Full Text of SB1933 96th General Assembly
SB1933 96TH GENERAL ASSEMBLY
|
|
|
96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB1933
Introduced 2/20/2009, by Sen. A. J. Wilhelmi SYNOPSIS AS INTRODUCED: |
|
|
Creates the Homeowners' Association Bill of Rights Act. Provides that the Act applies to common-interest communities of single-family detached homes to protect homeowners with respect to actions by their association. Defines terms. Provides for homeowner rights: to protection against foreclosure by an association except under limited circumstances; to resolve disputes with an association without litigation through a fact-finding hearing, mediation, a time to cure a violation, and other provisions; to fairness in litigation by providing for a homeowner's attorney fees and limits on an association's attorney fees; to receive information about all association rules and charges, including disclosure before a home purchase is binding; to stability in an association's rules and charges, and limits on changes to the rules and charges; to individual autonomy concerning the display of flags and signs, peaceful assembly, use of common property, and limits on association documents; to oversight of associations and directors, including open records, open meetings, open voting, elections, and recalls; to vote on association matters and seek association office; and to reasonable discharge of responsibilities by associations and directors.
|
| |
|
|
A BILL FOR
|
|
|
|
|
SB1933 |
|
LRB096 11028 AJO 21321 b |
|
| 1 |
| AN ACT concerning civil law.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 1. Short title. This Act may be cited as the | 5 |
| Homeowners' Association Bill of Rights Act. | 6 |
| Section 5. Application. This Act applies to | 7 |
| common-interest communities of 200 or more single-family | 8 |
| homes. The provisions protect homeowners with respect to | 9 |
| actions by their association or its directors, officers, | 10 |
| employees, managers, and other agents, but are not intended to | 11 |
| alter the rights of homeowners or associations with respect to | 12 |
| lenders, real estate agents, or developers. | 13 |
| Section 10. Definitions. In this Act: | 14 |
| "Common-interest community" means a real estate | 15 |
| development or neighborhood in which individually owned lots or | 16 |
| units are burdened by a servitude that imposes an obligation | 17 |
| that cannot be avoided by non-use or withdrawal: | 18 |
| (i) to pay for the use of, or contribute to the | 19 |
| maintenance of, property held or enjoyed in common by the | 20 |
| individual owners; or | 21 |
| (ii) to pay dues or assessments to an association that | 22 |
| provides services or facilities to the common property or |
|
|
|
SB1933 |
- 2 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| to the individually owned property, or that enforces other | 2 |
| servitudes burdening the property in the development or | 3 |
| neighborhood. | 4 |
| "Homeowner" means the owner of property within a | 5 |
| common-interest community. | 6 |
| "Association" means an organization, including homeowners | 7 |
| as members, created to manage the property or affairs of a | 8 |
| common-interest community. | 9 |
| "Common property" means property rights of an identical or | 10 |
| a similar kind held by the homeowners as appurtenances to their | 11 |
| individually owned lots or units. | 12 |
| "Declaration" means the recorded document or documents | 13 |
| containing the servitudes that create and govern the | 14 |
| common-interest community. | 15 |
| "Governing documents" means the declaration and other | 16 |
| documents, such as the articles of incorporation or articles of | 17 |
| association, bylaws, architectural guidelines, and rules and | 18 |
| regulations that determine rights or obligations of homeowners | 19 |
| or that otherwise govern the management or operation of an | 20 |
| association.
| 21 |
| Section 20. The Right to Resolve Disputes Without | 22 |
| Litigation.
| 23 |
| (1) Required Notice of Violation. Before an association may | 24 |
| seek foreclosure, file suit, charge any fee (including attorney | 25 |
| fees), limit common area use, or take other action against a |
|
|
|
SB1933 |
- 3 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| homeowner for violation of governing documents, except for an | 2 |
| emergency action as provided in subsection (8), the association | 3 |
| must, in addition to compliance with other law and governing | 4 |
| documents, do the following: | 5 |
| (a) Provide notice to the homeowner twice, at least 21 | 6 |
| days apart, that
(i) describes the basis for the claim, | 7 |
| including how the homeowner allegedly violated quoted | 8 |
| terms of the governing documents; (ii) states any amount | 9 |
| the association claims is due, describes how the homeowner | 10 |
| can remedy the violation, confirms the right to comply | 11 |
| without waiving the right to dispute the violation, and | 12 |
| gives notice of the right to request an installment plan | 13 |
| for assessments;
and (iii) states that the homeowner has a | 14 |
| reasonable period to cure of at least 21 days after the | 15 |
| second notice, unless the homeowner had an opportunity to | 16 |
| cure a similar violation within the past 6 months, and that | 17 |
| during the cure period the homeowner can obtain a hearing | 18 |
| as provided in subsection (2) or mediation as provided in | 19 |
| subsection (3), without incurring any attorney fees | 20 |
| charged by the association. | 21 |
| (b) If the certified mail notice is not delivered, | 22 |
| reasonably try to confirm the homeowner's current address | 23 |
| and either re-send the notice as in subdivision (1)(a) or, | 24 |
| if no other address can be found, reasonably try to | 25 |
| hand-deliver the notice, the period to cure starting anew | 26 |
| from this notice. |
|
|
|
SB1933 |
- 4 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (2) Right to a Hearing. After notice of subdivision (1)(a), | 2 |
| a homeowner has the right at no cost to a hearing to verify | 3 |
| facts and seek resolution with the directors or a committee | 4 |
| designated by the directors. If the directors use a committee, | 5 |
| any agreement must be enforceable, to be ratified by the | 6 |
| directors unless it conflicts with law or the governing | 7 |
| documents, and the homeowner must be allowed to appeal to the | 8 |
| directors. In addition: | 9 |
| (a) The association shall hold the hearing within 30 | 10 |
| days after the association receives the homeowner's | 11 |
| request and shall provide notice of the date, time, and | 12 |
| place at least 10 days before the hearing; the homeowner | 13 |
| may request postponement, which shall be granted if for not | 14 |
| longer than 10 days; additional postponements may be | 15 |
