CONDO-RESERVE STUDY

Illinois General Assembly - Full Text of SB3401

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Full Text of SB3401

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SB3401 - 104th General Assembly

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House Amendment 001

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SB3401 Engrossed
LRB104 18964 JRC 32409 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 5.
The Common Interest Community Association Act
5
is amended by adding Section 1-32 and by changing Section 1-35
6
as follows:

7

(765 ILCS 160/1-32 new)
8

Sec. 1-32.
Reserve study.
9

(a) As used in this Section:

10

"Major shared components or significant infrastructure"
11
means structural, mechanical, electrical, and plumbing
12
components of the common areas and any other components that
13
are the responsibility of the association to maintain,
14
restore, repair, and replace, or infrastructure, including,
15
but not limited to, roads, street lighting, hardscape,
16
landscape, ponds and lakes, water features, pools, and
17
accessory buildings, if applicable, with a restoration or
18
replacement cost exceeding $10,000, which are capital expenses
19
as identified in the federal tax code and generally accepted
20
accounting principles.
21

"Reserve study" means an analysis of the reserves required
22
for future major maintenance, repairs and replacements of the
23
common areas that:

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(1) identifies each structural, mechanical,
2

electrical, and plumbing component of the common areas and
3

any other components that are the responsibility of the
4

association to maintain, repair, and replace;
5

(2) states the normal useful life and the estimated
6

remaining useful life of each identified component;
7

(3) states the estimated cost of maintenance, repair,
8

or replacement of each identified component; and
9

(4) states the estimated annual reserve amount
10

necessary to accomplish any identified future maintenance,
11

repair, or replacement.
12

(b) Any association with major shared components or
13
significant infrastructure shall cause a reserve study to be
14
conducted and updated in accordance with this Section.
15

(c) Any association with major shared components or
16
significant infrastructure that has had a reserve study
17
conducted on or after January 1, 2024, shall have an updated
18
reserve study conducted within 5 years after the date the
19
reserve study was conducted, and at least every 5 years
20
thereafter, for purposes of assessing the condition of and
21
planning for maintenance, repair, and replacement of the
22
common areas.
23

(d) Any association with major shared components or
24
significant infrastructure that has not had a reserve study
25
conducted on or after January 1, 2024, shall require that a
26
reserve study be conducted on or before January 1, 2028, and

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
shall update the study every 5 years for purposes of assessing
2
the condition of and planning for maintenance, repair and
3
replacement of the common areas.
4

(e) The reserve study and any update to the reserve study
5
shall be conducted by a qualified person, association,
6
organization, or business entity that is knowledgeable about
7
the major shared components or significant infrastructure that
8
will be the subject of the reserve study. A qualified person,
9
association, organization, or business entity is one that has
10
experience and knowledge about the normal useful life,
11
function, performance, condition, maintenance, repair, and
12
replacement of any one or more of the major shared components
13
or significant infrastructure that will be the subject of the
14
reserve study, as well as the related expenses. The reserve
15
study is not required to be conducted by a single person,
16
association, organization, or business entity. An association
17
may internally prepare a reserve study if the reserve study
18
compiles information from a qualified person, association,
19
organization, or business entity.
20

(f) In the event of resale of any unit in the common
21
interest community, a copy of the most recent reserve study,
22
if any, shall be made available to any prospective purchaser
23
upon request.
24

(g) Any association with 15 or fewer units is exempt from
25
the requirements of this Section; however, the board still
26
must comply with budgeting and reserve requirements set forth

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
in this Act or in the community instruments.

2

(765 ILCS 160/1-35)
3

Sec. 1-35.
Member powers, duties, and obligations.
4

(a) The provisions of this Act, the declaration, bylaws,
5
other community instruments, and rules and regulations that
6
relate to the use of an individual unit or the common areas
7
shall be applicable to any person leasing a unit and shall be
8
deemed to be incorporated in any lease executed or renewed on
9
or after the effective date of this Act. Unless otherwise
10
provided in the community instruments, with regard to any
11
lease entered into subsequent to the effective date of this
12
Act, the unit owner leasing the unit shall deliver a copy of
13
the signed lease to the association or if the lease is oral, a
14
memorandum of the lease, not later than the date of occupancy
15
or 10 days after the lease is signed, whichever occurs first.
16

(b) If there are multiple owners of a single unit, only one
17
of the multiple owners shall be eligible to serve as a member
18
of the board at any one time, unless the unit owner owns
19
another unit independently.
20

(c) Two-thirds of the membership may remove a board member
21
as a director at a duly called special meeting.
22

