Sen. John J. Cullerton
Filed: 3/10/2008
 
 

 




 

 		












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AMENDMENT TO SENATE BILL 2432 




2
    AMENDMENT NO. ______. Amend Senate Bill 2432  by replacing  
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everything after the enacting clause with the following:
 
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    "Section 5. The Condominium Property Act is amended  by 
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changing Section 18 as follows:
 


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



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    (Text of Section after amendment by P.A. 95-624)

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    Sec. 18. Contents of bylaws. The bylaws shall provide for 
9
at least
the following:

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    (a) (1) The election from among the unit owners of a board 
11
    of managers,
the number of persons constituting such board, 
12
    and that the terms of at
least one-third of the members of 
13
    the board shall expire annually and that
all members of the 
14
    board shall be elected at large.
If there are multiple 
15
    owners of a single unit, only one of the multiple
owners 
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    shall be eligible to serve as a member of the board at any 
 


 






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    one time.

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

3
        (3) the compensation, if any, of the members of the 
4
    board;

5
        (4) the method of removal from office of members of the 
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    board;

7
        (5) that the board may engage the services of a manager 
8
    or managing agent;

9
        (6) that each unit owner shall receive, at least 30 
10
    days prior to the
adoption thereof by the board of 
11
    managers, a copy of the proposed annual
budget together 
12
    with an indication of which portions are intended for

13
    reserves, capital expenditures or repairs or payment of 
14
    real estate taxes;

15
        (7) that the board of managers shall annually supply to

16
    all unit owners an itemized accounting of the common 
17
    expenses
for the preceding year actually incurred or paid, 
18
    together
with an indication of which portions were for 
19
    reserves, capital
expenditures or repairs or payment of 
20
    real estate taxes and
with a tabulation of the amounts 
21
    collected pursuant to the
budget or assessment, and showing 
22
    the net excess or
deficit of income over expenditures plus 
23
    reserves;

24
        (8) (i) that each unit owner shall receive notice, in 
25
    the same manner
as is provided in this Act for membership 
26
    meetings, of any meeting of the
board of managers 
 


 






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    concerning the adoption of the proposed annual budget and

2
    regular assessments pursuant thereto or to adopt a separate 
3
    (special)
assessment, (ii) that except as provided in 
4
    subsection (iv) below, if an
adopted
budget or any separate 
5
    assessment adopted by the board would result in the
sum of 
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    all regular and separate assessments payable in the current 
7
    fiscal year
exceeding 115% of the sum of all regular and 
8
    separate
assessments payable during the
preceding fiscal 
9
    year, the
board of managers, upon written petition by unit 
10
    owners with 20 percent of
the votes of the association 
11
    delivered to the board within 14
days of the board action,

12
    shall call a meeting of the unit owners within 30 days of 
13
    the date of
delivery of the petition to consider the budget 
14
    or separate
assessment; unless a
majority of
the total 
15
    votes of the unit owners are cast at the meeting to reject 
16
    the
budget or separate assessment,
it is ratified, (iii) 
17
    that any common expense not set forth in the budget or
any 
18
    increase in assessments over the amount adopted in the 
19
    budget shall be
separately assessed against all unit 
20
    owners, (iv) that separate assessments for
expenditures 
21
    relating to emergencies or mandated by law may be adopted 
22
    by the
board of managers without being subject to unit 
23
    owner approval or the
provisions of item (ii) above or item 
24
    (v) below.  As used
herein, "emergency" means an immediate 
25
    danger to the structural integrity of
the
common elements 
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    or to the life, health, safety or property of the unit 
 


 






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    owners,
(v) that assessments
for additions and alterations 
2
    to the common elements or to association-owned
property not 
3
    included in the adopted annual budget, shall be separately