| granted by written agreement of the parties; the homeowner | 16 |
| may record the meeting; and the committee (and, on any | 17 |
| appeal, the directors) shall issue a written decision | 18 |
| including the notice required by subsection (4); and | 19 |
| (b) The association shall extend the period to cure | 20 |
| under subdivision (1)(a)(iv) until 15 days after notice of | 21 |
| the written decision by the committee or directors, | 22 |
| whichever is later. | 23 |
| (3) Right to Confidential Mediation. After notice given | 24 |
| under subdivision (1)(a), except with respect to disputes | 25 |
| involving only an assessment or small monetary charge, less | 26 |
| than $1,000, a homeowner shall have the right to one-half day |
|
|
|
SB1933 |
- 5 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| of neutral mediation, with the proceedings to be kept | 2 |
| confidential and not admissible in court except as provided by | 3 |
| State law. The requesting homeowner shall pay 50% of the | 4 |
| mediator's charge and the association shall pay the balance. | 5 |
| If, after 30 days, the parties cannot agree on a mediator, the | 6 |
| homeowner shall have the right to file an action against the | 7 |
| association. If the parties agree on a mediator, the | 8 |
| association shall extend the period to cure under subdivision | 9 |
| (1)(a)(iv) until 15 days after the mediation. | 10 |
| (4) Right to Options. After receiving notice of a decision | 11 |
| under subsection (2), a homeowner shall have the right, within | 12 |
| 15 days, to invoke the procedure of subsection (3). The notice | 13 |
| of decision under subdivision (2)(b) shall specify this right. | 14 |
| (5) Right to Extend Time to Cure. During the period to cure | 15 |
| as provided in subsection (1), as extended in subsection (2) or | 16 |
| (3), the association shall not incur attorney fees chargeable | 17 |
| to the homeowner, and shall not take any enforcement action | 18 |
| except for emergency action allowed by subsection (8). | 19 |
| (6) No Lawsuit Without Directors Voting. No association may | 20 |
| sue a homeowner without an authorizing vote by a majority of | 21 |
| all directors, in compliance with applicable law and
governing | 22 |
| documents that may set super-majority vote or other | 23 |
| requirements. | 24 |
| (7) Notice before Litigation. Except for emergency action | 25 |
| allowed by subsection (8), the association must provide | 26 |
| distinct notice at least 15 days before filing suit against a |
|
|
|
SB1933 |
- 6 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| homeowner, that: | 2 |
| (a) describes the basis for the suit, including how the | 3 |
| homeowner allegedly violated specified terms of the | 4 |
| governing documents; and | 5 |
| (b) states any amount the association claims due, | 6 |
| describes how the homeowner can cure the violation, and | 7 |
| gives notice of the right to request an installment plan | 8 |
| for assessments. | 9 |
| (8) Exception for Emergencies. Nothing precludes an | 10 |
| association from seeking a temporary injunction, or taking | 11 |
| temporary enforcement action, in a good faith response to an | 12 |
| emergency. An emergency is a situation that could not have been | 13 |
| reasonably foreseen, poses a significant and immediate threat | 14 |
| to the common-interest community. Any temporary enforcement | 15 |
| action entitles the homeowner to immediate notice and the | 16 |
| related rights, provided enforcement action may remain in place | 17 |
| pending (a) the final determination of homeowner rights or (b) | 18 |
| the end of the conditions resulting in the immediate and | 19 |
| significant threat, whichever comes sooner. | 20 |
| (9) No Additional Charges, but Additional Options Allowed. | 21 |
| No association may charge homeowners for exercise of their | 22 |
| rights under this Act, but an association may offer additional | 23 |
| options for alternative dispute resolution (ADR); however, no | 24 |
| association may require binding ADR, otherwise require a | 25 |
| homeowner to waive the right to go to court, or bill a | 26 |
| homeowner for mandatory ADR. In any litigation, if a party |
|
|
|
SB1933 |
- 7 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| moves to compel nonbinding ADR, the court may consider the | 2 |
| extent to which the parties already have pursued ADR. | 3 |
| (10) Annual Notice of Rights to Alternative Dispute | 4 |
| Resolution. Once each year, each association shall alert | 5 |
| homeowners of their rights to ADR, including statutory rights | 6 |
| and
any others available under subsection (9).
| 7 |
| Section 25. The Right to Fairness in Litigation.
| 8 |
| (1) Judicial Protection. Individual homeowners may sue an | 9 |
| association to enforce statutory rights as well as their rights | 10 |
| under this Act or governing documents, without being required | 11 |
| to sue other homeowners; further, the association shall pay for | 12 |
| any notice to homeowners that the court finds to be | 13 |
| appropriate. Governing documents shall not limit judicial | 14 |
| review or court enforcement; however, they may require ADR to | 15 |
| the extent permitted by Section 20. | 16 |
| (2) Compliance Under Protest. Homeowner compliance with an | 17 |
| association's demand for action, or demand to cease action, | 18 |
| including but not limited to any demand to pay assessments or | 19 |
| attorney fees, does not waive homeowner rights to challenge | 20 |
| such demand. | 21 |
| (3) Protected Homeowner Rights to Attorney Fees. In any | 22 |
| case brought by an association or homeowner to enforce | 23 |
| governing documents or applicable law, the homeowner shall be | 24 |
| awarded reasonable attorney fees and costs to the extent that | 25 |
| the homeowner prevails. Attorney fees shall reflect counsel's |
|
|
|
SB1933 |
- 8 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| reasonable hourly rate and time worked, and shall not be | 2 |
| limited by the amount the homeowner actually paid, if any. | 3 |
| (4) Limited Association Rights to Attorney Fees. In any | 4 |
| case brought by an association or homeowner to enforce | 5 |
| governing documents or applicable law, if authorized by the | 6 |
| declaration, the association shall be awarded reasonable | 7 |
| attorney fees and costs to the extent that the association | 8 |
| prevails; however, the reasonable attorney fees may be reduced | 9 |
| at the discretion of the court based on a finding that the | 10 |
| judicial review benefited the association or homeowners by | 11 |
| clarifying governing documents or applicable law, or other | 12 |
| equitable considerations. Attorney fees shall reflect | 13 |
| counsel's reasonable hourly rate and time worked, limited by | 14 |
| the amount the association actually paid.
