Sen. Mattie Hunter
Filed: 3/12/2009
 
 

 




 

 		












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AMENDMENT TO SENATE BILL 177 




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    AMENDMENT NO. ______. Amend Senate Bill 177 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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    Sec. 18. Contents of bylaws. The bylaws shall provide for 
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at least
the following:


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    (a) (1) The election from among the unit owners of a board 
10
    of managers,
the number of persons constituting such board, 
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    and that the terms of at
least one-third of the members of 
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    the board shall expire annually and that
all members of the 
13
    board shall be elected at large.
If there are multiple 
14
    owners of a single unit, only one of the multiple
owners 
15
    shall be eligible to serve as a member of the board at any 
16
    one time.


 


 






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        (2) the powers and duties of the board;


2
        (3) the compensation, if any, of the members of the 
3
    board;


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


6
        (5) that the board may engage the services of a manager 
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    or managing agent;


8
        (6) that each unit owner shall receive, at least 30 
9
    days prior to the
adoption thereof by the board of 
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    managers, a copy of the proposed annual
budget together 
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    with an indication of which portions are intended for

12
    reserves, capital expenditures or repairs or payment of 
13
    real estate taxes;


14
        (7) that the board of managers shall annually supply to

15
    all unit owners an itemized accounting of the common 
16
    expenses
for the preceding year actually incurred or paid, 
17
    together
with an indication of which portions were for 
18
    reserves, capital
expenditures or repairs or payment of 
19
    real estate taxes and
with a tabulation of the amounts 
20
    collected pursuant to the
budget or assessment, and showing 
21
    the net excess or
deficit of income over expenditures plus 
22
    reserves;


23
        (8) (i) that each unit owner shall receive notice, in 
24
    the same manner
as is provided in this Act for membership 
25
    meetings, of any meeting of the
board of managers 
26
    concerning the adoption of the proposed annual budget and

 


 






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    regular assessments pursuant thereto or to adopt a separate 
2
    (special)
assessment, (ii) that except as provided in 
3
    subsection (iv) below, if an
adopted
budget or any separate 
4
    assessment adopted by the board would result in the
sum of 
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    all regular and separate assessments payable in the current 
6
    fiscal year
exceeding 115% of the sum of all regular and 
7
    separate
assessments payable during the
preceding fiscal 
8
    year, the
board of managers, upon written petition by unit 
9
    owners with 20 percent of
the votes of the association 
10
    delivered to the board within 14
days of the board action,

11
    shall call a meeting of the unit owners within 30 days of 
12
    the date of
delivery of the petition to consider the budget 
13
    or separate
assessment; unless a
majority of
the total 
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    votes of the unit owners are cast at the meeting to reject 
15
    the
budget or separate assessment,
it is ratified, (iii) 
16
    that any common expense not set forth in the budget or
any 
17
    increase in assessments over the amount adopted in the 
18
    budget shall be
separately assessed against all unit 
19
    owners, (iv) that separate assessments for
expenditures 
20
    relating to emergencies or mandated by law may be adopted 
21
    by the
board of managers without being subject to unit 
22
    owner approval or the
provisions of item (ii) above or item 
23
    (v) below.  As used
herein, "emergency" means an immediate 
24
    danger to the structural integrity of
the
common elements 
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    or to the life, health, safety or property of the unit 
26
    owners,
(v) that assessments
for additions and alterations 
 


 






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    to the common elements or to association-owned
property not 
2
    included in the adopted annual budget, shall be separately

3
    assessed and are subject to approval of two-thirds of the 
4
    total votes of all
unit owners, (vi) that the board of 
5
    managers may adopt separate assessments
payable over more 
6
    than one fiscal year.  With respect to multi-year 
7
    assessments
not governed by items (iv) and (v), the entire 
8
    amount of the multi-year
assessment shall be deemed 
9
    considered and authorized in the first fiscal year
in which 
10
    the assessment is approved;


11
        (9) that meetings of the board of managers shall be 
12
    open to any unit
owner, except for the portion of any 
13
    meeting held (i) to discuss litigation
when an action 
14
    against or on behalf of the particular association has been

15
    filed and is pending in a court or administrative tribunal,

16
    or when the board of managers finds that such an action is 
17
    probable
or imminent, (ii) to consider information 
18
    regarding appointment, employment
or dismissal of an 
19
    employee, or (iii) to discuss violations of rules and

