093_HB1584enr

 
HB1584 Enrolled                      LRB093 03887 DRJ 03922 b

 1        AN ACT in relation to property.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Condominium  Property Act is amended by
 5    changing Section 18 as follows:

 6        (765 ILCS 605/18) (from Ch. 30, par. 318)
 7        Sec. 18. Contents of bylaws.  The  bylaws  shall  provide
 8    for at least the following:

 9        (a) (1)  The  election  from  among  the unit owners of a
10        board of managers, the  number  of  persons  constituting
11        such  board,  and that the terms of at least one-third of
12        the members of the board shall expire annually  and  that
13        all  members  of  the board shall be elected at large. If
14        there are multiple owners of a single unit, only  one  of
15        the  multiple  owners  shall  be  eligible  to serve as a
16        member of the board at any one time.
17             (2)  the powers and duties of the board;
18             (3)  the compensation, if any, of the members of the
19        board;
20             (4)  the method of removal from office of members of
21        the board;
22             (5)  that the board may engage  the  services  of  a
23        manager or managing agent;
24             (6)  that each unit owner shall receive, at least 30
25        days  prior  to  the  adoption  thereof  by  the board of
26        managers, a copy of the proposed annual  budget  together
27        with  an  indication  of  which portions are intended for
28        reserves, capital expenditures or repairs or  payment  of
29        real estate taxes;
30             (7)  that  the  board  of  managers  shall  annually
31        supply  to  all unit owners an itemized accounting of the
 
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 1        common expenses for the preceding year actually  incurred
 2        or  paid,  together  with an indication of which portions
 3        were for reserves, capital  expenditures  or  repairs  or
 4        payment of real estate taxes and with a tabulation of the
 5        amounts  collected  pursuant to the budget or assessment,
 6        and showing the net excess  or  deficit  of  income  over
 7        expenditures plus reserves;
 8             (8) (i)  that  each unit owner shall receive notice,
 9        in the same  manner  as  is  provided  in  this  Act  for
10        membership  meetings,  of  any  meeting  of  the board of
11        managers concerning the adoption of the  proposed  annual
12        budget  and  regular  assessments  pursuant thereto or to
13        adopt a separate (special) assessment, (ii)  that  except
14        as  provided  in  subsection  (iv)  below,  if an adopted
15        budget or any separate assessment adopted  by  the  board
16        would  result  in  the  sum  of  all regular and separate
17        assessments payable in the current fiscal year  exceeding
18        115%  of  the sum of all regular and separate assessments
19        payable during the preceding fiscal year,  the  board  of
20        managers,  upon  written  petition by unit owners with 20
21        percent of the votes of the association delivered to  the
22        board  within  14  days of the board action, shall call a
23        meeting of the unit owners within 30 days of the date  of
24        delivery  of  the  petition  to  consider  the  budget or
25        separate assessment; unless a majority of the total votes
26        of the unit owners are cast at the meeting to reject  the
27        budget or separate assessment, it is ratified, (iii) that
28        any  common  expense  not  set forth in the budget or any
29        increase in assessments over the amount  adopted  in  the
30        budget  shall  be  separately  assessed  against all unit
31        owners, (iv) that separate assessments  for  expenditures
32        relating to emergencies or mandated by law may be adopted
33        by  the  board  of managers without being subject to unit
34        owner approval or the provisions of item  (ii)  above  or
 