| 15 |
| Section 30. The Right to Be Told of All Rules and Charges. | 16 |
| (1) Governing Documents. An association may not enforce | 17 |
| charges or other rules against homeowners, except those set | 18 |
| forth in plain English in governing documents. All operating | 19 |
| rules shall be compiled in a single document, available to | 20 |
| homeowners on request. | 21 |
| (2) Disclosure to Buyers. Unless otherwise provided by | 22 |
| statute, the following provisions apply: | 23 |
| (a) At least 3 days before an offer to buy a home | 24 |
| becomes binding, the homeowner shall furnish the potential | 25 |
| buyer with: (i) all the association's governing documents, |
|
|
|
SB1933 |
- 9 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| excluding plats and plans; (ii)
a statement of each | 2 |
| existing assessment, any unpaid assessment currently due | 3 |
| from the selling homeowner, and any other alleged violation | 4 |
| of the association's governing documents by external | 5 |
| features of the home or landscape as of the date of the | 6 |
| certificate, citing applicable rules; (iii)
the | 7 |
| association's current operating budget and financial | 8 |
| statement, including any legally required summary of the | 9 |
| association's reserves; and (iv) a statement of the number | 10 |
| of foreclosure lawsuits filed within the past 3 years, any | 11 |
| unsatisfied judgments, and pending legal actions against | 12 |
| the association or otherwise relating to the | 13 |
| common-interest community of which the selling homeowner | 14 |
| has actual knowledge. | 15 |
| (b) Upon a homeowner's request, within 10 days the | 16 |
| association shall furnish a certificate with the | 17 |
| information specified in subdivision (2)(a). A requesting | 18 |
| homeowner is not liable for erroneous information in the | 19 |
| certificate. A buyer is not liable for any past assessment, | 20 |
| any future assessment greater than stated in the | 21 |
| certificate, unless lawfully increased after the sale, or | 22 |
| for violations of governing documents by external features | 23 |
| of the home or landscape not stated in the certificate. For | 24 |
| this certificate, the association may charge only actual | 25 |
| costs, not to exceed $1 per page. | 26 |
| (c) Upon request by a homeowner, potential buyer in |
|
|
|
SB1933 |
- 10 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| receipt of a certificate pursuant to subdivision (2)(b), or | 2 |
| homeowner's or buyer's authorized agent, within 7 days the | 3 |
| association shall make any legally required study of the | 4 |
| association's reserves reasonably available to copy and | 5 |
| audit. | 6 |
| (3) Limits on Default and Implied Powers. Governing | 7 |
| documents, and statutes governing homeowners, shall be | 8 |
| construed to favor homeowners' free and unrestricted use of | 9 |
| their homes, and against any person seeking to enforce a limit | 10 |
| on homeowner rights.
| 11 |
| (a) Absent specific authorization in the declaration | 12 |
| or in subdivision (3)(b) or subdivision (3)(c), an | 13 |
| association does not have power to adopt any rules that | 14 |
| restrict the use or occupancy of, or behavior within, | 15 |
| individually owned homes. | 16 |
| (b) Except as limited by statute or the governing | 17 |
| documents, an association has implied power to adopt | 18 |
| reasonable operating rules to govern the use of (i) common | 19 |
| property and (ii) individually owned property to protect | 20 |
| the common property. | 21 |
| (c) If the declaration grants a general power to adopt | 22 |
| rules, an association also has power to adopt reasonable | 23 |
| operating rules designed to: (i) protect homeowners from | 24 |
| unreasonable interference in the enjoyment of their | 25 |
| individual homes and the common property caused by use of | 26 |
| other individually owned homes; and (ii) restrict the |
|
|
|
SB1933 |
- 11 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| leasing of homes to meet valid underwriting requirements of | 2 |
| institutional lenders. | 3 |
| (d) Except to the extent provided by statute or | 4 |
| authorized by the declaration, a common-interest community | 5 |
| may not impose restrictions on the structures or | 6 |
| landscaping that may be placed on individually owned | 7 |
| property, or on the design, materials, colors, or plants | 8 |
| that may be used. | 9 |
| (e) An association may borrow money subject to any | 10 |
| limits stated in the governing documents but, unless the | 11 |
| declaration or a court-approved order grants specific | 12 |
| authority, the association may not assign future revenues | 13 |
| or create a security interest in common property without | 14 |
| approval by 51% of all homeowners (or more if required by | 15 |
| governing documents) in a vote after at least 30 days' | 16 |
| notice.
| 17 |
| Section 35. The Right to Stability in Rules and Charges.
