99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB2641

Introduced , by Rep. Kelly M. Cassidy

SYNOPSIS AS INTRODUCED:

765 ILCS 605/18 from Ch. 30, par. 318

Amends the Condominium Property Act. Provides that the bylaws of a condominium shall provide for the ratification and confirmation by the board of managers of actions taken by the board without a meeting in response to an emergency. Provides that the bylaws shall include specified procedural requirements relating to the ratification and confirmation.

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A BILL FOR

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1 AN ACT concerning civil law.

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 for

8 at least the following:

9 (a)(1) The election from among the unit owners of a board

10 of managers, the number of persons constituting such board, and

11 that the terms of at least one-third of the members of the

12 board shall expire annually and that all members of the board

13 shall be elected at large. If there are multiple owners of a

14 single unit, only one of the multiple owners shall be eligible

15 to serve as a member of the board at any one time.

16 (2) the powers and duties of the board;

17 (3) the compensation, if any, of the members of the board;

18 (4) the method of removal from office of members of the

19 board;

20 (5) that the board may engage the services of a manager or

21 managing agent;

22 (6) that each unit owner shall receive, at least 30 days

23 prior to the adoption thereof by the board of managers, a copy

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1 of the proposed annual budget together with an indication of

2 which portions are intended for reserves, capital expenditures

3 or repairs or payment of real estate taxes;

4 (7) that the board of managers shall annually supply to all

5 unit owners an itemized accounting of the common expenses for

6 the preceding year actually incurred or paid, together with an

7 indication of which portions were for reserves, capital

8 expenditures or repairs or payment of real estate taxes and

9 with a tabulation of the amounts collected pursuant to the

10 budget or assessment, and showing the net excess or deficit of

11 income over expenditures plus reserves;

12 (8)(i) that each unit owner shall receive notice, in the

13 same manner as is provided in this Act for membership meetings,

14 of any meeting of the board of managers concerning the adoption

15 of the proposed annual budget and regular assessments pursuant

16 thereto or to adopt a separate (special) assessment, (ii) that

17 except as provided in subsection (iv) below, if an adopted

18 budget or any separate assessment adopted by the board would

19 result in the sum of all regular and separate assessments

20 payable in the current fiscal year exceeding 115% of the sum of

21 all regular and separate assessments payable during the

22 preceding fiscal year, the board of managers, upon written

23 petition by unit owners with 20 percent of the votes of the

24 association delivered to the board within 14 days of the board

25 action, shall call a meeting of the unit owners within 30 days

26 of the date of delivery of the petition to consider the budget

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1 or separate assessment; unless a majority of the total votes of

2 the unit owners are cast at the meeting to reject the budget or

3 separate assessment, it is ratified, (iii) that any common

4 expense not set forth in the budget or any increase in

5 assessments over the amount adopted in the budget shall be

6 separately assessed against all unit owners, (iv) that separate

7 assessments for expenditures relating to emergencies or

8 mandated by law may be adopted by the board of managers without

9 being subject to unit owner approval or the provisions of item

10 (ii) above or item (v) below. As used herein, "emergency" means

11 an immediate danger to the structural integrity of the common

12 elements or to the life, health, safety or property of the unit

13 owners, (v) that assessments for additions and alterations to

14 the common elements or to association-owned property not

15 included in the adopted annual budget, shall be separately

16 assessed and are subject to approval of two-thirds of the total

17 votes of all unit owners, (vi) that the board of managers may

18 adopt separate assessments payable over more than one fiscal

19 year. With respect to multi-year assessments not governed by

20 items (iv) and (v), the entire amount of the multi-year

21 assessment shall be deemed considered and authorized in the

22 first fiscal year in which the assessment is approved;

23 (9) that meetings of the board of managers shall be open to

24 any unit owner, except for the portion of any meeting held (i)

25 to discuss litigation when an action against or on behalf of

26 the particular association has been filed and is pending in a

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1 court or administrative tribunal, or when the board of managers