HB1584 Enrolled             -3-      LRB093 03887 DRJ 03922 b
 1        item  (v)  below.   As  used herein, "emergency" means an
 2        immediate danger  to  the  structural  integrity  of  the
 3        common  elements  or  to  the  life,  health,  safety  or
 4        property  of  the  unit  owners, (v) that assessments for
 5        additions and alterations to the common  elements  or  to
 6        association-owned  property  not  included in the adopted
 7        annual budget,  shall  be  separately  assessed  and  are
 8        subject  to  approval of two-thirds of the total votes of
 9        all unit owners, (vi) that  the  board  of  managers  may
10        adopt  separate  assessments  payable  over more than one
11        fiscal year.  With respect to multi-year assessments  not
12        governed  by items (iv) and (v), the entire amount of the
13        multi-year assessment  shall  be  deemed  considered  and
14        authorized   in  the  first  fiscal  year  in  which  the
15        assessment is approved;
16             (9)  that meetings of the board of managers shall be
17        open to any unit owner, except for  the  portion  of  any
18        meeting  held  (i)  to  discuss litigation when an action
19        against or on behalf of the  particular  association  has
20        been  filed  and  is pending in a court or administrative
21        tribunal, or when the board of managers finds  that  such
22        an  action  is  probable  or  imminent,  (ii) to consider
23        information   regarding   appointment,   employment    or
24        dismissal  of an employee, or (iii) to discuss violations
25        of rules and regulations of the  association  or  a  unit
26        owner's unpaid share of common expenses; that any vote on
27        these  matters  shall  be  taken  at a meeting or portion
28        thereof open to any unit owner; that any unit  owner  may
29        record  the  proceedings  at meetings or portions thereof
30        required to be open by this Act by tape,  film  or  other
31        means;  that the board may prescribe reasonable rules and
32        regulations to govern the right to make such  recordings,
33        that notice of such meetings shall be mailed or delivered
34        at  least 48 hours prior thereto, unless a written waiver
 
HB1584 Enrolled             -4-      LRB093 03887 DRJ 03922 b
 1        of  such notice  is  signed  by  the  person  or  persons
 2        entitled  to  such  notice  pursuant  to the declaration,
 3        bylaws, other condominium instrument, or provision of law
 4        other  than  this  subsection  before  the   meeting   is
 5        convened,  and  that copies of notices of meetings of the
 6        board  of  managers  shall  be  posted  in  entranceways,
 7        elevators, or other conspicuous places in the condominium
 8        at least 48 hours prior to the meeting of  the  board  of
 9        managers  except where there is no common entranceway for
10        7 or more units, the board of managers may designate  one
11        or  more  locations in the proximity of these units where
12        the notices of meetings shall be posted;
13             (10)  that the board shall meet  at  least  4  times
14        annually;
15             (11)  that  no  member of the board or officer shall
16        be elected for a term of more  than  2  years,  but  that
17        officers and board members may succeed themselves;
18             (12)  the  designation  of  an  officer  to mail and
19        receive all notices and execute amendments to condominium
20        instruments as provided  for  in  this  Act  and  in  the
21        condominium instruments;
22             (13)  the  method  of filling vacancies on the board
23        which shall include authority for the  remaining  members
24        of the board to fill the vacancy by two-thirds vote until
25        the  next  annual  meeting of unit owners or for a period
26        terminating no later than 30 days following the filing of
27        a petition signed by unit owners holding 20% of the votes
28        of the association  requesting  a  meeting  of  the  unit
29        owners  to  fill the vacancy for the balance of the term,
30        and that a meeting of the unit owners shall be called for
31        purposes of filling a vacancy on the board no later  than
32        30 days following the filing of a petition signed by unit
33        owners  holding  20%  of  the  votes  of  the association
34        requesting such a meeting,  and  the  method  of  filling
 
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 1        vacancies  among  the  officers  that  shall  include the
 2        authority for the  members  of  the  board  to  fill  the
 3        vacancy for the unexpired portion of the term;
 4             (14)  what  percentage  of the board of managers, if
 5        other than a majority, shall constitute a quorum;
 6             (15)  provisions concerning notice of board meetings
 7        to members of the board;
 8             (16)  the board of managers may  not  enter  into  a
 9        contract   with   a   current  board  member  or  with  a
10        corporation or partnership in which a board member  or  a
11        member  of the board member's immediate family has 25% or
12        more interest, unless  notice  of  intent  to  enter  the
13        contract  is  given to unit owners within 20 days after a
14        decision is made to enter into the contract and the  unit
15        owners  are afforded an opportunity by filing a petition,
16        signed by 20% of the unit  owners,  for  an  election  to
17        approve  or  disapprove the contract; such petition shall
18        be filed within  20  days  after  such  notice  and  such
19        election  shall  be  held within 30 days after filing the
20        petition;  for  purposes  of  this  subsection,  a  board
21        member's  immediate  family  means  the  board   member's
22        spouse, parents, and children;
23             (17)  that  the board of managers may disseminate to
24        unit owners biographical and background information about
25        candidates for election to the board  if  (i)  reasonable
26        efforts  to  identify  all  candidates  are  made and all
27        candidates  are   given   an   opportunity   to   include
28        biographical    and   background   information   in   the
29        information to be disseminated; and (ii) the  board  does
30        not express a preference in favor of any candidate;
31             (18)  any  proxy  distributed for board elections by
32        the board of managers gives unit owners  the  opportunity
33        to  designate  any  person as the proxy holder, and gives
34        the unit owner the opportunity to  express  a  preference
 
