Illinois General Assembly - Full Text of SB2664
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Full Text of SB2664  98th General Assembly




SB2664 EnrolledLRB098 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 2, 9 and 22.1 as follows:
6    (765 ILCS 605/2)  (from Ch. 30, par. 302)
7    Sec. 2. Definitions. As used in this Act, unless the
8context otherwise requires:
9    (a) "Declaration" means the instrument by which the
10property is submitted to the provisions of this Act, as
11hereinafter provided, and such declaration as from time to time
13    (b) "Parcel" means the lot or lots, tract or tracts of
14land, described in the declaration, submitted to the provisions
15of this Act.
16    (c) "Property" means all the land, property and space
17comprising the parcel, all improvements and structures
18erected, constructed or contained therein or thereon,
19including the building and all easements, rights and
20appurtenances belonging thereto, and all fixtures and
21equipment intended for the mutual use, benefit or enjoyment of
22the unit owners, submitted to the provisions of this Act.
23    (d) "Unit" means a part of the property designed and



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1intended for any type of independent use.
2    (e) "Common Elements" means all portions of the property
3except the units, including limited common elements unless
4otherwise specified.
5    (f) "Person" means a natural individual, corporation,
6partnership, trustee or other legal entity capable of holding
7title to real property.
8    (g) "Unit Owner" means the person or persons whose estates
9or interests, individually or collectively, aggregate fee
10simple absolute ownership of a unit, or, in the case of a
11leasehold condominium, the lessee or lessees of a unit whose
12leasehold ownership of the unit expires simultaneously with the
13lease described in item (x) of this Section.
14    (h) "Majority" or "majority of the unit owners" means the
15owners of more than 50% in the aggregate in interest of the
16undivided ownership of the common elements. Any specified
17percentage of the unit owners means such percentage in the
18aggregate in interest of such undivided ownership. "Majority"
19or "majority of the members of the board of managers" means
20more than 50% of the total number of persons constituting such
21board pursuant to the bylaws. Any specified percentage of the
22members of the board of managers means that percentage of the
23total number of persons constituting such board pursuant to the
25    (i) "Plat" means a plat or plats of survey of the parcel
26and of all units in the property submitted to the provisions of



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1this Act, which may consist of a three-dimensional horizontal
2and vertical delineation of all such units.
3    (j) "Record" means to record in the office of the recorder
4or, whenever required, to file in the office of the Registrar
5of Titles of the county wherein the property is located.
6    (k) "Conversion Condominium" means a property which
7contains structures, excepting those newly constructed and
8intended for condominium ownership, which are, or have
9previously been, wholly or partially occupied before recording
10of condominium instruments by persons other than those who have
11contracted for the purchase of condominiums.
12    (l) "Condominium Instruments" means all documents and
13authorized amendments thereto recorded pursuant to the
14provisions of the Act, including the declaration, bylaws and
16    (m) "Common Expenses" means the proposed or actual expenses
17affecting the property, including reserves, if any, lawfully
18assessed by the Board of Managers of the Unit Owner's
20    (n) "Reserves" means those sums paid by unit owners which
21are separately maintained by the board of managers for purposes
22specified by the board of managers or the condominium
24    (o) "Unit Owners' Association" or "Association" means the
25association of all the unit owners, acting pursuant to bylaws
26through its duly elected board of managers.



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1    (p) "Purchaser" means any person or persons other than the
2Developer who purchase a unit in a bona fide transaction for
4    (q) "Developer" means any person who submits property
5legally or equitably owned in fee simple by the developer, or
6leased to the developer under a lease described in item (x) of
7this Section, to the provisions of this Act, or any person who
8offers units legally or equitably owned in fee simple by the
9developer, or leased to the developer under a lease described
10in item (x) of this Section, for sale in the ordinary course of
11such person's business, including any successor or successors
12to such developers' entire interest in the property other than
13the purchaser of an individual unit.
14    (r) "Add-on Condominium" means a property to which
15additional property may be added in accordance with condominium
16instruments and this Act.
17    (s) "Limited Common Elements" means a portion of the common
18elements so designated in the declaration as being reserved for
19the use of a certain unit or units to the exclusion of other
20units, including but not limited to balconies, terraces, patios
21and parking spaces or facilities.
22    (t) "Building" means all structures, attached or
23unattached, containing one or more units.
24    (u) "Master Association" means an organization described
25in Section 18.5 whether or not it is also an association
26described in Section 18.3.



