98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1167

 

Introduced , by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/18  from Ch. 30, par. 318

    Amends the Condominium Property Act. Deletes language providing that the bylaws of an association shall provide that a unit owner may vote by proxy in a board officer election. Makes related changes.


LRB098 07620 HEP 37692 b

 

 

A BILL FOR

 

HB1167LRB098 07620 HEP 37692 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 Condominium Property Act is amended by
5changing Section 18 as follows:
 
6    (765 ILCS 605/18)  (from Ch. 30, par. 318)
7    Sec. 18. Contents of bylaws. The bylaws shall provide for
8at least the following:
9    (a) (1) The election from among the unit owners of a board
10    of managers, the number of persons constituting such board,
11    and that the terms of at least one-third of the members of
12    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.
17        (2) the powers and duties of the board;
18        (3) the compensation, if any, of the members of the
19    board;
20        (4) the method of removal from office of members of the
21    board;
22        (5) that the board may engage the services of a manager
23    or managing agent;

 

 

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1        (6) that each unit owner shall receive, at least 30
2    days prior to the adoption thereof by the board of
3    managers, a copy of the proposed annual budget together
4    with an indication of which portions are intended for
5    reserves, capital expenditures or repairs or payment of
6    real estate taxes;
7        (7) that the board of managers shall annually supply to
8    all unit owners an itemized accounting of the common
9    expenses for the preceding year actually incurred or paid,
10    together with an indication of which portions were for
11    reserves, capital expenditures or repairs or payment of
12    real estate taxes and with a tabulation of the amounts
13    collected pursuant to the budget or assessment, and showing
14    the net excess or deficit of income over expenditures plus
15    reserves;
16        (8) (i) that each unit owner shall receive notice, in
17    the same manner as is provided in this Act for membership
18    meetings, of any meeting of the board of managers
19    concerning the adoption of the proposed annual budget and
20    regular assessments pursuant thereto or to adopt a separate
21    (special) assessment, (ii) that except as provided in
22    subsection (iv) below, if an adopted budget or any separate
23    assessment adopted by the board would result in the sum of
24    all regular and separate assessments payable in the current
25    fiscal year exceeding 115% of the sum of all regular and
26    separate assessments payable during the preceding fiscal

 

 

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1    year, the board of managers, upon written petition by unit
2    owners with 20 percent of the votes of the association
3    delivered to the board within 14 days of the board action,
4    shall call a meeting of the unit owners within 30 days of
5    the date of delivery of the petition to consider the budget
6    or separate assessment; unless a majority of the total
7    votes of the unit owners are cast at the meeting to reject
8    the budget or separate assessment, it is ratified, (iii)
9    that any common expense not set forth in the budget or any
10    increase in assessments over the amount adopted in the
11    budget shall be separately assessed against all unit
12    owners, (iv) that separate assessments for expenditures
13    relating to emergencies or mandated by law may be adopted
14    by the board of managers without being subject to unit
15    owner approval or the provisions of item (ii) above or item
16    (v) below. As used herein, "emergency" means an immediate
17    danger to the structural integrity of the common elements
18    or to the life, health, safety or property of the unit
19    owners, (v) that assessments for additions and alterations
20    to the common elements or to association-owned property not
21    included in the adopted annual budget, shall be separately
22    assessed and are subject to approval of two-thirds of the
23    total votes of all unit owners, (vi) that the board of
24    managers may adopt separate assessments payable over more
25    than one fiscal year. With respect to multi-year
26    assessments not governed by items (iv) and (v), the entire

 

 

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1    amount of the multi-year assessment shall be deemed
2    considered and authorized in the first fiscal year in which
3    the assessment is approved;
4        (9) that meetings of the board of managers shall be
5    open to any unit owner, except for the portion of any
6    meeting held (i) to discuss litigation when an action
7    against or on behalf of the particular association has been
8    filed and is pending in a court or administrative tribunal,
9    or when the board of managers finds that such an action is
10    probable or imminent, (ii) to consider information
11    regarding appointment, employment or dismissal of an
12    employee, or (iii) to discuss violations of rules and
13    regulations of the association or a unit owner's unpaid
14    share of common expenses; that any vote on these matters
15    shall be taken at a meeting or portion thereof open to any
16    unit owner; that any unit owner may record the proceedings
17    at meetings or portions thereof required to be open by this
18    Act by tape, film or other means; that the board may
19    prescribe reasonable rules and regulations to govern the
20    right to make such recordings, that notice of such meetings
21    shall be mailed or delivered at least 48 hours prior
22    thereto, unless a written waiver of such notice is signed
23    by the person or persons entitled to such notice pursuant
24    to the declaration, bylaws, other condominium instrument,
25    or provision of law other than this subsection before the
26    meeting is convened, and that copies of notices of meetings