20
    regulations of the association or a unit owner's unpaid 
21
    share of common
expenses; that any vote on these matters 
22
    shall be taken at a meeting or
portion thereof open to any 
23
    unit owner; that any unit owner may record the
proceedings 
24
    at meetings or portions thereof required to be open by this

25
    Act by tape, film or other means; that the board may 
26
    prescribe reasonable
rules and regulations to govern the 
 


 






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

9
    elevators, or other conspicuous places in the condominium 
10
    at least 48 hours
prior to the meeting of the board of 
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    managers except where there is no
common entranceway for 7 
12
    or more units, the board of managers may designate
one or 
13
    more locations in the proximity of these units where the 
14
    notices of
meetings shall be posted;


15
        (10) that the board shall meet at least 4 times 
16
    annually;


17
        (11) that no member of the board or officer shall be 
18
    elected for a term
of more than 2 years, but that officers 
19
    and board members may succeed
themselves. Any director may 
20
    be removed from the Board of Directors at a special meeting 
21
    of owners, called for said purpose by a two-thirds majority 
22
    of those present or voting by absentee ballot.  All 
23
    procedures governing secret ballot elections shall hereby 
24
    apply.  A director, after notice and an opportunity for a 
25
    hearing, may be suspended or removed for cause by a 
26
    two-thirds majority by the Directors;


 


 






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        (12) the designation of an officer to mail and receive 
2
    all notices and
execute amendments to condominium 
3
    instruments as provided for in this Act
and in the 
4
    condominium instruments;


5
        (13) the method of filling vacancies on the board
which 
6
    shall include authority for the remaining members of the 
7
    board to
fill the vacancy by two-thirds vote until the next 
8
    annual meeting of unit
owners or for a period terminating 
9
    no later than 30 days following the
filing of a petition 
10
    signed by unit owners holding 20% of the votes of the

11
    association requesting a meeting of the unit owners to fill 
12
    the vacancy for
the balance of the term, and that a meeting 
13
    of the unit owners shall be
called for purposes of filling 
14
    a vacancy on the board no later than 30 days
following the 
15
    filing of a petition signed by unit owners holding 20% of 
16
    the
votes of the association requesting such a meeting, and 
17
    the method of filling
vacancies among the officers that 
18
    shall include the authority for the members
of the board to 
19
    fill the vacancy for the unexpired portion of the term;


20
        (14) what percentage of the board of managers, if other 
21
    than a majority,
shall constitute a quorum;


22
        (15) provisions concerning notice of board meetings to 
23
    members of the
board;


24
        (16) the board of managers may not enter into a 
25
    contract with a
current board member
or with a corporation 
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    or partnership in which a board
member or a member of the 
 


 






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    board member's immediate family has 25% or
more interest, 
2
    unless notice of intent to enter the
contract is given to 
3
    unit owners within 20 days after a decision is made
to 
4
    enter into the contract and the unit owners are
afforded an 
5
    opportunity by filing a petition, signed by 20% of the unit

6
    owners, for an election to approve or disapprove the 
7
    contract;
such petition shall be filed within 20 days after 
8
    such notice and such
election shall be held within 30 days 
9
    after filing the petition; for purposes
of this subsection, 
10
    a board member's immediate family means the board member's

11
    spouse, parents, and children;


12
        (17) that the board of managers may disseminate
to unit 
13
    owners biographical and background information about 
14
    candidates for
election to the board if (i) reasonable 
15
    efforts to identify all candidates are
made and all 
16
    candidates are given an opportunity to include 
17
    biographical and
background information in the information 
18
    to be disseminated; and (ii) the
board does not express a 
19
    preference in favor of any candidate;


20
        (18) any proxy distributed for board elections
by the 
21
    board of managers gives unit owners the
opportunity to 
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    designate any person as the proxy holder, and gives the 
23
    unit
owner the opportunity to express a preference for any 
24
    of the known
candidates for the board or to write in a 
25
    name;


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


 






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    be called by
the president or 25% of the members of the 
2
    board; and


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        (20) that the board of managers may establish
and 
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    maintain a system of master metering of public utility 
5
    services and
collect payments in connection therewith, 
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    subject to the requirements of the
Tenant Utility Payment 
7
    Disclosure Act.