HB1584 Enrolled             -6-      LRB093 03887 DRJ 03922 b
 1        for any of the known candidates for the board or to write
 2        in a name;
 3             (19)  that special meetings of the board of managers
 4        can  be  called by the president or 25% of the members of
 5        the board; and
 6             (20)  that the board of managers may  establish  and
 7        maintain  a  system  of master metering of public utility
 8        services and collect payments  in  connection  therewith,
 9        subject to the requirements of the Tenant Utility Payment
10        Disclosure Act.

11        (b) (1)  What  percentage  of  the  unit owners, if other
12        than 20%, shall constitute a quorum  provided  that,  for
13        condominiums  with  20  or  more units, the percentage of
14        unit owners constituting a quorum shall be 20% unless the
15        unit owners holding a majority of the percentage interest
16        in the association provide for a higher percentage;
17             (2)  that the association shall have  one  class  of
18        membership;
19             (3)  that  the members shall hold an annual meeting,
20        one of the purposes of which shall be to elect members of
21        the board of managers;
22             (4)  the method of  calling  meetings  of  the  unit
23        owners;
24             (5)  that  special  meetings  of  the members can be
25        called by the president, board of managers, or by 20%  of
26        unit owners;
27             (6)  that  written  notice of any membership meeting
28        shall be mailed or delivered giving members no less  than
29        10 and no more than 30 days notice of the time, place and
30        purpose of such meeting;
31             (7)  that voting shall be on a percentage basis, and
32        that  the  percentage vote to which each unit is entitled
33        is the percentage interest of the undivided ownership  of
34        the  common  elements  appurtenant thereto, provided that
 
HB1584 Enrolled             -7-      LRB093 03887 DRJ 03922 b
 1        the bylaws may provide for approval  by  unit  owners  in
 2        connection with matters where the requisite approval on a
 3        percentage  basis  is  not  specified in this Act, on the
 4        basis of one vote per unit;
 5             (8)  that, where there is more than one owner  of  a
 6        unit,  if only one of the multiple owners is present at a
 7        meeting of the association, he is entitled  to  cast  all
 8        the votes allocated to that unit, if more than one of the
 9        multiple  owners are present, the votes allocated to that
10        unit may be cast only in accordance with the agreement of
11        a majority in interest of the multiple owners, unless the
12        declaration expressly provides otherwise, that  there  is
13        majority agreement if any one of the multiple owners cast
14        the  votes  allocated  to that unit without protest being
15        made promptly to the person presiding over the meeting by
16        any of the other owners of the unit;
17             (9)(A)  that  unless the Articles  of  Incorporation
18        or  the  bylaws otherwise provide, and except as provided
19        in subparagraph (B) of this paragraph (9)  in  connection
20        with  board  elections,  a  unit  owner may vote by proxy
21        executed in writing by the unit  owner  or  by  his  duly
22        authorized  attorney  in  fact;  that  the proxy shall be
23        invalid after 11 months from the date of  its  execution,
24        unless  otherwise  provided  in  the  proxy, and that the
25        every proxy must bear the date of execution  and,  unless
26        the  condominium  instruments or the written proxy itself
27        provide otherwise, is invalid after 11  months  from  the
28        date of its execution;
29             (B)  that if a rule adopted at least 120 days before
30        a board election or the declaration or bylaws provide for
31        balloting  as  set  forth in this subsection, unit owners
32        may not vote by proxy in board elections,  but  may  vote
33        only  (i)  by  submitting an association-issued ballot in
34        person at the election meeting or (ii) by  submitting  an
 