 

 

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1    of the board of managers shall be posted in entranceways,
2    elevators, or other conspicuous places in the condominium
3    at least 48 hours prior to the meeting of the board of
4    managers except where there is no common entranceway for 7
5    or more units, the board of managers may designate one or
6    more locations in the proximity of these units where the
7    notices of meetings shall be posted;
8        (10) that the board shall meet at least 4 times
9    annually;
10        (11) that no member of the board or officer shall be
11    elected for a term of more than 2 years, but that officers
12    and board members may succeed themselves;
13        (12) the designation of an officer to mail and receive
14    all notices and execute amendments to condominium
15    instruments as provided for in this Act and in the
16    condominium instruments;
17        (13) the method of filling vacancies on the board which
18    shall include authority for the remaining members of the
19    board to fill the vacancy by two-thirds vote until the next
20    annual meeting of unit owners or for a period terminating
21    no later than 30 days following the filing of a petition
22    signed by unit owners holding 20% of the votes of the
23    association requesting a meeting of the unit owners to fill
24    the vacancy for the balance of the term, and that a meeting
25    of the unit owners shall be called for purposes of filling
26    a vacancy on the board no later than 30 days following the

 

 

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1    filing of a petition signed by unit owners holding 20% of
2    the votes of the association requesting such a meeting, and
3    the method of filling vacancies among the officers that
4    shall include the authority for the members of the board to
5    fill the vacancy for the unexpired portion of the term;
6        (14) what percentage of the board of managers, if other
7    than a majority, shall constitute a quorum;
8        (15) provisions concerning notice of board meetings to
9    members of the board;
10        (16) the board of managers may not enter into a
11    contract with a current board member or with a corporation
12    or partnership in which a board member or a member of the
13    board member's immediate family has 25% or more interest,
14    unless notice of intent to enter the contract is given to
15    unit owners within 20 days after a decision is made to
16    enter into the contract and the unit owners are afforded an
17    opportunity by filing a petition, signed by 20% of the unit
18    owners, for an election to approve or disapprove the
19    contract; such petition shall be filed within 20 days after
20    such notice and such election shall be held within 30 days
21    after filing the petition; for purposes of this subsection,
22    a board member's immediate family means the board member's
23    spouse, parents, and children;
24        (17) that the board of managers may disseminate to unit
25    owners biographical and background information about
26    candidates for election to the board if (i) reasonable

 

 

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1    efforts to identify all candidates are made and all
2    candidates are given an opportunity to include
3    biographical and background information in the information
4    to be disseminated; and (ii) the board does not express a
5    preference in favor of any candidate;
6        (18) (blank); any proxy distributed for board
7    elections by the board of managers gives unit owners the
8    opportunity to designate any person as the proxy holder,
9    and gives the unit owner the opportunity to express a
10    preference for any of the known candidates for the board or
11    to write in a name;
12        (19) that special meetings of the board of managers can
13    be called by the president or 25% of the members of the
14    board; and
15        (20) that the board of managers may establish and
16    maintain a system of master metering of public utility
17    services and collect payments in connection therewith,
18    subject to the requirements of the Tenant Utility Payment
19    Disclosure Act.
20    (b) (1) What percentage of the unit owners, if other than
21    20%, shall constitute a quorum provided that, for
22    condominiums with 20 or more units, the percentage of unit
23    owners constituting a quorum shall be 20% unless the unit
24    owners holding a majority of the percentage interest in the
25    association provide for a higher percentage, provided that
26    in voting on amendments to the association's bylaws, a unit

 

 

