Bill Text: IL SB2664 | 2013-2014 | 98th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Condominium Property Act. Provides that the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, or a purchaser of a condominium unit from a mortgagee who acquired title through a judicial foreclosure, a consent foreclosure, a common law strict foreclosure, or the delivery of a deed in lieu of foreclosure (instead of the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, who takes possession of a condominium unit pursuant to a court order or a purchaser who acquires title from a mortgagee) shall have the duty to pay to the association an amount not to exceed the total of the regular monthly assessments for the condominium unit for the 9-month period immediately preceding the relevant event. Provides that the amount due may include any attorney's fees and court costs, but may not exceed 9 months of regular assessments due over the same 9-month period. Deletes language providing that the purchaser shall have the duty to pay the proportionate share, if any, of the common expenses for the unit which would have become due in the absence of any assessment acceleration for the 6 months immediately preceding the institution of an action to enforce the collection of assessments, and which remain unpaid. Deletes language providing that if the outstanding assessments are paid at any time during an action to enforce the collection of assessments, the purchaser shall have no obligation to pay any assessments which accrued before he or she acquired title. Provides that the notice of a foreclosure sale of a condominium unit shall state that a purchaser, other than a mortgagee, shall pay to the association any unpaid monthly assessments for the 9-month period preceding the sale, including attorney's fees and court costs. Provides that each notice of a judicial sale a condominium unit and each disclosure statement issued to a prospective purchaser shall list the required fees. Provides that in certain situations, the Board of Managers (instead of the owner) of a condominium unit must make specified information available within 14 days of the request (instead of "upon demand") and may do so either electronically or in writing. Makes corresponding changes. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 11-4)

Status: (Vetoed) 2014-11-24 - Bill Dead - Amendatory Veto No Positive Action Taken [SB2664 Detail]

Download: Illinois-2013-SB2664-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 SB2664 Introduced 1/21/2014, by Sen. Michael E. Hastings SYNOPSIS AS INTRODUCED:
765 ILCS 605/9 from Ch. 30, par. 309
765 ILCS 605/22.1 from Ch. 30, par. 322.1
Amends the Condominium Property Act. Provides that the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, or a purchaser of a condominium unit from a mortgagee who acquired title through a judicial foreclosure, a consent foreclosure, a common law strict foreclosure, or the delivery of a deed in lieu of foreclosure (instead of the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, who takes possession of a condominium unit pursuant to a court order or a purchaser who acquires title from a mortgagee) shall have the duty to pay to the association an amount not to exceed the total of the regular monthly assessments for the condominium unit for the 9-month period immediately preceding the relevant event. Provides that the amount due may include any attorney's fees and court costs, but may not exceed 9 months of regular assessments due over the same 9-month period. Deletes language providing that the purchaser shall have the duty to pay the proportionate share, if any, of the common expenses for the unit which would have become due in the absence of any assessment acceleration for the 6 months immediately preceding the institution of an action to enforce the collection of assessments, and which remain unpaid. Deletes language providing that if the outstanding assessments are paid at any time during an action to enforce the collection of assessments, the purchaser shall have no obligation to pay any assessments which accrued before he or she acquired title. Provides that the notice of a foreclosure sale of a condominium unit shall state that a purchaser, other than a mortgagee, shall pay to the association any unpaid monthly assessments for the 9-month period preceding the sale, including attorney's fees and court costs. Provides that each notice of a judicial sale a condominium unit and each disclosure statement issued to a prospective purchaser shall list the required fees. Provides that in certain situations, the Board of Managers (instead of the owner) of a condominium unit must make specified information available within 14 days of the request (instead of "upon demand") and may do so either electronically or in writing. Makes corresponding changes. Effective immediately.
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A BILL FOR
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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 Sections 9 and 22.1 as follows:
(765 ILCS 605/9) (from Ch. 30, par. 309)
Sec. 9. Sharing of expenses - Lien for nonpayment.
(a) All common expenses incurred or accrued prior to the
first conveyance of a unit shall be paid by the developer, and
during this period no common expense assessment shall be
payable to the association. It shall be the duty of each unit
owner including the developer to pay his proportionate share of
the common expenses commencing with the first conveyance. The
proportionate share shall be in the same ratio as his
percentage of ownership in the common elements set forth in the
declaration.
(b) The condominium instruments may provide that common
expenses for insurance premiums be assessed on a basis
reflecting increased charges for coverage on certain units.
(c) Budget and reserves.
(1) The board of managers shall prepare and distribute
to all unit owners a detailed proposed annual budget,
setting forth with particularity all anticipated common

