or as an agent for a unit owner,
25unit owners or association of unit owners for the purpose of
26carrying out the duties, responsibilities, and other

 

 

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1obligations necessary for the day to day operation and
2management of any property subject to this Act. For purposes of
3this subsection, the term "fiduciary insurance coverage" shall
4be defined as both a fidelity bond and directors and officers
5liability coverage, the fidelity bond in the full amount of
6association funds and association reserves that will be in the
7custody of the association, and the directors and officers
8liability coverage at a level as shall be determined to be
9reasonable by the board of managers, if not otherwise
10established by the declaration or by laws.
11    Until one year after the effective date of this amendatory
12Act of 1985, if a condominium association has reserves plus
13assessments in excess of $250,000 and cannot reasonably obtain
14100% fidelity bond coverage for such amount, then it must
15obtain a fidelity bond coverage of $250,000.
16    (h) Method of estimating the amount of the annual budget,
17and the manner of assessing and collecting from the unit owners
18their respective shares of such estimated expenses, and of any
19other expenses lawfully agreed upon.
20    (i) That upon 10 days notice to the manager or board of
21managers and payment of a reasonable fee, any unit owner shall
22be furnished a statement of his account setting forth the
23amount of any unpaid assessments or other charges due and owing
24from such owner.
25    (j) Designation and removal of personnel necessary for the
26maintenance, repair and replacement of the common elements.

 

 

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1    (k) Such restrictions on and requirements respecting the
2use and maintenance of the units and the use of the common
3elements, not set forth in the declaration, as are designed to
4prevent unreasonable interference with the use of their
5respective units and of the common elements by the several unit
6owners.
7    (l) Method of adopting and of amending administrative rules
8and regulations governing the operation and use of the common
9elements.
10    (m) The percentage of votes required to modify or amend the
11bylaws, but each one of the particulars set forth in this
12section shall always be embodied in the bylaws.
13    (n) (i) The provisions of this Act, the declaration,
14bylaws, other condominium instruments, and rules and
15regulations that relate to the use of the individual unit or
16the common elements shall be applicable to any person leasing a
17unit and shall be deemed to be incorporated in any lease
18executed or renewed on or after the effective date of this
19amendatory Act of 1984. (ii) With regard to any lease entered
20into subsequent to the effective date of this amendatory Act of
211989, the unit owner leasing the unit shall deliver a copy of
22the signed lease to the board or if the lease is oral, a
23memorandum of the lease, not later than the date of occupancy
24or 10 days after the lease is signed, whichever occurs first.
25In addition to any other remedies, by filing an action jointly
26against the tenant and the unit owner, an association may seek

 

 

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1to enjoin a tenant from occupying a unit or seek to evict a
2tenant under the provisions of Article IX of the Code of Civil
3Procedure for failure of the lessor-owner to comply with the
4leasing requirements prescribed by this Section or by the
5declaration, bylaws, and rules and regulations. The board of
6managers may proceed directly against a tenant, at law or in
7equity, or under the provisions of Article IX of the Code of
8Civil Procedure, for any other breach by tenant of any
9covenants, rules, regulations or bylaws.
10    (o) The association shall have no authority to forbear the
11payment of assessments by any unit owner.
12    (p) That when 30% or fewer of the units, by number, possess
13over 50% in the aggregate of the votes in the association, any
14percentage vote of members specified herein or in the
15condominium instruments shall require the specified percentage
16by number of units rather than by percentage of interest in the
17common elements allocated to units that would otherwise be
18applicable and garage units or storage units, or both, shall
19have, in total, no more votes than their aggregate percentage
20of ownership in the common elements; this shall mean that if
21garage units or storage units, or both, are to be given a vote,
22or portion of a vote, that the association must add the total
23number of votes cast of garage units, storage units, or both,
24and divide the total by the number of garage units, storage
25units, or both, and multiply by the aggregate percentage of
26ownership of garage units and storage units to determine the

 

 

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1vote, or portion of a vote, that garage units or storage units,
2or both, have. For purposes of this subsection (p), when making
3a determination of whether 30% or fewer of the units, by
4number, possess over 50% in the aggregate of the votes in the
5association, a unit shall not include a garage unit or a
6storage unit.
7    (q) That a unit owner may not assign, delegate, transfer,
8surrender, or avoid the duties, responsibilities, and
9liabilities of a unit owner under this Act, the condominium
10instruments, or the rules and regulations of the Association;
11and that such an attempted assignment, delegation, transfer,
12surrender, or avoidance shall be deemed void.
13    The provisions of this Section are applicable to all
14condominium instruments recorded under this Act. Any portion of
15a condominium instrument which contains provisions contrary to
16these provisions shall be void as against public policy and
17ineffective. Any such instrument which fails to contain the
18provisions required by this Section shall be deemed to
19incorporate such provisions by operation of law.
20(Source: P.A. 95-624, eff. 6-1-08; 96-55, eff. 1-1-10; 96-977,
21eff. 7-2-10.)