HB5422 96TH GENERAL ASSEMBLY

LRB096 16743 AJO 32036 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5422

Introduced 2/5/2010, by Rep. Elaine Nekritz

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.755 new

Creates the Condominium Ombudsperson Act and amends the State Finance Act. Creates the Office of the Condominium Ombudsperson in the Department of Financial and Professional Regulation under the supervision and control of the Secretary of the Department of Financial and Professional Regulation. Provides that the Ombudsperson shall offer training and educational materials and courses to condominium unit owners, condominium associations, and boards of managers in subjects relevant to the operation and management of condominium property and the rights and duties of a unit owner or unit owners' association. Requires the Ombudsperson to maintain a statewide toll-free telephone number, and a website with certain specified information, to provide information or assistance on matters relating to condominium property. Requires the Ombudsperson to report annually to the General Assembly. Provides that every condominium unit owners' association shall pay an annual fee to the Ombudsperson to cover the administration of the Act. Creates the Condominium Ombudsperson Fund as a special fund in the State treasury, to consist of fees received by the Ombudsperson, to be used exclusively for expenditures necessary for the proper administration of the Act. Repeals the Act on July 1, 2013. Effective July 1, 2010.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning condominium property.

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

Section 1. Short title. This Act may be cited as the Condominium Ombudsperson Act.

Section 5. Definitions. As used in this Act:

"Board of managers", "condominium instruments", "master association", "unit", "unit owner", and "unit owners' association" have the meanings ascribed to those terms in the Condominium Property Act.

"Condominium association" means a unit owners' association or master association.

"Department" means the Department of Financial and Professional Regulation.

"Office" means the Office of the Condominium Ombudsperson established under Section 15.

"Ombudsperson" means the Condominium Ombudsperson employed under Section 15.

"Person" includes a natural person, firm, association, organization, partnership, business trust, corporation, limited liability company, or public entity.

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

(1) Managing condominium property is a complex responsibility. Unit owners and persons charged with managing condominium property may have little or no prior experience in managing real property, operating a not-for-profit association or corporation, complying with the law governing condominium property, and interpreting and enforcing restrictions and rules imposed by the condominium instruments or other applicable covenants. Unit owners may not fully understand their rights and obligations under the law and the condominium instruments or other applicable covenants. Mistakes and misunderstandings are inevitable and may lead to serious, costly, and divisive problems. A Condominium Ombudsperson will seek to educate unit owners, condominium associations, and boards of managers as to their legal rights and obligations. Effective education can prevent or reduce the severity of problems within a condominium community.

(2) The principal remedy for a violation of condominium property law is private litigation. Litigation is not an ideal remedy for many condominium property disputes, because the disputants are neighbors who must maintain ongoing relationships. The adversarial nature of litigation can disrupt these relationships, creating animosity that degrades the quality of life within the condominium community and makes future disputes more likely to arise. Litigation imposes costs on a condominium community as a whole, costs that must be paid by all unit owners through increased assessments. Many unit owners cannot afford to bring a lawsuit and are effectively denied the benefit of laws designed for their protection. A Condominium Ombudsperson will provide a neutral, nonjudicial forum for resolution of condominium property disputes.

(3) Anecdotal accounts of abuses within condominium communities create continuing public demand for reform of condominium property law. This results in frequent changes to the law, making it more difficult to understand and apply and imposing significant transitional costs on condominium communities statewide. By collecting empirical data on the nature and incidence of problems within condominium communities, a Condominium Ombudsperson will provide a sound basis for prioritizing reform efforts, thereby increasing the stability of condominium property law.

(4) The costs of the Office of the Condominium Ombudsperson should be borne entirely by condominium unit owners through the imposition of an annual fee.

Section 15. Office of the Condominium Ombudsperson.

(a) The Office of the Condominium Ombudsperson is created in the Department of Financial and Professional Regulation under the supervision and control of the Secretary of the Department of Financial and Professional Regulation.

(b) Commencing July 1, 2010, the Secretary of the Department of Financial and Professional Regulation shall employ a Condominium 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 Secretary, in addition to the powers set forth in this Act.

(c) The Ombudsperson may adopt rules governing practices and procedures under this Act. Any rule adopted under this Act is subject to the rulemaking provisions of the Illinois Administrative Procedure Act.

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

(e) The Ombudsperson may convene an advisory committee to make recommendations on matters within the Ombudsperson's jurisdiction. The members of any such advisory committee shall receive a per diem and expenses as determined by the Department. In selecting the members of an advisory committee, the Ombudsperson shall ensure a fair representation of the interests involved.

Section 20. Training and education.