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1    (v) "Developer Control" means such control at a time prior
2to the election of the Board of Managers provided for in
3Section 18.2(b) of this Act.
4    (w) "Meeting of Board of Managers or Board of Master
5Association" means any gathering of a quorum of the members of
6the Board of Managers or Board of the Master Association held
7for the purpose of conducting board business.
8    (x) "Leasehold Condominium" means a property submitted to
9the provisions of this Act which is subject to a lease, the
10expiration or termination of which would terminate the
11condominium and the lessor of which is (i) exempt from taxation
12under Section 501(c)(3) of the Internal Revenue Code of 1986,
13as amended, (ii) a limited liability company whose sole member
14is exempt from taxation under Section 501 (c)(3) of the
15Internal Revenue Code of 1986, as amended, or (iii) a Public
16Housing Authority created pursuant to the Housing Authorities
17Act that is located in a municipality having a population in
18excess of 1,000,000 inhabitants.
19    (y) "Regular Monthly Assessments" means the amount charged
20by the association as provided for in the current annual budget
21adopted under subsection (c) of Section 9 of this Act.
22(Source: P.A. 93-474, eff. 8-8-03.)
23    (765 ILCS 605/9)  (from Ch. 30, par. 309)
24    Sec. 9. Sharing of expenses - Lien for nonpayment.
25    (a) All common expenses incurred or accrued prior to the



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1first conveyance of a unit shall be paid by the developer, and
2during this period no common expense assessment shall be
3payable to the association. It shall be the duty of each unit
4owner including the developer to pay his proportionate share of
5the common expenses commencing with the first conveyance. The
6proportionate share shall be in the same ratio as his
7percentage of ownership in the common elements set forth in the
9    (b) The condominium instruments may provide that common
10expenses for insurance premiums be assessed on a basis
11reflecting increased charges for coverage on certain units.
12    (c) Budget and reserves.
13        (1) The board of managers shall prepare and distribute
14    to all unit owners a detailed proposed annual budget,
15    setting forth with particularity all anticipated common
16    expenses by category as well as all anticipated assessments
17    and other income. The initial budget and common expense
18    assessment based thereon shall be adopted prior to the
19    conveyance of any unit. The budget shall also set forth
20    each unit owner's proposed common expense assessment.
21        (2) All budgets adopted by a board of managers on or
22    after July 1, 1990 shall provide for reasonable reserves
23    for capital expenditures and deferred maintenance for
24    repair or replacement of the common elements. To determine
25    the amount of reserves appropriate for an association, the
26    board of managers shall take into consideration the



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1    following: (i) the repair and replacement cost, and the
2    estimated useful life, of the property which the
3    association is obligated to maintain, including but not
4    limited to structural and mechanical components, surfaces
5    of the buildings and common elements, and energy systems
6    and equipment; (ii) the current and anticipated return on
7    investment of association funds; (iii) any independent
8    professional reserve study which the association may
9    obtain; (iv) the financial impact on unit owners, and the
10    market value of the condominium units, of any assessment
11    increase needed to fund reserves; and (v) the ability of
12    the association to obtain financing or refinancing.
13        (3) Notwithstanding the provisions of this subsection
14    (c), an association without a reserve requirement in its
15    condominium instruments may elect to waive in whole or in
16    part the reserve requirements of this Section by a vote of
17    2/3 of the total votes of the association. Any association
18    having elected under this paragraph (3) to waive the
19    provisions of subsection (c) may by a vote of 2/3 of the
20    total votes of the association elect to again be governed
21    by the requirements of subsection (c).
22        (4) In the event that an association elects to waive
23    all or part of the reserve requirements of this Section,
24    that fact must be disclosed after the meeting at which the
25    waiver occurs by the association in the financial
26    statements of the association and, highlighted in bold



