97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1972

 

Introduced 2/10/2011, by Sen. Pamela J. Althoff

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/18.5  from Ch. 30, par. 318.5

    Amends the Condominium Property Act. Provides, in provisions concerning master associations, that a purchaser of a unit at a judicial foreclosure sale, other than a mortgagee who takes possession pursuant to a court order or a purchaser who acquires title from a mortgagee, has the duty to pay the proportionate share of the common expenses for the unit during the 6 months immediately before the filing of an action to collect assessments and the association's costs of collection, including reasonable attorney's fees, (instead of collect assessments) that remain unpaid by the prior owner. Provides that if the outstanding assessments and the association's costs of collection, including reasonable attorney's fees (instead of outstanding assessments) are paid during an action to collect assessments, the purchaser shall have no obligation to pay any assessments or costs (instead of any assessments) that accrued before he or she acquired title. Makes related changes.


LRB097 10092 AJO 50271 b

 

 

A BILL FOR

 

SB1972LRB097 10092 AJO 50271 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 18.5 as follows:
 
6    (765 ILCS 605/18.5)  (from Ch. 30, par. 318.5)
7    Sec. 18.5. Master Associations.
8    (a) If the declaration, other condominium instrument, or
9other duly recorded covenants provide that any of the powers of
10the unit owners associations are to be exercised by or may be
11delegated to a nonprofit corporation or unincorporated
12association that exercises those or other powers on behalf of
13one or more condominiums, or for the benefit of the unit owners
14of one or more condominiums, such corporation or association
15shall be a master association.
16    (b) There shall be included in the declaration, other
17condominium instruments, or other duly recorded covenants
18establishing the powers and duties of the master association
19the provisions set forth in subsections (c) through (h).
20    In interpreting subsections (c) through (h), the courts
21should interpret these provisions so that they are interpreted
22consistently with the similar parallel provisions found in
23other parts of this Act.

 

 

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1    (c) Meetings and finances.
2        (1) Each unit owner of a condominium subject to the
3    authority of the board of the master association shall
4    receive, at least 30 days prior to the adoption thereof by
5    the board of the master association, a copy of the proposed
6    annual budget.
7        (2) The board of the master association shall annually
8    supply to all unit owners of condominiums subject to the
9    authority of the board of the master association an
10    itemized accounting of the common expenses for the
11    preceding year actually incurred or paid, together with a
12    tabulation of the amounts collected pursuant to the budget
13    or assessment, and showing the net excess or deficit of
14    income over expenditures plus reserves.
15        (3) Each unit owner of a condominium subject to the
16    authority of the board of the master association shall
17    receive written notice mailed or delivered no less than 10
18    and no more than 30 days prior to any meeting of the board
19    of the master association concerning the adoption of the
20    proposed annual budget or any increase in the budget, or
21    establishment of an assessment.
22        (4) Meetings of the board of the master association
23    shall be open to any unit owner in a condominium subject to
24    the authority of the board of the master association,
25    except for the portion of any meeting held:
26            (A) to discuss litigation when an action against or

 

 

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1        on behalf of the particular master association has been
2        filed and is pending in a court or administrative
3        tribunal, or when the board of the master association
4        finds that such an action is probable or imminent,
5            (B) to consider information regarding appointment,
6        employment or dismissal of an employee, or
7            (C) to discuss violations of rules and regulations
8        of the master association or unpaid common expenses
9        owed to the master association.
10    Any vote on these matters shall be taken at a meeting or
11    portion thereof open to any unit owner of a condominium
12    subject to the authority of the master association.
13        Any unit owner may record the proceedings at meetings
14    required to be open by this Act by tape, film or other
15    means; the board may prescribe reasonable rules and
16    regulations to govern the right to make such recordings.
17    Notice of meetings shall be mailed or delivered at least 48
18    hours prior thereto, unless a written waiver of such notice
19    is signed by the persons entitled to notice before the
20    meeting is convened. Copies of notices of meetings of the
21    board of the master association shall be posted in
22    entranceways, elevators, or other conspicuous places in
23    the condominium at least 48 hours prior to the meeting of
24    the board of the master association. Where there is no
25    common entranceway for 7 or more units, the board of the
26    master association may designate one or more locations in

 

 