4
    assessed and are subject to approval of two-thirds of the 
5
    total votes of all
unit owners, (vi) that the board of 
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    managers may adopt separate assessments
payable over more 
7
    than one fiscal year.  With respect to multi-year 
8
    assessments
not governed by items (iv) and (v), the entire 
9
    amount of the multi-year
assessment shall be deemed 
10
    considered and authorized in the first fiscal year
in which 
11
    the assessment is approved;

12
        (9) that meetings of the board of managers shall be 
13
    open to any unit
owner, except for the portion of any 
14
    meeting held (i) to discuss litigation
when an action 
15
    against or on behalf of the particular association has been

16
    filed and is pending in a court or administrative tribunal,

17
    or when the board of managers finds that such an action is 
18
    probable
or imminent, (ii) to consider information 
19
    regarding appointment, employment
or dismissal of an 
20
    employee, or (iii) to discuss violations of rules and

21
    regulations of the association or a unit owner's unpaid 
22
    share of common
expenses; that any vote on these matters 
23
    shall be taken at a meeting or
portion thereof open to any 
24
    unit owner; that any unit owner may record the
proceedings 
25
    at meetings or portions thereof required to be open by this

26
    Act by tape, film or other means; that the board may 
 


 






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    prescribe reasonable
rules and regulations to govern the 
2
    right to make such recordings, that
notice of such meetings 
3
    shall be mailed or delivered at least 48 hours
prior 
4
    thereto, unless a written waiver of  such notice is signed 
5
    by the
person or persons entitled to such notice pursuant 
6
    to the declaration,
bylaws, other condominium instrument, 
7
    or provision of law other than this
subsection before the 
8
    meeting is convened, and that copies of notices of
meetings 
9
    of the board of managers shall be posted in entranceways,

10
    elevators, or other conspicuous places in the condominium 
11
    at least 48 hours
prior to the meeting of the board of 
12
    managers except where there is no
common entranceway for 7 
13
    or more units, the board of managers may designate
one or 
14
    more locations in the proximity of these units where the 
15
    notices of
meetings shall be posted;

16
        (10) that the board shall meet at least 4 times 
17
    annually;

18
        (11) that no member of the board or officer shall be 
19
    elected for a term
of more than 2 years, but that officers 
20
    and board members may succeed
themselves;

21
        (12) the designation of an officer to mail and receive 
22
    all notices and
execute amendments to condominium 
23
    instruments as provided for in this Act
and in the 
24
    condominium instruments;

25
        (13) the method of filling vacancies on the board
which 
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    shall include authority for the remaining members of the 
 


 






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    board to
fill the vacancy by two-thirds vote until the next 
2
    annual meeting of unit
owners or for a period terminating 
3
    no later than 30 days following the
filing of a petition 
4
    signed by unit owners holding 20% of the votes of the

5
    association requesting a meeting of the unit owners to fill 
6
    the vacancy for
the balance of the term, and that a meeting 
7
    of the unit owners shall be
called for purposes of filling 
8
    a vacancy on the board no later than 30 days
following the 
9
    filing of a petition signed by unit owners holding 20% of 
10
    the
votes of the association requesting such a meeting, and 
11
    the method of filling
vacancies among the officers that 
12
    shall include the authority for the members
of the board to 
13
    fill the vacancy for the unexpired portion of the term;

14
        (14) what percentage of the board of managers, if other 
15
    than a majority,
shall constitute a quorum;

16
        (15) provisions concerning notice of board meetings to 
17
    members of the
board;

18
        (16) the board of managers may not enter into a 
19
    contract with a
current board member
or with a corporation 
20
    or partnership in which a board
member or a member of the 
21
    board member's immediate family has 25% or
more interest, 
22
    unless notice of intent to enter the
contract is given to 
23
    unit owners within 20 days after a decision is made
to 
24
    enter into the contract and the unit owners are
afforded an 
25
    opportunity by filing a petition, signed by 20% of the unit

26
    owners, for an election to approve or disapprove the 
 


 