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1    print, in the response to any request of a prospective
2    purchaser for the information prescribed under Section
3    22.1; and no member of the board of managers or the
4    managing agent of the association shall be liable, and no
5    cause of action may be brought for damages against these
6    parties, for the lack or inadequacy of reserve funds in the
7    association budget.
8    (d) (Blank).
9    (e) The condominium instruments may provide for the
10assessment, in connection with expenditures for the limited
11common elements, of only those units to which the limited
12common elements are assigned.
13    (f) Payment of any assessment shall be in amounts and at
14times determined by the board of managers.
15    (g) Lien.
16        (1) If any unit owner shall fail or refuse to make any
17    payment of the common expenses or the amount of any unpaid
18    fine when due, the amount thereof together with any
19    interest, late charges, reasonable attorney fees incurred
20    enforcing the covenants of the condominium instruments,
21    rules and regulations of the board of managers, or any
22    applicable statute or ordinance, and costs of collections
23    shall constitute a lien on the interest of the unit owner
24    in the property prior to all other liens and encumbrances,
25    recorded or unrecorded, except only (a) taxes, special
26    assessments and special taxes theretofore or thereafter



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1    levied by any political subdivision or municipal
2    corporation of this State and other State or federal taxes
3    which by law are a lien on the interest of the unit owner
4    prior to preexisting recorded encumbrances thereon and (b)
5    encumbrances on the interest of the unit owner recorded
6    prior to the date of such failure or refusal which by law
7    would be a lien thereon prior to subsequently recorded
8    encumbrances. Any action brought to extinguish the lien of
9    the association shall include the association as a party.
10        (2) With respect to encumbrances executed prior to
11    August 30, 1984 or encumbrances executed subsequent to
12    August 30, 1984 which are neither bonafide first mortgages
13    nor trust deeds and which encumbrances contain a statement
14    of a mailing address in the State of Illinois where notice
15    may be mailed to the encumbrancer thereunder, if and
16    whenever and as often as the manager or board of managers
17    shall send, by United States certified or registered mail,
18    return receipt requested, to any such encumbrancer at the
19    mailing address set forth in the recorded encumbrance a
20    statement of the amounts and due dates of the unpaid common
21    expenses with respect to the encumbered unit, then, unless
22    otherwise provided in the declaration or bylaws, the prior
23    recorded encumbrance shall be subject to the lien of all
24    unpaid common expenses with respect to the unit which
25    become due and payable within a period of 90 days after the
26    date of mailing of each such notice.



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1        (3) The purchaser of a condominium unit at a judicial
2    foreclosure sale, or a mortgagee who receives title to a
3    unit by deed in lieu of foreclosure or judgment by common
4    law strict foreclosure or otherwise takes possession
5    pursuant to court order under the Illinois Mortgage
6    Foreclosure Law, shall have the duty to pay the unit's
7    proportionate share of the common expenses for the unit
8    assessed from and after the first day of the month after
9    the date of the judicial foreclosure sale, delivery of the
10    deed in lieu of foreclosure, entry of a judgment in common
11    law strict foreclosure, or taking of possession pursuant to
12    such court order. Such payment confirms the extinguishment
13    of any lien created pursuant to paragraph (1) or (2) of
14    this subsection (g) by virtue of the failure or refusal of
15    a prior unit owner to make payment of common expenses,
16    where the judicial foreclosure sale has been confirmed by
17    order of the court, a deed in lieu thereof has been
18    accepted by the lender, or a consent judgment has been
19    entered by the court.
20        (4) The purchaser of a condominium unit at a judicial
21    foreclosure sale, other than a mortgagee, or a purchaser of
22    a condominium unit from a mortgagee who acquired title
23    through a judicial foreclosure, a consent foreclosure, a
24    common law strict foreclosure, or the delivery of a deed in
25    lieu of foreclosure who takes possession of a condominium
26    unit pursuant to a court order or a purchaser who acquires



