97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3653

 

Introduced 2/10/2012, by Sen. Chris Lauzen

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 160/1-45
765 ILCS 605/18.5  from Ch. 30, par. 318.5

    Amends the Common Interest Community Association Act. Makes a technical change in provisions concerning finances. Amends the Condominium Property Act. Makes a technical change in provisions concerning master associations.


LRB097 19706 AJO 64963 b

 

 

A BILL FOR

 

SB3653LRB097 19706 AJO 64963 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Common Interest Community Association Act is
5amended by changing Section 1-45 as follows:
 
6    (765 ILCS 160/1-45)
7    Sec. 1-45. Finances.
8    (a) Each unit owner shall shall receive through a
9prescribed delivery method, at least 30 days but not more than
1060 days prior to the adoption thereof by the board, a copy of
11the proposed annual budget together with an indication of which
12portions are intended for reserves, capital expenditures or
13repairs or payment of real estate taxes.
14    (b) The board shall provide all unit owners with a
15reasonably detailed summary of the receipts, common expenses,
16and reserves for the preceding budget year. The board shall (i)
17make available for review to all unit owners an itemized
18accounting of the common expenses for the preceding year
19actually incurred or paid, together with an indication of which
20portions were for reserves, capital expenditures or repairs or
21payment of real estate taxes and with a tabulation of the
22amounts collected pursuant to the budget or assessment, and
23showing the net excess or deficit of income over expenditures

 

 

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1plus reserves or (ii) provide a consolidated annual independent
2audit report of the financial status of all fund accounts
3within the association.
4    (c) If an adopted budget or any separate assessment adopted
5by the board would result in the sum of all regular and
6separate assessments payable in the current fiscal year
7exceeding 115% of the sum of all regular and separate
8assessments payable during the preceding fiscal year, the
9common interest community association, upon written petition
10by unit owners with 20% of the votes of the association
11delivered to the board within 14 days of the board action,
12shall call a meeting of the unit owners within 30 days of the
13date of delivery of the petition to consider the budget or
14separate assessment; unless a majority of the total votes of
15the unit owners are cast at the meeting to reject the budget or
16separate assessment, it shall be deemed ratified.
17    (d) Any common expense not set forth in the budget or any
18increase in assessments over the amount adopted in the budget
19shall be separately assessed against all unit owners.
20    (e) Separate assessments for expenditures relating to
21emergencies or mandated by law may be adopted by the board
22without being subject to unit owner approval or the provisions
23of subsection (c) or (f) of this Section. As used herein,
24"emergency" means an immediate danger to the structural
25integrity of the common areas or to the life, health, safety,
26or property of the unit owners.

 

 

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1    (f) Assessments for additions and alterations to the common
2areas or to association-owned property not included in the
3adopted annual budget, shall be separately assessed and are
4subject to approval of two-thirds of the total members at a
5meeting called for that purpose.
6    (g) The board may adopt separate assessments payable over
7more than one fiscal year. With respect to multi-year
8assessments not governed by subsections (e) and (f) of this
9Section, the entire amount of the multi-year assessment shall
10be deemed considered and authorized in the first fiscal year in
11which the assessment is approved.
12    (h) The board of a common interest community association
13shall have the authority to establish and maintain a system of
14master metering of public utility services to collect payments
15in conjunction therewith, subject to the requirements of the
16Tenant Utility Payment Disclosure Act.
17(Source: P.A. 96-1400, eff. 7-29-10; 97-605, eff. 8-26-11.)
 
18    Section 10. The Condominium Property Act is amended by
19changing Section 18.5 as follows:
 
20    (765 ILCS 605/18.5)  (from Ch. 30, par. 318.5)
21    Sec. 18.5. Master Associations.
22    (a) If the the declaration, other condominium instrument,
23or other duly recorded covenants provide that any of the powers
24of the unit owners associations are to be exercised by or may

 

 

