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


Sen. Michael E. Hastings

Filed: 3/20/2014





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2    AMENDMENT NO. ______. Amend Senate Bill 2664 by replacing
3everything after the enacting clause with the following:
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



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1comprising the parcel, all improvements and structures
2erected, constructed or contained therein or thereon,
3including the building and all easements, rights and
4appurtenances belonging thereto, and all fixtures and
5equipment intended for the mutual use, benefit or enjoyment of
6the unit owners, submitted to the provisions of this Act.
7    (d) "Unit" means a part of the property designed and
8intended for any type of independent use.
9    (e) "Common Elements" means all portions of the property
10except the units, including limited common elements unless
11otherwise specified.
12    (f) "Person" means a natural individual, corporation,
13partnership, trustee or other legal entity capable of holding
14title to real property.
15    (g) "Unit Owner" means the person or persons whose estates
16or interests, individually or collectively, aggregate fee
17simple absolute ownership of a unit, or, in the case of a
18leasehold condominium, the lessee or lessees of a unit whose
19leasehold ownership of the unit expires simultaneously with the
20lease described in item (x) of this Section.
21    (h) "Majority" or "majority of the unit owners" means the
22owners of more than 50% in the aggregate in interest of the
23undivided ownership of the common elements. Any specified
24percentage of the unit owners means such percentage in the
25aggregate in interest of such undivided ownership. "Majority"
26or "majority of the members of the board of managers" means



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1more than 50% of the total number of persons constituting such
2board pursuant to the bylaws. Any specified percentage of the
3members of the board of managers means that percentage of the
4total number of persons constituting such board pursuant to the
6    (i) "Plat" means a plat or plats of survey of the parcel
7and of all units in the property submitted to the provisions of
8this Act, which may consist of a three-dimensional horizontal
9and vertical delineation of all such units.
10    (j) "Record" means to record in the office of the recorder
11or, whenever required, to file in the office of the Registrar
12of Titles of the county wherein the property is located.
13    (k) "Conversion Condominium" means a property which
14contains structures, excepting those newly constructed and
15intended for condominium ownership, which are, or have
16previously been, wholly or partially occupied before recording
17of condominium instruments by persons other than those who have
18contracted for the purchase of condominiums.
19    (l) "Condominium Instruments" means all documents and
20authorized amendments thereto recorded pursuant to the
21provisions of the Act, including the declaration, bylaws and
23    (m) "Common Expenses" means the proposed or actual expenses
24affecting the property, including reserves, if any, lawfully
25assessed by the Board of Managers of the Unit Owner's



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1    (n) "Reserves" means those sums paid by unit owners which
2are separately maintained by the board of managers for purposes
3specified by the board of managers or the condominium
5    (o) "Unit Owners' Association" or "Association" means the
6association of all the unit owners, acting pursuant to bylaws
7through its duly elected board of managers.
8    (p) "Purchaser" means any person or persons other than the
9Developer who purchase a unit in a bona fide transaction for
11    (q) "Developer" means any person who submits property
12legally or equitably owned in fee simple by the developer, or
13leased to the developer under a lease described in item (x) of
14this Section, to the provisions of this Act, or any person who
15offers units legally or equitably owned in fee simple by the
16developer, or leased to the developer under a lease described
17in item (x) of this Section, for sale in the ordinary course of
18such person's business, including any successor or successors
19to such developers' entire interest in the property other than
20the purchaser of an individual unit.
21    (r) "Add-on Condominium" means a property to which
22additional property may be added in accordance with condominium
23instruments and this Act.
24    (s) "Limited Common Elements" means a portion of the common
25elements so designated in the declaration as being reserved for
26the use of a certain unit or units to the exclusion of other



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1units, including but not limited to balconies, terraces, patios
2and parking spaces or facilities.
3    (t) "Building" means all structures, attached or
4unattached, containing one or more units.
5    (u) "Master Association" means an organization described
6in Section 18.5 whether or not it is also an association
7described in Section 18.3.
8    (v) "Developer Control" means such control at a time prior
9to the election of the Board of Managers provided for in
10Section 18.2(b) of this Act.
11    (w) "Meeting of Board of Managers or Board of Master
12Association" means any gathering of a quorum of the members of
13the Board of Managers or Board of the Master Association held
14for the purpose of conducting board business.
15    (x) "Leasehold Condominium" means a property submitted to
16the provisions of this Act which is subject to a lease, the
17expiration or termination of which would terminate the
18condominium and the lessor of which is (i) exempt from taxation
19under Section 501(c)(3) of the Internal Revenue Code of 1986,
20as amended, (ii) a limited liability company whose sole member
21is exempt from taxation under Section 501 (c)(3) of the
22Internal Revenue Code of 1986, as amended, or (iii) a Public
23Housing Authority created pursuant to the Housing Authorities
24Act that is located in a municipality having a population in
25excess of 1,000,000 inhabitants.
26    (y) "Regular Monthly Assessments" means the amount charged