(d) In the event of any resale of a unit in a common
23
interest community association by a member or unit owner other
24
than the developer, the board shall make available for
25
inspection to the prospective purchaser, upon demand, the

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
following:
2

(1) A copy of the declaration, other instruments, and
3

any rules and regulations.
4

(2) A statement of any liens, including a statement of
5

the account of the unit setting forth the amounts of
6

unpaid assessments and other charges due and owing.
7

(3) A statement of any capital expenditures
8

anticipated by the association within the current or
9

succeeding 2 fiscal years.
10

(4) A statement of the status and amount of any
11

reserve or replacement fund and any other fund
12

specifically designated for association projects.
13

(5) A copy of the statement of financial condition of
14

the association for the last fiscal year for which such a
15

statement is available.
16

(6) A statement of the status of any pending suits or
17

judgments in which the association is a party.
18

(7) A statement setting forth what insurance coverage
19

is provided for all members or unit owners by the
20

association for common properties.
21

(8) A copy of the most recent reserve study, if any.

22

The principal officer of the board or such other officer
23
as is specifically designated shall furnish the above
24
information within 30 days after receiving a written request
25
for such information.
26

A reasonable fee covering the direct out-of-pocket cost of

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
copying and providing such information may be charged by the
2
association or the board to the unit seller for providing the
3
information.
4
(Source: P.A. 97-605, eff. 8-26-11; 97-1090, eff. 8-24-12;
5
98-842, eff. 1-1-15
.)

6

Section 10.
The Condominium Property Act is amended by
7
changing Sections 18.5 and 22.1 and by adding Section 18.13 as
8
follows:

9

(765 ILCS 605/18.5)

(from Ch. 30, par. 318.5)
10

Sec. 18.5.
Master Associations.
11

(a) If the declaration, other condominium instrument, or
12
other duly recorded covenants provide that any of the powers
13
of the unit owners associations are to be exercised by or may
14
be delegated to a nonprofit corporation or unincorporated
15
association that exercises those or other powers on behalf of
16
one or more condominiums, or for the benefit of the unit owners
17
of one or more condominiums, such corporation or association
18
shall be a master association.
19

(b) There shall be included in the declaration, other
20
condominium instruments, or other duly recorded covenants
21
establishing the powers and duties of the master association
22
the provisions set forth in subsections (c) through (h).
23

In interpreting subsections (c) through (h), the courts
24
should interpret these provisions so that they are interpreted

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
consistently with the similar parallel provisions found in
2
other parts of this Act.
3