| 18 |
| (1) Seniority of Documents. In resolving any conflict among | 19 |
| governing documents, the senior document controls. | 20 |
| (2) Homeowner Powers to Amend Governing Documents. For any | 21 |
| governing document, the following apply: | 22 |
| (a) Except as limited by the governing document, a | 23 |
| senior document, or statute, homeowners have the power to | 24 |
| amend subject to the following requirements: | 25 |
| (i) Unless the governing document, a senior |
|
|
|
SB1933 |
- 12 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| document, or statute specifies a different number, an | 2 |
| amendment adopted by homeowners holding a majority of | 3 |
| the voting power is effective to: | 4 |
| (a) extend the term of the governing document; | 5 |
| (b) make administrative changes reasonably | 6 |
| necessary for management or administration of the | 7 |
| common property; or | 8 |
| (c) prohibit or materially restrict uses of | 9 |
| individually owned homes that threaten to harm or | 10 |
| unreasonably interfere with reasonable use and | 11 |
| enjoyment of other property in the community, or to | 12 |
| amend or repeal such prohibition or restriction | 13 |
| adopted by amendment under this subdivision | 14 |
| (2)(a)(i)(c). | 15 |
| (ii) Unless the governing document, a senior | 16 |
| document, or statute specifies a different number, an | 17 |
| amendment adopted by homeowners holding two-thirds of | 18 |
| the voting power is effective for all other lawful | 19 |
| purposes except as stated in subdivisions (2)(b) and | 20 |
| (2)(c). | 21 |
| (b) Amendments that do not apply uniformly to similar | 22 |
| homes and amendments that would violate association duties | 23 |
| to homeowners under this Act are not effective without | 24 |
| approval by homeowners whose interests would be adversely | 25 |
| affected, unless the declaration clearly and specifically | 26 |
| apprises purchasers that such amendments may be made. This |
|
|
|
SB1933 |
- 13 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| subdivision (2)(b) does not apply to non-uniform | 2 |
| modifications made under circumstances that would justify | 3 |
| judicial modification. | 4 |
| (c) Except as otherwise expressly authorized by the | 5 |
| declaration, and except as provided in subdivision (2)(a), | 6 |
| unanimous homeowner approval is required to (i) prohibit or | 7 |
| materially restrict the use or occupancy of, or behavior | 8 |
| within, individually owned lots or units or (ii) change the | 9 |
| basis for allocating voting rights or assessments among | 10 |
| homeowners. | 11 |
| (d) At least 60 days before voting on any proposed | 12 |
| amendment to a governing document, the association shall | 13 |
| provide notice to all homeowners, including the specific | 14 |
| text proposed and a description of the amendment's purpose | 15 |
| and anticipated effects. No amendment takes effect before | 16 |
| the association provides notice of adoption to all | 17 |
| homeowners, certified by an association officer, and to the | 18 |
| extent required by law, the association records the | 19 |
| amendment. | 20 |
| (e) Directors have no power to amend a governing | 21 |
| document except where expressly authorized by statute or, | 22 |
| where not otherwise contrary to statute, expressly | 23 |
| authorized by the governing document or a senior document; | 24 |
| provided that, if governing documents authorize directors | 25 |
| to impose any duty or charge on homeowners, this shall be | 26 |
| done by operating rule unless the governing document |
|
|
|
SB1933 |
- 14 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| requires otherwise; and provided further that homeowners | 2 |
| only, not directors, shall have power to amend: | 3 |
| (i) any provision that affects number, | 4 |
| qualifications, powers and duties, terms of office, or | 5 |
| manner and time of election or removal of directors; or | 6 |
| (ii) any provision with respect to amendment of any | 7 |
| governing document. | 8 |
| (3) Limits on Operating Rule Changes by Directors. | 9 |
| Directors may adopt, amend, or repeal operating rules only if | 10 |
| all of the following requirements are satisfied: | 11 |
| (a) All operating rules must be: | 12 |
| (i) in writing; | 13 |
| (ii) within directors' authority conferred by law | 14 |
| or corporate documents; | 15 |
| (iii) not inconsistent with law and corporate | 16 |
| documents; | 17 |
| (iv) adopted, amended, or repealed in good faith | 18 |
| and in substantial compliance with this Act; and | 19 |
| (v) reasonable. | 20 |
| (b) Subdivisions (3)(d) and (3)(e) apply only to | 21 |
| operating rules that relate to one or more of the following | 22 |
| subjects: | 23 |
| (i) use of common property; | 24 |
| (ii) use of a home, including any aesthetic or | 25 |
| architectural standards that govern alteration of a | 26 |
| home; |
|
|
|
SB1933 |
- 15 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (iii) homeowner discipline, including any | 2 |
| withdrawal of privileges or charges for violating | 3 |
| governing documents and any procedure for withdrawing | 4 |
| privileges or imposing charges; | 5 |
| (iv) any standard for delinquent assessment | 6 |
| installment or other payment plans; | 7 |
| (v) any procedure to resolve disputes; | 8 |
| (vi) any procedure for reviewing and approving or | 9 |
| disapproving a proposed physical change to a home or to | 10 |
| the common area; and | 11 |
| (vii) any procedure for elections. | 12 |
| (c) For the following actions by directors, | 13 |
| subdivisions (3)(d) and (3)(e) do not apply: | 14 |
| (i) a decision regarding maintenance of the common | 15 |
| property; | 16 |
| (ii) a decision on a specific matter that is not | 17 |
| intended to apply generally; | 18 |
| (iii) a decision setting the amount of a regular or | 19 |
| special assessment; | 20 |
| (iv) a rule change required by law, if directors | 21 |
| have no discretion as to the substantive effect of the | 22 |
| rule change; and | 23 |
| (v) issuance of a document that merely repeats | 24 |
| existing law or the governing documents. | 25 |
| (d) Directors shall provide written notice of a | 26 |
| proposed rule change to homeowners at least 30 days before |
|
|
|
SB1933 |
- 16 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| making the rule change. The notice shall include the text, | 2 |
| and a description of the purpose and effect of the proposed | 3 |
| rule change, except as provided by subdivision | 4 |
| (3)(d)(iii). | 5 |
| (i) A decision on a proposed rule change shall be | 6 |
| made at a meeting of the directors, after consideration | 7 |
| of any comments made by homeowners. | 8 |
| (ii) Not more than 15 days after making the rule | 9 |
| change, the directors shall deliver notice of the rule | 10 |
| change to every homeowner. If the rule change is an | 11 |