2 finds that such an action is probable or imminent, (ii) to

3 consider information regarding appointment, employment or

4 dismissal of an employee, or (iii) to discuss violations of

5 rules and regulations of the association or a unit owner's

6 unpaid share of common expenses; that any vote on these matters

7 shall be taken at a meeting or portion thereof open to any unit

8 owner; that any unit owner may record the proceedings at

9 meetings or portions thereof required to be open by this Act by

10 tape, film or other means; that the board may prescribe

11 reasonable rules and regulations to govern the right to make

12 such recordings, that notice of such meetings shall be mailed

13 or delivered at least 48 hours prior thereto, unless a written

14 waiver of such notice is signed by the person or persons

15 entitled to such notice pursuant to the declaration, bylaws,

16 other condominium instrument, or provision of law other than

17 this subsection before the meeting is convened, and that copies

18 of notices of meetings of the board of managers shall be posted

19 in entranceways, elevators, or other conspicuous places in the

20 condominium at least 48 hours prior to the meeting of the board

21 of managers except where there is no common entranceway for 7

22 or more units, the board of managers may designate one or more

23 locations in the proximity of these units where the notices of

24 meetings shall be posted;

25 (10) that the board shall meet at least 4 times annually;

26 (11) that no member of the board or officer shall be

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1 elected for a term of more than 2 years, but that officers and

2 board members may succeed themselves;

3 (12) the designation of an officer to mail and receive all

4 notices and execute amendments to condominium instruments as

5 provided for in this Act and in the condominium instruments;

6 (13) the method of filling vacancies on the board which

7 shall include authority for the remaining members of the board

8 to fill the vacancy by two-thirds vote until the next annual

9 meeting of unit owners or for a period terminating no later

10 than 30 days following the filing of a petition signed by unit

11 owners holding 20% of the votes of the association requesting a

12 meeting of the unit owners to fill the vacancy for the balance

13 of the term, and that a meeting of the unit owners shall be

14 called for purposes of filling a vacancy on the board no later

15 than 30 days following the filing of a petition signed by unit

16 owners holding 20% of the votes of the association requesting

17 such a meeting, and the method of filling vacancies among the

18 officers that shall include the authority for the members of

19 the board to fill the vacancy for the unexpired portion of the

20 term;

21 (14) what percentage of the board of managers, if other

22 than a majority, shall constitute a quorum;

23 (15) provisions concerning notice of board meetings to

24 members of the board;

25 (16) the board of managers may not enter into a contract

26 with a current board member or with a corporation or

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1 partnership in which a board member or a member of the board

2 member's immediate family has 25% or more interest, unless

3 notice of intent to enter the contract is given to unit owners

4 within 20 days after a decision is made to enter into the

5 contract and the unit owners are afforded an opportunity by

6 filing a petition, signed by 20% of the unit owners, for an

7 election to approve or disapprove the contract; such petition

8 shall be filed within 20 days after such notice and such

9 election shall be held within 30 days after filing the

10 petition; for purposes of this subsection, a board member's

11 immediate family means the board member's spouse, parents, and

12 children;

13 (17) that the board of managers may disseminate to unit

14 owners biographical and background information about

15 candidates for election to the board if (i) reasonable efforts

16 to identify all candidates are made and all candidates are

17 given an opportunity to include biographical and background

18 information in the information to be disseminated; and (ii) the

19 board does not express a preference in favor of any candidate;

20 (18) any proxy distributed for board elections by the board

21 of managers gives unit owners the opportunity to designate any

22 person as the proxy holder, and gives the unit owner the

23 opportunity to express a preference for any of the known

24 candidates for the board or to write in a name;

25 (19) that special meetings of the board of managers can be

26 called by the president or 25% of the members of the board;~~and~~

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1 (20) that the board of managers may establish and maintain