(c) Meetings and finances.
4

(1) Each unit owner of a condominium subject to the
5

authority of the board of the master association shall
6

receive, at least 30 days prior to the adoption thereof by
7

the board of the master association, a copy of the
8

proposed annual budget.
9

(2) The board of the master association shall annually
10

supply to all unit owners of condominiums subject to the
11

authority of the board of the master association an
12

itemized accounting of the common expenses for the
13

preceding year actually incurred or paid, together with a
14

tabulation of the amounts collected pursuant to the budget
15

or assessment, and showing the net excess or deficit of
16

income over expenditures plus reserves.
17

(3) Each unit owner of a condominium subject to the
18

authority of the board of the master association shall
19

receive written notice mailed or delivered no less than 10
20

and no more than 30 days prior to any meeting of the board
21

of the master association concerning the adoption of the
22

proposed annual budget or any increase in the budget, or
23

establishment of an assessment.
24

(4) Meetings of the board of the master association
25

shall be open to any unit owner in a condominium subject to
26

the authority of the board of the master association,

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

except for the portion of any meeting held:
2

(A) to discuss litigation when an action against
3

or on behalf of the particular master association has
4

been filed and is pending in a court or administrative
5

tribunal, or when the board of the master association
6

finds that such an action is probable or imminent,
7

(B) to consider information regarding appointment,
8

employment or dismissal of an employee, or
9

(C) to discuss violations of rules and regulations
10

of the master association or unpaid common expenses
11

owed to the master association.
12

Any vote on these matters shall be taken at a meeting or
13

portion thereof open to any unit owner of a condominium
14

subject to the authority of the master association.
15

Any unit owner may record the proceedings at meetings
16

required to be open by this Act by tape, film or other
17

means; the board may prescribe reasonable rules and
18

regulations to govern the right to make such recordings.
19

Notice of meetings shall be mailed or delivered at least
20

48 hours prior thereto, unless a written waiver of such
21

notice is signed by the persons entitled to notice before
22

the meeting is convened. Copies of notices of meetings of
23

the board of the master association shall be posted in
24

entranceways, elevators, or other conspicuous places in
25

the condominium at least 48 hours prior to the meeting of
26

the board of the master association. Where there is no

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

common entranceway for 7 or more units, the board of the
2

master association may designate one or more locations in
3

the proximity of these units where the notices of meetings
4

shall be posted.
5

(5) If the declaration provides for election by unit
6

owners of members of the board of directors in the event of
7

a resale of a unit in the master association, the
8

purchaser of a unit from a seller other than the developer
9

pursuant to an installment sales contract for purchase
10

shall, during such times as he or she resides in the unit,
11

be counted toward a quorum for purposes of election of
12

members of the board of directors at any meeting of the
13

unit owners called for purposes of electing members of the
14

board, and shall have the right to vote for the election of
15

members of the board of directors and to be elected to and
16

serve on the board of directors unless the seller
17

expressly retains in writing any or all of those rights.
18

In no event may the seller and purchaser both be counted
19

toward a quorum, be permitted to vote for a particular
20

office, or be elected and serve on the board. Satisfactory
21

evidence of the installment sales contract shall be made
22

available to the association or its agents. For purposes
23

of this subsection, "installment sales contract" shall
24

have the same meaning as set forth in Section 5 of the
25

Installment Sales Contract Act and subsection (e) of
26

Section 1 of the Dwelling Unit Installment Contract Act.

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(6) The board of the master association shall have the
2

authority to establish and maintain a system of master
3

metering of public utility services and to collect
4

payments in connection therewith, subject to the
5

requirements of the Tenant Utility Payment Disclosure Act.
6

(7) The board of the master association or a common
7

interest community association shall have the power, after
8

notice and an opportunity to be heard, to levy and collect
9

reasonable fines from members for violations of the
10

declaration, bylaws, and rules and regulations of the
11

master association or the common interest community
12

association. Nothing contained in this subdivision (7)
13

shall give rise to a statutory lien for unpaid fines.
14

(8) Other than attorney's fees, no fees pertaining to
15

the collection of a unit owner's financial obligation to
16

the Association, including fees charged by a manager or
17

managing agent, shall be added to and deemed a part of an
18

owner's respective share of the common expenses unless:
19

(i) the managing agent fees relate to the costs to collect
20

common expenses for the Association; (ii) the fees are set
21

forth in a contract between the managing agent and the
22

Association; and (iii) the authority to add the management
23

fees to an owner's respective share of the common expenses
24

is specifically stated in the declaration or bylaws of the
25

Association.
26

(d) Records.

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(1) The board of the master association shall maintain
2

the following records of the association and make them
3

available for examination and copying at convenient hours
4

of weekdays by any unit owners in a condominium subject to
5

the authority of the board or their mortgagees and their
6

duly authorized agents or attorneys:
7

(i) Copies of the recorded declaration, other
8

condominium instruments, other duly recorded covenants
9

and bylaws and any amendments, articles of
10

incorporation of the master association, annual
11

reports and any rules and regulations adopted by the
12

master association or its board shall be available.
13

Prior to the organization of the master association,
14

the developer shall maintain and make available the
15

records set forth in this subdivision (d)(1) for
16

examination and copying.
17

(ii) Detailed and accurate records in
18

chronological order of the receipts and expenditures
19

affecting the common areas, specifying and itemizing
20

the maintenance and repair expenses of the common
21

areas and any other expenses incurred, and copies of
22

all contracts, leases, or other agreements entered
23

into by the master association, shall be maintained.
24

(iii) The minutes of all meetings of the master
25

association and the board of the master association
26

shall be maintained for not less than 7 years.

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(iv) Ballots and proxies related thereto, if any,
2

for any election held for the board of the master
3

association and for any other matters voted on by the
4

unit owners shall be maintained for not less than one
5

year.
6

(v) Such other records of the master association
7

as are available for inspection by members of a
8

not-for-profit corporation pursuant to Section 107.75
9

of the General Not For Profit Corporation Act of 1986
10

shall be maintained.
11

(vi) With respect to units owned by a land trust,
12

if a trustee designates in writing a person to cast
13

votes on behalf of the unit owner, the designation
14

shall remain in effect until a subsequent document is
15

filed with the association.
16

(2) Where a request for records under this subsection
17

is made in writing to the board of managers or its agent,
18

failure to provide the requested record or to respond
19

within 30 days shall be deemed a denial by the board of
20

directors.
21

(3) A reasonable fee may be charged by the master
22

association or its board for the cost of copying.
23

(4) If the board of directors fails to provide records
24

properly requested under subdivision (d)(1) within the
25

time period provided in subdivision (d)(2), the unit owner
26

may seek appropriate relief, including an award of

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

attorney's fees and costs.
2

(e) The board of directors shall have standing and
3
capacity to act in a representative capacity in relation to
4
matters involving the common areas of the master association
5
or more than one unit, on behalf of the unit owners as their
6
interests may appear.
7