HB1584 Enrolled             -8-      LRB093 03887 DRJ 03922 b
 1        association-issued  ballot  to  the  association  or  its
 2        designated  agent  by  mail  or  other  means of delivery
 3        specified in the declaration, bylaws, or rule;  that  the
 4        ballots  shall be mailed or otherwise distributed to unit
 5        owners not less than 10 and not more than 30 days  before
 6        the  election  meeting,  and  the  board  shall give unit
 7        owners not less than 21 days' prior written notice of the
 8        deadline for inclusion  of  a  candidate's  name  on  the
 9        ballots;  that  the deadline shall be no more than 7 days
10        before the ballots are mailed or otherwise distributed to
11        unit owners; that every  such  ballot  must  include  the
12        names  of  all candidates who have given the board or its
13        authorized agent timely written notice of their candidacy
14        and  must  give  the  person  casting  the   ballot   the
15        opportunity  to  cast votes for candidates whose names do
16        not appear on the ballot; that a ballot received  by  the
17        association  or  its  designated agent after the close of
18        voting shall not  be  counted;  that  a  unit  owner  who
19        submits  a  ballot  by  mail  or  other means of delivery
20        specified in the declaration, bylaws, or rule may request
21        and cast a ballot in person at the election meeting,  and
22        thereby void any ballot previously submitted by that unit
23        owner;
24             (C)  that  if a written petition by unit owners with
25        at least 20% of the votes of the association is delivered
26        to the board within 14 days after the board's approval of
27        a rule adopted  pursuant  to  subparagraph  (B)  of  this
28        paragraph (9), the board shall call a meeting of the unit
29        owners  within  30 days after the date of delivery of the
30        petition; that unless a majority of the  total  votes  of
31        the  unit  owners  are  cast at the meeting to reject the
32        rule, the rule is ratified;
33             (10)  that the association may, upon adoption of the
34        appropriate rules  by  the  board  of  managers,  conduct
 
HB1584 Enrolled             -9-      LRB093 03887 DRJ 03922 b
 1        elections  by  secret ballot whereby the voting ballot is
 2        marked only with the percentage interest for the unit and
 3        the vote itself, provided that the  board  further  adopt
 4        rules  to  verify  the status of the unit owner issuing a
 5        proxy or casting a ballot; and further, that a  candidate
 6        for election to the board of managers or such candidate's
 7        representative  shall have the right to be present at the
 8        counting of ballots at such election;
 9             (11)  that in the event of a resale of a condominium
10        unit the purchaser of a unit from a seller other than the
11        developer  pursuant  to  an  installment   contract   for
12        purchase  shall during such times as he or she resides in
13        the unit be counted  toward  a  quorum  for  purposes  of
14        election  of  members  of  the  board  of managers at any
15        meeting  of  the  unit  owners  called  for  purposes  of
16        electing members of the board, shall have  the  right  to
17        vote for the election of members of the board of managers
18        and  to  be elected to and serve on the board of managers
19        unless the seller expressly retains in writing any or all
20        of such rights.  In no event may the seller and purchaser
21        both be counted toward a quorum, be permitted to vote for
22        a particular office or be elected and serve on the board.
23        Satisfactory evidence of the installment contact shall be
24        made available to the association  or  its  agents.   For
25        purposes  of this subsection, "installment contact" shall
26        have the same meaning as set forth in Section  1  (e)  of
27        "An   Act  relating  to  installment  contracts  to  sell
28        dwelling  structures",  approved  August  11,  1967,   as
29        amended;
30             (12)  the  method  by  which  matters subject to the
31        approval of unit owners set forth in this Act, or in  the
32        condominium  instruments,  will  be submitted to the unit
33        owners at special membership  meetings  called  for  such
34        purposes; and
 