2 a system of master metering of public utility services and

3 collect payments in connection therewith, subject to the

4 requirements of the Tenant Utility Payment Disclosure Act; and ~~.~~

5 (21) that the board may ratify and confirm actions of the

6 members of the board taken in response to an emergency, as that

7 term is defined in subdivision (a)(8)(iv) of this Section, if

8 it had the right to authorize the actions in advance; that the

9 board may not ratify and confirm any actions done in violation

10 of this Act, other laws, or the condominium instruments, except

11 that the board may subsequently ratify and confirm emergency

12 actions authorized by one or more board members, regardless of

13 whether a quorum of the board was present to vote to authorize

14 the actions or proper prior notice of board action otherwise

15 required by this Act, other laws, or the condominium

16 instruments was given; that the board shall give notice to the

17 unit owners of: (i) the occurrence of the emergency event

18 within 2 business days after the emergency event, and (ii) the

19 general description of the actions taken to address the event

20 within 7 days after the emergency event; that a board vote to

21 ratify and confirm the emergency actions must be held within 30

22 days after the emergency event, at either a regular or special

23 board meeting; that the notice of the meeting shall

24 specifically state that a vote of the board will be held at the

25 meeting to ratify and confirm the emergency actions taken.

26 (b)(1) What percentage of the unit owners, if other than

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1 20%, shall constitute a quorum provided that, for condominiums

2 with 20 or more units, the percentage of unit owners

3 constituting a quorum shall be 20% unless the unit owners

4 holding a majority of the percentage interest in the

5 association provide for a higher percentage, provided that in

6 voting on amendments to the association's bylaws, a unit owner

7 who is in arrears on the unit owner's regular or separate

8 assessments for 60 days or more, shall not be counted for

9 purposes of determining if a quorum is present, but that unit

10 owner retains the right to vote on amendments to the

11 association's bylaws;

12 (2) that the association shall have one class of

13 membership;

14 (3) that the members shall hold an annual meeting, one of

15 the purposes of which shall be to elect members of the board of

16 managers;

17 (4) the method of calling meetings of the unit owners;

18 (5) that special meetings of the members can be called by

19 the president, board of managers, or by 20% of unit owners;

20 (6) that written notice of any membership meeting shall be

21 mailed or delivered giving members no less than 10 and no more

22 than 30 days notice of the time, place and purpose of such

23 meeting except that notice may be sent, to the extent the

24 condominium instruments or rules adopted thereunder expressly

25 so provide, by electronic transmission consented to by the unit

26 owner to whom the notice is given, provided the director and

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1 officer or his agent certifies in writing to the delivery by

2 electronic transmission;

3 (7) that voting shall be on a percentage basis, and that

4 the percentage vote to which each unit is entitled is the

5 percentage interest of the undivided ownership of the common

6 elements appurtenant thereto, provided that the bylaws may

7 provide for approval by unit owners in connection with matters

8 where the requisite approval on a percentage basis is not

9 specified in this Act, on the basis of one vote per unit;

10 (8) that, where there is more than one owner of a unit, if

11 only one of the multiple owners is present at a meeting of the

12 association, he is entitled to cast all the votes allocated to

13 that unit, if more than one of the multiple owners are present,

14 the votes allocated to that unit may be cast only in accordance

15 with the agreement of a majority in interest of the multiple

16 owners, unless the declaration expressly provides otherwise,

17 that there is majority agreement if any one of the multiple

18 owners cast the votes allocated to that unit without protest

19 being made promptly to the person presiding over the meeting by

20 any of the other owners of the unit;

21 (9)(A) except as provided in subparagraph (B) of this

22 paragraph (9) in connection with board elections, that a unit

23 owner may vote by proxy executed in writing by the unit owner

24 or by his duly authorized attorney in fact; that the proxy must

25 bear the date of execution and, unless the condominium

26 instruments or the written proxy itself provide otherwise, is

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1 invalid after 11 months from the date of its execution; to the

2 extent the condominium instruments or rules adopted thereunder

3 expressly so provide, a vote or proxy may be submitted by

4 electronic transmission, provided that any such electronic

5 transmission shall either set forth or be submitted with

6 information from which it can be determined that the electronic

7 transmission was authorized by the unit owner or the unit

8 owner's proxy;