(f) Administration of property prior to election of the
8
initial board of directors.
9

(1) Until the election, by the unit owners or the
10

boards of managers of the underlying condominium
11

associations, of the initial board of directors of a
12

master association whose declaration is recorded on or
13

after August 10, 1990, the same rights, titles, powers,
14

privileges, trusts, duties and obligations that are vested
15

in or imposed upon the board of directors by this Act or in
16

the declaration or other duly recorded covenant shall be
17

held and performed by the developer.
18

(2) The election of the initial board of directors of
19

a master association whose declaration is recorded on or
20

after August 10, 1990, by the unit owners or the boards of
21

managers of the underlying condominium associations, shall
22

be held not later than 60 days after the conveyance by the
23

developer of 75% of the units, or 3 years after the
24

recording of the declaration, whichever is earlier. The
25

developer shall give at least 21 days notice of the
26

meeting to elect the initial board of directors and shall

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

upon request provide to any unit owner, within 3 working
2

days of the request, the names, addresses, and weighted
3

vote of each unit owner entitled to vote at the meeting.
4

Any unit owner shall upon receipt of the request be
5

provided with the same information, within 10 days of the
6

request, with respect to each subsequent meeting to elect
7

members of the board of directors.
8

(3) If the initial board of directors of a master
9

association whose declaration is recorded on or after
10

August 10, 1990 is not elected by the unit owners or the
11

members of the underlying condominium association board of
12

managers at the time established in subdivision (f)(2),
13

the developer shall continue in office for a period of 30
14

days, whereupon written notice of his resignation shall be
15

sent to all of the unit owners or members of the underlying
16

condominium board of managers entitled to vote at an
17

election for members of the board of directors.
18

(4) Within 60 days following the election of a
19

majority of the board of directors, other than the
20

developer, by unit owners, the developer shall deliver to
21

the board of directors:
22

(i) All original documents as recorded or filed
23

pertaining to the property, its administration, and
24

the association, such as the declaration, articles of
25

incorporation, other instruments, annual reports,
26

minutes, rules and regulations, and contracts, leases,

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

or other agreements entered into by the association.
2

If any original documents are unavailable, a copy may
3

be provided if certified by affidavit of the
4

developer, or an officer or agent of the developer, as
5

being a complete copy of the actual document recorded
6

or filed.
7

(ii) A detailed accounting by the developer,
8

setting forth the source and nature of receipts and
9

expenditures in connection with the management,
10

maintenance and operation of the property, copies of
11

all insurance policies, and a list of any loans or
12

advances to the association which are outstanding.
13

(iii) Association funds, which shall have been at
14

all times segregated from any other moneys of the
15

developer.
16

(iv) A schedule of all real or personal property,
17

equipment and fixtures belonging to the association,
18

including documents transferring the property,
19

warranties, if any, for all real and personal property
20

and equipment, deeds, title insurance policies, and
21

all tax bills.
22

(v) A list of all litigation, administrative
23

action and arbitrations involving the association, any
24

notices of governmental bodies involving actions taken
25

or which may be taken concerning the association,
26

engineering and architectural drawings and

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

specifications as approved by any governmental
2

authority, all other documents filed with any other
3

governmental authority, all governmental certificates,
4

correspondence involving enforcement of any
5

association requirements, copies of any documents
6

relating to disputes involving unit owners, and
7

originals of all documents relating to everything
8

listed in this subparagraph.
9

(vi) If the developer fails to fully comply with
10

this paragraph (4) within the 60 days provided and
11

fails to fully comply within 10 days of written demand
12

mailed by registered or certified mail to his or her
13

last known address, the board may bring an action to
14

compel compliance with this paragraph (4). If the
15

court finds that any of the required deliveries were
16

not made within the required period, the board shall
17

be entitled to recover its reasonable attorneys' fees
18

and costs incurred from and after the date of
19

expiration of the 10 day demand.
20

(5) With respect to any master association whose
21

declaration is recorded on or after August 10, 1990, any
22

contract, lease, or other agreement made prior to the
23