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    contract;
such petition shall be filed within 20 days after 
2
    such notice and such
election shall be held within 30 days 
3
    after filing the petition; for purposes
of this subsection, 
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    a board member's immediate family means the board member's

5
    spouse, parents, and children;

6
        (17) that the board of managers may disseminate
to unit 
7
    owners biographical and background information about 
8
    candidates for
election to the board if (i) reasonable 
9
    efforts to identify all candidates are
made and all 
10
    candidates are given an opportunity to include 
11
    biographical and
background information in the information 
12
    to be disseminated; and (ii) the
board does not express a 
13
    preference in favor of any candidate;

14
        (18) any proxy distributed for board elections
by the 
15
    board of managers gives unit owners the
opportunity to 
16
    designate any person as the proxy holder, and gives the 
17
    unit
owner the opportunity to express a preference for any 
18
    of the known
candidates for the board or to write in a 
19
    name;

20
        (19) that special meetings of the board of managers can 
21
    be called by
the president or 25% of the members of the 
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    board; and

23
        (20) that the board of managers may establish
and 
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    maintain a system of master metering of public utility 
25
    services and
collect payments in connection therewith, 
26
    subject to the requirements of the
Tenant Utility Payment 
 


 






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    Disclosure Act.

2
    (b) (1) What percentage of the unit owners, if other than 
3
    20%, shall
constitute a quorum provided that, for 
4
    condominiums with 20 or more units,
the percentage of unit 
5
    owners constituting a quorum shall be 20% unless the
unit 
6
    owners holding a majority of the percentage interest in the

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    association provide for a higher percentage;

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        (2) that the association shall have one class of 
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    membership;

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        (3) that the members shall hold an annual meeting, one 
11
    of the purposes
of which shall be to elect members of the 
12
    board of managers;

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

14
        (5) that special meetings of the members can be called 
15
    by the president,
board of managers, or by 20% of unit 
16
    owners;

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        (6) that written notice of any membership meeting shall 
18
    be mailed
or delivered giving members no less than 10 and 
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    no more than 30 days
notice of the time, place and purpose 
20
    of such meeting;

21
        (7) that voting shall be on a percentage basis, and 
22
    that the percentage
vote to which each unit is entitled is 
23
    the percentage interest of the
undivided ownership of the 
24
    common elements appurtenant thereto, provided
that the 
25
    bylaws may provide for approval by unit owners in 
26
    connection with
matters where the requisite approval on a 
 


 






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    percentage basis is not specified
in this Act, on the basis 
2
    of one vote per unit;

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        (8) that, where there is more than one owner of a unit, 
4
    if only one
of the multiple owners is present at a meeting 
5
    of the association, he is
entitled to cast all the votes 
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    allocated to that unit, if more than one of
the multiple 
7
    owners are present, the votes allocated to that unit may be

8
    cast only in accordance with the agreement of a majority in 
9
    interest of the
multiple owners, unless the declaration 
10
    expressly provides otherwise, that
there is majority 
11
    agreement if any one of the multiple owners cast the
votes 
12
    allocated to that unit without protest being made promptly 
13
    to the
person presiding over the meeting by any of the 
14
    other owners of the unit;

15
        (9)(A) that  unless the Articles of Incorporation or the 
16
    bylaws
otherwise
provide, and except as provided in 
17
    subparagraph (B) of this paragraph (9) in
connection with 
18
    board elections,
a unit owner may vote by proxy executed in 
19
    writing by the unit
owner or by his duly authorized 
20
    attorney in fact; that the proxy must bear the date of

21
    execution
and, unless the condominium instruments or the 
22
    written proxy itself provide
otherwise, is
invalid after 11 
23
    months from the date of its execution;

24
        (B) that if a rule adopted at least 120 days before a 
25
    board election
or the
declaration or bylaws provide for 
26
    balloting as set forth in this subsection,
unit
owners may 
 


 