HB1584 Enrolled             -10-     LRB093 03887 DRJ 03922 b
 1             (13)  that  matters  subject to the affirmative vote
 2        of not less than 2/3 of the votes of  unit  owners  at  a
 3        meeting  duly called for that purpose, shall include, but
 4        not be limited to:
 5                  (i)  merger    or    consolidation    of    the
 6             association;
 7                  (ii)  sale,   lease,   exchange,    or    other
 8             disposition  (excluding  the  mortgage or pledge) of
 9             all, or substantially all of the property and assets
10             of the association; and
11                  (iii)  the purchase or sale of land or of units
12             on behalf of all unit owners.
13        (c)  Election of a president  from  among  the  board  of
14    managers, who shall preside over the meetings of the board of
15    managers and of the unit owners.
16        (d)  Election  of  a  secretary  from  among the board of
17    managers, who shall keep the minutes of all meetings  of  the
18    board  of  managers  and of the unit owners and who shall, in
19    general, perform all the duties incident  to  the  office  of
20    secretary.
21        (e)  Election  of  a  treasurer  from  among the board of
22    managers, who shall keep the financial records and  books  of
23    account.
24        (f)  Maintenance,  repair  and  replacement of the common
25    elements and  payments  therefor,  including  the  method  of
26    approving payment vouchers.
27        (g)  An  association  with  30 or more units shall obtain
28    and maintain fidelity insurance covering persons who  control
29    or  disburse  funds of the association for the maximum amount
30    of coverage available to protect  funds  in  the  custody  or
31    control of the association plus the association reserve fund.
32    All  management companies which are responsible for the funds
33    held or administered by the association  shall  maintain  and
34    furnish  to  the  association a fidelity bond for the maximum
 
HB1584 Enrolled             -11-     LRB093 03887 DRJ 03922 b
 1    amount of coverage available to protect funds in the  custody
 2    of the management company at any time.  The association shall
 3    bear  the  cost  of the fidelity insurance and fidelity bond,
 4    unless otherwise provided by contract between the association
 5    and a management  company.   The  association  shall  be  the
 6    direct  obligee  of  any  such  fidelity  bond.  A management
 7    company holding reserve funds of an association shall at  all
 8    times  maintain  a  separate  account  for  each association,
 9    provided, however, that for investment purposes, the Board of
10    Managers of an association may authorize a management company
11    to maintain the  association's  reserve  funds  in  a  single
12    interest   bearing   account  with  similar  funds  of  other
13    associations.  The management  company  shall  at  all  times
14    maintain  records  identifying all moneys of each association
15    in such investment account. The management company  may  hold
16    all  operating  funds  of  associations which it manages in a
17    single operating account but  shall  at  all  times  maintain
18    records  identifying  all  moneys of each association in such
19    operating account. Such operating and reserve funds  held  by
20    the  management  company  for  the  association  shall not be
21    subject to attachment  by  any  creditor  of  the  management
22    company.
23        For  the  purpose of this subsection a management company
24    shall be defined as a person,  partnership,  corporation,  or
25    other legal entity entitled to transact business on behalf of
26    others,  acting on behalf of or as an agent for a unit owner,
27    unit owners or association of unit owners for the purpose  of
28    carrying   out   the   duties,  responsibilities,  and  other
29    obligations necessary  for  the  day  to  day  operation  and
30    management of any property subject to this Act.  For purposes
31    of  this  subsection, the term "fiduciary insurance coverage"
32    shall be defined as both a fidelity bond  and  directors  and
33    officers  liability  coverage,  the fidelity bond in the full
34    amount of association funds  and  association  reserves  that
 
