98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2664

 

Introduced 1/21/2014, by Sen. Michael E. Hastings

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/9  from Ch. 30, par. 309
765 ILCS 605/22.1  from Ch. 30, par. 322.1

    Amends the Condominium Property Act. Provides that the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, or a purchaser of a condominium unit from a mortgagee who acquired title through a judicial foreclosure, a consent foreclosure, a common law strict foreclosure, or the delivery of a deed in lieu of foreclosure (instead of the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, who takes possession of a condominium unit pursuant to a court order or a purchaser who acquires title from a mortgagee) shall have the duty to pay to the association an amount not to exceed the total of the regular monthly assessments for the condominium unit for the 9-month period immediately preceding the relevant event. Provides that the amount due may include any attorney's fees and court costs, but may not exceed 9 months of regular assessments due over the same 9-month period. Deletes language providing that the purchaser shall have the duty to pay the proportionate share, if any, of the common expenses for the unit which would have become due in the absence of any assessment acceleration for the 6 months immediately preceding the institution of an action to enforce the collection of assessments, and which remain unpaid. Deletes language providing that if the outstanding assessments are paid at any time during an action to enforce the collection of assessments, the purchaser shall have no obligation to pay any assessments which accrued before he or she acquired title. Provides that the notice of a foreclosure sale of a condominium unit shall state that a purchaser, other than a mortgagee, shall pay to the association any unpaid monthly assessments for the 9-month period preceding the sale, including attorney's fees and court costs. Provides that each notice of a judicial sale a condominium unit and each disclosure statement issued to a prospective purchaser shall list the required fees. Provides that in certain situations, the Board of Managers (instead of the owner) of a condominium unit must make specified information available within 14 days of the request (instead of "upon demand") and may do so either electronically or in writing. Makes corresponding changes. Effective immediately.


LRB098 12651 HEP 47084 b

 

 

A BILL FOR

 

SB2664LRB098 12651 HEP 47084 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 9 and 22.1 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    (b) The condominium instruments may provide that common
18expenses for insurance premiums be assessed on a basis
19reflecting increased charges for coverage on certain units.
20    (c) Budget and reserves.
21        (1) The board of managers shall prepare and distribute
22    to all unit owners a detailed proposed annual budget,
23    setting forth with particularity all anticipated common

 

 

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1    expenses by category as well as all anticipated assessments
2    and other income. The initial budget and common expense
3    assessment based thereon shall be adopted prior to the
4    conveyance of any unit. The budget shall also set forth
5    each unit owner's proposed common expense assessment.
6        (2) All budgets adopted by a board of managers on or
7    after July 1, 1990 shall provide for reasonable reserves
8    for capital expenditures and deferred maintenance for
9    repair or replacement of the common elements. To determine
10    the amount of reserves appropriate for an association, the
11    board of managers shall take into consideration the
12    following: (i) the repair and replacement cost, and the
13    estimated useful life, of the property which the
14    association is obligated to maintain, including but not
15    limited to structural and mechanical components, surfaces
16    of the buildings and common elements, and energy systems
17    and equipment; (ii) the current and anticipated return on
18    investment of association funds; (iii) any independent
19    professional reserve study which the association may
20    obtain; (iv) the financial impact on unit owners, and the
21    market value of the condominium units, of any assessment
22    increase needed to fund reserves; and (v) the ability of
23    the association to obtain financing or refinancing.
24        (3) Notwithstanding the provisions of this subsection
25    (c), an association without a reserve requirement in its
26    condominium instruments may elect to waive in whole or in

 

 

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1    part the reserve requirements of this Section by a vote of
2    2/3 of the total votes of the association. Any association
3    having elected under this paragraph (3) to waive the
4    provisions of subsection (c) may by a vote of 2/3 of the
5    total votes of the association elect to again be governed
6    by the requirements of subsection (c).
7        (4) In the event that an association elects to waive
8    all or part of the reserve requirements of this Section,
9    that fact must be disclosed after the meeting at which the
10    waiver occurs by the association in the financial
11    statements of the association and, highlighted in bold
12    print, in the response to any request of a prospective
13    purchaser for the information prescribed under Section
14    22.1; and no member of the board of managers or the
15    managing agent of the association shall be liable, and no
16    cause of action may be brought for damages against these
17    parties, for the lack or inadequacy of reserve funds in the
18    association budget.
19    (d) (Blank).
20    (e) The condominium instruments may provide for the
21assessment, in connection with expenditures for the limited
22common elements, of only those units to which the limited
23common elements are assigned.
24    (f) Payment of any assessment shall be in amounts and at
25times determined by the board of managers.
26    (g) Lien.