| emergency rule change made under subdivision | 12 |
| (3)(d)(iii), the notice shall include the text of the | 13 |
| rule change, a description of the purpose and effect of | 14 |
| the rule change, and the date that the rule change | 15 |
| expires. | 16 |
| (iii) If directors determine that an immediate | 17 |
| rule change is required to address an imminent threat | 18 |
| to public health or safety, or an imminent risk of | 19 |
| substantial economic loss to the association, | 20 |
| directors may make an emergency rule change; and no | 21 |
| prior notice is required. An emergency rule change is | 22 |
| effective for 120 days, unless the rule change provides | 23 |
| for a shorter effective period. A rule change made | 24 |
| under this subdivision (3)(d)(iii) may not be | 25 |
| readopted under this paragraph. | 26 |
| (e) Homeowners holding 5% of the voting power may call |
|
|
|
SB1933 |
- 17 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| a special meeting of the homeowners to reverse any rule | 2 |
| change. | 3 |
| (i) To call such special meeting homeowners must, | 4 |
| no more than 30 days after being notified of a rule | 5 |
| change, deliver a written request to the association's | 6 |
| president, secretary, or registered agent, after which | 7 |
| the directors shall give notice of the meeting to all | 8 |
| homeowners. Homeowners are deemed notified of a rule | 9 |
| change after receiving notice of the rule change or | 10 |
| enforcement of the resulting rule, whichever happens | 11 |
| first. Homeowner requests to copy or review | 12 |
| association member lists with addresses, e-mail, and | 13 |
| phone numbers for the purpose of seeking support to | 14 |
| reverse a rule change shall be honored as soon as | 15 |
| reasonably possible, in any event within 3 business | 16 |
| days. Homeowners shall be allowed to use common | 17 |
| property reasonably in seeking support to reverse a | 18 |
| rule change. | 19 |
| (ii) At such special meeting with a quorum present, | 20 |
| the rule change shall be reversed by majority vote of | 21 |
| homeowners represented and voting, unless a corporate | 22 |
| document or statute requires otherwise. | 23 |
| (iii) Unless otherwise provided by the corporate | 24 |
| documents, for this subdivision (3)(e), one vote may be | 25 |
| cast for each home. | 26 |
| (iv) Special meetings under this subdivision |
|
|
|
SB1933 |
- 18 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (3)(e) shall follow laws generally applicable to | 2 |
| special meetings. | 3 |
| (v) A rule change reversed under this subdivision | 4 |
| (3)(e) may not be readopted for one year after the date | 5 |
| of the meeting reversing the rule change. Nothing in | 6 |
| this subdivision (3)(e) precludes directors from | 7 |
| adopting a different rule on the same subject as a rule | 8 |
| change that has been reversed. | 9 |
| (vi) As soon as possible and not more than 15 days | 10 |
| after the close of voting at a special meeting, the | 11 |
| directors shall provide every homeowner with notice of | 12 |
| the results of a vote held pursuant to this subdivision | 13 |
| (3)(e). This subdivision (3)(e) does not apply to | 14 |
| emergency rule changes under subdivision (3)(d)(iii). | 15 |
| (4) Required Notice for Homeowner Votes on Assessments. | 16 |
| Unless governing documents
require a longer period, homeowner | 17 |
| votes to impose or increase regular or special assessments | 18 |
| require at least 30 days' advance notice.
| 19 |
| Section 40. The Right to Individual Autonomy.
| 20 |
| (1) Signs and Flags. Homeowners have the right to display | 21 |
| noncommercial signs, flags, religious objects, and "for sale" | 22 |
| signs on their property; however, the declaration may set | 23 |
| reasonable limits so long as, for 3 months before any election | 24 |
| or other vote held by an association, government, or other | 25 |
| entity with geographic territory overlapping any part of a |
|
|
|
SB1933 |
- 19 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| common-interest community, the association does not forbid | 2 |
| display of reasonable-size signs relating to the election or | 3 |
| vote. | 4 |
| (2) Neighbor Contacts. Homeowners have the right | 5 |
| peacefully to visit, telephone, petition, or otherwise contact | 6 |
| their neighbors; however, the declaration may set reasonable | 7 |
| restrictions if it permits some weekday afternoon and some | 8 |
| weekend hours for such neighbor contacts. | 9 |
| (3) Peaceful Assembly. Homeowners have the right to invite | 10 |
| guests to assemble peacefully on their property; however, the | 11 |
| declaration may set reasonable limits to protect nearby homes. | 12 |
| (4) Common Property. Where an association makes any part of | 13 |
| common property available for use by homeowners: | 14 |
| (a) the governing documents shall state any charge for | 15 |
| homeowners' use, which shall not exceed the association's | 16 |
| marginal cost for use, as well as any other restrictions on | 17 |
| such use, which shall be content-neutral and otherwise | 18 |
| reasonable; and | 19 |
| (b) the governing documents shall not unreasonably | 20 |
| restrict homeowners' rights to invite public officers or | 21 |
| candidates for public office to appear or speak in common | 22 |
| areas, or unreasonably restrict lawful uses relating to an | 23 |
| election or other vote held by the association or any | 24 |
| government or quasi-governmental entity with geographic | 25 |
| territory overlapping any part of the common-interest | 26 |
| community. |
|
|
|
SB1933 |
- 20 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (5) Discrimination Prohibited. Restrictions on signs and | 2 |
| flags, neighbor contacts, peaceful assembly, common property, | 3 |
| or other self-expression shall not differ based on the content | 4 |
| of a view sought to be expressed by a homeowner. If an | 5 |
| association allows homeowners to express views on a topic, in a | 6 |
| newsletter or other forum, other homeowners equally shall be | 7 |
| allowed to respond with differing views. | 8 |
| (6) No Forced Membership in Another Organization. An | 9 |
| association may not force a homeowner to join a separate | 10 |
| organization unless (a) expressly authorized by the | 11 |
| declaration before the homeowner's purchase or (b) | 12 |
| associations merge in compliance with State law. | 13 |
| (7) No Mandatory Charitable or Political Funding. | 14 |
| Assessments or other mandatory dues from association members | 15 |
| may not be used by the association for charitable or political | 16 |
| purposes. Any solicitations for charitable or political | 17 |
| purposes by an association must be conducted separately from | 18 |
| the billing for customary assessments of fees, and clearly be | 19 |
| designated as voluntary.