election of a majority of the board of directors other
24

than the developer by or on behalf of unit owners or
25

underlying condominium associations, the association or
26

the board of directors, which extends for a period of more

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

than 2 years from the recording of the declaration, shall
2

be subject to cancellation by more than 1/2 of the votes of
3

the unit owners, other than the developer, cast at a
4

special meeting of members called for that purpose during
5

a period of 90 days prior to the expiration of the 2 year
6

period if the board of managers is elected by the unit
7

owners, otherwise by more than 1/2 of the underlying
8

condominium board of managers. At least 60 days prior to
9

the expiration of the 2 year period, the board of
10

directors, or, if the board is still under developer
11

control, then the board of managers or the developer shall
12

send notice to every unit owner or underlying condominium
13

board of managers, notifying them of this provision, of
14

what contracts, leases and other agreements are affected,
15

and of the procedure for calling a meeting of the unit
16

owners or for action by the underlying condominium board
17

of managers for the purpose of acting to terminate such
18

contracts, leases or other agreements. During the 90 day
19

period the other party to the contract, lease, or other
20

agreement shall also have the right of cancellation.
21

(6) The statute of limitations for any actions in law
22

or equity which the master association may bring shall not
23

begin to run until the unit owners or underlying
24

condominium board of managers have elected a majority of
25

the members of the board of directors.
26

(g) In the event of any resale of a unit in a master

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
association by a unit owner other than the developer, the
2
owner shall obtain from the board of directors and shall make
3
available for inspection to the prospective purchaser, upon
4
demand, the following:
5

(1) A copy of the declaration, other instruments and
6

any rules and regulations.
7

(2) A statement of any liens, including a statement of
8

the account of the unit setting forth the amounts of
9

unpaid assessments and other charges due and owing.
10

(3) A statement of any capital expenditures
11

anticipated by the association within the current or
12

succeeding 2 fiscal years.
13

(4) A statement of the status and amount of any
14

reserve for replacement fund and any portion of such fund
15

earmarked for any specified project by the board of
16

directors.
17

(5) A copy of the statement of financial condition of
18

the association for the last fiscal year for which such a
19

statement is available.
20

(6) A statement of the status of any pending suits or
21

judgments in which the association is a party.
22

(7) A statement setting forth what insurance coverage
23

is provided for all unit owners by the association.
24

(8) A statement that any improvements or alterations
25

made to the unit, or any part of the common areas assigned
26

thereto, by the prior unit owner are in good faith

SB3401 Engrossed
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1

believed to be in compliance with the declaration of the
2

master association.
3

(9) A copy of the most recent reserve study, if any.

4

The principal officer of the unit owner's association or
5
such other officer as is specifically designated shall furnish
6
the above information when requested to do so in writing,
7
within 30 days of receiving the request.
8

A reasonable fee covering the direct out-of-pocket cost of
9
copying and providing such information may be charged by the
10
association or its board of directors to the unit seller for
11
providing the information.
12

(g-1) The purchaser of a unit of a common interest
13
community at a judicial foreclosure sale, other than a
14
mortgagee, who takes possession of a unit of a common interest
15
community pursuant to a court order or a purchaser who
16
acquires title from a mortgagee shall have the duty to pay the
17
proportionate share, if any, of the common expenses for the
18
unit that would have become due in the absence of any
19
assessment acceleration during the 6 months immediately
20
preceding institution of an action to enforce the collection
21
of assessments and the court costs incurred by the association
22
in an action to enforce the collection that remain unpaid by
23
the owner during whose possession the assessments accrued. If
24
the outstanding assessments and the court costs incurred by
25
the association in an action to enforce the collection are
26
paid at any time during any action to enforce the collection of

SB3401 Engrossed
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1
assessments, the purchaser shall have no obligation to pay any
2
assessments that accrued before he or she acquired title. The
3
notice of sale of a unit of a common interest community under
4
subsection (c) of Section 15-1507 of the Code of Civil
5
Procedure shall state that the purchaser of the unit other
6
than a mortgagee shall pay the assessments and court costs
7
required by this subsection (g-1).
8

