HB4338 104TH GENERAL ASSEMBLY

LRB104 15964 JRC 29205 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4338

Introduced 1/14/2026, by Rep. Sonya M. Harper

SYNOPSIS AS INTRODUCED:

765 ILCS 615/10
765 ILCS 615/20
765 ILCS 615/25
765 ILCS 615/30
765 ILCS 615/40

Amends the Condominium and Common Interest Community Ombudsperson Act. Requires every elected or appointed member of a condominium or common interest community board to complete within 12 months of election or appointment a certified governance and fiduciary training program. Requires the Office of Ombudsperson to make the program available online for free or at low-cost. Describes elements that must be included in the program, including the following: a publicly accessible database listing enforcement actions against licensed community association managers and management companies that includes the nature of the violation, date of enforcement action, type of penalty or corrective measure, and status of compliance or appeal. Requires the Office to establish a Condominium Mediation and Arbitration Program that allows owners and associations to voluntarily resolve disputes before litigation involving governance, access to information, and enforcement of rules. Provides that mediation proceedings are confidential, but outcomes may be summarized anonymously in the Ombudsperson's annual report for data purposes. Makes findings.

A BILL FOR

AN ACT concerning civil law.

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

Section 5. The Condominium and Common Interest Community Ombudsperson Act is amended by changing Sections 10, 20, 25, 30, and 40 as follows:

(765 ILCS 615/10)

(Section scheduled to be repealed on January 1, 2029)

Sec. 10. Findings. The General Assembly finds as follows:

(1) Managing condominium property or common interest community property is a complex responsibility. Unit owners and persons charged with managing condominium property or common interest community property may have little or no prior experience in managing real property, operating a not-for-profit association or corporation, complying with the laws governing condominium property or common interest community property, and interpreting and enforcing restrictions and rules imposed by applicable instruments or covenants. Unit owners may not fully understand their rights and obligations under the law or applicable instruments or covenants. Mistakes and misunderstandings are inevitable and may lead to serious, costly, and divisive problems. This Act seeks to educate unit owners, condominium associations, common interest community associations, boards of managers, and boards of directors about the Condominium Property Act and the Common Interest Community Association Act. Effective education can prevent or reduce the severity of problems within a condominium or common interest community.

(2) Anecdotal accounts of abuses within condominiums and common interest communities create continuing public demand for reform of condominium and common interest community property law. This results in frequent changes to the law, making it difficult to understand and apply, and imposes significant transitional costs on these communities statewide. By collecting empirical data on the nature and incidence of problems within these communities, this Act will provide a sound basis for prioritizing reform efforts, thereby increasing the stability of condominium and common interest community property law.

(3) Condominium ownership is one of the most significant financial investments for Illinois residents, particularly in urban areas, such as Chicago. A growing number of condominium owners report misconduct, negligence, and obstruction from condominium boards and property management firms, causing diminished transparency, loss of property value, and emotional distress. Although the Office of the Condominium and Common Interest Ombudsperson is charged with licensing community association managers, it lacks sufficient mechanisms for timely enforcement, mediation, and public accountability. Vulnerable populations, particularly seniors, low-income residents, and individuals in smaller associations, face disproportionate harm because of the cost of legal representation and the absence of accessible administrative remedies. It is, therefore, necessary to strength the Office's enforcement authority and ensure fair governance through education and accountability measures.

(Source: P.A. 98-1135, eff. 1-1-17 (See Section 20 of P.A. 99-776 for effective date of P.A. 98-1135).)

(765 ILCS 615/20)

(Section scheduled to be repealed on January 1, 2029)

Sec. 20. Office of the Condominium and Common Interest Community Ombudsperson.

(a) There is created in the Division of Real Estate within the Department of Financial and Professional Regulation, under the supervision and control of the Secretary, the Office of the Condominium and Common Interest Community Ombudsperson.