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1    owner who is in arrears on the unit owner's regular or
2    separate assessments for 60 days or more, shall not be
3    counted for purposes of determining if a quorum is present,
4    but that unit owner retains the right to vote on amendments
5    to the association's bylaws;
6        (2) that the association shall have one class of
7    membership;
8        (3) that the members shall hold an annual meeting, one
9    of the purposes of which shall be to elect members of the
10    board of managers;
11        (4) the method of calling meetings of the unit owners;
12        (5) that special meetings of the members can be called
13    by the president, board of managers, or by 20% of unit
14    owners;
15        (6) that written notice of any membership meeting shall
16    be mailed or delivered giving members no less than 10 and
17    no more than 30 days notice of the time, place and purpose
18    of such meeting;
19        (7) that voting shall be on a percentage basis, and
20    that the percentage vote to which each unit is entitled is
21    the percentage interest of the undivided ownership of the
22    common elements appurtenant thereto, provided that the
23    bylaws may provide for approval by unit owners in
24    connection with matters where the requisite approval on a
25    percentage basis is not specified in this Act, on the basis
26    of one vote per unit;

 

 

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1        (8) that, where there is more than one owner of a unit,
2    if only one of the multiple owners is present at a meeting
3    of the association, he is entitled to cast all the votes
4    allocated to that unit, if more than one of the multiple
5    owners are present, the votes allocated to that unit may be
6    cast only in accordance with the agreement of a majority in
7    interest of the multiple owners, unless the declaration
8    expressly provides otherwise, that there is majority
9    agreement if any one of the multiple owners cast the votes
10    allocated to that unit without protest being made promptly
11    to the person presiding over the meeting by any of the
12    other owners of the unit;
13        (9)(A) that unless the Articles of Incorporation or the
14    bylaws otherwise provide, and except as provided in
15    subparagraph (B) of this paragraph (9) in connection with
16    board elections, a unit owner may vote by proxy executed in
17    writing by the unit owner or by his duly authorized
18    attorney in fact; that the proxy must bear the date of
19    execution and, unless the condominium instruments or the
20    written proxy itself provide otherwise, is invalid after 11
21    months from the date of its execution;
22        (B) that if a rule adopted at least 120 days before a
23    board election or the declaration or bylaws provide for
24    balloting as set forth in this subsection, unit owners may
25    not vote by proxy in board elections, but may vote only (i)
26    by submitting an association-issued ballot in person at the

 

 

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1    election meeting or (ii) by submitting an
2    association-issued ballot to the association or its
3    designated agent by mail or other means of delivery
4    specified in the declaration, bylaws, or rule; that the
5    ballots shall be mailed or otherwise distributed to unit
6    owners not less than 10 and not more than 30 days before
7    the election meeting, and the board shall give unit owners
8    not less than 21 days' prior written notice of the deadline
9    for inclusion of a candidate's name on the ballots; that
10    the deadline shall be no more than 7 days before the
11    ballots are mailed or otherwise distributed to unit owners;
12    that every such ballot must include the names of all
13    candidates who have given the board or its authorized agent
14    timely written notice of their candidacy and must give the
15    person casting the ballot the opportunity to cast votes for
16    candidates whose names do not appear on the ballot; that a
17    ballot received by the association or its designated agent
18    after the close of voting shall not be counted; that a unit
19    owner who submits a ballot by mail or other means of
20    delivery specified in the declaration, bylaws, or rule may
21    request and cast a ballot in person at the election
22    meeting, and thereby void any ballot previously submitted
23    by that unit owner;
24        (C) that if a written petition by unit owners with at
25    least 20% of the votes of the association is delivered to
26    the board within 14 days after the board's approval of a

 

 

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1    rule adopted pursuant to subparagraph (B) of this paragraph
2    (9), the board shall call a meeting of the unit owners
3    within 30 days after the date of delivery of the petition;
4    that unless a majority of the total votes of the unit
5    owners are cast at the meeting to reject the rule, the rule
6    is ratified;
7        (10) that the association may, upon adoption of the
8    appropriate rules by the board of managers, conduct
9    elections by secret ballot whereby the voting ballot is
10    marked only with the percentage interest for the unit and
11    the vote itself, provided that the board further adopt
12    rules to verify the status of the unit owner issuing a
13    proxy or casting a ballot; and further, that a candidate
14    for election to the board of managers or such candidate's
15    representative shall have the right to be present at the
16    counting of ballots at such election;
17        (11) that in the event of a resale of a condominium
18    unit the purchaser of a unit from a seller other than the
19    developer pursuant to an installment contract for purchase
20    shall during such times as he or she resides in the unit be
21    counted toward a quorum for purposes of election of members
22    of the board of managers at any meeting of the unit owners
23    called for purposes of electing members of the board, shall
24    have the right to vote for the election of members of the
25    board of managers and to be elected to and serve on the
26    board of managers unless the seller expressly retains in