| 20 |
| (8) Ultimate Limit on Governing Documents. Governing | 21 |
| documents must be created in compliance with law, and not | 22 |
| include terms that are illegal or unconstitutional, or that | 23 |
| violate public policy. Terms that are invalid because they | 24 |
| violate public policy include, but are not limited to, terms: | 25 |
| (a) that are arbitrary, spiteful, or capricious; | 26 |
| (b) that unreasonably burden a fundamental |
|
|
|
SB1933 |
- 21 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| constitutional right; | 2 |
| (c) that impose an unreasonable restraint on | 3 |
| alienation; | 4 |
| (d) that impose an unreasonable restraint on trade or | 5 |
| competition; or | 6 |
| (e) that are unconscionable.
| 7 |
| Section 45. The Right to Oversight of Associations and | 8 |
| Directors. | 9 |
| (1) Open Records. All association meeting minutes, | 10 |
| financial and budget materials, contracts, court filings, and | 11 |
| other records must be maintained for at least 4 years at the | 12 |
| association's main business office or other suitable location | 13 |
| near homes in the association. | 14 |
| (a) Except as provided in subdivision (1)(b), the | 15 |
| association must make all records available for homeowners | 16 |
| or their authorized agents to inspect and copy such | 17 |
| materials. Such copying shall be permitted during regular | 18 |
| working hours, within 10 days of a written request without | 19 |
| requiring a statement of purpose or reason and at a | 20 |
| reasonable cost. | 21 |
| (b) Documents protected by the attorney-client | 22 |
| privilege or as work product are exempt from disclosure to | 23 |
| the same extent as they would be in litigation, as are | 24 |
| contracts being negotiated. The following records also are | 25 |
| exempt from disclosure to homeowners or their agents, |
|
|
|
SB1933 |
- 22 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| except upon court order for good cause shown, provided that | 2 |
| such records shall be kept confidential except upon court | 3 |
| order for good cause shown: | 4 |
| (i) staff personnel records, except the | 5 |
| association shall make available under subdivision | 6 |
| (1)(a) records of time worked and salary and benefits | 7 |
| paid; and | 8 |
| (ii) records of homeowners other than the | 9 |
| requester, except the association shall make available | 10 |
| under subdivision (1)(a) the list of homeowners with | 11 |
| their mailing addresses and a compilation of | 12 |
| violations of the governing documents, other than for | 13 |
| nonpayment of an assessment, and this compilation | 14 |
| must: | 15 |
| (a) describe the violation alleged and the | 16 |
| sanction sought or imposed; and | 17 |
| (b) not identify the person against whom the | 18 |
| sanction was sought unless the matter was | 19 |
| considered in an open meeting or court. | 20 |
| (c) If an association refuses to allow a homeowner or a | 21 |
| homeowner's agent to review records as provided in this | 22 |
| Section, the requester is entitled to an immediate | 23 |
| injunction, a penalty of $500, or in the court's | 24 |
| discretion, more, and attorney fees, even if the | 25 |
| association makes records available after the filing of an | 26 |
| action in the circuit court for the release of the records. |
|
|
|
SB1933 |
- 23 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (d) Any director may inspect any association records, | 2 |
| except attorney-client privileged or work product records | 3 |
| concerning potential, ongoing, or past litigation against | 4 |
| the director. In addition to their rights under subdivision | 5 |
| (1)(a), directors may make copies of minutes of any meeting | 6 |
| during their term of office, and of any other document for | 7 |
| purposes reasonably related to their duties as directors. | 8 |
| (e) Pending litigation does not reduce the rights | 9 |
| provided in this Act. | 10 |
| (2) Quarterly Review. Every 90 days, or more frequently if | 11 |
| required by governing documents, the directors shall review at | 12 |
| one of the association meetings: | 13 |
| (a) the latest statements from financial institutions | 14 |
| that hold association accounts; | 15 |
| (b) current reconciliations of the association's | 16 |
| operating and reserve accounts; | 17 |
| (c) a year-to-date income and expense statement for | 18 |
| association operating accounts, compared with the budget; | 19 |
| (d) year-to-date revenues and expenses for the reserve | 20 |
| account, compared with the budget; and
| 21 |
| (e) the status of any lawsuit, arbitration, or | 22 |
| mediation involving the association. | 23 |
| (3) Open Meetings. Except for executive sessions, | 24 |
| homeowners may attend, record, and (subject to reasonable | 25 |
| limits) speak at any meeting of the association or its | 26 |
| directors. |
|
|
|
SB1933 |
- 24 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (a) Directors may meet in executive session only to: | 2 |
| (i) approve, modify, terminate, or take other | 3 |
| action regarding a contract between the association | 4 |
| and an attorney; | 5 |
| (ii) consult with counsel on litigation or | 6 |
| otherwise to obtain legal advice, if the discussion | 7 |
| would be protected by attorney-client privilege; | 8 |
| (iii) discuss the character, alleged misconduct, | 9 |
| professional competence, or physical or mental health | 10 |
| of an association manager or employee; | 11 |
| (iv) discuss a homeowner's failure to pay an | 12 |
| assessment or other alleged violation of governing | 13 |
| documents, except as provided in subdivision (3)(b); | 14 |
| or | 15 |
| (v) discuss ongoing contract negotiations. | 16 |
| (b) Directors shall use executive session to discuss | 17 |
| alleged violations of governing documents unless the | 18 |
| person who may be sanctioned requests an open meeting in | 19 |
| writing. The person who may be sanctioned may attend and | 20 |
| testify at any hearing concerning the alleged violation, | 21 |
| but has no right to attend director deliberations. | 22 |
| (c) Meeting minutes shall note generally any matter | 23 |
| discussed in executive session. | 24 |
| (4) Open Voting. All votes by directors shall be recorded | 25 |
| in the minutes available to all homeowners, except to the | 26 |
| extent permitted by subsection (3). Directors may not vote by |
|
|
|
SB1933 |
- 25 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| proxy or by secret ballot, except a secret ballot to elect | 2 |
| officers. This rule also applies to any committee or agent of | 3 |
