SB1579eng 96TH GENERAL ASSEMBLY

SB1579 Engrossed LRB096 10910 ASK 21156 b

AN ACT concerning professions and occupations.

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 Community Association Manager Act.

Section 5. Legislative intent. It is the intent of the General Assembly that this Act provide for the regulation of managers of community associations, ensure that those who hold themselves out as possessing professional qualifications to engage in the provision of community association management services are, in fact, qualified to render management services of a professional nature, and provide for the maintenance of high standards of professional conduct by those licensed as community association managers.

Section 10. Definitions. In this Act:

"Commission" means the Community Association Manager Regulatory Commission.

"Community association" means an association in which membership is a condition of ownership or shareholder interest of a unit in a condominium, cooperative, townhouse, villa, or other residential unit which is part of a residential development plan and that is authorized to impose an assessment, rents, or other costs that may become a lien on the unit or lot.

"Community association manager" means an individual who administers for remuneration the financial, administrative, maintenance, or other duties for the community association, including the following services: (A) collecting, controlling or disbursing funds of the community association or having the authority to do so; (B) preparing budgets or other financial documents for the community association; (C) assisting in the conduct of community association meetings; (D) maintaining association records; and (E) administrating association contracts, as stated in the declaration, bylaws, proprietary lease, declaration of covenants, or other governing document of the community association. "Community association manager" does not mean support staff, including, but not limited to bookkeepers, administrative assistants, secretaries, property inspectors, or customer service representatives.

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

"License" means the license issued to a person to act as a community association manager under this Act.

"Licensee" means a person to whom a license has been issued under this Act.

Section 15. License required. No person may provide services as a community association manager to community associations in this State after January 1, 2011, unless he or she holds a current and valid license issued by the Department or is otherwise exempt from licensure under this Act.

Section 20. Exemptions; distinction from real estate license.

(a) This Act does not apply to any of the following:

(1) Any director, officer, or member of a community association providing one or more of the services of a community association manager without compensation for such services to the association.

(2) Any person providing one or more of the services of a community association manager to a community association of 10 units or less.

(3) A licensed attorney acting solely as an incident to the practice of law.

(4) A person acting as a receiver, trustee in bankruptcy, administrator, executor, or guardian acting under a court order or under the authority of a will or of a trust instrument.

(b) A licensed community association manager may not perform or engage in any activities for which a real estate broker or real estate salesperson license is required under the Real Estate License Act of 2000, unless he or she also possesses a current license under the Real Estate License Act of 2000 and is providing those services as provided for in that Act and the applicable rules.

Section 25. Community Association Manager Regulatory Commission.

(a) There is hereby created the Community Association Manager Regulatory Commission, which shall consist of 7 members appointed by the Governor, with the advice and consent of the Senate. All members must be residents of the State and must have resided in the State for at least 5 years immediately preceding the date of appointment. Five members of the Commission must be licensees under this Act, except that, initially, these members must meet the qualifications for licensure and must obtain a license within 6 months after the rules to administer this Act are adopted by the Department. Two members of the Commission shall be owners or shareholders of a unit in a community association at the time of appointment who are not licensees under this Act.

(b) Commission members shall serve for terms of 5 years, except that, initially, 4 members shall serve for 5 years and 3 members shall serve for 3 years. All members shall serve until his or her successor is appointed and qualified. All vacancies shall be filled in like manner for the unexpired term. The Governor shall remove from the Commission any member whose license has become void or has been revoked or suspended and may remove any member of the Commission for neglect of duty, misconduct, or incompetence.

(c) The presence of two-thirds of the full Commission shall constitute a quorum for the transaction of business. Action shall only be taken upon the majority vote of a quorum, except regarding disciplinary actions, which shall require a unanimous vote of a quorum.

(d) Any member of the Commission, any attorney providing advice to the Commission, any person acting as a consultant to the Commission, and any witness testifying in a proceeding authorized under this Act, excluding the party making the complaint, shall be immune from liability in any civil action brought against him or her for acts occurring while acting in his or her capacity as a Commission member, consultant, or witness, respectively, unless the conduct that gave rise to the action was willful or wanton misconduct.

Section 30. Powers and duties of the Department. The Department shall exercise the powers and duties prescribed by the Civil Administrative Code of Illinois for the administration of licensure Acts and shall exercise other powers and duties necessary for effectuating the purposes of this Act.