(h) Errors and omissions.
9

(1) If there is an omission or error in the
10

declaration or other instrument of the master association,
11

the master association may correct the error or omission
12

by an amendment to the declaration or other instrument, as
13

may be required to conform it to this Act, to any other
14

applicable statute, or to the declaration. The amendment
15

shall be adopted by vote of two-thirds of the members of
16

the board of directors or by a majority vote of the unit
17

owners at a meeting called for that purpose, unless the
18

Act or the declaration of the master association
19

specifically provides for greater percentages or different
20

procedures.
21

(2) If, through a scrivener's error, a unit has not
22

been designated as owning an appropriate undivided share
23

of the common areas or does not bear an appropriate share
24

of the common expenses, or if all of the common expenses or
25

all of the common elements in the condominium have not
26

been distributed in the declaration, so that the sum total

SB3401 Engrossed
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1

of the shares of common areas which have been distributed
2

or the sum total of the shares of the common expenses fail
3

to equal 100%, or if it appears that more than 100% of the
4

common elements or common expenses have been distributed,
5

the error may be corrected by operation of law by filing an
6

amendment to the declaration, approved by vote of
7

two-thirds of the members of the board of directors or a
8

majority vote of the unit owners at a meeting called for
9

that purpose, which proportionately adjusts all percentage
10

interests so that the total is equal to 100%, unless the
11

declaration specifically provides for a different
12

procedure or different percentage vote by the owners of
13

the units and the owners of mortgages thereon affected by
14

modification being made in the undivided interest in the
15

common areas, the number of votes in the unit owners
16

association or the liability for common expenses
17

appertaining to the unit.
18

(3) If an omission or error or a scrivener's error in
19

the declaration or other instrument is corrected by vote
20

of two-thirds of the members of the board of directors
21

pursuant to the authority established in subdivisions
22

(h)(1) or (h)(2) of this Section, the board, upon written
23

petition by unit owners with 20% of the votes of the
24

association or resolutions adopted by the board of
25

managers or board of directors of the condominium and
26

common interest community associations which select 20% of

SB3401 Engrossed
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1

the members of the board of directors of the master
2

association, whichever is applicable, received within 30
3

days of the board action, shall call a meeting of the unit
4

owners or the boards of the condominium and common
5

interest community associations which select members of
6

the board of directors of the master association within 30
7

days of the filing of the petition or receipt of the
8

condominium and common interest community association
9

resolution to consider the board action. Unless a majority
10

of the votes of the unit owners of the association are cast
11

at the meeting to reject the action, or board of managers
12

or board of directors of condominium and common interest
13

community associations which select over 50% of the
14

members of the board of the master association adopt
15

resolutions prior to the meeting rejecting the action of
16

the board of directors of the master association, it is
17

ratified whether or not a quorum is present.
18

(4) The procedures for amendments set forth in this
19

subsection (h) cannot be used if such an amendment would
20

materially or adversely affect property rights of the unit
21

owners unless the affected unit owners consent in writing.
22

This Section does not restrict the powers of the
23

association to otherwise amend the declaration, bylaws, or
24

other condominium instruments, but authorizes a simple
25

process of amendment requiring a lesser vote for the
26

purpose of correcting defects, errors, or omissions when

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

the property rights of the unit owners are not materially
2

or adversely affected.
3

(5) If there is an omission or error in the
4

declaration or other instruments that may not be corrected
5

by an amendment procedure set forth in subdivision (h)(1)
6

or (h)(2) of this Section, then the circuit court in the
7

county in which the master association is located shall
8

have jurisdiction to hear a petition of one or more of the
9

unit owners thereon or of the association, to correct the
10

error or omission, and the action may be a class action.
11

The court may require that one or more methods of
12

correcting the error or omission be submitted to the unit
13

owners to determine the most acceptable correction. All
14

unit owners in the association must be joined as parties
15

to the action. Service of process on owners may be by
16

publication, but the plaintiff shall furnish all unit
17

owners not personally served with process with copies of
18

the petition and final judgment of the court by certified
19

mail, return receipt requested, at their last known
20

address.
21

(6) Nothing contained in this Section shall be
22

construed to invalidate any provision of a declaration
23

authorizing the developer to amend an instrument prior to
24

the latest date on which the initial membership meeting of
25

the unit owners must be held, whether or not it has
26

actually been held, to bring the instrument into

SB3401 Engrossed
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1

compliance with the legal requirements of the Federal
2

National Mortgage Association, the Federal Home Loan
3

Mortgage Corporation, the Federal Housing Administration,
4

the United States Veterans Administration or their
5

respective successors and assigns.
6

(i) The provisions of subsections (c) through (h) are
7
applicable to all declarations, other condominium instruments,
8
and other duly recorded covenants establishing the powers and
9
duties of the master association recorded under this Act. Any
10
portion of a declaration, other condominium instrument, or
11
other duly recorded covenant establishing the powers and
12
duties of a master association which contains provisions
13
contrary to the provisions of subsection (c) through (h) shall
14
be void as against public policy and ineffective. Any
15
declaration, other condominium instrument, or other duly
16
recorded covenant establishing the powers and duties of the
17
master association which fails to contain the provisions
18
required by subsections (c) through (h) shall be deemed to
19
incorporate such provisions by operation of law.
20