| the association that makes final decisions to spend association | 4 |
| funds, or approve or disapprove architectural decisions. | 5 |
| (5) Special Meetings. In addition to any provisions for | 6 |
| special meetings in the governing documents, the directors | 7 |
| shall provide 5 days' notice and convene a special meeting of | 8 |
| the association to be held no less than 5 days and no more than | 9 |
| 10 days after the chair, the secretary, or the association's | 10 |
| registered agent receives a petition stating one or more | 11 |
| purposes for such meeting and signed by homeowners holding 10% | 12 |
| of the voting power, unless other law or the corporate | 13 |
| documents state a different percentage. The petition may | 14 |
| specify a person to chair the special meeting. Each purpose | 15 |
| and, if specified in the petition, the chair of such special | 16 |
| meeting shall be stated in its notice. | 17 |
| Section 50. The Right to Vote and Run for Office. | 18 |
| (1) Voting Rights. No association may deny a homeowner's | 19 |
| right to vote on any issue that affects an assessment or other | 20 |
| provision of governing documents that apply to the membership | 21 |
| class of the homeowner. | 22 |
| (a) For a home with multiple owners, unless expressly | 23 |
| provided by the declaration: if only one owner seeks to | 24 |
| vote, that owner votes for the home; but if more than one | 25 |
| owner seeks to vote, votes must be allocated by agreement |
|
|
|
SB1933 |
- 26 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| of a majority of the home's owners or, absent agreement, | 2 |
| co-owners shall split votes in proportion to their | 3 |
| ownership interest. Agreement exists if any homeowner | 4 |
| votes without another homeowner protesting either before | 5 |
| the vote in writing or, at the vote, promptly to the person | 6 |
| presiding over the vote. | 7 |
| (b) No vote may be cast except by the homeowner or, | 8 |
| where permitted by law and the governing documents, by a | 9 |
| person holding a proxy. The following requirements apply to | 10 |
| a proxy: | 11 |
| (i) The proxy must be dated and designate a meeting | 12 |
| for which it applies. | 13 |
| (ii) The proxy may not be revocable without notice, | 14 |
| and may be revoked only by actual notice to the person | 15 |
| presiding over the meeting. | 16 |
| (iii) The proxy must designate each specific | 17 |
| agenda item to which it applies, except a homeowner may | 18 |
| execute a proxy without designating any item if used | 19 |
| solely to determine whether a quorum exists. For each | 20 |
| specific agenda item designated, the proxy must | 21 |
| specify a vote for or against the proposition or, in an | 22 |
| election, state a specific position regarding whom to | 23 |
| vote for. If a proxy does not state proper instructions | 24 |
| to vote on an item, the proxy must be treated as if the | 25 |
| homeowner were present but not voting on that item. | 26 |
| (iv) When a holder casts proxy votes, the holder |
|
|
|
SB1933 |
- 27 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| must disclose the number of proxies held, and the | 2 |
| proxies must be kept as part of the public record of | 3 |
| the meeting for the period provided by law. | 4 |
| (v) Association governing documents may provide | 5 |
| for homeowner proxy voting by absentee ballot, with the | 6 |
| ballot as specific as any other proxy, and with the | 7 |
| association's secretary to announce the number of such | 8 |
| ballots received for each vote at the meeting, and the | 9 |
| ballots kept as part of the public record of the | 10 |
| meeting. | 11 |
| (c) Votes allocated to homes owned by the association | 12 |
| may not be cast, by proxy or otherwise, for any purpose. | 13 |
| (2) Candidacy. No homeowner may be denied the right to run | 14 |
| for office. | 15 |
| (a) Unless a person is appointed by the developer, the | 16 |
| person may not serve as director or officer if the person | 17 |
| or any relative serves as manager for the association or, | 18 |
| if a master association, manager of any association that is | 19 |
| subject to the governing documents of the master | 20 |
| association. | 21 |
| (b) Each candidate named on a ballot for director must | 22 |
| make a good faith effort to disclose in writing, by actual | 23 |
| notice to all homeowners or as otherwise provided in the | 24 |
| corporate documents, any financial, business, | 25 |
| professional, or personal relationship or interest that | 26 |
| would appear to a reasonable person to result in a |
|
|
|
SB1933 |
- 28 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| potential conflict of interest if the candidate were | 2 |
| elected director. | 3 |
| (c) Notice of which positions will be on the ballot in | 4 |
| the next election and what the deadline for filing for such | 5 |
| positions is shall be submitted to each homeowner between | 6 |
| 20 and 45 days before the filing deadline. An election | 7 |
| shall not be held until at least 30 but no more than 60 | 8 |
| days after filing deadline. | 9 |
| (3) Voting Procedure. Unless State law sets different | 10 |
| requirements, and if not otherwise specified by corporate | 11 |
| documents, a quorum exists if homeowners with 25% of the voting | 12 |
| power attend or, where permitted, are present by proxy at a | 13 |
| meeting; provided, where only a specified class may vote on a | 14 |
| particular issue, a quorum to vote on that matter requires 25% | 15 |
| of the voting power of that class. At any meeting, election of | 16 |
| directors, recalls, and homeowner votes on assessments, | 17 |
| amendments to governing documents, operating rules, or other | 18 |
| matters shall be conducted by secret ballot (except as provided | 19 |
| with respect to proxies in subdivision (1)(b)), with all | 20 |
| ballots kept as part of the records of the election for the | 21 |
| period provided by law. | 22 |
| (4) Access to Forums. If any candidate for an election, or | 23 |
| homeowner advocating a point of view for purposes reasonably | 24 |
| related to a homeowner vote, is permitted to use a forum that | 25 |
| is paid for by the community (such as a newsletter, bulletin | 26 |
| board, or meeting area) to promote his or her candidacy for a |
|
|
|
SB1933 |
- 29 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| board election, then other candidates and homeowners shall also | 2 |
| be permitted equal access to the same forum under the same | 3 |
| conditions.