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1    the proximity of these units where the notices of meetings
2    shall be posted.
3        (5) If the declaration provides for election by unit
4    owners of members of the board of directors in the event of
5    a resale of a unit in the master association, the purchaser
6    of a unit from a seller other than the developer pursuant
7    to an installment contract for purchase shall, during such
8    times as he or she resides in the unit, be counted toward a
9    quorum for purposes of election of members of the board of
10    directors at any meeting of the unit owners called for
11    purposes of electing members of the board, and shall have
12    the right to vote for the election of members of the board
13    of directors and to be elected to and serve on the board of
14    directors unless the seller expressly retains in writing
15    any or all of those rights. In no event may the seller and
16    purchaser both be counted toward a quorum, be permitted to
17    vote for a particular office, or be elected and serve on
18    the board. Satisfactory evidence of the installment
19    contract shall be made available to the association or its
20    agents. For purposes of this subsection, "installment
21    contract" shall have the same meaning as set forth in
22    subsection (e) of Section 1 of the Dwelling Unit
23    Installment Contract Act.
24        (6) The board of the master association shall have the
25    authority to establish and maintain a system of master
26    metering of public utility services and to collect payments

 

 

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1    in connection therewith, subject to the requirements of the
2    Tenant Utility Payment Disclosure Act.
3        (7) The board of the master association or a common
4    interest community association shall have the power, after
5    notice and an opportunity to be heard, to levy and collect
6    reasonable fines from members for violations of the
7    declaration, bylaws, and rules and regulations of the
8    master association or the common interest community
9    association. Nothing contained in this subdivision (7)
10    shall give rise to a statutory lien for unpaid fines.
11        (8) Other than attorney's fees, no fees pertaining to
12    the collection of a unit owner's financial obligation to
13    the Association, including fees charged by a manager or
14    managing agent, shall be added to and deemed a part of an
15    owner's respective share of the common expenses unless: (i)
16    the managing agent fees relate to the costs to collect
17    common expenses for the Association; (ii) the fees are set
18    forth in a contract between the managing agent and the
19    Association; and (iii) the authority to add the management
20    fees to an owner's respective share of the common expenses
21    is specifically stated in the declaration or bylaws of the
22    Association.
23    (d) Records.
24        (1) The board of the master association shall maintain
25    the following records of the association and make them
26    available for examination and copying at convenient hours

 

 

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1    of weekdays by any unit owners in a condominium subject to
2    the authority of the board or their mortgagees and their
3    duly authorized agents or attorneys:
4            (i) Copies of the recorded declaration, other
5        condominium instruments, other duly recorded covenants
6        and bylaws and any amendments, articles of
7        incorporation of the master association, annual
8        reports and any rules and regulations adopted by the
9        master association or its board shall be available.
10        Prior to the organization of the master association,
11        the developer shall maintain and make available the
12        records set forth in this subdivision (d)(1) for
13        examination and copying.
14            (ii) Detailed and accurate records in
15        chronological order of the receipts and expenditures
16        affecting the common areas, specifying and itemizing
17        the maintenance and repair expenses of the common areas
18        and any other expenses incurred, and copies of all
19        contracts, leases, or other agreements entered into by
20        the master association, shall be maintained.
21            (iii) The minutes of all meetings of the master
22        association and the board of the master association
23        shall be maintained for not less than 7 years.
24            (iv) Ballots and proxies related thereto, if any,
25        for any election held for the board of the master
26        association and for any other matters voted on by the

 

 

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1        unit owners shall be maintained for not less than one
2        year.
3            (v) Such other records of the master association as
4        are available for inspection by members of a
5        not-for-profit corporation pursuant to Section 107.75
6        of the General Not For Profit Corporation Act of 1986
7        shall be maintained.
8            (vi) With respect to units owned by a land trust,
9        if a trustee designates in writing a person to cast
10        votes on behalf of the unit owner, the designation
11        shall remain in effect until a subsequent document is
12        filed with the association.
13        (2) Where a request for records under this subsection
14    is made in writing to the board of managers or its agent,
15    failure to provide the requested record or to respond
16    within 30 days shall be deemed a denial by the board of
17    directors.
18        (3) A reasonable fee may be charged by the master
19    association or its board for the cost of copying.
20        (4) If the board of directors fails to provide records
21    properly requested under subdivision (d)(1) within the
22    time period provided in subdivision (d)(2), the unit owner
23    may seek appropriate relief, including an award of
24    attorney's fees and costs.
25    (e) The board of directors shall have standing and capacity
26to act in a representative capacity in relation to matters

 

 