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1be delegated to a nonprofit corporation or unincorporated
2association that exercises those or other powers on behalf of
3one or more condominiums, or for the benefit of the unit owners
4of one or more condominiums, such corporation or association
5shall be a master association.
6    (b) There shall be included in the declaration, other
7condominium instruments, or other duly recorded covenants
8establishing the powers and duties of the master association
9the provisions set forth in subsections (c) through (h).
10    In interpreting subsections (c) through (h), the courts
11should interpret these provisions so that they are interpreted
12consistently with the similar parallel provisions found in
13other parts of this Act.
14    (c) Meetings and finances.
15        (1) Each unit owner of a condominium subject to the
16    authority of the board of the master association shall
17    receive, at least 30 days prior to the adoption thereof by
18    the board of the master association, a copy of the proposed
19    annual budget.
20        (2) The board of the master association shall annually
21    supply to all unit owners of condominiums subject to the
22    authority of the board of the master association an
23    itemized accounting of the common expenses for the
24    preceding year actually incurred or paid, together with a
25    tabulation of the amounts collected pursuant to the budget
26    or assessment, and showing the net excess or deficit of

 

 

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1    income over expenditures plus reserves.
2        (3) Each unit owner of a condominium subject to the
3    authority of the board of the master association shall
4    receive written notice mailed or delivered no less than 10
5    and no more than 30 days prior to any meeting of the board
6    of the master association concerning the adoption of the
7    proposed annual budget or any increase in the budget, or
8    establishment of an assessment.
9        (4) Meetings of the board of the master association
10    shall be open to any unit owner in a condominium subject to
11    the authority of the board of the master association,
12    except for the portion of any meeting held:
13            (A) to discuss litigation when an action against or
14        on behalf of the particular master association has been
15        filed and is pending in a court or administrative
16        tribunal, or when the board of the master association
17        finds that such an action is probable or imminent,
18            (B) to consider information regarding appointment,
19        employment or dismissal of an employee, or
20            (C) to discuss violations of rules and regulations
21        of the master association or unpaid common expenses
22        owed to the master association.
23    Any vote on these matters shall be taken at a meeting or
24    portion thereof open to any unit owner of a condominium
25    subject to the authority of the master association.
26        Any unit owner may record the proceedings at meetings

 

 

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1    required to be open by this Act by tape, film or other
2    means; the board may prescribe reasonable rules and
3    regulations to govern the right to make such recordings.
4    Notice of meetings shall be mailed or delivered at least 48
5    hours prior thereto, unless a written waiver of such notice
6    is signed by the persons entitled to notice before the
7    meeting is convened. Copies of notices of meetings of the
8    board of the master association shall be posted in
9    entranceways, elevators, or other conspicuous places in
10    the condominium at least 48 hours prior to the meeting of
11    the board of the master association. Where there is no
12    common entranceway for 7 or more units, the board of the
13    master association may designate one or more locations in
14    the proximity of these units where the notices of meetings
15    shall be posted.
16        (5) If the declaration provides for election by unit
17    owners of members of the board of directors in the event of
18    a resale of a unit in the master association, the purchaser
19    of a unit from a seller other than the developer pursuant
20    to an installment contract for purchase shall, during such
21    times as he or she resides in the unit, be counted toward a
22    quorum for purposes of election of members of the board of
23    directors at any meeting of the unit owners called for
24    purposes of electing members of the board, and shall have
25    the right to vote for the election of members of the board
26    of directors and to be elected to and serve on the board of

 

 

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1    directors unless the seller expressly retains in writing
2    any or all of those rights. In no event may the seller and
3    purchaser both be counted toward a quorum, be permitted to
4    vote for a particular office, or be elected and serve on
5    the board. Satisfactory evidence of the installment
6    contract shall be made available to the association or its
7    agents. For purposes of this subsection, "installment
8    contract" shall have the same meaning as set forth in
9    subsection (e) of Section 1 of the Dwelling Unit
10    Installment Contract Act.
11        (6) The board of the master association shall have the
12    authority to establish and maintain a system of master
13    metering of public utility services and to collect payments
14    in connection therewith, subject to the requirements of the
15    Tenant Utility Payment Disclosure Act.
16        (7) The board of the master association or a common
17    interest community association shall have the power, after
18    notice and an opportunity to be heard, to levy and collect
19    reasonable fines from members for violations of the
20    declaration, bylaws, and rules and regulations of the
21    master association or the common interest community
22    association. Nothing contained in this subdivision (7)
23    shall give rise to a statutory lien for unpaid fines.
24        (8) Other than attorney's fees, no fees pertaining to
25    the collection of a unit owner's financial obligation to
26    the Association, including fees charged by a manager or