 

 

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1        (1) If any unit owner shall fail or refuse to make any
2    payment of the common expenses or the amount of any unpaid
3    fine when due, the amount thereof together with any
4    interest, late charges, reasonable attorney fees incurred
5    enforcing the covenants of the condominium instruments,
6    rules and regulations of the board of managers, or any
7    applicable statute or ordinance, and costs of collections
8    shall constitute a lien on the interest of the unit owner
9    in the property prior to all other liens and encumbrances,
10    recorded or unrecorded, except only (a) taxes, special
11    assessments and special taxes theretofore or thereafter
12    levied by any political subdivision or municipal
13    corporation of this State and other State or federal taxes
14    which by law are a lien on the interest of the unit owner
15    prior to preexisting recorded encumbrances thereon and (b)
16    encumbrances on the interest of the unit owner recorded
17    prior to the date of such failure or refusal which by law
18    would be a lien thereon prior to subsequently recorded
19    encumbrances. Any action brought to extinguish the lien of
20    the association shall include the association as a party.
21        (2) With respect to encumbrances executed prior to
22    August 30, 1984 or encumbrances executed subsequent to
23    August 30, 1984 which are neither bonafide first mortgages
24    nor trust deeds and which encumbrances contain a statement
25    of a mailing address in the State of Illinois where notice
26    may be mailed to the encumbrancer thereunder, if and

 

 

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1    whenever and as often as the manager or board of managers
2    shall send, by United States certified or registered mail,
3    return receipt requested, to any such encumbrancer at the
4    mailing address set forth in the recorded encumbrance a
5    statement of the amounts and due dates of the unpaid common
6    expenses with respect to the encumbered unit, then, unless
7    otherwise provided in the declaration or bylaws, the prior
8    recorded encumbrance shall be subject to the lien of all
9    unpaid common expenses with respect to the unit which
10    become due and payable within a period of 90 days after the
11    date of mailing of each such notice.
12        (3) The purchaser of a condominium unit at a judicial
13    foreclosure sale, or a mortgagee who receives title to a
14    unit by deed in lieu of foreclosure or judgment by common
15    law strict foreclosure or otherwise takes possession
16    pursuant to court order under the Illinois Mortgage
17    Foreclosure Law, shall have the duty to pay the unit's
18    proportionate share of the common expenses for the unit
19    assessed from and after the first day of the month after
20    the date of the judicial foreclosure sale, delivery of the
21    deed in lieu of foreclosure, entry of a judgment in common
22    law strict foreclosure, or taking of possession pursuant to
23    such court order. Such payment confirms the extinguishment
24    of any lien created pursuant to paragraph (1) or (2) of
25    this subsection (g) by virtue of the failure or refusal of
26    a prior unit owner to make payment of common expenses,

 

 

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1    where the judicial foreclosure sale has been confirmed by
2    order of the court, a deed in lieu thereof has been
3    accepted by the lender, or a consent judgment has been
4    entered by the court.
5        (4) The purchaser of a condominium unit at a judicial
6    foreclosure sale, other than a mortgagee, or a purchaser of
7    a condominium unit from a mortgagee who acquired title
8    through a judicial foreclosure, a consent foreclosure, a
9    common law strict foreclosure, or the delivery of a deed in
10    lieu of foreclosure who takes possession of a condominium
11    unit pursuant to a court order or a purchaser who acquires
12    title from a mortgagee shall have the duty to pay to the
13    association an amount not to exceed the total of the
14    regular monthly assessments for the condominium unit for
15    the 9-month period immediately preceding any of these
16    events. The amount due may include any attorney's fees and
17    court costs incurred by the association during this same
18    9-month period caused by the nonpayment of these
19    assessments along with unpaid regular monthly assessments
20    for the same period. However, the total amount may not
21    exceed 9 months of regular assessments due over the same
22    9-month period the proportionate share, if any, of the
23    common expenses for the unit which would have become due in
24    the absence of any assessment acceleration during the 6
25    months immediately preceding institution of an action to
26    enforce the collection of assessments, and which remain

 

 

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1    unpaid by the owner during whose possession the assessments
2    accrued. If the outstanding assessments are paid at any
3    time during any action to enforce the collection of
4    assessments, the purchaser shall have no obligation to pay
5    any assessments which accrued before he or she acquired
6    title.
7        (5) The notice of sale of a condominium unit under
8    subsection (c) of Section 15-1507 of the Code of Civil
9    Procedure shall state that the purchaser of the unit other
10    than a mortgagee shall pay to the association amounts the
11    assessments and the legal fees required by subdivision
12    subdivisions (g)(1) and (g)(4) of Section 9 of this Act.
13    The statement of assessment account issued by the
14    association to a unit owner under subsection (i) of Section
15    18 of this Act, and the disclosure statement issued to a
16    prospective purchaser under Section 22.1 of this Act, shall
17    state the amount of the assessments and the legal fees, if
18    any, required by subdivision subdivisions (g)(1) and
19    (g)(4) of Section 9 of this Act.
20    (h) A lien for common expenses shall be in favor of the
21members of the board of managers and their successors in office
22and shall be for the benefit of all other unit owners. Notice
23of the lien may be recorded by the board of managers, or if the
24developer is the manager or has a majority of seats on the
25board of managers and the manager or board of managers fails to
26do so, any unit owner may record notice of the lien. Upon the