Section 35. Powers and duties of the Commission. The Commission may perform each of the following:

(1) Elect annually from among its members a chairperson and prescribe the duties of such office.

(2) Assist the Department in the following matters:

(A) enforcing the rules of professional conduct as stated under this Act;

(B) developing appropriate administrative enforcement procedures for violations of the rules of professional conduct;

(C) providing forms and receiving applications for licensure;

(D) creating examinations to be given to applicants;

(E) issuing licenses and renewals as provided under this Act;

(F) imposing disciplinary actions in the manner prescribed under this Act; and

(G) determining the criteria to be included in the State examination and to administer or cause to be administered the State examination.

Section 40. Qualifications.

(a) No person shall be qualified for licensure under this Act, unless he or she meets all of the following qualifications:

(1) He or she is at least 21 years of age.

(2) He or she is a citizen or legal permanent resident of the United States.

(3) He or she has not been convicted of a felony.

(4) He or she provides satisfactory evidence to the Commission of having completed at least 20 classroom hours in community association management courses approved by the Commission.

(5) He or she has successfully completed an examination covering the fundamentals of community association management, including the Condominium Property Act, the General Not For Profit Corporation Act of 1986, and any other statutes that the Commission deems appropriate as it relates to community association management.

(6) He or she has not had a license suspended or revoked in any jurisdiction as a community association manager, or the comparable category of licensee, or been convicted of any offense in any jurisdiction arising from actions as a community association manager.

(b) Notwithstanding the provisions of subsection (a) of this Section:

(1) the education requirement to qualify for the licensing examination does not apply to persons holding a real estate broker or real estate salesperson license issued under the Real Estate License Act of 2000; and

(2) the examination and initial education requirement shall not apply to persons who, within 6 months after the rules to administer this Act are adopted by the Department, apply for a license by providing satisfactory evidence to the Department and the Commission of qualifying experience or education, including without limitation evidence that he or she has (A) practiced community association management for a period of 5 years or (B) achieved a designation awarded by recognized community association management organizations in the State.

Section 45. Examination.

(a) Every person who makes application for initial licensure as a community association manager shall personally take and achieve a passing score on a nationally prepared and administered standardized examination for the community association management profession. The standardized examination must be developed according to the basic principles of professional testing standards utilizing psychometric measurement. The examination shall be prepared by an independent testing service designated by the Commission using standards set forth by the National Organization for Competency Assurances and shall be approved by the Department.

(b) The designated independent testing service shall conduct the examinations at such times and places as the Commission shall approve.

(c) An applicant shall be eligible to take the examination only after successfully completing the education requirements set forth in this Act and attaining the minimum age required under this Act.

Section 50. Fidelity insurance; segregation of accounts.

(a) A licensee or the firm with which the licensee is employed shall not have access to and disburse funds of a community association unless each of the following conditions occur:

(1) There is fidelity insurance in place to insure against loss for theft of community association funds.

(2) The fidelity insurance coverage is not less than all moneys under the limit of the licensee or the firm of the licensee for the association.

(3) The fidelity insurance covers the licensee and all partners, officers, and employees of the firm with whom the licensee is employed during the term of the insurance coverage, as well as the association officers, directors, and employees.

(4) The insurance company issuing the fidelity insurance may not cancel or refuse to renew the bond without giving at least 10 days prior written notice.

(5) Unless an agreement between the community association and the licensee or a management company provides to the contrary, the association secures and pays for the fidelity insurance.

The community association manager must be named as an additional insured party on the association policy.

(b) A licensee who provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association or, with the consent of the association, combine the accounts of one or more associations, but in that event, separately account for the funds of each association. The funds shall not, in any event, be commingled with the licensee's or firm's funds. The maintenance of such accounts by the licensee shall be custodial, and such accounts shall be in the name of the respective community association or firm as the agent for the association.

(c) The licensee or the firm of the licensee shall also obtain the appropriate general liability and errors and omissions insurance to cover any losses or claims against community association clients.

Section 55. Disciplinary action.

(a) Disciplinary action recommended by the Commission and imposed by the Department may consist of one or more of the following:

(1) The revocation or suspension of a license.

(2) The refusal to renew or reinstate a license.