 

 

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1    managing agent, shall be added to and deemed a part of an
2    owner's respective share of the common expenses unless: (i)
3    the managing agent fees relate to the costs to collect
4    common expenses for the Association; (ii) the fees are set
5    forth in a contract between the managing agent and the
6    Association; and (iii) the authority to add the management
7    fees to an owner's respective share of the common expenses
8    is specifically stated in the declaration or bylaws of the
9    Association.
10    (d) Records.
11        (1) The board of the master association shall maintain
12    the following records of the association and make them
13    available for examination and copying at convenient hours
14    of weekdays by any unit owners in a condominium subject to
15    the authority of the board or their mortgagees and their
16    duly authorized agents or attorneys:
17            (i) Copies of the recorded declaration, other
18        condominium instruments, other duly recorded covenants
19        and bylaws and any amendments, articles of
20        incorporation of the master association, annual
21        reports and any rules and regulations adopted by the
22        master association or its board shall be available.
23        Prior to the organization of the master association,
24        the developer shall maintain and make available the
25        records set forth in this subdivision (d)(1) for
26        examination and copying.

 

 

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1            (ii) Detailed and accurate records in
2        chronological order of the receipts and expenditures
3        affecting the common areas, specifying and itemizing
4        the maintenance and repair expenses of the common areas
5        and any other expenses incurred, and copies of all
6        contracts, leases, or other agreements entered into by
7        the master association, shall be maintained.
8            (iii) The minutes of all meetings of the master
9        association and the board of the master association
10        shall be maintained for not less than 7 years.
11            (iv) Ballots and proxies related thereto, if any,
12        for any election held for the board of the master
13        association and for any other matters voted on by the
14        unit owners shall be maintained for not less than one
15        year.
16            (v) Such other records of the master association as
17        are available for inspection by members of a
18        not-for-profit corporation pursuant to Section 107.75
19        of the General Not For Profit Corporation Act of 1986
20        shall be maintained.
21            (vi) With respect to units owned by a land trust,
22        if a trustee designates in writing a person to cast
23        votes on behalf of the unit owner, the designation
24        shall remain in effect until a subsequent document is
25        filed with the association.
26        (2) Where a request for records under this subsection

 

 

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1    is made in writing to the board of managers or its agent,
2    failure to provide the requested record or to respond
3    within 30 days shall be deemed a denial by the board of
4    directors.
5        (3) A reasonable fee may be charged by the master
6    association or its board for the cost of copying.
7        (4) If the board of directors fails to provide records
8    properly requested under subdivision (d)(1) within the
9    time period provided in subdivision (d)(2), the unit owner
10    may seek appropriate relief, including an award of
11    attorney's fees and costs.
12    (e) The board of directors shall have standing and capacity
13to act in a representative capacity in relation to matters
14involving the common areas of the master association or more
15than one unit, on behalf of the unit owners as their interests
16may appear.
17    (f) Administration of property prior to election of the
18initial board of directors.
19        (1) Until the election, by the unit owners or the
20    boards of managers of the underlying condominium
21    associations, of the initial board of directors of a master
22    association whose declaration is recorded on or after
23    August 10, 1990, the same rights, titles, powers,
24    privileges, trusts, duties and obligations that are vested
25    in or imposed upon the board of directors by this Act or in
26    the declaration or other duly recorded covenant shall be

 

 