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1involving the common areas of the master association or more
2than one unit, on behalf of the unit owners as their interests
3may appear.
4    (f) Administration of property prior to election of the
5initial board of directors.
6        (1) Until the election, by the unit owners or the
7    boards of managers of the underlying condominium
8    associations, of the initial board of directors of a master
9    association whose declaration is recorded on or after
10    August 10, 1990, the same rights, titles, powers,
11    privileges, trusts, duties and obligations that are vested
12    in or imposed upon the board of directors by this Act or in
13    the declaration or other duly recorded covenant shall be
14    held and performed by the developer.
15        (2) The election of the initial board of directors of a
16    master association whose declaration is recorded on or
17    after August 10, 1990, by the unit owners or the boards of
18    managers of the underlying condominium associations, shall
19    be held not later than 60 days after the conveyance by the
20    developer of 75% of the units, or 3 years after the
21    recording of the declaration, whichever is earlier. The
22    developer shall give at least 21 days notice of the meeting
23    to elect the initial board of directors and shall upon
24    request provide to any unit owner, within 3 working days of
25    the request, the names, addresses, and weighted vote of
26    each unit owner entitled to vote at the meeting. Any unit

 

 

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1    owner shall upon receipt of the request be provided with
2    the same information, within 10 days of the request, with
3    respect to each subsequent meeting to elect members of the
4    board of directors.
5        (3) If the initial board of directors of a master
6    association whose declaration is recorded on or after
7    August 10, 1990 is not elected by the unit owners or the
8    members of the underlying condominium association board of
9    managers at the time established in subdivision (f)(2), the
10    developer shall continue in office for a period of 30 days,
11    whereupon written notice of his resignation shall be sent
12    to all of the unit owners or members of the underlying
13    condominium board of managers entitled to vote at an
14    election for members of the board of directors.
15        (4) Within 60 days following the election of a majority
16    of the board of directors, other than the developer, by
17    unit owners, the developer shall deliver to the board of
18    directors:
19            (i) All original documents as recorded or filed
20        pertaining to the property, its administration, and
21        the association, such as the declaration, articles of
22        incorporation, other instruments, annual reports,
23        minutes, rules and regulations, and contracts, leases,
24        or other agreements entered into by the association. If
25        any original documents are unavailable, a copy may be
26        provided if certified by affidavit of the developer, or

 

 

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1        an officer or agent of the developer, as being a
2        complete copy of the actual document recorded or filed.
3            (ii) A detailed accounting by the developer,
4        setting forth the source and nature of receipts and
5        expenditures in connection with the management,
6        maintenance and operation of the property, copies of
7        all insurance policies, and a list of any loans or
8        advances to the association which are outstanding.
9            (iii) Association funds, which shall have been at
10        all times segregated from any other moneys of the
11        developer.
12            (iv) A schedule of all real or personal property,
13        equipment and fixtures belonging to the association,
14        including documents transferring the property,
15        warranties, if any, for all real and personal property
16        and equipment, deeds, title insurance policies, and
17        all tax bills.
18            (v) A list of all litigation, administrative
19        action and arbitrations involving the association, any
20        notices of governmental bodies involving actions taken
21        or which may be taken concerning the association,
22        engineering and architectural drawings and
23        specifications as approved by any governmental
24        authority, all other documents filed with any other
25        governmental authority, all governmental certificates,
26        correspondence involving enforcement of any

 

 

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1        association requirements, copies of any documents
2        relating to disputes involving unit owners, and
3        originals of all documents relating to everything
4        listed in this subparagraph.
5            (vi) If the developer fails to fully comply with
6        this paragraph (4) within the 60 days provided and
7        fails to fully comply within 10 days of written demand
8        mailed by registered or certified mail to his or her
9        last known address, the board may bring an action to
10        compel compliance with this paragraph (4). If the court
11        finds that any of the required deliveries were not made
12        within the required period, the board shall be entitled
13        to recover its reasonable attorneys' fees and costs
14        incurred from and after the date of expiration of the
15        10 day demand.
16        (5) With respect to any master association whose
17    declaration is recorded on or after August 10, 1990, any
18    contract, lease, or other agreement made prior to the
19    election of a majority of the board of directors other than
20    the developer by or on behalf of unit owners or underlying
21    condominium associations, the association or the board of
22    directors, which extends for a period of more than 2 years
23    from the recording of the declaration, shall be subject to
24    cancellation by more than 1/2 of the votes of the unit
25    owners, other than the developer, cast at a special meeting
26    of members called for that purpose during a period of 90

 

 

