HB0050 101ST GENERAL ASSEMBLY

LRB101 04111 LNS 49119 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0050

Introduced 1/9/2019, by Rep. André Thapedi

SYNOPSIS AS INTRODUCED:

765 ILCS 605/18.7

Amends the Condominium Property Act. Provides that if a community association enters into a written contract with a party to provide maintenance or management services for the community association, the contract is enforceable only if the contract meets certain requirements. Provides that the community association is authorized to procure services from another party and is entitled to collect any fees or charges paid for service performed by another party from the party contracting to provide maintenance or management services if the party fails to provide contracted maintenance or management services. Excludes contracts for services or property made available for the convenience of unit owners, including, but not limited to, coin-operated laundry, food, soft drink, or telephone vendors, cable television or retail store operators, businesses, restaurants, or similar vendors. Provides that a party contracting to provide maintenance or management services to a community association may not purchase a unit at a foreclosure sale resulting from the community association's foreclosure of a community association lien for unpaid assessments or take a deed in lieu of foreclosure. Provides that if 50% or more of the units in the condominium are owned by a party contracting to provide maintenance or management services to a community association, or by an officer or board member of such a party, the contract with the party providing maintenance or management services may be canceled by a majority vote of the unit owners other than the contracting party, or an officer or board member of such a party.

A BILL FOR

AN ACT concerning civil law.

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

Section 5. The Condominium Property Act is amended by changing Section 18.7 as follows:

(765 ILCS 605/18.7)

Sec. 18.7. Standards for community association managers.

(a) "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 that is part of a residential development plan as a master association or common interest community and that is authorized to impose an assessment and other costs that may become a lien on the unit or lot.

(b) "Community association manager" means an individual who administers for compensation the coordination of financial, administrative, maintenance, or other duties called for in the management contract, including individuals who are direct employees of a community association. A manager does not include support staff, such as bookkeepers, administrative assistants, secretaries, property inspectors, or customer service representatives.

(c) Requirements. To perform services as a community association manager, an individual must meet these requirements:

(1) shall have attained the age of 21 and be a citizen or legal permanent resident of the United States;

(2) shall not have been convicted of forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud or other similar offense or offenses;

(3) shall have a working knowledge of the fundamentals of community association management, including the Condominium Property Act, the Illinois Not-for-Profit Corporation Act, and any other laws pertaining to community association management; and

(4) shall not have engaged in the following activities: failure to cooperate with any law enforcement agency in the investigation of a complaint; or failure to produce any document, book, or record in the possession or control of the community association manager after a request for production of that document, book, or record in the course of an investigation of a complaint.

(d) Access to community association funds. For community associations of 6 or more units, apartments, townhomes, villas or other residential units, a community association manager or the firm with whom the manager is employed shall not solely and exclusively have access to and disburse funds of a community association unless:

(1) There is a fidelity bond in place.

(2) The fidelity bond is in an amount not less than all monies of that association in the custody or control of the community association manager.

(3) The fidelity bond covers the community association manager and all partners, officers, and employees of the firm with whom the community association manager is employed during the term of the bond, as well as the community association officers, directors, and employees of the community association who control or disburse funds.

(4) The insurance company issuing the bond may not cancel or refuse to renew the bond without giving not less than 10 days' prior written notice to the community association.

(5) The community association shall secure and pay for the bond.

(e) A community association manager who provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association. The funds shall not, in any event, be commingled with funds of the community association manager, the firm of the community association manager, or any other community association. The maintenance of these accounts shall be custodial, and the accounts shall be in the name of the respective community association.

(f) Exempt persons. Except as otherwise provided, this Section does not apply to any 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.

(g) Right of Action.

(1) Nothing in this amendatory Act of the 95th General Assembly shall create a cause of action by a unit owner, shareholder, or community association member against a community association manager or the firm of a community association manager.

(2) This amendatory Act of the 95th General Assembly shall not impair any right of action by a unit owner or shareholder against a community association board of directors under existing law.

(h) If a community association enters into a written contract with a party to provide maintenance or management services for the community association, the contract is enforceable only if the contract:

(1) specifies the services, obligations, and responsibilities of the party contracting to provide maintenance or management services to the unit owners;

(2) specifies the costs incurred in the performance of those services, obligations, or responsibilities that are reimbursed by the community association to the party contracting to provide maintenance or management services;

(3) provides an indication of how often each service, obligation, or responsibility is to be performed, either: (i) stated for each service, obligation, or responsibility; or (ii) in categories thereof;

(4) specifies a minimum number of personnel to be employed by the party contracting to provide maintenance or management services;

(5) discloses any financial or ownership interest that the developer, if the developer is in control of the community association, holds with regard to the party contracting to provide maintenance or management services; and

(6) discloses any financial or ownership interest a board member or any party providing maintenance or management services to the community association holds with the contracting party.

If the party contracting to provide maintenance or management services fails to provide such services in accordance with the contract, the community association is authorized to procure such services from another party and is entitled to collect any fees or charges paid for service performed by another party from the party contracting to provide maintenance or management services.

Any services or obligations not stated on the face of the contract are unenforceable.

Notwithstanding other vendors' contracts with a community association to maintain equipment or property made available to serve unit owners, this Section applies to contracts for maintenance or management services for which the community association pays compensation. This Section shall not apply to contracts for services or property made available for the convenience of unit owners by lessees or licensees of the community association, including, but not limited to, coin-operated laundry, food, soft drink, or telephone vendors, cable television or retail store operators, businesses, restaurants, or similar vendors.

A party contracting to provide maintenance or management services to a community association, or an officer or board member of such a party, may not purchase a unit at a foreclosure sale resulting from the community association's foreclosure of a community association lien for unpaid assessments or take a deed in lieu of foreclosure. If 50% or more of the units in the condominium are owned by a party contracting to provide maintenance or management services to a community association, or by an officer or board member of such a party, the contract with the party providing maintenance or management services may be canceled by a majority vote of the unit owners other than the contracting party, or an officer or board member of such a party.

(Source: P.A. 95-318, eff. 1-1-08.)