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1    held and performed by the developer.
2        (2) The election of the initial board of directors of a
3    master association whose declaration is recorded on or
4    after August 10, 1990, by the unit owners or the boards of
5    managers of the underlying condominium associations, shall
6    be held not later than 60 days after the conveyance by the
7    developer of 75% of the units, or 3 years after the
8    recording of the declaration, whichever is earlier. The
9    developer shall give at least 21 days notice of the meeting
10    to elect the initial board of directors and shall upon
11    request provide to any unit owner, within 3 working days of
12    the request, the names, addresses, and weighted vote of
13    each unit owner entitled to vote at the meeting. Any unit
14    owner shall upon receipt of the request be provided with
15    the same information, within 10 days of the request, with
16    respect to each subsequent meeting to elect members of the
17    board of directors.
18        (3) If the initial board of directors of a master
19    association whose declaration is recorded on or after
20    August 10, 1990 is not elected by the unit owners or the
21    members of the underlying condominium association board of
22    managers at the time established in subdivision (f)(2), the
23    developer shall continue in office for a period of 30 days,
24    whereupon written notice of his resignation shall be sent
25    to all of the unit owners or members of the underlying
26    condominium board of managers entitled to vote at an

 

 

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1    election for members of the board of directors.
2        (4) Within 60 days following the election of a majority
3    of the board of directors, other than the developer, by
4    unit owners, the developer shall deliver to the board of
5    directors:
6            (i) All original documents as recorded or filed
7        pertaining to the property, its administration, and
8        the association, such as the declaration, articles of
9        incorporation, other instruments, annual reports,
10        minutes, rules and regulations, and contracts, leases,
11        or other agreements entered into by the association. If
12        any original documents are unavailable, a copy may be
13        provided if certified by affidavit of the developer, or
14        an officer or agent of the developer, as being a
15        complete copy of the actual document recorded or filed.
16            (ii) A detailed accounting by the developer,
17        setting forth the source and nature of receipts and
18        expenditures in connection with the management,
19        maintenance and operation of the property, copies of
20        all insurance policies, and a list of any loans or
21        advances to the association which are outstanding.
22            (iii) Association funds, which shall have been at
23        all times segregated from any other moneys of the
24        developer.
25            (iv) A schedule of all real or personal property,
26        equipment and fixtures belonging to the association,

 

 

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1        including documents transferring the property,
2        warranties, if any, for all real and personal property
3        and equipment, deeds, title insurance policies, and
4        all tax bills.
5            (v) A list of all litigation, administrative
6        action and arbitrations involving the association, any
7        notices of governmental bodies involving actions taken
8        or which may be taken concerning the association,
9        engineering and architectural drawings and
10        specifications as approved by any governmental
11        authority, all other documents filed with any other
12        governmental authority, all governmental certificates,
13        correspondence involving enforcement of any
14        association requirements, copies of any documents
15        relating to disputes involving unit owners, and
16        originals of all documents relating to everything
17        listed in this subparagraph.
18            (vi) If the developer fails to fully comply with
19        this paragraph (4) within the 60 days provided and
20        fails to fully comply within 10 days of written demand
21        mailed by registered or certified mail to his or her
22        last known address, the board may bring an action to
23        compel compliance with this paragraph (4). If the court
24        finds that any of the required deliveries were not made
25        within the required period, the board shall be entitled
26        to recover its reasonable attorneys' fees and costs

 

 

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1        incurred from and after the date of expiration of the
2        10 day demand.
3        (5) With respect to any master association whose
4    declaration is recorded on or after August 10, 1990, any
5    contract, lease, or other agreement made prior to the
6    election of a majority of the board of directors other than
7    the developer by or on behalf of unit owners or underlying
8    condominium associations, the association or the board of
9    directors, which extends for a period of more than 2 years
10    from the recording of the declaration, shall be subject to
11    cancellation by more than 1/2 of the votes of the unit
12    owners, other than the developer, cast at a special meeting
13    of members called for that purpose during a period of 90
14    days prior to the expiration of the 2 year period if the
15    board of managers is elected by the unit owners, otherwise
16    by more than 1/2 of the underlying condominium board of
17    managers. At least 60 days prior to the expiration of the 2
18    year period, the board of directors, or, if the board is
19    still under developer control, then the board of managers
20    or the developer shall send notice to every unit owner or
21    underlying condominium board of managers, notifying them
22    of this provision, of what contracts, leases and other
23    agreements are affected, and of the procedure for calling a
24    meeting of the unit owners or for action by the underlying
25    condominium board of managers for the purpose of acting to
26    terminate such contracts, leases or other agreements.