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    (b) (1) What percentage of the unit owners, if other than 
9
    20%, shall
constitute a quorum provided that, for 
10
    condominiums with 20 or more units,
the percentage of unit 
11
    owners constituting a quorum shall be 20% unless the
unit 
12
    owners holding a majority of the percentage interest in the

13
    association provide for a higher percentage;


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        (2) that the association shall have one class of 
15
    membership;


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        (3) that the members shall hold an annual meeting, one 
17
    of the purposes
of which shall be to elect members of the 
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    board of managers;


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


20
        (5) that special meetings of the members can be called 
21
    by the president,
board of managers, or by 20% of unit 
22
    owners;


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        (6) that written notice of any membership meeting shall 
24
    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 
26
    of such meeting;


 


 






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        (7) that voting shall be on a percentage basis, and 
2
    that the percentage
vote to which each unit is entitled is 
3
    the percentage interest of the
undivided ownership of the 
4
    common elements appurtenant thereto, provided
that the 
5
    bylaws may provide for approval by unit owners in 
6
    connection with
matters where the requisite approval on a 
7
    percentage basis is not specified
in this Act, on the basis 
8
    of one vote per unit;


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        (8) that, where there is more than one owner of a unit, 
10
    if only one
of the multiple owners is present at a meeting 
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    of the association, he is
entitled to cast all the votes 
12
    allocated to that unit, if more than one of
the multiple 
13
    owners are present, the votes allocated to that unit may be

14
    cast only in accordance with the agreement of a majority in 
15
    interest of the
multiple owners, unless the declaration 
16
    expressly provides otherwise, that
there is majority 
17
    agreement if any one of the multiple owners cast the
votes 
18
    allocated to that unit without protest being made promptly 
19
    to the
person presiding over the meeting by any of the 
20
    other owners of the unit;


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        (9)(A) that  unless the Articles of Incorporation or the 
22
    bylaws
otherwise
provide, and except as provided in 
23
    subparagraph (B) of this paragraph (9) in
connection with 
24
    board elections,
a unit owner may vote by proxy executed in 
25
    writing by the unit
owner or by his duly authorized 
26
    attorney in fact; that the proxy must bear the date of

 


 






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    execution
and, unless the condominium instruments or the 
2
    written proxy itself provide
otherwise, is
invalid after 11 
3
    months from the date of its execution;


4
        (B) that if a rule adopted at least 120 days before a 
5
    board election
or the
declaration or bylaws provide for 
6
    balloting as set forth in this subsection,
unit
owners may 
7
    not vote by proxy in board elections, but may vote only (i) 
8
    by
submitting an association-issued ballot in person at the 
9
    election meeting or
(ii) by
submitting an 
10
    association-issued ballot to the association or its 
11
    designated
agent
by mail or other means of delivery 
12
    specified in the declaration, bylaws, or
rule; that
the 
13
    ballots shall be mailed or otherwise distributed to unit 
14
    owners not less
than 10
and not more than 30 days before 
15
    the election meeting, and the board shall give
unit owners 
16
    not less than 21 days' prior written notice of the deadline 
17
    for
inclusion of a candidate's name on the ballots; that 
18
    the deadline shall be no
more
than 7 days before the 
19
    ballots are mailed or otherwise distributed to unit
owners; 
20
    that
every such ballot must include the names of all 
21
    candidates who have given the
board or its authorized agent 
22
    timely written notice of their candidacy and must
give the 
23
    person casting the ballot the opportunity to cast votes for 
24
    candidates
whose names do not appear on the ballot; that a 
25
    ballot received by the
association
or
its designated agent 
26
    after the close of voting shall not be counted; that a
unit

 


 






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    owner
who submits a ballot by mail or other means of 
2
    delivery specified in the
declaration, bylaws, or rule may 
3
    request and cast a ballot in person at the
election

4
    meeting, and thereby void any ballot previously submitted 
5
    by that unit owner;


6
        (C) that if a written petition by unit owners with at 
7
    least 20% of the
votes of
the association is delivered to 
8
    the board within 14 days after the board's
approval
of a 
9
    rule adopted pursuant to subparagraph (B) of this paragraph 
10
    (9), the board
shall call a meeting of the unit owners 
11
    within 30 days after the date of
delivery of
the petition; 
12
    that unless a majority of the total votes of the unit 
13
    owners are
cast
at the
meeting to reject the rule, the rule 
14
    is ratified;


15
        (10) that the association may, upon adoption of the 
16
    appropriate rules by
the board of managers, conduct 
17
    elections by secret ballot whereby the voting
ballot is 
18
    marked only with the percentage interest for the unit and 
19
    the vote
itself, provided that the board further adopt 
20
    rules to verify the status of the
unit owner issuing a 
21
    proxy or casting a ballot; and further, that a candidate