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1    days prior to the expiration of the 2 year period if the
2    board of managers is elected by the unit owners, otherwise
3    by more than 1/2 of the underlying condominium board of
4    managers. At least 60 days prior to the expiration of the 2
5    year period, the board of directors, or, if the board is
6    still under developer control, then the board of managers
7    or the developer shall send notice to every unit owner or
8    underlying condominium board of managers, notifying them
9    of this provision, of what contracts, leases and other
10    agreements are affected, and of the procedure for calling a
11    meeting of the unit owners or for action by the underlying
12    condominium board of managers for the purpose of acting to
13    terminate such contracts, leases or other agreements.
14    During the 90 day period the other party to the contract,
15    lease, or other agreement shall also have the right of
16    cancellation.
17        (6) The statute of limitations for any actions in law
18    or equity which the master association may bring shall not
19    begin to run until the unit owners or underlying
20    condominium board of managers have elected a majority of
21    the members of the board of directors.
22    (g) In the event of any resale of a unit in a master
23association by a unit owner other than the developer, the owner
24shall obtain from the board of directors and shall make
25available for inspection to the prospective purchaser, upon
26demand, the following:

 

 

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1        (1) A copy of the declaration, other instruments and
2    any rules and regulations.
3        (2) A statement of any liens, including a statement of
4    the account of the unit setting forth the amounts of unpaid
5    assessments and other charges due and owing.
6        (3) A statement of any capital expenditures
7    anticipated by the association within the current or
8    succeeding 2 fiscal years.
9        (4) A statement of the status and amount of any reserve
10    for replacement fund and any portion of such fund earmarked
11    for any specified project by the board of directors.
12        (5) A copy of the statement of financial condition of
13    the association for the last fiscal year for which such a
14    statement is available.
15        (6) A statement of the status of any pending suits or
16    judgments in which the association is a party.
17        (7) A statement setting forth what insurance coverage
18    is provided for all unit owners by the association.
19        (8) A statement that any improvements or alterations
20    made to the unit, or any part of the common areas assigned
21    thereto, by the prior unit owner are in good faith believed
22    to be in compliance with the declaration of the master
23    association.
24    The principal officer of the unit owner's association or
25such other officer as is specifically designated shall furnish
26the above information when requested to do so in writing,

 

 

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1within 30 days of receiving the request.
2    A reasonable fee covering the direct out-of-pocket cost of
3copying and providing such information may be charged by the
4association or its board of directors to the unit seller for
5providing the information.
6    (g-1) The purchaser of a unit of a common interest
7community at a judicial foreclosure sale, other than (i) a
8mortgagee, who takes possession of a unit of a common interest
9community pursuant to a court order or (ii) a purchaser who
10acquires title from a mortgagee shall have the duty to pay the
11proportionate share, if any, of the common expenses for the
12unit that would have become due in the absence of any
13assessment acceleration during the 6 months immediately
14preceding institution of an action to enforce the collection of
15assessments, and the association's costs of collection,
16including reasonable attorney's fees, and that remain unpaid by
17the owner during whose possession the assessments accrued. If
18the outstanding assessments and the association's costs of
19collection, including reasonable attorney's fees, are paid at
20any time during any action to enforce the collection of
21assessments, the purchaser shall have no obligation to pay any
22assessments or costs that accrued before he or she acquired
23title. The notice of sale of a unit of a common interest
24community under subsection (c) of Section 15-1507 of the Code
25of Civil Procedure shall state that the purchaser of the unit
26other than a mortgagee shall pay the assessments and costs

 

 

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1required by this subsection (g-1).
2    (h) Errors and omissions.
3        (1) If there is an omission or error in the declaration
4    or other instrument of the master association, the master
5    association may correct the error or omission by an
6    amendment to the declaration or other instrument, as may be
7    required to conform it to this Act, to any other applicable
8    statute, or to the declaration. The amendment shall be
9    adopted by vote of two-thirds of the members of the board
10    of directors or by a majority vote of the unit owners at a
11    meeting called for that purpose, unless the Act or the
12    declaration of the master association specifically
13    provides for greater percentages or different procedures.
14        (2) If, through a scrivener's error, a unit has not
15    been designated as owning an appropriate undivided share of
16    the common areas or does not bear an appropriate share of
17    the common expenses, or if all of the common expenses or
18    all of the common elements in the condominium have not been
19    distributed in the declaration, so that the sum total of
20    the shares of common areas which have been distributed or
21    the sum total of the shares of the common expenses fail to
22    equal 100%, or if it appears that more than 100% of the
23    common elements or common expenses have been distributed,
24    the error may be corrected by operation of law by filing an
25    amendment to the declaration, approved by vote of
26    two-thirds of the members of the board of directors or a