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expenses by category as well as all anticipated assessments
and other income. The initial budget and common expense
assessment based thereon shall be adopted prior to the
conveyance of any unit. The budget shall also set forth
each unit owner's proposed common expense assessment.
(2) All budgets adopted by a board of managers on or
after July 1, 1990 shall provide for reasonable reserves
for capital expenditures and deferred maintenance for
repair or replacement of the common elements. To determine
the amount of reserves appropriate for an association, the
board of managers shall take into consideration the
following: (i) the repair and replacement cost, and the
estimated useful life, of the property which the
association is obligated to maintain, including but not
limited to structural and mechanical components, surfaces
of the buildings and common elements, and energy systems
and equipment; (ii) the current and anticipated return on
investment of association funds; (iii) any independent
professional reserve study which the association may
obtain; (iv) the financial impact on unit owners, and the
market value of the condominium units, of any assessment
increase needed to fund reserves; and (v) the ability of
the association to obtain financing or refinancing.
(3) Notwithstanding the provisions of this subsection
(c), an association without a reserve requirement in its
condominium instruments may elect to waive in whole or in

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part the reserve requirements of this Section by a vote of
2/3 of the total votes of the association. Any association
having elected under this paragraph (3) to waive the
provisions of subsection (c) may by a vote of 2/3 of the
total votes of the association elect to again be governed
by the requirements of subsection (c).
(4) In the event that an association elects to waive
all or part of the reserve requirements of this Section,
that fact must be disclosed after the meeting at which the
waiver occurs by the association in the financial
statements of the association and, highlighted in bold
print, in the response to any request of a prospective
purchaser for the information prescribed under Section
22.1; and no member of the board of managers or the
managing agent of the association shall be liable, and no
cause of action may be brought for damages against these
parties, for the lack or inadequacy of reserve funds in the
association budget.
(d) (Blank).
(e) The condominium instruments may provide for the
assessment, in connection with expenditures for the limited
common elements, of only those units to which the limited
common elements are assigned.
(f) Payment of any assessment shall be in amounts and at
times determined by the board of managers.
(g) Lien.

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(1) If any unit owner shall fail or refuse to make any
payment of the common expenses or the amount of any unpaid
fine when due, the amount thereof together with any
interest, late charges, reasonable attorney fees incurred
enforcing the covenants of the condominium instruments,
rules and regulations of the board of managers, or any
applicable statute or ordinance, and costs of collections
shall constitute a lien on the interest of the unit owner
in the property prior to all other liens and encumbrances,
recorded or unrecorded, except only (a) taxes, special
assessments and special taxes theretofore or thereafter
levied by any political subdivision or municipal
corporation of this State and other State or federal taxes
which by law are a lien on the interest of the unit owner
prior to preexisting recorded encumbrances thereon and (b)
encumbrances on the interest of the unit owner recorded
prior to the date of such failure or refusal which by law
would be a lien thereon prior to subsequently recorded
encumbrances. Any action brought to extinguish the lien of
the association shall include the association as a party.
(2) With respect to encumbrances executed prior to
August 30, 1984 or encumbrances executed subsequent to
August 30, 1984 which are neither bonafide first mortgages
nor trust deeds and which encumbrances contain a statement
of a mailing address in the State of Illinois where notice
may be mailed to the encumbrancer thereunder, if and

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whenever and as often as the manager or board of managers
shall send, by United States certified or registered mail,
return receipt requested, to any such encumbrancer at the
mailing address set forth in the recorded encumbrance a
statement of the amounts and due dates of the unpaid common
expenses with respect to the encumbered unit, then, unless
otherwise provided in the declaration or bylaws, the prior
recorded encumbrance shall be subject to the lien of all
unpaid common expenses with respect to the unit which
become due and payable within a period of 90 days after the
date of mailing of each such notice.
(3) The purchaser of a condominium unit at a judicial
foreclosure sale, or a mortgagee who receives title to a
unit by deed in lieu of foreclosure or judgment by common
law strict foreclosure or otherwise takes possession
pursuant to court order under the Illinois Mortgage
Foreclosure Law, shall have the duty to pay the unit's
proportionate share of the common expenses for the unit
assessed from and after the first day of the month after
the date of the judicial foreclosure sale, delivery of the
deed in lieu of foreclosure, entry of a judgment in common
law strict foreclosure, or taking of possession pursuant to
such court order. Such payment confirms the extinguishment
of any lien created pursuant to paragraph (1) or (2) of
this subsection (g) by virtue of the failure or refusal of
a prior unit owner to make payment of common expenses,

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where the judicial foreclosure sale has been confirmed by
order of the court, a deed in lieu thereof has been
accepted by the lender, or a consent judgment has been
entered by the court.
(4) The purchaser of a condominium unit at a judicial
foreclosure sale, other than a mortgagee, or a purchaser of
a condominium unit from a mortgagee who acquired title
through a judicial foreclosure, a consent foreclosure, a
common law strict foreclosure, or the delivery of a deed in
lieu of foreclosure who takes possession of a condominium
unit pursuant to a court order or a purchaser who acquires
title from a mortgagee shall have the duty to pay to the
association an amount not to exceed the total of the
regular monthly assessments for the condominium unit for
the 9-month period immediately preceding any of these
events. The amount due may include any attorney's fees and
court costs incurred by the association during this same
9-month period caused by the nonpayment of these
assessments along with unpaid regular monthly assessments
for the same period. However, the total amount may not
exceed 9 months of regular assessments due over the same
9-month period the proportionate share, if any, of the
common expenses for the unit which would have become due in
the absence of any assessment acceleration during the 6
months immediately preceding institution of an action to
enforce the collection of assessments, and which remain

