Attached is new Public Act 96-1045, effective 7/14/10.
It creates a 6 month assessment superlien right in non-condo associations which associations are subject to Section 18.5 of the Illinois Condominium Property Act. Since it is effective immediately, all non-condo associations that are involved in a mortgage foreclosure should consider initiating collection actions to perfect their rights to collect this superlien when and if the unit gets sold by the foreclosing lender to a 3rd party buyer.
The language of the Act is virtually identical to that of the condo 6 month superlien in Section 9(g)(4) of the Condo Act, and I would assume it will be interpreted the same way.
One thing to note: If and when the pending Common Interest Community Association Act gets signed by the Governor, it currently has language that says that Section 18.5 doesn't apply to an association governed by the CICAA. Since PA 96-1045 is only in Section 18.5, the enactment of the CICAA may throw the usefulness of PA 96-1045 into question, unless and until it can be moved (or added) to the CICAA.
View Public Act 96-1045
Public Act 96-1400, Effective Immediately, Gives Non-Condo Associations Their Own Governing Statute
On July 29, 2010, the Governor signed Public Act 96-1400, IL Common Interest Community Association Act (CICAA), which became effective immediately.
The Act, a copy of which is attached, uses the IL Condominium Property Act as a framework, so many of the provisions will appear similar, if not identical, to the ICPA. But the Condo Act-type provisions are scattered in a different sequence than in the Condo Act.
A Section by section review of the Act:
A. Section 1-5: Definitions. Some terminology obvious changes from the Condo Act. “Common Areas” instead of common elements, for example.
The term “unit” is used, but as “a part of the property designed and intended for any type of independent use”. Note that units do not carry any percentage interests in the common areas, as such is a condo concept. I predict that the use of the term “unit” vs. “parcel” (also a defined term) will cause confusion as to whether the association is a condo or a CICA.
“Common Interest Community” is defined as “ real estate other than a condominium or cooperative with respect to which any person by virtue of his or her ownership of a partial interest or a unit therein is obligated to pay for the maintenance, improvement , insurance premiums or real estate taxes of common areas described in a declaration which is administered by an association. A CIC may include attached or detached townhomes, villas or single family homes, or master associations. A master assn means a CICA that exercise power on behalf of one or more condos or CICAs for the benefit of the unit owners of the assns. So you could have a CICA as the master assn for a group of condo assns.
Section 1-10: Applicability. This is a key provision. It states: “Unless expressly provided otherwise herein, the provisions of this act are applicable to all common interest community associations in this State.”
This appears to mean just what it says: That any assn that would qualify as a CICA is now governed by this Act, without the right to opt in or out (except for certain small assns under Section 1-75).
This begs a good number of questions:
- Under the forcible law, the right to use the forcible law is predicated on an assn being a common interest community assn under Section 18.5 of the Condo Act. But there is no amendment of the forcible law to explain whether assns that are now governed by this CICAA are allowed to use the forcible law going forward.
- What happens to Section 18.5 anyway? It covers much of the same ground as the CICAA, but the new Act doesn’t integrate the two in any way.
- There was a recent amendment to Section 18.5 to allow for condo-like superlien rights (6 months of assessments) in foreclosure cases. But that amendment is not part of the CICAA. So what is its viability now that the CICAA governs all non-condos assns?
Section 1-15. Construction: Similar to Condo Act Section 4.1(a)(1), (a)(6) and (c)
Section 1-20. Amendments. Similar to Condo Act Section 17. Now requires that a CICA’s bylaws be recorded as part of the declaration.
But adds a new subsection(c) that says if an association currently allows leasing, but amends it documents to “prohibit” leasing, the prohibition shall not apply to a 501(c) (3) entity (tax exempt) which is leasing a unit (as landlord) at the time of the amendment. And such entity may continue to lease the unit out until it sells the unit, and it may not be fined for such a lease(s).
Query: Most assns only limit leasing (x number of units may be leased at one time). Is that a “prohibition”? Or if a CICA assn only limits leasing, can the 501(c)(3) be stopped from leasing its unit out if at some point that lease would make the assn go over its limit? Can the assn fine the entity in those situations?
The answer is not clear.
Section 1-25. Board of Managers. This and Section 1-30 track much of Sections 18 and 18.4 of the Condo Act.
Note that subsection (h)(3) allows mail in voting.
Section 1-30. Board duties and obligations. This includes the access to records language now in Section 18.5 (d).
Section 1-35. Unit owner powers. This also tracks parts of Section 18, including the provisions on leases being given to the assn, but without the reference to use of the forcible law. Query; Does the lack of reference to the forcible law reduce the assns power to use the forcible law? Again, lack of coordination with the forcible law makes it hard to answer this question.
The resale information requirements of 18.5(g) are repeated here.
Section 1-40. Meetings. Similar to Section 18(a)(9). But now is clearer that notice of a bd meeting must be given to all unit owners by mail or delivery OR by posting notice at least 48 hours before the meeting, but that for certain bd meetings (mostly budget or special assessments) only mailed or delivered notice is ok.
The fact that posting is an alternative, and not a requirement, is a change. The IL Not-for-Profit Corporation Act and Section 18.5 of the Condo Act both required non-condo NFP corporations to post notice in addition to mailed or delivered notice.
Also note Section 1-40(b)(6) which requires that at every Board meeting some time be set aside for owner comment, but that the amount of owner comment time and where in the meeting the owner comment is to occur is up to the Board.
Note: Since “mailed or delivered” is undefined, the provisions in the declaration regarding the same should still apply.
Section 1-45. Finances. Similar to the provisions of Section 18 on timing of budget issuance and on special assessment adoption.
Section 1-50. Administration of property prior to election of initial Bd. Similar to Section 18.2 of the Condo Act
Section 1-55. Fidelity Insurance. Similar to Section 18(g) but not as extensive on the agent’s responsibility for holding funds in separate accounts, but see Section 1-65.
Section 1-60. Errors and omissions. Similar to section 27(b) re correcting declarations or bylaws that have obvious errors.
Section 1-65. Management Company. Picks up the tail end of Section 18(g) re the handling of assn accounts.
Section 1-70. Display of flags. Similar to Section 18.6.
Section 1-75. Exemptions. Assns of 10 or under which are not-for-profit corporations, or have budgets of under $100,000,00 are exempt from the Act unless they elect into the Act. If an assn of 10 units or less or have a budget of less than $50,000, and which give up the right to use the courts or arbitration as a means of collecting assessments may opt out of most of the Act..
Query; If an assn has under 10 units with a budget of less than $50,000 and has given up the right to use the courts to collect assessments, and also given up arbitration to so collect, how is it supposed to collect unpaid assessments? Mediation?
Article 5. This creates new rights in service personnel to terminate leases when they leave on active duty. It has very little to do with CICAs.
Overall: This Act has been a long time coming. But it has a number of holes as relate to Section 18.5 and the forcible law. It will need amendment almost immediately, in my opinion, to provide some certainty of application. And it would be good if there was provision that similar provisions in the Condo Act should be construed in a similar manner with provisions in this Act.
View Public Act 96-1400 |