22
    for election to the board of managers or such
candidate's 
23
    representative shall have the right to be present at the

24
    counting of ballots at such election;


25
        (11) that in the event of a resale of a condominium 
26
    unit the purchaser
of a unit from a seller other than the 
 


 






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    developer pursuant to an installment
contract for purchase 
2
    shall during such times as he or she resides in the
unit be 
3
    counted toward a quorum for purposes of election of members 
4
    of the
board of managers at any meeting of the unit owners 
5
    called for purposes of
electing members of the board, shall 
6
    have the right to vote for the
election of members of the 
7
    board of managers and to be elected to and serve
on the 
8
    board of managers unless the seller expressly retains in 
9
    writing any
or all of such rights.  In no event may the 
10
    seller and purchaser both be
counted toward a quorum, be 
11
    permitted to vote for a particular office or be
elected and 
12
    serve on the board.  Satisfactory evidence of the 
13
    installment
contact shall be made available to the 
14
    association or its agents.  For
purposes of this subsection, 
15
    "installment contact" shall have the same
meaning as set 
16
    forth in Section 1 (e) of "An Act relating to installment

17
    contracts to sell dwelling structures", approved August 
18
    11, 1967, as amended;


19
        (12) the method by which matters subject to the 
20
    approval of unit owners
set forth in this Act, or in the 
21
    condominium instruments, will be
submitted to the unit 
22
    owners at special membership meetings called for such

23
    purposes; and


24
        (13) that matters subject to the affirmative vote of 
25
    not less than 2/3
of the votes of unit owners at a meeting 
26
    duly called for that purpose,
shall include, but not be 
 


 






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    limited to:


2
            (i) merger or consolidation of the association;


3
            (ii) sale, lease, exchange, or other disposition 
4
        (excluding the mortgage
or pledge) of all, or 
5
        substantially all of the property and assets of the

6
        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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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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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, 
19
bylaws, other
condominium instruments, and rules and 
20
regulations that relate to the use
of the individual unit or 
21
the common elements shall be applicable to
any person leasing a 
22
unit and shall be deemed to be incorporated in any
lease 
23
executed or renewed on or after the effective date of this 
24
amendatory
Act of 1984. (ii) With regard to any lease entered 
25
into subsequent to the
effective date of this amendatory Act of 
26
1989, the unit owner leasing the
unit shall deliver a copy of 
 


 






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1
the signed lease to the board or if the
lease is oral, a 
2
memorandum of the lease, not later than the date of
occupancy 
3
or 10 days after the lease is signed, whichever occurs first. 
4
In
addition to any other remedies, by filing an action jointly 
5
against the
tenant and the unit owner, an association may seek 
6
to enjoin a tenant from
occupying a unit or seek to evict a 
7
tenant under the provisions of Article
IX of the Code of Civil 
8
Procedure for failure of the lessor-owner to
comply with the 
9
leasing requirements prescribed by
this Section or by the 
10
declaration, bylaws, and
rules and regulations. The board of 
11
managers may proceed directly against a
tenant, at law or in 
12
equity, or under the provisions of Article IX of the
Code of 
13
Civil Procedure, for any other breach by tenant of any

14
covenants, rules, regulations 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. For purposes of this subsection (p), when making a 
24
determination of whether 30% or fewer of the units, by number, 
25
possess over 50% in the aggregate of the votes in the 
26
association,  a unit shall not include a garage unit or a 
 


 






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1
storage unit.


2
    (q) That a unit owner may not assign, delegate, transfer, 
3
surrender, or
avoid the duties, responsibilities, and 
4
liabilities of a unit owner under this
Act, the condominium 
5
instruments, or the rules and regulations of the
Association; 
6
and that such an attempted assignment, delegation, transfer,

7
surrender, or avoidance shall be deemed void.

8
    The provisions of this Section are applicable to all 
9
condominium
instruments recorded under this Act.  Any portion of 
10
a condominium
instrument which contains provisions contrary to 
11
these provisions shall be
void as against public policy and 
12
ineffective.  Any such instrument which
fails to contain the 
13
provisions required by this Section shall be deemed to

14
incorporate such provisions by operation of law.

15
(Source: P.A. 95-624, eff. 6-1-08.)".