(j) (Blank).
21

(k) Reserve study.
22

(1) As used in this Section:

23

"Major shared components or significant
24

infrastructure" means structural, mechanical, electrical,
25

and plumbing components of the common areas and any other
26

components that are the responsibility of the association

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

to maintain, restore, repair, and replace, or
2

infrastructure including, but not limited to, roads,
3

street lighting, hardscape, landscape, ponds and lakes,
4

water features, pools, and accessory buildings, if
5

applicable, with a restoration or replacement cost
6

exceeding $10,000, which are capital expenses as
7

identified in the federal tax code and generally accepted
8

accounting principles.
9

"Reserve study" means an analysis of the reserves
10

required for future major maintenance, repairs and
11

replacements of the common elements that:
12

(2) Any association with major shared components or
13

significant infrastructure shall cause a reserve study to
14

be conducted and updated in accordance with this Section.
15

(3) Any association with major shared components or
16

significant infrastructure that has had a reserve study
17

conducted on or after January 1, 2024, shall have an
18

updated reserve study conducted within 5 years after the
19

date the reserve study was conducted, and at least every 5
20

years thereafter, for purposes of assessing the condition
21

of and planning for maintenance, repair, and replacement
22

of the common areas.
23

(4) Any association with major shared components or
24

significant infrastructure that has not had a reserve
25

study conducted on or after January 1, 2024, shall require
26

that a reserve study be conducted on or before January 1,

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

2028, and shall update the study every 5 years for
2

purposes of assessing the condition of and planning for
3

maintenance, repair and replacement of the common areas.
4

(5) The reserve study and any update thereof shall be
5

conducted by a qualified person, association,
6

organization, or business entity who is knowledgeable
7

about the major shared components or significant
8

infrastructure that will be the subject of the reserve
9

study. A qualified person, association, organization, or
10

business entity is one who has experience and knowledge
11

about the normal useful life, function, performance,
12

condition, maintenance, repair, and replacement, and
13

related expenses, of any one or more of the major shared
14

components or significant infrastructure that will be the
15

subject of the reserve study. The reserve study is not
16

required to be conducted by a single person, association,
17

organization, or business entity. An association may
18

internally prepare a reserve study provided that such a
19

reserve study compiles information from a qualified
20

person, association, organization, or business entity.
21

(6) In the event of resale of any unit in the common
22

interest community, a copy of the most recent reserve
23

study, if any, shall be made available to any prospective
24

purchaser, upon request.
25

(7) Any association with 15 or fewer units is exempt
26

from the requirements of this subsection (j); however, the

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

board still must comply with budgeting and reserve
2

requirements as provided elsewhere in the Act or in the
3

community instruments.
4
(Source: P.A. 100-416, eff. 1-1-18
.)

5

(765 ILCS 605/18.13 new)
6

Sec. 18.13.
Reserve study.
7

(a) As used in this Section:
8

"Major shared components or significant infrastructure"
9
means structural, mechanical, electrical, and plumbing
10
components of the common elements and any other components
11
that are the responsibility of the association to maintain,
12
restore, repair, and replace, or infrastructure, including,
13
but not limited to, roads, street lighting, hardscape,
14
landscape, ponds and lakes, water features, pools, and
15
accessory buildings, if applicable, with a restoration or
16
replacement cost exceeding $10,000, which are capital expenses
17
as identified in the federal tax code and generally accepted
18
accounting principles.
19

"Reserve study" means an analysis of the reserves required
20
for future major maintenance, repairs, and replacements of the
21
common elements that:
22

(1) identifies each structural, mechanical,
23

electrical, and plumbing component of the common elements
24

and any other components that are the responsibility of
25

the association to maintain, repair, and replace;

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(2) states the normal useful life and the estimated
2

remaining useful life of each identified component;
3

(3) states the estimated cost of maintenance, repair,
4

or replacement of each identified component; and
5

(4) states the estimated annual reserve amount
6

necessary to accomplish any identified future maintenance,
7

repair, or replacement.
8

(b) Any association with major shared components or
9
significant infrastructure shall cause a reserve study to be
10
conducted and updated in accordance with this Section.
11

(c) Any association with major shared components or
12
significant infrastructure that has had a reserve study
13
conducted on or after January 1, 2024, shall have an updated
14
reserve study conducted within 5 years after the date the
15
reserve study was conducted, and at least every 5 years
16
thereafter, for purposes of assessing the condition of and
17
planning for maintenance, repair, and replacement of the
18
common elements.
19