 

 

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1    During the 90 day period the other party to the contract,
2    lease, or other agreement shall also have the right of
3    cancellation.
4        (6) The statute of limitations for any actions in law
5    or equity which the master association may bring shall not
6    begin to run until the unit owners or underlying
7    condominium board of managers have elected a majority of
8    the members of the board of directors.
9    (g) In the event of any resale of a unit in a master
10association by a unit owner other than the developer, the owner
11shall obtain from the board of directors and shall make
12available for inspection to the prospective purchaser, upon
13demand, the following:
14        (1) A copy of the declaration, other instruments and
15    any rules and regulations.
16        (2) A statement of any liens, including a statement of
17    the account of the unit setting forth the amounts of unpaid
18    assessments and other charges due and owing.
19        (3) A statement of any capital expenditures
20    anticipated by the association within the current or
21    succeeding 2 fiscal years.
22        (4) A statement of the status and amount of any reserve
23    for replacement fund and any portion of such fund earmarked
24    for any specified project by the board of directors.
25        (5) A copy of the statement of financial condition of
26    the association for the last fiscal year for which such a

 

 

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1    statement is available.
2        (6) A statement of the status of any pending suits or
3    judgments in which the association is a party.
4        (7) A statement setting forth what insurance coverage
5    is provided for all unit owners by the association.
6        (8) A statement that any improvements or alterations
7    made to the unit, or any part of the common areas assigned
8    thereto, by the prior unit owner are in good faith believed
9    to be in compliance with the declaration of the master
10    association.
11    The principal officer of the unit owner's association or
12such other officer as is specifically designated shall furnish
13the above information when requested to do so in writing,
14within 30 days of receiving the request.
15    A reasonable fee covering the direct out-of-pocket cost of
16copying and providing such information may be charged by the
17association or its board of directors to the unit seller for
18providing the information.
19    (g-1) The purchaser of a unit of a common interest
20community at a judicial foreclosure sale, other than a
21mortgagee, who takes possession of a unit of a common interest
22community pursuant to a court order or a purchaser who acquires
23title from a mortgagee shall have the duty to pay the
24proportionate share, if any, of the common expenses for the
25unit that would have become due in the absence of any
26assessment acceleration during the 6 months immediately

 

 

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1preceding institution of an action to enforce the collection of
2assessments and the court costs incurred by the association in
3an action to enforce the collection that remain unpaid by the
4owner during whose possession the assessments accrued. If the
5outstanding assessments and the court costs incurred by the
6association in an action to enforce the collection are paid at
7any time during any action to enforce the collection of
8assessments, the purchaser shall have no obligation to pay any
9assessments that accrued before he or she acquired title. The
10notice of sale of a unit of a common interest community under
11subsection (c) of Section 15-1507 of the Code of Civil
12Procedure shall state that the purchaser of the unit other than
13a mortgagee shall pay the assessments and court costs required
14by this subsection (g-1).
15    (h) Errors and omissions.
16        (1) If there is an omission or error in the declaration
17    or other instrument of the master association, the master
18    association may correct the error or omission by an
19    amendment to the declaration or other instrument, as may be
20    required to conform it to this Act, to any other applicable
21    statute, or to the declaration. The amendment shall be
22    adopted by vote of two-thirds of the members of the board
23    of directors or by a majority vote of the unit owners at a
24    meeting called for that purpose, unless the Act or the
25    declaration of the master association specifically
26    provides for greater percentages or different procedures.

 

 

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1        (2) If, through a scrivener's error, a unit has not
2    been designated as owning an appropriate undivided share of
3    the common areas or does not bear an appropriate share of
4    the common expenses, or if all of the common expenses or
5    all of the common elements in the condominium have not been
6    distributed in the declaration, so that the sum total of
7    the shares of common areas which have been distributed or
8    the sum total of the shares of the common expenses fail to
9    equal 100%, or if it appears that more than 100% of the
10    common elements or common expenses have been distributed,
11    the error may be corrected by operation of law by filing an
12    amendment to the declaration, approved by vote of
13    two-thirds of the members of the board of directors or a
14    majority vote of the unit owners at a meeting called for
15    that purpose, which proportionately adjusts all percentage
16    interests so that the total is equal to 100%, unless the
17    declaration specifically provides for a different
18    procedure or different percentage vote by the owners of the
19    units and the owners of mortgages thereon affected by
20    modification being made in the undivided interest in the
21    common areas, the number of votes in the unit owners
22    association or the liability for common expenses
23    appertaining to the unit.
24        (3) If an omission or error or a scrivener's error in
25    the declaration or other instrument is corrected by vote of
26    two-thirds of the members of the board of directors