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1by the association as provided for in the current annual budget
2adopted under subsection (c) of Section 9 of this Act.
3(Source: P.A. 93-474, eff. 8-8-03.)"; and
4    (765 ILCS 605/9)  (from Ch. 30, par. 309)
5    Sec. 9. Sharing of expenses - Lien for nonpayment.
6    (a) All common expenses incurred or accrued prior to the
7first conveyance of a unit shall be paid by the developer, and
8during this period no common expense assessment shall be
9payable to the association. It shall be the duty of each unit
10owner including the developer to pay his proportionate share of
11the common expenses commencing with the first conveyance. The
12proportionate share shall be in the same ratio as his
13percentage of ownership in the common elements set forth in the
15    (b) The condominium instruments may provide that common
16expenses for insurance premiums be assessed on a basis
17reflecting increased charges for coverage on certain units.
18    (c) Budget and reserves.
19        (1) The board of managers shall prepare and distribute
20    to all unit owners a detailed proposed annual budget,
21    setting forth with particularity all anticipated common
22    expenses by category as well as all anticipated assessments
23    and other income. The initial budget and common expense
24    assessment based thereon shall be adopted prior to the
25    conveyance of any unit. The budget shall also set forth



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



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



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1    enforcing the covenants of the condominium instruments,
2    rules and regulations of the board of managers, or any
3    applicable statute or ordinance, and costs of collections
4    shall constitute a lien on the interest of the unit owner
5    in the property prior to all other liens and encumbrances,
6    recorded or unrecorded, except only (a) taxes, special
7    assessments and special taxes theretofore or thereafter
8    levied by any political subdivision or municipal
9    corporation of this State and other State or federal taxes
10    which by law are a lien on the interest of the unit owner
11    prior to preexisting recorded encumbrances thereon and (b)
12    encumbrances on the interest of the unit owner recorded
13    prior to the date of such failure or refusal which by law
14    would be a lien thereon prior to subsequently recorded
15    encumbrances. Any action brought to extinguish the lien of
16    the association shall include the association as a party.
17        (2) With respect to encumbrances executed prior to
18    August 30, 1984 or encumbrances executed subsequent to
19    August 30, 1984 which are neither bonafide first mortgages
20    nor trust deeds and which encumbrances contain a statement
21    of a mailing address in the State of Illinois where notice
22    may be mailed to the encumbrancer thereunder, if and
23    whenever and as often as the manager or board of managers
24    shall send, by United States certified or registered mail,
25    return receipt requested, to any such encumbrancer at the
26    mailing address set forth in the recorded encumbrance a



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



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



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



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1manner as a mortgage of real property.
2    (i) Unless otherwise provided in the declaration, the
3members of the board of managers and their successors in
4office, acting on behalf of the other unit owners, shall have
5the power to bid on the interest so foreclosed at the
6foreclosure sale, and to acquire and hold, lease, mortgage and
7convey it.
8    (j) Any encumbrancer may from time to time request in
9writing a written statement from the manager or board of
10managers setting forth the unpaid common expenses with respect
11to the unit covered by his encumbrance. Unless the request is
12complied with within 20 days, all unpaid common expenses which
13become due prior to the date of the making of such request
14shall be subordinate to the lien of the encumbrance. Any
15encumbrancer holding a lien on a unit may pay any unpaid common
16expenses payable with respect to the unit, and upon payment the
17encumbrancer shall have a lien on the unit for the amounts paid
18at the same rank as the lien of his encumbrance.
19    (k) Nothing in Public Act 83-1271 is intended to change the
20lien priorities of any encumbrance created prior to August 30,
22(Source: P.A. 94-1049, eff. 1-1-07.)
23    (765 ILCS 605/22.1)  (from Ch. 30, par. 322.1)
24    Sec. 22.1. (a) In the event of any resale of a condominium
25unit by a unit owner other than the developer, the Board of



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



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



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1to secure a debt, the owner shall inform the Board of Managers
2of the unit owner's association of the identity of the lender
3together with a mailing address at which the lender can receive
4notices from the association. If a unit owner fails or refuses
5to inform the Board as required under subsection (c) then that
6unit owner shall be liable to the association for all costs,
7expenses and reasonable attorneys fees and such other damages,
8if any, incurred by the association as a result of such failure
9or refusal.
10    A reasonable fee covering the direct out-of-pocket cost of
11providing such information and copying may be charged by the
12association or its Board of Managers to the unit seller for
13providing such information.
14(Source: P.A. 87-692.)
15    Section 99. Effective date. This Act takes effect upon
16becoming law.".