9 (B) that if a rule adopted at least 120 days before a board

10 election or the declaration or bylaws provide for balloting as

11 set forth in this subsection, unit owners may not vote by proxy

12 in board elections, but may vote only (i) by submitting an

13 association-issued ballot in person at the election meeting or

14 (ii) by submitting an association-issued ballot to the

15 association or its designated agent by mail or other means of

16 delivery specified in the declaration, bylaws, or rule; that

17 the ballots shall be mailed or otherwise distributed to unit

18 owners not less than 10 and not more than 30 days before the

19 election meeting, and the board shall give unit owners not less

20 than 21 days' prior written notice of the deadline for

21 inclusion of a candidate's name on the ballots; that the

22 deadline shall be no more than 7 days before the ballots are

23 mailed or otherwise distributed to unit owners; that every such

24 ballot must include the names of all candidates who have given

25 the board or its authorized agent timely written notice of

26 their candidacy and must give the person casting the ballot the

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1 opportunity to cast votes for candidates whose names do not

2 appear on the ballot; that a ballot received by the association

3 or its designated agent after the close of voting shall not be

4 counted; that a unit owner who submits a ballot by mail or

5 other means of delivery specified in the declaration, bylaws,

6 or rule may request and cast a ballot in person at the election

7 meeting, and thereby void any ballot previously submitted by

8 that unit owner;

9 (B-5) that if a rule adopted at least 120 days before a

10 board election or the declaration or bylaws provide for

11 balloting as set forth in this subparagraph, unit owners may

12 not vote by proxy in board elections, but may vote only (i) by

13 submitting an association-issued ballot in person at the

14 election meeting; or (ii) by any acceptable technological means

15 as defined in Section 2 of this Act; instructions regarding the

16 use of electronic means for voting shall be distributed to all

17 unit owners not less than 10 and not more than 30 days before

18 the election meeting, and the board shall give unit owners not

19 less than 21 days' prior written notice of the deadline for

20 inclusion of a candidate's name on the ballots; the deadline

21 shall be no more than 7 days before the instructions for voting

22 using electronic or acceptable technological means is

23 distributed to unit owners; every instruction notice must

24 include the names of all candidates who have given the board or

25 its authorized agent timely written notice of their candidacy

26 and must give the person voting through electronic or

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1 acceptable technological means the opportunity to cast votes

2 for candidates whose names do not appear on the ballot; a unit

3 owner who submits a vote using electronic or acceptable

4 technological means may request and cast a ballot in person at

5 the election meeting, thereby voiding any vote previously

6 submitted by that unit owner;

7 (C) that if a written petition by unit owners with at least

8 20% of the votes of the association is delivered to the board

9 within 14 days after the board's approval of a rule adopted

10 pursuant to subparagraph (B) or subparagraph (B-5) of this

11 paragraph (9), the board shall call a meeting of the unit

12 owners within 30 days after the date of delivery of the

13 petition; that unless a majority of the total votes of the unit

14 owners are cast at the meeting to reject the rule, the rule is

15 ratified;

16 (D) that votes cast by ballot under subparagraph (B) or

17 electronic or acceptable technological means under

18 subparagraph (B-5) of this paragraph (9) are valid for the

19 purpose of establishing a quorum;

20 (10) that the association may, upon adoption of the

21 appropriate rules by the board of managers, conduct elections

22 by secret ballot whereby the voting ballot is marked only with

23 the percentage interest for the unit and the vote itself,

24 provided that the board further adopt rules to verify the

25 status of the unit owner issuing a proxy or casting a ballot;

26 and further, that a candidate for election to the board of

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1 managers or such candidate's representative shall have the

2 right to be present at the counting of ballots at such

3 election;

4 (11) that in the event of a resale of a condominium unit

5 the purchaser of a unit from a seller other than the developer

6 pursuant to an installment contract for purchase shall during

7 such times as he or she resides in the unit be counted toward a

8 quorum for purposes of election of members of the board of

9 managers at any meeting of the unit owners called for purposes

10 of electing members of the board, shall have the right to vote

11 for the election of members of the board of managers and to be

12 elected to and serve on the board of managers unless the seller

13 expressly retains in writing any or all of such rights. In no

14 event may the seller and purchaser both be counted toward a

15 quorum, be permitted to vote for a particular office or be

16 elected and serve on the board. Satisfactory evidence of the

17 installment contact shall be made available to the association

18 or its agents. For purposes of this subsection, "installment

19 contact" shall have the same meaning as set forth in Section 1

20 (e) of "An Act relating to installment contracts to sell

21 dwelling structures", approved August 11, 1967, as amended;