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    not vote by proxy in board elections, but may vote only (i) 
2
    by
submitting an association-issued ballot in person at the 
3
    election meeting or
(ii) by
submitting an 
4
    association-issued ballot to the association or its 
5
    designated
agent
by mail or other means of delivery 
6
    specified in the declaration, bylaws, or
rule; that
the 
7
    ballots shall be mailed or otherwise distributed to unit 
8
    owners not less
than 10
and not more than 30 days before 
9
    the election meeting, and the board shall give
unit owners 
10
    not less than 21 days' prior written notice of the deadline 
11
    for
inclusion of a candidate's name on the ballots; that 
12
    the deadline shall be no
more
than 7 days before the 
13
    ballots are mailed or otherwise distributed to unit
owners; 
14
    that
every such ballot must include the names of all 
15
    candidates who have given the
board or its authorized agent 
16
    timely written notice of their candidacy and must
give the 
17
    person casting the ballot the opportunity to cast votes for 
18
    candidates
whose names do not appear on the ballot; that a 
19
    ballot received by the
association
or
its designated agent 
20
    after the close of voting shall not be counted; that a
unit

21
    owner
who submits a ballot by mail or other means of 
22
    delivery specified in the
declaration, bylaws, or rule may 
23
    request and cast a ballot in person at the
election

24
    meeting, and thereby void any ballot previously submitted 
25
    by that unit owner;

26
        (C) that if a written petition by unit owners with at 
 


 






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    least 20% of the
votes of
the association is delivered to 
2
    the board within 14 days after the board's
approval
of a 
3
    rule adopted pursuant to subparagraph (B) of this paragraph 
4
    (9), the board
shall call a meeting of the unit owners 
5
    within 30 days after the date of
delivery of
the petition; 
6
    that unless a majority of the total votes of the unit 
7
    owners are
cast
at the
meeting to reject the rule, the rule 
8
    is ratified;

9
        (10) that the association may, upon adoption of the 
10
    appropriate rules by
the board of managers, conduct 
11
    elections by secret ballot whereby the voting
ballot is 
12
    marked only with the percentage interest for the unit and 
13
    the vote
itself, provided that the board further adopt 
14
    rules to verify the status of the
unit owner issuing a 
15
    proxy or casting a ballot; and further, that a candidate

16
    for election to the board of managers or such
candidate's 
17
    representative shall have the right to be present at the

18
    counting of ballots at such election;

19
        (11) that in the event of a resale of a condominium 
20
    unit the purchaser
of a unit from a seller other than the 
21
    developer pursuant to an installment
contract for purchase 
22
    shall during such times as he or she resides in the
unit be 
23
    counted toward a quorum for purposes of election of members 
24
    of the
board of managers at any meeting of the unit owners 
25
    called for purposes of
electing members of the board, shall 
26
    have the right to vote for the
election of members of the 
 


 






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    board of managers and to be elected to and serve
on the 
2
    board of managers unless the seller expressly retains in 
3
    writing any
or all of such rights.  In no event may the 
4
    seller and purchaser both be
counted toward a quorum, be 
5
    permitted to vote for a particular office or be
elected and 
6
    serve on the board.  Satisfactory evidence of the 
7
    installment
contact shall be made available to the 
8
    association or its agents.  For
purposes of this subsection, 
9
    "installment contact" shall have the same
meaning as set 
10
    forth in Section 1 (e) of "An Act relating to installment

11
    contracts to sell dwelling structures", approved August 
12
    11, 1967, as amended;

13
        (12) the method by which matters subject to the 
14
    approval of unit owners
set forth in this Act, or in the 
15
    condominium instruments, will be
submitted to the unit 
16
    owners at special membership meetings called for such

17
    purposes; and

18
        (13) that matters subject to the affirmative vote of 
19
    not less than 2/3
of the votes of unit owners at a meeting 
20
    duly called for that purpose,
shall include, but not be 
21
    limited to:

22
            (i) merger or consolidation of the association;

23
            (ii) sale, lease, exchange, or other disposition 
24
        (excluding the mortgage
or pledge) of all, or 
25
        substantially all of the property and assets of the

26
        association; and

 


 






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            (iii) the purchase or sale of land or of units on 
2
        behalf of all unit owners.

