Recipes under the Law
by Robyn K. Kish, CAI-ILAC
For cooks, there's often nothing better than trying a new recipe or using new ingredients to spice up an old one. The legislature has recently adopted several new laws that offer new recipes or recipe changes for associations.
Owner-Occupant Board Members. One new ingredient spices up the recipe for the structure of an association's board of directors/managers. Effective January 1, 2022, SB636 (Public Act 102-0162) amends Section 18(a)(1) of the Illinois Condominium Property Act (the “Condo Act”), 765 ILCS 605/18, to provide that a new association (or an existing association by an amendment to its declaration after the effective date) may adopt a new board structure whereby a majority, or a lessor amount, of board members must reside on the property. This change prohibits an association from requiring more than a majority of the board be owner occupants. This amendment was carefully crafted to simply change the structure of the board without creating two classes of membership, which is prohibited by the Condo Act. Under the amendment, every unit owner is still qualified to be a board member, whether or not they are a resident. When cooking up the structure of the board, the association just needs to ensure that the board as a whole contains a majority, or such lesser number as the declaration or amendment provides, of owner-occupant members.
Energy Policy Statement. Another recipe change amends the Homeowners' Energy Policy Statement Act, 765 ILCS 165. Effective July 1, 2021, HB644 (Public Act 102-0161) specifically excludes from the requirements of the Act any building that has a shared roof and is subject to a condo, homeowner, or common interest community association. The amendment also changes the cooking time from 60 to 90 days for a condo, homeowner, or common interest community association to adopt an energy policy statement after receiving a request for such a policy or an application to install a solar energy system from a member. It also extends the cooking time from 60 to 75 days after the submission of an owner's application for the installation or use of a solar energy system for the association to process and approve or deny the application.
Removing Unlawful Restrictive Covenants – Although it may be difficult to believe, there are some older associations with ingredients in their governing documents that prohibit ownership on the basis of race, color, religion, or national origin. In the past, in order to remove such unlawful restrictions, an association was required to follow its regular amendment recipe. This will change as of January 1, 2022, thanks to HB0058 (Public Act 102-0110), which adds a new recipe to remove such unlawful restrictions in The Counties Code, 55 ILCS 5/3-5048. This new recipe allows the board of a condo, homeowner, master, or common interest community association or a cooperative to cook up a restrictive covenant modification to remove such unlawful restriction ingredient from their governing documents by a majority vote of the board without a vote of the owners.
The recipe for a restrictive covenant modification requires a complete copy of the original instrument containing the unlawful restriction with the language of the unlawful restriction stricken and a petition to modify it; the recipe in §3-5048(c)(2) sets forth exactly what the petition must include. The board must file the restrictive covenant modification with the Recorder (now part of the County Clerk's Office) who then sends it to the State's Attorney. Within 30 days of receipt, the State's Attorney must make a determination as to whether the restrictive covenant modification is proper and if so, send it back to the Recorder, who must then record the modification, which will remove the unlawful restriction ingredient from the association's governing documents. The fee for recording such a modification cannot exceed $10. Once it receives the recorded copy, the board must give notice and a copy of the restrictive covenant modification to all owners within 21 days.
The new recipe also provides for involvement by owners who can submit a written request to the board to remove an unlawful restriction ingredient from their governing documents. Once received, the board has 90 days to determine whether there is an unlawful restrictive covenant and, if so, cook up (and file) a restrictive covenant modification to remove the unlawful restriction. If the Board fails, or refuses, to timely file such a restrictive covenant modification after receiving an owner's request, the owner may file an action to compel the association and, if successful, the owner may recover reasonable attorney's fees and costs from the association.
The CAM Act. The most recipe changes relate to the regulation of community association managers (“CAMs”). Effective January 1, 2022, HB806 (Public Act 102-0020) amends a number of statutes including The Community Association Manager Licensing and Disciplinary Act (the “CAM Act”), 225 ILCS 427/1 et seq. The most notable change in the CAM Act is the extension of the date of its repeal from January 1, 2022 to January 1, 2027.
The amendment includes some ingredient changes to the recipe for CAMs. The ingredients for advertising have been expanded to include social media and electronic forum posts. The address ingredient has changed to prohibit P.O. Boxes and require that all applicants and licensees provide the regulatory Dept. with valid street and email addresses of record and inform the Dept. of any change in said addresses within 14 days. There's also a whole new ingredient in the CAM recipe – a designated community association manager.
The recipe for CAM licensing has a number of changes, including the removal of the exemption that allowed a person to temporarily act as a CAM without a license while his/her application for licensure was pending if s/he was licensed under the laws of another state or country. It also adds the requirement for completion of a high school degree or equivalency certificate to the qualifications for licensure and removes the exemption for those with a real estate license to complete the required CAM courses to qualify for licensure. The changes also restrict certain criminal records from what applicants for licensure must report to the Dept. but add specific convictions/pleas and administrative sanctions that applicants and licensees must report to Dept. within 30 days. There's also a new recipe for licensure as a community association management firm.
The CAM discipline recipe has a few changes. A license will not be renewed if there are unpaid fines or fees owed to Dept. unless the licensee has entered into a payment plan with the Dept. and is current with the payments. The grounds for the Dept. to refuse to issue or renew a license have been amended as have the disciplinary procedures for licensees who fail to comply with continuing education requirements or are convicted of illegal discrimination. There have also been changes to the investigation and hearing procedures of the Dept. in disciplinary actions.
Finally, there have been some miscellaneous changes to the CAM recipe, including insurance requirements, a statute of limitations for actions under the Act, and a prohibition against private rights of action under the Act. The requirement for the Dept. to maintain a roster of names and addresses of all licensees has been removed.
ILAC – On a side note, IL-CAI's Legislative Action Committee (ILAC) was involved in reviewing, amending, and lobbying for changes to the above amendments to benefit CAI's members. ILAC members all volunteer their time and experience to identify, review, and propose changes to pending legislation. However, their lobbying efforts cost money. Please consider making a donation to ILAC so that it can continue to lobby for legislation that benefits condo, homeowner, or common interest community association.