2018 PROPOSED LEGISLATION AFFECTING CONDOMINIUM AND COMMON INTEREST COMMUNITY ASSOCIATIONS by

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1 2018 PROPOSED LEGISLATION AFFECTING CONDOMINIUM AND COMMON INTEREST COMMUNITY ASSOCIATIONS by Michael C. Kim MICHAEL C. KIM & ASSOCIATES February 21, 2018 This Illinois legislative session has seen a significant number of proposed amendments that could significantly affect condominium and common interest communities, for good and for bad. As in prior years, not all submitted bills will make it through the entire process (that is, pass both House and Senate and be signed into law by the Governor). If you see something you like or don t like, consider doing something to have your input heard (such as submit testimony/witness slips to a House or Senate committee, contact your legislator or support an organization s effort if consistent with your own views). Note that a bill can be amended (even radically) as it wends its way through the legislative process, so do not expect that the initially submitted version will be the final version. HOUSE BILLS (HB) HB 2401 is a carryover from 2017 and would amend both the Illinois Condominium Property Act ( ICPA ) and the Common Interest Community Association Act ( CICA Act ) to define the one class of membership requirement to apply only to voting membership. HB 2401 would also amend ICPA Section 15 (Sale of Entire Condominium Property) to require approval by at least 85% of the unit owners if the property contains 7 or more units, unless less than 25% of the units are owner-occupied (in which case, the required percentage would be at least 75%). Note that there are a couple of pending amendments that would delete the voting membership change but would also clarify that more than one class of membership would not be created by adopting rules and regulations for assignment of parking spaces or storage spaces or adopting rules and regulations for safety and security of the common elements or the unit owners. COMMENT: Not clear what is intended, what problem(s) being addressed or whether amendments will be accepted. Possibly could result in discriminatory treatment of non-resident unit owners. HB 4760 would amend the Code of Civil Procedure and the Consumer Fraud and Deceptive Business Practices Act by requiring that eviction case files be sealed (that is, not available to the public) until 30 days after the entry of an eviction order unless the court did not find the tenant or occupant to have materially breached the lease or the condominium governing documents or is a holdover tenant, but then the court file will be sealed within 5 years after filing of the eviction action unless certain specified situations apply. A person who disseminates information from a sealed court file is subject to a claim by the tenant/occupant who can recover up to two times the monthly rent or twice the damages sustained, whichever is greater, plus attorney s fees. 19 S. LaSalle St., Suite 303, Chicago, IL Phone (312) Website

2 COMMENT: Possibly meant to protect the credit standing of tenants/occupants who are not guilty of misconduct but made a party to an eviction case for other purposes, but this proposed sealing/unsealing of the court file could complicate matters for Condo and CIC collection/eviction actions. HB 4816 would amend ICPA Section 19 to prohibit the board of managers (directors) or any person who obtains information under the ICPA from selling or distributing that information (specifically, the names, addresses, addresses, phone numbers and weighted votes of the unit owners) to any commercial or other entity unrelated to the condo association; instead that information may be use only for matters related to the condominium association. COMMENT: Part of the huge push back regarding unit owners addresses and phone numbers. However, there is no provision to recover damages or attorney s fees from violators. HB 4910 would create new provisions in the ICPA and CICA Act that would limit the home rule power of municipalities to adopt ordinances inconsistent with previously enacted changes to Section 1-20 (amendments) and 1-45 (finances) of the CICA Act, and to adopt ordinances inconsistent with previously adopted changes to Section 9 (common expenses/lien), 15 (sale of entire property), 18 (bylaws), 18.4 (powers and duties of board), (generally accepted accounting principles), 19 (records of association), 27 (amendments) and 31 (subdivision/ combination of units). COMMENT: Sponsor Representative Thapedi is pushing back against the push back to his 2017 bill which required unit owners addresses and phone numbers to be included on the unit owners list. In particular, one possible tactic would be a city ordinance that would overrule that requirement for a particular city (i.e. exercise of home rule powers). HB 5126 would amend ICPA Section 18 to include the amount of and procedures for imposing a fine for disclosure of a unit owner s information (specifically name, address, address or telephone number) which that unit owner has indicated should not be disclosed to other members of the association under ICPA Section 19. COMMENT: Part of the /telephone number push back but overly broad by including name and postal address of the owner. HB 5208 would amend the Community Association Manager Licensing and Disciplinary Act ( Manager Licensing Act ) to lower the minimum age for licensure to 18. COMMENT: Not enough old guys? HB 5276 would amend the CICA Act to eliminate the provision allowing officers and directors to succeed themselves, but instead allows term limits to be imposed via the community instruments. COMMENT: As long as there is an on-going pool of qualified and right-minded candidates, term limits may be a good idea; otherwise, not so much. 2