3
    (c) Election of a president from among the board of 
4
managers, who shall
preside over the meetings of the board of 
5
managers and of the unit owners.

6
    (d) Election of a secretary from among the board of 
7
managers, who shall
keep the minutes of all meetings
of the 
8
board of managers and of the unit owners and who shall, in 
9
general,
perform all the duties incident to the office of 
10
secretary.

11
    (e) Election of a treasurer from among the board of 
12
managers, who shall
keep the financial records and
books of 
13
account.

14
    (f) Maintenance, repair and replacement of the common 
15
elements and
payments therefor, including the method of 
16
approving payment vouchers.

17
    (g) An association with 30 or more units shall obtain and 
18
maintain
fidelity insurance covering persons who control or 
19
disburse funds of the
association for the maximum amount of 
20
coverage available to protect funds
in the custody or control 
21
of the association plus the association reserve
fund.  All 
22
management companies which are responsible for the funds held 
23
or
administered by the association shall maintain and furnish 
24
to the
association a fidelity bond for the maximum amount of 
25
coverage available to
protect funds in the custody of the 
26
management company at any time.  The
association shall bear the 
 


 






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cost of the fidelity insurance and fidelity
bond, unless 
2
otherwise provided by contract between the association and a

3
management company.  The association shall be the direct obligee 
4
of any
such fidelity bond.  A management company holding reserve 
5
funds of an
association shall at all times maintain a separate 
6
account for each
association, provided, however, that for 
7
investment purposes, the Board of
Managers of an association 
8
may authorize a management company to maintain
the 
9
association's reserve funds in a single interest bearing 
10
account with
similar funds of other associations.  The 
11
management company shall at all
times maintain records 
12
identifying all moneys of each association in such
investment 
13
account. The management company may hold all operating funds of

14
associations which it manages in a single operating account but 
15
shall at
all times maintain records identifying all moneys of 
16
each association in
such operating account. Such operating and 
17
reserve funds held by the
management company for the 
18
association shall not be subject to attachment
by any creditor 
19
of the management company.

20
    For the purpose of this subsection a management company 
21
shall be
defined as a person, partnership, corporation, or 
22
other legal entity
entitled to transact business on behalf of 
23
others, acting on behalf of or
as an agent for a unit owner, 
24
unit owners or association of unit owners for
the purpose of 
25
carrying out the duties, responsibilities, and other

26
obligations necessary for the day to day operation and 
 


 






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management of any
property subject to this Act.  For purposes of 
2
this subsection, the term
"fiduciary insurance coverage" shall 
3
be defined as both a fidelity bond and
directors and officers 
4
liability coverage, the fidelity bond in the full
amount of 
5
association funds and association reserves that will be in the

6
custody of the association, and the directors and officers 
7
liability
coverage at a level as shall be determined to be 
8
reasonable by the board of
managers, if not otherwise 
9
established by the declaration or by laws.

10
    Until one year after the effective date of this amendatory 
11
Act of 1985,
if a condominium association has reserves plus 
12
assessments in excess of
$250,000 and cannot reasonably obtain 
13
100% fidelity bond coverage for such
amount, then it must 
14
obtain a fidelity bond coverage of $250,000.

15
    (h) Method of estimating the amount of the annual budget, 
16
and the manner
of assessing and collecting from the unit owners 
17
their respective shares of
such estimated expenses, and of any 
18
other expenses lawfully agreed upon.