(3) The placement of the community association manager on probation for a reasonable period of time.

(4) The issuance of a reprimand or a censor to the community association manager.

(5) The imposition of a reasonable fine.

(b) A community association manager is subject to disciplinary action if the community association manager commits any of the following:

(1) A felony or offense involving moral turpitude or unprofessional conduct.

(2) Any violation of this Act or the provisions of an order of the Department or an agreement with the Department.

(3) Failure to cooperate with the Commission in the investigation of a complaint, including without limitation failure to produce any document, book, or record in the possession or control of the community association manager after the Commission or the Department requests production of such document, book, or record in the course of an investigation of a complaint.

Section 60. Fees.

(a) All fees shall be deposited into the Community Association Manager Licensing Fund, which is hereby created as a special fund in the State treasury.

(b) A fee not to exceed $100 shall be paid for each application made to the Department, whether the same is an application for examination or reexamination or for issuance, renewal, reactivation, or reinstatement of a license or any other application requiring formal action or consideration by the Department.

(c) All fees shall be paid to the Department or its authorized representative and shall be paid by the applicant in advance of examination dates or of any action by the Department.

(d) Fees imposed under this Act shall not be increased within a given year by more than a percentage that exceeds the percentage increase, if any, in the Consumer Price Index for All Urban Consumers for the Midwest Area for all items published by the U.S. Department of Labor for the 12 months ending on the previous December 31.

Section 65. Licensure; renewal; reactivation; reinstatement.

(a) All licenses issued under this Act shall expire every 4 years on a date established by the Department, but may be renewed upon the payment of the renewal fee authorized by this Section and satisfactory completion of mandatory continuing education.

(b) Any person may reactivate an expired license within a one-year grace period after the date of its expiration by making written application for reactivation and paying a reactivation fee imposed by the Department.

(c) In the event that a person fails to reactivate his or her license within the one-year grace period specified in this Section, a person may reinstate such license within 4 years after the date of the expiration of the grace period by making written application for reinstatement, paying a reinstatement fee, and providing proof to the Department of his or her continued professional competence as required by the Department. Thereafter, a person shall not be reinstated unless he or she fulfills and meets the requirements and conditions required of an applicant applying for the issuance of an original license, which requirements shall include retaking and passing the licensure examination.

(d) Any person who performs community association management services after the expiration of his or her license shall be practicing in violation of this Act and be subject to any of the sanctions authorized under this Act. The Department may refuse to reactivate or reinstate any expired license for conduct that constitutes a violation of any provision of this Act.

Section 70. Continuing education.

(a) Except as otherwise provided in this Section, each person who applies for renewal of his or her license as a community association manager must successfully complete continuing education courses approved by the Commission at the rate of 4 hours per year or its equivalent or 16 hours over a 4 year period. No license may be renewed except upon the successful completion of the required courses or their equivalent as determined by the Department with the recommendation of the Commission.

(b) The continuing education requirement for community association managers shall consist of a curriculum established by the Commission. In establishing the curriculum, the Commission shall consider subjects that will educate licensees on recent changes in applicable laws and new laws and refresh the licensee in areas of community association management that the Commission deems appropriate, and any other areas that the Commission deems timely and applicable in order to prevent violations of this Act and to protect the public.

(c) Individuals who complete authorized courses in the core curriculum or elective courses to renew a real estate broker or real estate salesperson license shall receive credit for each course to calculate the continuing education requirement to renew a community association manager license.

(d) The curriculum developed by the Commission shall qualify as elective courses required to achieve or renew a real estate broker or real estate salesperson license under the Real Estate License Act.

Section 80. Rulemaking conditions. Rulemaking authority to implement this Act, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized.

Section 900. The Regulatory Sunset Act is amended by adding Section 4.31 as follows:

(5 ILCS 80/4.31 new)

Sec. 4.31. Act repealed on January 1, 2021. The following Act is repealed on January 1, 2021:

The Community Association Manager Act.

Section 905. The State Finance Act is amended by adding Section 5.719 as follows:

(30 ILCS 105/5.719 new)

Sec. 5.719. The Community Association Manager Licensing Fund.

(765 ILCS 605/18.7 rep.)

Section 910. The Condominium Property Act is amended by repealing Section 18.7.

Section 999. Effective date. This Act takes effect upon becoming law.