HB1584 Enrolled             -12-     LRB093 03887 DRJ 03922 b
 1    will  be in the custody of the association, and the directors
 2    and officers liability  coverage  at  a  level  as  shall  be
 3    determined  to be reasonable by the board of managers, if not
 4    otherwise established by the declaration or by laws.
 5        Until  one  year  after  the  effective  date   of   this
 6    amendatory  Act  of  1985,  if  a condominium association has
 7    reserves plus assessments in excess of  $250,000  and  cannot
 8    reasonably  obtain  100%  fidelity  bond  coverage  for  such
 9    amount,  then  it  must  obtain  a  fidelity bond coverage of
10    $250,000.
11        (h)  Method  of  estimating  the  amount  of  the  annual
12    budget, and the manner of assessing and collecting  from  the
13    unit   owners  their  respective  shares  of  such  estimated
14    expenses, and of any other expenses lawfully agreed upon.
15        (i)  That upon 10 days notice to the manager or board  of
16    managers  and  payment  of  a  reasonable fee, any unit owner
17    shall be furnished a statement of his account  setting  forth
18    the amount of any unpaid assessments or other charges due and
19    owing from such owner.
20        (j)  Designation  and  removal of personnel necessary for
21    the  maintenance,  repair  and  replacement  of  the   common
22    elements.
23        (k)  Such restrictions on and requirements respecting the
24    use  and  maintenance  of the units and the use of the common
25    elements, not set forth in the declaration, as  are  designed
26    to  prevent  unreasonable  interference with the use of their
27    respective units and of the common elements  by  the  several
28    unit owners.
29        (l)  Method  of  adopting  and of amending administrative
30    rules and regulations governing the operation and use of  the
31    common elements.
32        (m)  The  percentage of votes required to modify or amend
33    the bylaws, but each one of the particulars set forth in this
34    section shall always be embodied in the bylaws.
 
HB1584 Enrolled             -13-     LRB093 03887 DRJ 03922 b
 1        (n) (i)  The provisions of  this  Act,  the  declaration,
 2    bylaws,   other   condominium   instruments,  and  rules  and
 3    regulations that relate to the use of the individual unit  or
 4    the common elements shall be applicable to any person leasing
 5    a  unit  and  shall be deemed to be incorporated in any lease
 6    executed or renewed on or after the effective  date  of  this
 7    amendatory Act of 1984. (ii) With regard to any lease entered
 8    into  subsequent to the effective date of this amendatory Act
 9    of 1989, the unit owner leasing the unit shall deliver a copy
10    of the signed lease to the board or if the lease is  oral,  a
11    memorandum of the lease, not later than the date of occupancy
12    or 10 days after the lease is signed, whichever occurs first.
13    In  addition  to  any  other  remedies,  by  filing an action
14    jointly against the tenant and the unit owner, an association
15    may seek to enjoin a tenant from occupying a unit or seek  to
16    evict a tenant under the provisions of Article IX of the Code
17    of  Civil Procedure for failure of the lessor-owner to comply
18    with the leasing requirements prescribed by this  Section  or
19    by  the  declaration,  bylaws, and rules and regulations. The
20    board of managers may proceed directly against a  tenant,  at
21    law  or  in  equity, or under the provisions of Article IX of
22    the Code of Civil Procedure, for any other breach  by  tenant
23    of any covenants, rules, regulations or bylaws.
24        (o)  The  association  shall have no authority to forbear
25    the payment of assessments by any unit owner.
26        (p)  That when 30% or fewer  of  the  units,  by  number,
27    possess  over  50%  in  the  aggregate  of  the  votes in the
28    association, any percentage vote of members specified  herein
29    or in the condominium instruments shall require the specified
30    percentage  by  number  of units rather than by percentage of
31    interest in the common elements allocated to units that would
32    otherwise be applicable.
33        (q)  That  a  unit  owner  may  not   assign,   delegate,
34    transfer,  surrender,  or avoid the duties, responsibilities,
 
HB1584 Enrolled             -14-     LRB093 03887 DRJ 03922 b
 1    and  liabilities  of  a  unit  owner  under  this  Act,   the
 2    condominium  instruments, or the rules and regulations of the
 3    Association;  and  that   such   an   attempted   assignment,
 4    delegation, transfer, surrender, or avoidance shall be deemed
 5    void.
 6        The  provisions  of  this  Section  are applicable to all
 7    condominium instruments recorded under this Act.  Any portion
 8    of  a  condominium  instrument  which   contains   provisions
 9    contrary  to these provisions shall be void as against public
10    policy and ineffective.  Any such instrument which  fails  to
11    contain  the  provisions  required  by  this Section shall be
12    deemed to incorporate such provisions by operation of law.
13    (Source: P.A. 88-135; 88-417; 88-626,  eff.  9-9-94;  88-670,
14    eff. 12-2-94; 89-41, eff. 6-23-95.)