| 4 |
| Section 55. The Right to Reasonable Associations and | 5 |
| Directors.
| 6 |
| (1) Duties of Associations. In addition to compliance with | 7 |
| law and governing documents, an association, whether acting | 8 |
| through directors, officers, managers, or other agents, by | 9 |
| homeowner vote, or otherwise, has the following duties to its | 10 |
| homeowners: | 11 |
| (a) to use ordinary care and prudence in managing | 12 |
| property and financial affairs; | 13 |
| (b) to treat homeowners fairly; and | 14 |
| (c) to act reasonably in the exercise of discretionary | 15 |
| powers, including rule-making, enforcement, and | 16 |
| design-control powers. | 17 |
| (2) Duties of Directors, Officers, Managers, and Other | 18 |
| Agents. In addition to compliance with law and governing | 19 |
| documents, association directors, officers, managers, and | 20 |
| other agents must act in good faith, deal fairly with the | 21 |
| association and its homeowners, and use ordinary care and | 22 |
| prudence in performing their functions. | 23 |
| (a) A director, officer, attorney, manager, or other | 24 |
| agent of an association shall not solicit or accept any | 25 |
| form of compensation, gratuity, or other remuneration |
|
|
|
SB1933 |
- 30 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| that: | 2 |
| (i) would improperly influence or would appear to a | 3 |
| reasonable person to improperly influence the | 4 |
| decisions made by such agent; or | 5 |
| (ii) would result or would appear to a reasonable | 6 |
| person to result in a conflict of interest for such | 7 |
| agent. | 8 |
| (b) Unless appointed by the developer, a director or an | 9 |
| officer of an association shall not: | 10 |
| (i) enter into or renew a contract with the | 11 |
| association to provide goods or services to the | 12 |
| association; or | 13 |
| (ii)
otherwise accept any commission, personal | 14 |
| profit, or compensation of any kind from the | 15 |
| association for providing goods or services to the | 16 |
| association. | 17 |
| (3) Protection Regarding Attorneys. In contracting for a | 18 |
| lawyer to seek foreclosure or take other enforcement action, no | 19 |
| association may make legal fees in whole or part contingent on | 20 |
| the amount paid (for fees or otherwise) by a homeowner. Any | 21 |
| homeowner payment to the lawyer shall be held for the | 22 |
| association. No contract may authorize anyone to prevent a | 23 |
| homeowner from seeking to resolve any dispute directly with | 24 |
| directors or other agents of an association. | 25 |
| (4) Protection Regarding Managers. All association | 26 |
| managers must be licensed and bonded where required by law. In |
|
|
|
SB1933 |
- 31 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| contracting with managers, an association may pay a flat fee, | 2 |
| hourly rates, or a combination of flat fees and hourly rates. | 3 |
| Managers may not be paid any fee, bonus, incentive, or other | 4 |
| amount based on the number or value of violations they allege | 5 |
| or address. Managers may not impose charges on homeowners, | 6 |
| except where reasonable and expressly authorized by governing | 7 |
| documents. All homeowner payments to the manager shall be held | 8 |
| for the association. | 9 |
| (5) Determination of Architectural Requests. A homeowner's | 10 |
| request that the association or related architectural body | 11 |
| approve the homeowner's planned construction, landscaping, | 12 |
| maintenance, or repairs shall be deemed approved unless, within | 13 |
| 30 days or such other period as the declaration may specify, | 14 |
| the association or architectural body provides written notice | 15 |
| specifically detailing a lawful basis for disapproval in whole | 16 |
| or part. Such notice shall specify that homeowners have the | 17 |
| right to reconsideration by the directors, unless the directors | 18 |
| collectively made the original decision. Each year the | 19 |
| association in writing shall remind homeowners that rules | 20 |
| govern approval of construction, landscaping, maintenance, or | 21 |
| repairs. | 22 |
| (6) Retaliation Specifically Forbidden. No association, | 23 |
| director, officer, manager, or other agent of an association | 24 |
| may take, or direct, or encourage another person to attempt | 25 |
| retaliatory action against a homeowner because the homeowner | 26 |
| has: |
|
|
|
SB1933 |
- 32 - |
LRB096 11028 AJO 21321 b |
|
| 1 |
| (a) complained about alleged violations of law or | 2 |
| governing documents; | 3 |
| (b) requested to review books, records, or other papers | 4 |
| of the association; or
| 5 |
| (c) taken any other lawful action asserting homeowner | 6 |
| rights or otherwise seeking to improve association | 7 |
| operations. The retaliatory forbidden action includes, | 8 |
| without limitation, ill-motivated litigation as well as | 9 |
| deprivation of other rights protected by law or governing | 10 |
| documents. | 11 |
| (7) Remedies. In addition to other remedies authorized by | 12 |
| this Act or other law, homeowners are entitled to recover | 13 |
| compensatory and, for intentional violations, punitive damages | 14 |
| from an association and its directors, officers, managers, or | 15 |
| other agents who act unlawfully. In addition, upon proof of | 16 |
| intentional violations by directors, officers, managers, or | 17 |
| other agents of the association, homeowners are entitled to | 18 |
| appropriate relief in equity including, without limitation, | 19 |
| removal of offenders from positions with the association, a bar | 20 |
| against their return to office for a specified time, and an | 21 |
| order requiring the offender to repay the association for | 22 |
| expenses including legal fees.
|
|