(b) The Department shall name an Ombudsperson and other persons as necessary to discharge the requirements of this Act. The Ombudsperson shall have the powers delegated to him or her by the Department, in addition to the powers set forth in this Act.

(c) Neither the Ombudsperson nor the Department shall have any authority to consider matters that may constitute grounds for charges or complaints under the Illinois Human Rights Act or that are properly brought before the Department of Human Rights or the Illinois Human Rights Commission, before a comparable department or body established by a county, municipality, or township pursuant to an ordinance prohibiting discrimination and established for the purpose of investigating and adjudicating charges or complaints of discrimination under the ordinance, or before a federal agency or commission that administers and enforces federal anti-discrimination laws and investigates and adjudicates charges or complaints of discrimination under such laws.

(d) Information and advice provided by the Ombudsperson has no binding legal effect and is not subject to the provisions of the Illinois Administrative Procedure Act.

(e) The Office is authorized to receive, investigate, and mediate complaints from unit owners regarding misconduct, governance violations, or denial of lawful request for records; recommend corrective actions; and refer substantiated complaints to the appropriate enforcement unit of the Department. Subject to the confidentiality provisions in Section 45 of this Act and except as otherwise protected by law, the Office, the Department, or both may compel the production of documents, minutes, or financial statements necessary to investigate complaints.

(Source: P.A. 98-1135, eff. 1-1-17 (See Section 20 of P.A. 99-776 for effective date of P.A. 98-1135); 99-776, eff. 8-12-16.)

(765 ILCS 615/25)

(Section scheduled to be repealed on January 1, 2029)

Sec. 25. Training and education.

(a) On or before July 1, 2017, the Ombudsperson shall offer training, outreach, and educational materials, including but not limited to, materials concerning fiduciary duties, ethical obligations, and statutory requirements, and may arrange for the offering of courses to unit owners, associations, boards of managers, and boards of directors in subjects relevant to: (i) the operation and management of condominiums and common interest communities; and (ii) the Condominium Property Act and the Common Interest Community Association Act.

(b) Every elected or appointed member of a condominium or common interest community board must, within 12 months of election or appointment, complete a certified governance and fiduciary training program. The Office must make available online to all board members free or at low-cost such a program, which includes instruction on the following:

(1) fiduciary duties and conflict of interest avoidance;

(2) financial management and transparency requirements;

(3) member rights and procedures for access to records; and

(4) ethical standards of conduct and penalties for misconduct.

(Source: P.A. 98-1135, eff. 1-1-17 (See Section 20 of P.A. 99-776 for effective date of P.A. 98-1135); 99-776, eff. 8-12-16.)

(765 ILCS 615/30)

(Section scheduled to be repealed on January 1, 2029)

Sec. 30. Website; toll-free number.

(a) The Office shall maintain on the Department's website the following information:

(1) the text of this Act, the Condominium Property Act, the Common Interest Community Association Act, and any other statute, administrative rule, or regulation that the Ombudsperson determines is relevant to the operation and management of a condominium association or common interest community association;

(2) information concerning non-judicial resolution of disputes that may arise within a condominium or common interest community, including, but not limited to, alternative dispute resolution programs and contacts for locally-available dispute resolution programs;

(3) a description of the services provided by the Ombudsperson and information on how to contact the Ombudsperson for assistance; and

(4) any other information that the Ombudsperson determines is useful to unit owners, associations, boards of managers, and boards of directors; and .

(5) a publicly accessible database listing enforcement actions against licensed community association managers and management companies that includes the nature of the violation, date of enforcement action, type of penalty or corrective measure, and status of compliance or appeal.

(b) The Office may make available during regular business hours a statewide toll-free telephone number to provide information and resources on matters relating to condominium property and common interest community property.

(Source: P.A. 98-1135, eff. 1-1-17 (See Section 20 of P.A. 99-776 for effective date of P.A. 98-1135); 99-776, eff. 8-12-16.)

(765 ILCS 615/40)

(Section scheduled to be repealed on January 1, 2029)

Sec. 40. Dispute resolution.