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unpaid by the owner during whose possession the assessments
accrued. If the outstanding assessments are paid at any
time during any action to enforce the collection of
assessments, the purchaser shall have no obligation to pay
any assessments which accrued before he or she acquired
title.
(5) The notice of sale of a condominium unit under
subsection (c) of Section 15-1507 of the Code of Civil
Procedure shall state that the purchaser of the unit other
than a mortgagee shall pay to the association amounts the
assessments and the legal fees required by subdivision
subdivisions (g)(1) and (g)(4) of Section 9 of this Act.
The statement of assessment account issued by the
association to a unit owner under subsection (i) of Section
18 of this Act, and the disclosure statement issued to a
prospective purchaser under Section 22.1 of this Act, shall
state the amount of the assessments and the legal fees, if
any, required by subdivision subdivisions (g)(1) and
(g)(4) of Section 9 of this Act.
(h) A lien for common expenses shall be in favor of the
members of the board of managers and their successors in office
and shall be for the benefit of all other unit owners. Notice
of the lien may be recorded by the board of managers, or if the
developer is the manager or has a majority of seats on the
board of managers and the manager or board of managers fails to
do so, any unit owner may record notice of the lien. Upon the

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recording of such notice the lien may be foreclosed by an
action brought in the name of the board of managers in the same
manner as a mortgage of real property.
(i) Unless otherwise provided in the declaration, the
members of the board of managers and their successors in
office, acting on behalf of the other unit owners, shall have
the power to bid on the interest so foreclosed at the
foreclosure sale, and to acquire and hold, lease, mortgage and
convey it.
(j) Any encumbrancer may from time to time request in
writing a written statement from the manager or board of
managers setting forth the unpaid common expenses with respect
to the unit covered by his encumbrance. Unless the request is
complied with within 20 days, all unpaid common expenses which
become due prior to the date of the making of such request
shall be subordinate to the lien of the encumbrance. Any
encumbrancer holding a lien on a unit may pay any unpaid common
expenses payable with respect to the unit, and upon payment the
encumbrancer shall have a lien on the unit for the amounts paid
at the same rank as the lien of his encumbrance.
(k) Nothing in Public Act 83-1271 is intended to change the
lien priorities of any encumbrance created prior to August 30,
1984.
(Source: P.A. 94-1049, eff. 1-1-07.)
(765 ILCS 605/22.1) (from Ch. 30, par. 322.1)

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Sec. 22.1. (a) In the event of any resale of a condominium
unit by a unit owner other than the developer, the Board of
Managers shall, within 14 days of a request from the owner or
owner's agent, produce for the seller and the prospective
purchaser either electronically or in writing: such owner shall
obtain from the Board of Managers and shall make available for
inspection to the prospective purchaser, upon demand, the
following:
(1) A copy of the Declaration, by-laws, other
condominium instruments and any rules and regulations.
(2) A statement of any liens, including a statement of
the account of the unit setting forth the amounts of unpaid
assessments and other charges due and owing as authorized
and limited by the provisions of Section 9 of this Act or
the condominium instruments.
(3) A statement of any capital expenditures
anticipated by the unit owner's association within the
current or succeeding two fiscal years.
(4) A statement of the status and amount of any reserve
for replacement fund and any portion of such fund earmarked
for any specified project by the Board of Managers.
(5) A copy of the statement of financial condition of
the unit owner's association for the last fiscal year for
which such statement is available.
(6) A statement of the status of any pending suits or
judgments in which the unit owner's association is a party.

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(7) A statement setting forth what insurance coverage
is provided for all unit owners by the unit owner's
association.
(8) A statement that any improvements or alterations
made to the unit, or the limited common elements assigned
thereto, by the prior unit owner are in good faith believed
to be in compliance with the condominium instruments.
(9) The identity and mailing address of the principal
officer of the unit owner's association or of the other
officer or agent as is specifically designated to receive
notices.
(10) If ownership of the condominium unit was
transferred by either a judicial foreclosure sale, a
consent foreclosure, a common law strict foreclosure, or a
deed in lieu of foreclosure, a statement setting forth the
total due and owing under subsection (g) of Section 9 of
this Act.
(b) The principal officer of the unit owner's association
or such other officer as is specifically designated shall
furnish the above information when requested to do so either
electronically or in writing and within 14 30 days of the
request.
(c) Within 15 days of the recording of a mortgage or trust
deed against a unit ownership given by the owner of that unit
to secure a debt, the owner shall inform the Board of Managers
of the unit owner's association of the identity of the lender

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together with a mailing address at which the lender can receive
notices from the association. If a unit owner fails or refuses
to inform the Board as required under subsection (c) then that
unit owner shall be liable to the association for all costs,
expenses and reasonable attorneys fees and such other damages,
if any, incurred by the association as a result of such failure
or refusal.
A reasonable fee covering the direct out-of-pocket cost of
providing such information and copying may be charged by the
association or its Board of Managers to the unit seller for
providing such information.
(Source: P.A. 87-692.)
Section 99. Effective date. This Act takes effect upon
becoming law.