3 HB 5348 would amend the Manager Licensing Act to delete licensing of community association management firms and add references to and description of designated community association manager ; clarifies that licensing is for a person, not an entity; eliminates the requirement that two members of the licensing board must be supervising community association managers ; and makes related changes to various other sections. HB 5483 would amend the Illinois Code of Civil Procedure to allow revival of judgments in the fifth year after its entry. A judgment would not be enforceable after 5 years without such revival. COMMENT: Shortens the enforcement period of a judgment from 7 to 5 years, unless revived. Need to be diligent in enforcing judgments. HB 5484 would amend the Illinois Code of Civil Procedure to require that in an action to collect a debt (such as assessments), the defendant debtor must be provided along with the Summons, a printed notice of his/her rights, including the right to ask for a Reasonable Payment Plan as well as other information. COMMENT: Sort of a mini fair debt collection measure. HB 5505 would amend the Manager Licensing Act to specify a 4 year term, with a 10 year total term limit, for members of the Manager Licensing and Disciplinary Board. HB 5744 is the same as SB HB 5783 would amend the ICPA to require associations with 200 (instead of 100) units to use generally accepted accounting principles, to be phased in as follows: By January 1, 2019 for associations having less than 176 units but not more than 199 units; by January 1, 2020 for associations having less than 136 units but not more than 175 units; and by January 1, 2021 for associations having less than 101 units but not more than 135 units. COMMENT: I think I need an accountant to explain this. SENATE BILLS SB 572 is a carry over amendment from 2017 and would amend ICPA Section 19 to delete the requirement that the unit owners list include addresses and telephone numbers. COMMENT: Another push back vehicle on the /phone number controversy involving the Section 19 owners list requirements. SB 758 is a carry over from 2017, which would amend the Illinois Code of Civil Procedure to allow constructive service of defendants in an eviction case by posting or publication. It would also allow service by a national private delivery service or by electronic transmission ( ) if the tenant has given specific written consent to such means of service. 3

4 COMMENT: Should be supported. SB 928 would amend the CICA Act to require that in the resale of a unit, the board must make available any adopted common expense collection policies, a statement setting forth the current assessment obligations, including any special assessments or other common expenses, and a statement setting forth the current late fees or interest that may be charged on an unpaid balance. COMMENT: Only applies to common interest communities, not condo associations. SB 2439 would amend the Manager Licensing Act to remove default on an educational (student) loan as a basis for license revocation. SB 2485 would amend the ICPA to require that a unit owner be given notice and an opportunity for a hearing before a lien can be filed against his/her unit for unpaid assessments, fines, late charges, interest or attorneys fees incurred in enforcing covenants, rules and regulations or law, and costs of collection. Similarly, a unit owner must be given notice of default and an opportunity for hearing regarding any fees in dispute before the association can exercise its remedies against him/her or his/her tenant. Also, the association would not have authority to initiate collection proceedings against a unit owner until the board issues a 30 day written notice of delinquency and provides the unit owner with an opportunity for a hearing to dispute any amounts due. Finally, the board must give written notice before imposing a fine for a violation. COMMENT: More unit owner s rights being inserted, some of which are possibly redundant (for example, an owner will have notice and opportunity for hearing before a fine is imposed, but then gets another notice and opportunity for a hearing before collection of the imposed fine, and then after the collection action is filed, the owner again can challenge that fine in court). SB 2529 is the same as SB SB 2556 would amend ICPA Section 9.2 to allow a unit owner to recover his/her attorney s fees from the opposing party if that owner is determined to be the substantially prevailing party by a court or arbitrator in any proceeding between that owner and the association or its board or any individual member of the board regarding enforcement of the board/association s obligations under the ICPA, condo instruments, rules and regulations or any applicable statute or ordinance, or a disputed charge on the owner s account or a purported default by the owner, his/her tenant or his/her guest. Also, the association cannot include any attorney s fees in its collection demand letter to start an eviction case. COMMENT: Could be a good idea but very controversial. SB 2653 is the same as SB SB 3036 is the same as HB SB 3165 is same as HB SB 3394 is the same as HB

5 CONCLUSION Committee meetings are underway, and there is a theoretical May 31 deadline to pass bills out of both the House and Senate. We will let you know what finally emerges from the sausage making process. Copyright Michael C. Kim & Associates. All Rights Reserved. This article is being provided for general information and does not constitute legal advice. For a specific problem, you should consult an attorney. 5