(a) Beginning on July 1, 2020, and subject to appropriation, unit owners meeting the requirements of this Section may make a written request, as outlined in subsection (f) of this Section, to the Ombudsperson for assistance in resolving a dispute between a unit owner and an association that involves a violation of the Condominium Property Act or the Common Interest Community Association Act.

(b) The Ombudsperson shall not accept requests for resolutions of disputes with community association managers, supervising community association managers, or community association management firms, as defined in the Community Association Manager Licensing and Disciplinary Act.

(c) The Ombudsperson shall not accept requests for resolutions of disputes for which there is a pending complaint filed in any court or administrative tribunal in any jurisdiction or for which arbitration or alternative dispute resolution is scheduled to occur or has previously occurred.

(d) The assistance described in subsection (a) of this Section is available only to unit owners. In order for a unit owner to receive the assistance from the Ombudsperson described in subsection (a) of this Section, the unit owner must:

(1) owe no outstanding assessments, fees, or funds to the association, unless the assessments, fees, or funds are central to the dispute;

(2) allege a dispute that was initiated, or initially occurred, within the 2 calendar years preceding the date of the request;

(3) have made a written complaint pursuant to the unit owner's association's complaint policy, as outlined in Section 35, which alleged violations of the Condominium Property Act or the Common Interest Community Association Act;

(4) have received a final and adverse decision from the association and attach a copy of the association's final adverse decision marked "final" to the request to the Ombudsperson; and

(5) have filed the request within 30 days after the receipt of the association's final adverse decision.

(e) A unit owner who has not received a response, marked "final", to his or her complaint from the association within a reasonable time may request assistance from the Ombudsperson pursuant to subsection (a) of this Section if the unit owner meets the requirements of items (1), (2), and (3) of subsection (d) of this Section. A unit owner may not request assistance from the Ombudsperson until at least 90 days after the initial written complaint was submitted to the association. The Ombudsperson may decline a unit owner's request for assistance on the basis that a reasonable time has not yet passed.

(f) The request for assistance shall be in writing, on forms provided electronically by the Office, and include the following:

(1) the name, address, and contact information of the unit owner;

(2) the name, address, and contact information of the association;

(3) the applicable association governing documents unless the absence of governing documents is central to the dispute;

(4) the date of the final adverse decision by the association;

(5) a copy of the association's written complaint policy required under Section 35 of this Act;

(6) a copy of the unit owner's complaint to the association with a specific reference to the alleged violations of the Condominium Property Act or the Common Interest Community Association Act;

(7) documentation verifying the unit owner's ownership of a unit, such as a copy of a recorded deed or other document conferring title; and

(8) a copy of the association's adverse decision marked "final", if applicable.

(g) On receipt of a unit owner's request for assistance that the Department determines meets the requirements of this Section, the Ombudsperson shall, within the limits of the available resources, confer with the interested parties and assist in efforts to resolve the dispute by mutual agreement of the parties.

(h) The Office must establish a Condominium Mediation and Arbitration Program that allows owners and associations to voluntarily resolve disputes before litigation involving governance, access to information, and enforcement of rules. Mediation proceedings are confidential, but outcomes may be summarized anonymously in the Ombudsperson's annual report for data purposes. The Ombudsperson shall assist only opposing parties who mutually agree to participate in dispute resolution.

(i) A unit owner is limited to one request for assistance per dispute. The meaning of dispute is to be broadly interpreted by the Department.

(j) The Department has the authority to determine whether or not a final decision is adverse under paragraph (4) of subsection (d) of this Section.

(k) The Department shall, on or before July 1, 2020, establish rules describing the time limit, method, and manner for dispute resolution.

(l) (Blank).

(Source: P.A. 98-1135, eff. 1-1-17 (See Section 20 of P.A. 99-776 for effective date of P.A. 98-1135); 99-776, eff. 8-12-16.)