 

 

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1    writing any or all of such rights. In no event may the
2    seller and purchaser both be counted toward a quorum, be
3    permitted to vote for a particular office or be elected and
4    serve on the board. Satisfactory evidence of the
5    installment contact shall be made available to the
6    association or its agents. For purposes of this subsection,
7    "installment contact" shall have the same meaning as set
8    forth in Section 1 (e) of "An Act relating to installment
9    contracts to sell dwelling structures", approved August
10    11, 1967, as amended;
11        (12) the method by which matters subject to the
12    approval of unit owners set forth in this Act, or in the
13    condominium instruments, will be submitted to the unit
14    owners at special membership meetings called for such
15    purposes; and
16        (13) that matters subject to the affirmative vote of
17    not less than 2/3 of the votes of unit owners at a meeting
18    duly called for that purpose, shall include, but not be
19    limited to:
20            (i) merger or consolidation of the association;
21            (ii) sale, lease, exchange, or other disposition
22        (excluding the mortgage or pledge) of all, or
23        substantially all of the property and assets of the
24        association; and
25            (iii) the purchase or sale of land or of units on
26        behalf of all unit owners.

 

 

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1    (c) Election of a president from among the board of
2managers, who shall preside over the meetings of the board of
3managers and of the unit owners.
4    (d) Election of a secretary from among the board of
5managers, who shall keep the minutes of all meetings of the
6board of managers and of the unit owners and who shall, in
7general, perform all the duties incident to the office of
8secretary.
9    (e) Election of a treasurer from among the board of
10managers, who shall keep the financial records and books of
11account.
12    (f) Maintenance, repair and replacement of the common
13elements and payments therefor, including the method of
14approving payment vouchers.
15    (g) An association with 30 or more units shall obtain and
16maintain fidelity insurance covering persons who control or
17disburse funds of the association for the maximum amount of
18coverage available to protect funds in the custody or control
19of the association plus the association reserve fund. All
20management companies which are responsible for the funds held
21or administered by the association shall maintain and furnish
22to the association a fidelity bond for the maximum amount of
23coverage available to protect funds in the custody of the
24management company at any time. The association shall bear the
25cost of the fidelity insurance and fidelity bond, unless
26otherwise provided by contract between the association and a

 

 

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1management company. The association shall be the direct obligee
2of any such fidelity bond. A management company holding reserve
3funds of an association shall at all times maintain a separate
4account for each association, provided, however, that for
5investment purposes, the Board of Managers of an association
6may authorize a management company to maintain the
7association's reserve funds in a single interest bearing
8account with similar funds of other associations. The
9management company shall at all times maintain records
10identifying all moneys of each association in such investment
11account. The management company may hold all operating funds of
12associations which it manages in a single operating account but
13shall at all times maintain records identifying all moneys of
14each association in such operating account. Such operating and
15reserve funds held by the management company for the
16association shall not be subject to attachment by any creditor
17of the management company.
18    For the purpose of this subsection a management company
19shall be defined as a person, partnership, corporation, or
20other legal entity entitled to transact business on behalf of
21others, acting on behalf of or as an agent for a unit owner,
22unit owners or association of unit owners for the purpose of
23carrying out the duties, responsibilities, and other
24obligations necessary for the day to day operation and
25management of any property subject to this Act. For purposes of
26this subsection, the term "fiduciary insurance coverage" shall

 

 