 

 

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1recording of such notice the lien may be foreclosed by an
2action brought in the name of the board of managers in the same
3manner as a mortgage of real property.
4    (i) Unless otherwise provided in the declaration, the
5members of the board of managers and their successors in
6office, acting on behalf of the other unit owners, shall have
7the power to bid on the interest so foreclosed at the
8foreclosure sale, and to acquire and hold, lease, mortgage and
9convey it.
10    (j) Any encumbrancer may from time to time request in
11writing a written statement from the manager or board of
12managers setting forth the unpaid common expenses with respect
13to the unit covered by his encumbrance. Unless the request is
14complied with within 20 days, all unpaid common expenses which
15become due prior to the date of the making of such request
16shall be subordinate to the lien of the encumbrance. Any
17encumbrancer holding a lien on a unit may pay any unpaid common
18expenses payable with respect to the unit, and upon payment the
19encumbrancer shall have a lien on the unit for the amounts paid
20at the same rank as the lien of his encumbrance.
21    (k) Nothing in Public Act 83-1271 is intended to change the
22lien priorities of any encumbrance created prior to August 30,
231984.
24(Source: P.A. 94-1049, eff. 1-1-07.)
 
25    (765 ILCS 605/22.1)  (from Ch. 30, par. 322.1)

 

 

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1    Sec. 22.1. (a) In the event of any resale of a condominium
2unit by a unit owner other than the developer, the Board of
3Managers shall, within 14 days of a request from the owner or
4owner's agent, produce for the seller and the prospective
5purchaser either electronically or in writing: such owner shall
6obtain from the Board of Managers and shall make available for
7inspection to the prospective purchaser, upon demand, the
8following:
9        (1) A copy of the Declaration, by-laws, other
10    condominium instruments and any rules and regulations.
11        (2) A statement of any liens, including a statement of
12    the account of the unit setting forth the amounts of unpaid
13    assessments and other charges due and owing as authorized
14    and limited by the provisions of Section 9 of this Act or
15    the condominium instruments.
16        (3) A statement of any capital expenditures
17    anticipated by the unit owner's association within the
18    current or succeeding two fiscal years.
19        (4) A statement of the status and amount of any reserve
20    for replacement fund and any portion of such fund earmarked
21    for any specified project by the Board of Managers.
22        (5) A copy of the statement of financial condition of
23    the unit owner's association for the last fiscal year for
24    which such statement is available.
25        (6) A statement of the status of any pending suits or
26    judgments in which the unit owner's association is a party.

 

 

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1        (7) A statement setting forth what insurance coverage
2    is provided for all unit owners by the unit owner's
3    association.
4        (8) A statement that any improvements or alterations
5    made to the unit, or the limited common elements assigned
6    thereto, by the prior unit owner are in good faith believed
7    to be in compliance with the condominium instruments.
8        (9) The identity and mailing address of the principal
9    officer of the unit owner's association or of the other
10    officer or agent as is specifically designated to receive
11    notices.
12        (10) If ownership of the condominium unit was
13    transferred by either a judicial foreclosure sale, a
14    consent foreclosure, a common law strict foreclosure, or a
15    deed in lieu of foreclosure, a statement setting forth the
16    total due and owing under subsection (g) of Section 9 of
17    this Act.
18    (b) The principal officer of the unit owner's association
19or such other officer as is specifically designated shall
20furnish the above information when requested to do so either
21electronically or in writing and within 14 30 days of the
22request.
23    (c) Within 15 days of the recording of a mortgage or trust
24deed against a unit ownership given by the owner of that unit
25to secure a debt, the owner shall inform the Board of Managers
26of the unit owner's association of the identity of the lender

 

 

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1together with a mailing address at which the lender can receive
2notices from the association. If a unit owner fails or refuses
3to inform the Board as required under subsection (c) then that
4unit owner shall be liable to the association for all costs,
5expenses and reasonable attorneys fees and such other damages,
6if any, incurred by the association as a result of such failure
7or refusal.
8    A reasonable fee covering the direct out-of-pocket cost of
9providing such information and copying may be charged by the
10association or its Board of Managers to the unit seller for
11providing such information.
12(Source: P.A. 87-692.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.