(a) The Ombudsperson shall offer training and other educational materials and courses to condominium unit owners, condominium associations, and boards of managers, in subjects relevant to the operation and management of condominium property and the rights and duties of unit owners, condominium associations, and boards of managers.

(b) The Ombudsperson may charge a fee for training and other educational materials and courses provided under this Section, not to exceed the actual cost of the training or other materials and courses.

Section 25. Toll-free number; Internet website.

(a) The Office shall maintain a statewide toll-free telephone number to provide information or assistance on matters relating to condominium property.

(b) The Office shall maintain an Internet website, which shall provide all of the following information:

(1) The text of this Act, the Condominium Property Act, and any other statute or regulation that the Ombudsperson determines would be relevant to the operation and management of condominium property or the rights and duties of unit owners, condominium associations, and boards of managers.

(2) Information concerning nonjudicial resolution of disputes that may arise within a condominium community, including 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.

(4) An analysis, prepared each year, of changes in the law affecting condominium property.

(5) Any other information that the Ombudsperson determines would be useful to unit owners, condominium associations, and boards of managers.

(c) Information provided on the Office's Internet website shall also be made available in printed form. The Office may charge a fee for the purchase of such printed materials, not to exceed the actual cost of printing and delivery.

Section 30. Members of condominium board of managers or master association.

(a) Within 60 days after assuming office as a member of a board of managers or a master association, every such member shall certify that he or she has read each of the following:

(1) The condominium instruments relating to the condominium property administered by the board of managers or master association.

(2) This Act or, if the Ombudsperson prepares a detailed summary of the requirements of this Act, that summary.

(b) Each member of a board of managers or a master association shall file the certification required by this Section with the Ombudsperson.

Section 35. Dispute resolution assistance.

(a) Any interested person may request that the Ombudsperson provide assistance in resolving a dispute between a unit owner and a condominium association or board of managers that involves the law governing condominium property or the condominium instruments relating to a condominium community.

(b) On receipt of a request for assistance, 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.

(c) The Ombudsperson shall not charge a fee for services provided under this Section.

Section 40. Reports.

(a) The Ombudsperson shall submit an annual written report to the General Assembly, no later than October 1 of each year. The report shall include all of the following information:

(1) Annual workload and performance data, including the number of requests for assistance received, the manner in which a request was or was not resolved, and the staff time required to resolve the inquiry. For each category of data, the Ombudsperson shall provide subtotals based on the type of question or dispute involved in the request.

(2) Analysis of the most common and serious types of disputes within condominium communities, along with any recommendations for statutory reform to reduce the frequency or severity of those disputes.

(b) On or before January 1, 2012, the Ombudsperson shall submit recommendations to the General Assembly on the following topics:

(1) Whether the Ombudsperson should be authorized to enforce condominium property law.

(2) Whether the Ombudsperson should be authorized to oversee unit owners' association elections.

(3) Whether the scope of application of Section 30 should be narrowed or broadened.

(4) Whether the Ombudsperson should provide or subsidize mediation of condominium property disputes.

Section 45. Fees.

(a) Every condominium unit owners' association shall pay to the Ombudsperson an annual fee as provided in this Section. This fee shall be in addition to any other fees authorized to be charged by the Ombudsperson under this Act. The total fee due from an association under this Section in any year shall be the product of (i) the number of units composing the condominium property administered by the association multiplied by (ii) the annual fee amount for that year determined under subsection (b).

(b) The initial annual fee amount to be used in calculating a unit owners' association's fee under this Section shall be $3. The Ombudsperson shall increase or decrease the annual fee amount every year to provide only the revenue that he or she estimates will be necessary for the Office's operation expenses during the next year. The annual fee amount shall not exceed $10, however.

(c) A unit owners' association is excused from paying the fee for a unit if another association has paid the fee for that unit. An association that is excused from paying the fee for a unit shall certify, on a form prescribed by the Ombudsperson for that purpose, that another association has paid the fee for that unit. The Ombudsperson may adopt a rule governing which association is required to pay the fee for a unit that is administered by more than one association.

Section 50. Condominium Ombudsperson Fund. All moneys received by the Ombudsperson as fees under this Act shall be deposited into the Condominium Ombudsperson Fund, which is hereby created as a special fund in the State treasury. All moneys in the fund, upon appropriation by the General Assembly, shall be used exclusively for expenditures by the Ombudsperson that are necessary for the proper administration of this Act.

Section 85. Repeal. This Act is repealed on July 1, 2013.

Section 90. The State Finance Act is amended by adding Section 5.755 as follows:

(30 ILCS 105/5.755 new)

Sec. 5.755. The Condominium Ombudsperson Fund.

Section 99. Effective date. This Act takes effect July 1, 2010.