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1be defined as both a fidelity bond and directors and officers
2liability coverage, the fidelity bond in the full amount of
3association funds and association reserves that will be in the
4custody of the association, and the directors and officers
5liability coverage at a level as shall be determined to be
6reasonable by the board of managers, if not otherwise
7established by the declaration or by laws.
8    Until one year after the effective date of this amendatory
9Act of 1985, if a condominium association has reserves plus
10assessments in excess of $250,000 and cannot reasonably obtain
11100% fidelity bond coverage for such amount, then it must
12obtain a fidelity bond coverage of $250,000.
13    (h) Method of estimating the amount of the annual budget,
14and the manner of assessing and collecting from the unit owners
15their respective shares of such estimated expenses, and of any
16other expenses lawfully agreed upon.
17    (i) That upon 10 days notice to the manager or board of
18managers and payment of a reasonable fee, any unit owner shall
19be furnished a statement of his account setting forth the
20amount of any unpaid assessments or other charges due and owing
21from such owner.
22    (j) Designation and removal of personnel necessary for the
23maintenance, repair and replacement of the common elements.
24    (k) Such restrictions on and requirements respecting the
25use and maintenance of the units and the use of the common
26elements, not set forth in the declaration, as are designed to

 

 

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1prevent unreasonable interference with the use of their
2respective units and of the common elements by the several unit
3owners.
4    (l) Method of adopting and of amending administrative rules
5and regulations governing the operation and use of the common
6elements.
7    (m) The percentage of votes required to modify or amend the
8bylaws, but each one of the particulars set forth in this
9section shall always be embodied in the bylaws.
10    (n) (i) The provisions of this Act, the declaration,
11bylaws, other condominium instruments, and rules and
12regulations that relate to the use of the individual unit or
13the common elements shall be applicable to any person leasing a
14unit and shall be deemed to be incorporated in any lease
15executed or renewed on or after the effective date of this
16amendatory Act of 1984. (ii) With regard to any lease entered
17into subsequent to the effective date of this amendatory Act of
181989, the unit owner leasing the unit shall deliver a copy of
19the signed lease to the board or if the lease is oral, a
20memorandum of the lease, not later than the date of occupancy
21or 10 days after the lease is signed, whichever occurs first.
22In addition to any other remedies, by filing an action jointly
23against the tenant and the unit owner, an association may seek
24to enjoin a tenant from occupying a unit or seek to evict a
25tenant under the provisions of Article IX of the Code of Civil
26Procedure for failure of the lessor-owner to comply with the

 

 

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1leasing requirements prescribed by this Section or by the
2declaration, bylaws, and rules and regulations. The board of
3managers may proceed directly against a tenant, at law or in
4equity, or under the provisions of Article IX of the Code of
5Civil Procedure, for any other breach by tenant of any
6covenants, rules, regulations or bylaws.
7    (o) The association shall have no authority to forbear the
8payment of assessments by any unit owner.
9    (p) That when 30% or fewer of the units, by number, possess
10over 50% in the aggregate of the votes in the association, any
11percentage vote of members specified herein or in the
12condominium instruments shall require the specified percentage
13by number of units rather than by percentage of interest in the
14common elements allocated to units that would otherwise be
15applicable and garage units or storage units, or both, shall
16have, in total, no more votes than their aggregate percentage
17of ownership in the common elements; this shall mean that if
18garage units or storage units, or both, are to be given a vote,
19or portion of a vote, that the association must add the total
20number of votes cast of garage units, storage units, or both,
21and divide the total by the number of garage units, storage
22units, or both, and multiply by the aggregate percentage of
23ownership of garage units and storage units to determine the
24vote, or portion of a vote, that garage units or storage units,
25or both, have. For purposes of this subsection (p), when making
26a determination of whether 30% or fewer of the units, by

 

 

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1number, possess over 50% in the aggregate of the votes in the
2association, a unit shall not include a garage unit or a
3storage unit.
4    (q) That a unit owner may not assign, delegate, transfer,
5surrender, or avoid the duties, responsibilities, and
6liabilities of a unit owner under this Act, the condominium
7instruments, or the rules and regulations of the Association;
8and that such an attempted assignment, delegation, transfer,
9surrender, or avoidance shall be deemed void.
10    The provisions of this Section are applicable to all
11condominium instruments recorded under this Act. Any portion of
12a condominium instrument which contains provisions contrary to
13these provisions shall be void as against public policy and
14ineffective. Any such instrument which fails to contain the
15provisions required by this Section shall be deemed to
16incorporate such provisions by operation of law.
17(Source: P.A. 95-624, eff. 6-1-08; 96-55, eff. 1-1-10; 96-977,
18eff. 7-2-10.)