 

 

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1    majority vote of the unit owners at a meeting called for
2    that purpose, which proportionately adjusts all percentage
3    interests so that the total is equal to 100%, unless the
4    declaration specifically provides for a different
5    procedure or different percentage vote by the owners of the
6    units and the owners of mortgages thereon affected by
7    modification being made in the undivided interest in the
8    common areas, the number of votes in the unit owners
9    association or the liability for common expenses
10    appertaining to the unit.
11        (3) If an omission or error or a scrivener's error in
12    the declaration or other instrument is corrected by vote of
13    two-thirds of the members of the board of directors
14    pursuant to the authority established in subdivisions
15    (h)(1) or (h)(2) of this Section, the board, upon written
16    petition by unit owners with 20% of the votes of the
17    association or resolutions adopted by the board of managers
18    or board of directors of the condominium and common
19    interest community associations which select 20% of the
20    members of the board of directors of the master
21    association, whichever is applicable, received within 30
22    days of the board action, shall call a meeting of the unit
23    owners or the boards of the condominium and common interest
24    community associations which select members of the board of
25    directors of the master association within 30 days of the
26    filing of the petition or receipt of the condominium and

 

 

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1    common interest community association resolution to
2    consider the board action. Unless a majority of the votes
3    of the unit owners of the association are cast at the
4    meeting to reject the action, or board of managers or board
5    of directors of condominium and common interest community
6    associations which select over 50% of the members of the
7    board of the master association adopt resolutions prior to
8    the meeting rejecting the action of the board of directors
9    of the master association, it is ratified whether or not a
10    quorum is present.
11        (4) The procedures for amendments set forth in this
12    subsection (h) cannot be used if such an amendment would
13    materially or adversely affect property rights of the unit
14    owners unless the affected unit owners consent in writing.
15    This Section does not restrict the powers of the
16    association to otherwise amend the declaration, bylaws, or
17    other condominium instruments, but authorizes a simple
18    process of amendment requiring a lesser vote for the
19    purpose of correcting defects, errors, or omissions when
20    the property rights of the unit owners are not materially
21    or adversely affected.
22        (5) If there is an omission or error in the declaration
23    or other instruments that may not be corrected by an
24    amendment procedure set forth in subdivision (h)(1) or
25    (h)(2) of this Section, then the circuit court in the
26    county in which the master association is located shall

 

 

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1    have jurisdiction to hear a petition of one or more of the
2    unit owners thereon or of the association, to correct the
3    error or omission, and the action may be a class action.
4    The court may require that one or more methods of
5    correcting the error or omission be submitted to the unit
6    owners to determine the most acceptable correction. All
7    unit owners in the association must be joined as parties to
8    the action. Service of process on owners may be by
9    publication, but the plaintiff shall furnish all unit
10    owners not personally served with process with copies of
11    the petition and final judgment of the court by certified
12    mail, return receipt requested, at their last known
13    address.
14        (6) Nothing contained in this Section shall be
15    construed to invalidate any provision of a declaration
16    authorizing the developer to amend an instrument prior to
17    the latest date on which the initial membership meeting of
18    the unit owners must be held, whether or not it has
19    actually been held, to bring the instrument into compliance
20    with the legal requirements of the Federal National
21    Mortgage Association, the Federal Home Loan Mortgage
22    Corporation, the Federal Housing Administration, the
23    United States Veterans Administration or their respective
24    successors and assigns.
25    (i) The provisions of subsections (c) through (h) are
26applicable to all declarations, other condominium instruments,

 

 

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1and other duly recorded covenants establishing the powers and
2duties of the master association recorded under this Act. Any
3portion of a declaration, other condominium instrument, or
4other duly recorded covenant establishing the powers and duties
5of a master association which contains provisions contrary to
6the provisions of subsection (c) through (h) shall be void as
7against public policy and ineffective. Any declaration, other
8condominium instrument, or other duly recorded covenant
9establishing the powers and duties of the master association
10which fails to contain the provisions required by subsections
11(c) through (h) shall be deemed to incorporate such provisions
12by operation of law.
13    (j) The provisions of subsections (c) through (h) are
14applicable to all common interest community associations and
15their unit owners for common interest community associations
16which are subject to the provisions of Section 9-102(a)(8) of
17the Code of Civil Procedure. For purposes of this subsection,
18the terms "common interest community" and "unit owners" shall
19have the same meaning as set forth in Section 9-102(c) of the
20Code of Civil Procedure.
21(Source: P.A. 96-1045, eff. 7-14-10.)