(d) Any association with major shared components or
20
significant infrastructure that has not had a reserve study
21
conducted on or after January 1, 2024, shall require that a
22
reserve study be conducted on or before January 1, 2028, and
23
shall update the study every 5 years for purposes of assessing
24
the condition of and planning for maintenance, repair, and
25
replacement of the common elements.
26

(e) The reserve study and any update to the reserve study

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
shall be conducted by a qualified person, association,
2
organization, or business entity that is knowledgeable about
3
the major shared components or significant infrastructure that
4
will be the subject of the reserve study. A qualified person,
5
association, organization, or business entity is one that has
6
experience and knowledge about the normal useful life,
7
function, performance, condition, maintenance, repair, and
8
replacement of any one or more of the major shared components
9
or significant infrastructure that will be the subject of the
10
reserve study, as well as the related expenses. The reserve
11
study is not required to be conducted by a single person,
12
association, organization, or business entity. An association
13
may internally prepare a reserve study provided that such a
14
reserve study compiles information from a qualified person,
15
association, organization, or business entity.
16

(f) In the event of resale of any unit in the association,
17
a copy of the most recent reserve study, if any, shall be made
18
available to any prospective purchaser, upon request.
19

(g) Any association with 15 or fewer units is exempt from
20
the requirements of this Section; however, the board must
21
still comply with budgeting and reserve requirements as
22
provided elsewhere in the Act or in the community instruments.

23

(765 ILCS 605/22.1)

(from Ch. 30, par. 322.1)
24

Sec. 22.1.
(a) In the event of any resale of a condominium
25
unit by a unit owner other than the developer such owner shall

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
obtain from the Board of Managers and shall make available for
2
inspection to the prospective purchaser, upon demand, the
3
following:
4

(1) A copy of the Declaration, by-laws, other
5

condominium instruments, and any rules and regulations.
6

(2) A statement of any liens, including a statement of
7

the account of the unit setting forth the amounts of
8

unpaid assessments and other charges due and owing as
9

authorized and limited by the provisions of Section 9 of
10

this Act or the condominium instruments.
11

(3) A statement of any capital expenditures
12

anticipated by the unit owner's association within the
13

current or succeeding 2 fiscal years.
14

(4) A statement of the status and amount of any
15

reserve for replacement fund and any portion of such fund
16

earmarked for any specified project by the Board of
17

Managers.
18

(5) A copy of the statement of financial condition of
19

the unit owner's association for the last fiscal year for
20

which such statement is available.
21

(6) A statement of the status of any pending suits or
22

judgments in which the unit owner's association is a
23

party.
24

(7) A statement setting forth what insurance coverage
25

is provided for all unit owners by the unit owner's
26

association.

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1

(8) A statement that any improvements or alterations
2

made to the unit, or the limited common elements assigned
3

thereto, by the prior unit owner are in good faith
4

believed to be in compliance with the condominium
5

instruments.

6

(9) The identity and mailing address of the principal
7

officer of the unit owner's association or of the other
8

officer or agent as is specifically designated to receive
9

notices.
10

(10) A copy of the most recent reserve study, if any.

11

(b) The principal officer of the unit owner's association
12
or such other officer as is specifically designated shall
13
furnish the above information when requested to do so in
14
writing and within 10 business days of the request.
15

(c) Within 15 days of the recording of a mortgage or trust
16
deed against a unit ownership given by the owner of that unit
17
to secure a debt, the owner shall inform the Board of Managers
18
of the unit owner's association of the identity of the lender
19
together with a mailing address at which the lender can
20
receive notices from the association. If a unit owner fails or
21
refuses to inform the Board as required under subsection (c)
22
then that unit owner shall be liable to the association for all
23
costs, expenses, and reasonable attorney's fees and such other
24
damages, if any, incurred by the association as a result of
25
such failure or refusal.
26

A reasonable fee, not to exceed $375, covering the direct

SB3401 Engrossed
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LRB104 18964 JRC 32409 b
1
out-of-pocket cost of providing such information and copying
2
may be charged by the association or its Board of Managers to
3
the unit seller for providing such information. Beginning one
4
year after the effective date of this amendatory Act of the
5
102nd General Assembly, the $375 fee shall be increased or
6
decreased, as applicable, by a percentage equal to the
7
percentage change in the consumer price index-u during the
8
preceding 12-month calendar year. "Consumer price index-u"
9
means the index published by the Bureau of Labor Statistics of
10
the United States Department of Labor that measures the
11
average change in prices of goods and services purchased by
12
all urban consumers, United States city average, all items,
13
1982-84 = 100. An association may charge an additional $100
14
for rush service completed within 72 hours.
15
(Source: P.A. 102-976, eff. 1-1-23
.)

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