22 (12) the method by which matters subject to the approval of

23 unit owners set forth in this Act, or in the condominium

24 instruments, will be submitted to the unit owners at special

25 membership meetings called for such purposes; and

26 (13) that matters subject to the affirmative vote of not

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1 less than 2/3 of the votes of unit owners at a meeting duly

2 called for that purpose, shall include, but not be limited to:

3 (i) merger or consolidation of the association;

4 (ii) sale, lease, exchange, or other disposition

5 (excluding the mortgage or pledge) of all, or substantially

6 all of the property and assets of the association; and

7 (iii) the purchase or sale of land or of units on

8 behalf of all unit owners.

9 (c) Election of a president from among the board of

10 managers, who shall preside over the meetings of the board of

11 managers and of the unit owners.

12 (d) Election of a secretary from among the board of

13 managers, who shall keep the minutes of all meetings of the

14 board of managers and of the unit owners and who shall, in

15 general, perform all the duties incident to the office of

16 secretary.

17 (e) Election of a treasurer from among the board of

18 managers, who shall keep the financial records and books of

19 account.

20 (f) Maintenance, repair and replacement of the common

21 elements and payments therefor, including the method of

22 approving payment vouchers.

23 (g) An association with 30 or more units shall obtain and

24 maintain fidelity insurance covering persons who control or

25 disburse funds of the association for the maximum amount of

26 coverage available to protect funds in the custody or control

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1 of the association plus the association reserve fund. All

2 management companies which are responsible for the funds held

3 or administered by the association shall maintain and furnish

4 to the association a fidelity bond for the maximum amount of

5 coverage available to protect funds in the custody of the

6 management company at any time. The association shall bear the

7 cost of the fidelity insurance and fidelity bond, unless

8 otherwise provided by contract between the association and a

9 management company. The association shall be the direct obligee

10 of any such fidelity bond. A management company holding reserve

11 funds of an association shall at all times maintain a separate

12 account for each association, provided, however, that for

13 investment purposes, the Board of Managers of an association

14 may authorize a management company to maintain the

15 association's reserve funds in a single interest bearing

16 account with similar funds of other associations. The

17 management company shall at all times maintain records

18 identifying all moneys of each association in such investment

19 account. The management company may hold all operating funds of

20 associations which it manages in a single operating account but

21 shall at all times maintain records identifying all moneys of

22 each association in such operating account. Such operating and

23 reserve funds held by the management company for the

24 association shall not be subject to attachment by any creditor

25 of the management company.

26 For the purpose of this subsection a management company

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1 shall be defined as a person, partnership, corporation, or

2 other legal entity entitled to transact business on behalf of

3 others, acting on behalf of or as an agent for a unit owner,

4 unit owners or association of unit owners for the purpose of

5 carrying out the duties, responsibilities, and other

6 obligations necessary for the day to day operation and

7 management of any property subject to this Act. For purposes of

8 this subsection, the term "fiduciary insurance coverage" shall

9 be defined as both a fidelity bond and directors and officers

10 liability coverage, the fidelity bond in the full amount of

11 association funds and association reserves that will be in the

12 custody of the association, and the directors and officers

13 liability coverage at a level as shall be determined to be

14 reasonable by the board of managers, if not otherwise

15 established by the declaration or by laws.

16 Until one year after the effective date of this amendatory

17 Act of 1985, if a condominium association has reserves plus

18 assessments in excess of $250,000 and cannot reasonably obtain

19 100% fidelity bond coverage for such amount, then it must

20 obtain a fidelity bond coverage of $250,000.

21 (h) Method of estimating the amount of the annual budget,

22 and the manner of assessing and collecting from the unit owners

23 their respective shares of such estimated expenses, and of any

24 other expenses lawfully agreed upon.