19
    (i) That upon 10 days notice to the manager or board of 
20
managers and
payment of a reasonable fee, any unit owner shall 
21
be furnished a statement
of his account setting forth the 
22
amount of any unpaid assessments or other
charges due and owing 
23
from such owner.

24
    (j) Designation and removal of personnel necessary for the 
25
maintenance,
repair and replacement of the common elements.

26
    (k) Such restrictions on and requirements respecting the 
 


 






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use and
maintenance of the units and the use of the common 
2
elements, not set forth
in the declaration, as are designed to 
3
prevent unreasonable interference
with the use of their 
4
respective units and of the common elements by the
several unit 
5
owners. Restrictions regarding the use of the units may include 
6
other prohibitions on, or the allowance of, smoking tobacco 
7
products. 

8
    (l) Method of adopting and of amending administrative rules 
9
and
regulations governing the operation and use of the common 
10
elements.

11
    (m) The percentage of votes required to modify or amend the 
12
bylaws, but
each one of the particulars set forth in this 
13
section shall always be
embodied in the bylaws.

14
    (n) (i) The provisions of this Act, the declaration, 
15
bylaws, other
condominium instruments, and rules and 
16
regulations that relate to the use
of the individual unit or 
17
the common elements shall be applicable to
any person leasing a 
18
unit and shall be deemed to be incorporated in any
lease 
19
executed or renewed on or after the effective date of this 
20
amendatory
Act of 1984. (ii) With regard to any lease entered 
21
into subsequent to the
effective date of this amendatory Act of 
22
1989, the unit owner leasing the
unit shall deliver a copy of 
23
the signed lease to the board or if the
lease is oral, a 
24
memorandum of the lease, not later than the date of
occupancy 
25
or 10 days after the lease is signed, whichever occurs first. 
26
In
addition to any other remedies, by filing an action jointly 
 


 






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1
against the
tenant and the unit owner, an association may seek 
2
to enjoin a tenant from
occupying a unit or seek to evict a 
3
tenant under the provisions of Article
IX of the Code of Civil 
4
Procedure for failure of the lessor-owner to
comply with the 
5
leasing requirements prescribed by
this Section or by the 
6
declaration, bylaws, and
rules and regulations. The board of 
7
managers may proceed directly against a
tenant, at law or in 
8
equity, or under the provisions of Article IX of the
Code of 
9
Civil Procedure, for any other breach by tenant of any

10
covenants, rules, regulations or bylaws.

11
    (o) The association shall have no authority to forbear the 
12
payment
of assessments by any unit owner.

13
    (p) That when 30% or fewer of the units, by number,
possess 
14
over 50% in the aggregate of the votes in the association,
any 
15
percentage vote of members specified herein or in the 
16
condominium
instruments shall require the specified percentage 
17
by number of units
rather than by percentage of interest in the 
18
common elements allocated
to units that would otherwise be 
19
applicable. For purposes of this subsection (p), when making a 
20
determination of whether 30% or fewer of the units, by number, 
21
possess over 50% in the aggregate of the votes in the 
22
association,  a unit shall not include a garage unit or a 
23
storage unit.


24
    (q) That a unit owner may not assign, delegate, transfer, 
25
surrender, or
avoid the duties, responsibilities, and 
26
liabilities of a unit owner under this
Act, the condominium 
 


 






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1
instruments, or the rules and regulations of the
Association; 
2
and that such an attempted assignment, delegation, transfer,

3
surrender, or avoidance shall be deemed void.

4
    The provisions of this Section are applicable to all 
5
condominium
instruments recorded under this Act.  Any portion of 
6
a condominium
instrument which contains provisions contrary to 
7
these provisions shall be
void as against public policy and 
8
ineffective.  Any such instrument which
fails to contain the 
9
provisions required by this Section shall be deemed to

10
incorporate such provisions by operation of law.

11
(Source: P.A. 95-624, eff. 6-1-08.)

 

12
    Section 99. Effective date. This Act takes effect January 
13
1, 2009.".