 

 

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1    pursuant to the authority established in subdivisions
2    (h)(1) or (h)(2) of this Section, the board, upon written
3    petition by unit owners with 20% of the votes of the
4    association or resolutions adopted by the board of managers
5    or board of directors of the condominium and common
6    interest community associations which select 20% of the
7    members of the board of directors of the master
8    association, whichever is applicable, received within 30
9    days of the board action, shall call a meeting of the unit
10    owners or the boards of the condominium and common interest
11    community associations which select members of the board of
12    directors of the master association within 30 days of the
13    filing of the petition or receipt of the condominium and
14    common interest community association resolution to
15    consider the board action. Unless a majority of the votes
16    of the unit owners of the association are cast at the
17    meeting to reject the action, or board of managers or board
18    of directors of condominium and common interest community
19    associations which select over 50% of the members of the
20    board of the master association adopt resolutions prior to
21    the meeting rejecting the action of the board of directors
22    of the master association, it is ratified whether or not a
23    quorum is present.
24        (4) The procedures for amendments set forth in this
25    subsection (h) cannot be used if such an amendment would
26    materially or adversely affect property rights of the unit

 

 

SB3653- 20 -LRB097 19706 AJO 64963 b

1    owners unless the affected unit owners consent in writing.
2    This Section does not restrict the powers of the
3    association to otherwise amend the declaration, bylaws, or
4    other condominium instruments, but authorizes a simple
5    process of amendment requiring a lesser vote for the
6    purpose of correcting defects, errors, or omissions when
7    the property rights of the unit owners are not materially
8    or adversely affected.
9        (5) If there is an omission or error in the declaration
10    or other instruments that may not be corrected by an
11    amendment procedure set forth in subdivision (h)(1) or
12    (h)(2) of this Section, then the circuit court in the
13    county in which the master association is located shall
14    have jurisdiction to hear a petition of one or more of the
15    unit owners thereon or of the association, to correct the
16    error or omission, and the action may be a class action.
17    The court may require that one or more methods of
18    correcting the error or omission be submitted to the unit
19    owners to determine the most acceptable correction. All
20    unit owners in the association must be joined as parties to
21    the action. Service of process on owners may be by
22    publication, but the plaintiff shall furnish all unit
23    owners not personally served with process with copies of
24    the petition and final judgment of the court by certified
25    mail, return receipt requested, at their last known
26    address.

 

 

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1        (6) Nothing contained in this Section shall be
2    construed to invalidate any provision of a declaration
3    authorizing the developer to amend an instrument prior to
4    the latest date on which the initial membership meeting of
5    the unit owners must be held, whether or not it has
6    actually been held, to bring the instrument into compliance
7    with the legal requirements of the Federal National
8    Mortgage Association, the Federal Home Loan Mortgage
9    Corporation, the Federal Housing Administration, the
10    United States Veterans Administration or their respective
11    successors and assigns.
12    (i) The provisions of subsections (c) through (h) are
13applicable to all declarations, other condominium instruments,
14and other duly recorded covenants establishing the powers and
15duties of the master association recorded under this Act. Any
16portion of a declaration, other condominium instrument, or
17other duly recorded covenant establishing the powers and duties
18of a master association which contains provisions contrary to
19the provisions of subsection (c) through (h) shall be void as
20against public policy and ineffective. Any declaration, other
21condominium instrument, or other duly recorded covenant
22establishing the powers and duties of the master association
23which fails to contain the provisions required by subsections
24(c) through (h) shall be deemed to incorporate such provisions
25by operation of law.
26    (j) (Blank).

 

 

SB3653- 22 -LRB097 19706 AJO 64963 b

1(Source: P.A. 96-1045, eff. 7-14-10; 97-535, eff. 1-1-12;
297-605, eff. 8-26-11; revised 10-4-11.)