25 (i) That upon 10 days notice to the manager or board of

26 managers and payment of a reasonable fee, any unit owner shall

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1 be furnished a statement of his account setting forth the

2 amount of any unpaid assessments or other charges due and owing

3 from such owner.

4 (j) Designation and removal of personnel necessary for the

5 maintenance, repair and replacement of the common elements.

6 (k) Such restrictions on and requirements respecting the

7 use and maintenance of the units and the use of the common

8 elements, not set forth in the declaration, as are designed to

9 prevent unreasonable interference with the use of their

10 respective units and of the common elements by the several unit

11 owners.

12 (l) Method of adopting and of amending administrative rules

13 and regulations governing the operation and use of the common

14 elements.

15 (m) The percentage of votes required to modify or amend the

16 bylaws, but each one of the particulars set forth in this

17 section shall always be embodied in the bylaws.

18 (n)(i) The provisions of this Act, the declaration, bylaws,

19 other condominium instruments, and rules and regulations that

20 relate to the use of the individual unit or the common elements

21 shall be applicable to any person leasing a unit and shall be

22 deemed to be incorporated in any lease executed or renewed on

23 or after the effective date of this amendatory Act of 1984.

24 (ii) With regard to any lease entered into subsequent to the

25 effective date of this amendatory Act of 1989, the unit owner

26 leasing the unit shall deliver a copy of the signed lease to

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1 the board or if the lease is oral, a memorandum of the lease,

2 not later than the date of occupancy or 10 days after the lease

3 is signed, whichever occurs first. In addition to any other

4 remedies, by filing an action jointly against the tenant and

5 the unit owner, an association may seek to enjoin a tenant from

6 occupying a unit or seek to evict a tenant under the provisions

7 of Article IX of the Code of Civil Procedure for failure of the

8 lessor-owner to comply with the leasing requirements

9 prescribed by this Section or by the declaration, bylaws, and

10 rules and regulations. The board of managers may proceed

11 directly against a tenant, at law or in equity, or under the

12 provisions of Article IX of the Code of Civil Procedure, for

13 any other breach by tenant of any covenants, rules, regulations

14 or bylaws.

15 (o) The association shall have no authority to forbear the

16 payment of assessments by any unit owner.

17 (p) That when 30% or fewer of the units, by number, possess

18 over 50% in the aggregate of the votes in the association, any

19 percentage vote of members specified herein or in the

20 condominium instruments shall require the specified percentage

21 by number of units rather than by percentage of interest in the

22 common elements allocated to units that would otherwise be

23 applicable and garage units or storage units, or both, shall

24 have, in total, no more votes than their aggregate percentage

25 of ownership in the common elements; this shall mean that if

26 garage units or storage units, or both, are to be given a vote,

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1 or portion of a vote, that the association must add the total

2 number of votes cast of garage units, storage units, or both,

3 and divide the total by the number of garage units, storage

4 units, or both, and multiply by the aggregate percentage of

5 ownership of garage units and storage units to determine the

6 vote, or portion of a vote, that garage units or storage units,

7 or both, have. For purposes of this subsection (p), when making

8 a determination of whether 30% or fewer of the units, by

9 number, possess over 50% in the aggregate of the votes in the

10 association, a unit shall not include a garage unit or a

11 storage unit.

12 (q) That a unit owner may not assign, delegate, transfer,

13 surrender, or avoid the duties, responsibilities, and

14 liabilities of a unit owner under this Act, the condominium

15 instruments, or the rules and regulations of the Association;

16 and that such an attempted assignment, delegation, transfer,

17 surrender, or avoidance shall be deemed void.

18 The provisions of this Section are applicable to all

19 condominium instruments recorded under this Act. Any portion of

20 a condominium instrument which contains provisions contrary to

21 these provisions shall be void as against public policy and

22 ineffective. Any such instrument which fails to contain the

23 provisions required by this Section shall be deemed to

24 incorporate such provisions by operation of law.

25 (Source: P.A. 98-1042, eff. 1-1-15.)