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1    title from a mortgagee shall have the duty to pay to the
2    association an amount not to exceed the total of the unpaid
3    regular monthly assessments for the condominium unit for
4    the 9-month period immediately preceding the date of the
5    judicial foreclosure sale, delivery of the deed in lieu of
6    foreclosure, entry of a judgment in a common law strict
7    foreclosure, or the taking of possession pursuant to a
8    court order under the Illinois Mortgage Foreclosure Law.
9    The amount due may include any attorney's fees incurred by
10    the association due to the non-payment of the assessments
11    during the same 9-month period, and in no event shall the
12    total amount due exceed the sum of 9 months of regular
13    monthly assessments the proportionate share, if any, of the
14    common expenses for the unit which would have become due in
15    the absence of any assessment acceleration during the 6
16    months immediately preceding institution of an action to
17    enforce the collection of assessments, and which remain
18    unpaid by the owner during whose possession the assessments
19    accrued. If the outstanding assessments are paid at any
20    time during any action to enforce the collection of
21    assessments, the purchaser shall have no obligation to pay
22    any assessments which accrued before he or she acquired
23    title.
24        (5) The notice of sale of a condominium unit under
25    subsection (c) of Section 15-1507 of the Code of Civil
26    Procedure shall state that the purchaser of the unit other



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



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1    (j) Any encumbrancer may from time to time request in
2writing a written statement from the manager or board of
3managers setting forth the unpaid common expenses with respect
4to the unit covered by his encumbrance. Unless the request is
5complied with within 20 days, all unpaid common expenses which
6become due prior to the date of the making of such request
7shall be subordinate to the lien of the encumbrance. Any
8encumbrancer holding a lien on a unit may pay any unpaid common
9expenses payable with respect to the unit, and upon payment the
10encumbrancer shall have a lien on the unit for the amounts paid
11at the same rank as the lien of his encumbrance.
12    (k) Nothing in Public Act 83-1271 is intended to change the
13lien priorities of any encumbrance created prior to August 30,
15(Source: P.A. 94-1049, eff. 1-1-07.)
16    (765 ILCS 605/22.1)  (from Ch. 30, par. 322.1)
17    Sec. 22.1. (a) In the event of any resale of a condominium
18unit by a unit owner other than the developer, the Board of
19Managers shall produce for the seller and the prospective
20purchaser, either electronically or in writing, within 14 days
21of a request from the owner or the owner's agent if the
22association is managed by a community association management
23firm or a community association manager, as those terms are
24defined in Section 10 of the Community Association Manager
25Licensing and Disciplinary Act, and within 21 days if the



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1association is self-managed: such owner shall obtain from the
2Board of Managers and shall make available for inspection to
3the prospective purchaser, upon demand, the following:
4        (1) A copy of the Declaration, by-laws, other
5    condominium instruments and any rules and regulations.
6        (2) A statement of any liens, including a statement of
7    the account of the unit setting forth the amounts of unpaid
8    assessments and other charges due and owing as authorized
9    and limited by the provisions of Section 9 of this Act or
10    the condominium instruments.
11        (3) A statement of any capital expenditures
12    anticipated by the unit owner's association within the
13    current or succeeding two fiscal years.
14        (4) A statement of the status and amount of any reserve
15    for replacement fund and any portion of such fund earmarked
16    for any specified project by the Board of Managers.
17        (5) A copy of the statement of financial condition of
18    the unit owner's association for the last fiscal year for
19    which such statement is available.
20        (6) A statement of the status of any pending suits or
21    judgments in which the unit owner's association is a party.
22        (7) A statement setting forth what insurance coverage
23    is provided for all unit owners by the unit owner's
24    association.
25        (8) A statement that any improvements or alterations
26    made to the unit, or the limited common elements assigned



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



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1if any, incurred by the association as a result of such failure
2or refusal.
3    A reasonable fee covering the direct out-of-pocket cost of
4providing such information and copying may be charged by the
5association or its Board of Managers to the unit seller for
6providing such information.
7(Source: P.A. 87-692.)
8    Section 99. Effective date. This Act takes effect upon
9becoming law.