ILLINOIS CONDOMINIUM PROPERTY ACT - updated through August 8, 2003

A Summary of

Illinois Association Law

ILLINOIS CONDOMINIUM PROPERTY ACT

COMMON INTEREST

COMMUNITY ASSOCIATION ACT

CONDOMINIUM AND COMMON INTEREST

COMMUNITY OMBUDSPERSON ACT

ILLINOIS GENERAL NOT FOR PROFIT

CORPORATION ACT OF 1986

Serving condominium, homeowner and townhome associations

in Illinois, Wisconsin, Missouri, Florida, and Arizona

1.855.537.0500

www.ksnlaw.com

2019 Edition

Kovitz Shifrin Nesbit is "The Condo Law Firm". Since 1983,

we have focused our practice on association law

(condominium, homeowner, townhome), landlord/tenant law,

and the cooperative form of ownership. Additionally, we

represent clients in business matters including real estate

transactions and property tax appeals. We have four

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thousands of communities throughout Illinois and Wisconsin.

Our attorneys are also licensed in Arizona, Florida, Missouri,

and Wisconsin.

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INTRODUCTION

There are a variety of laws pertinent to community association

governance, including numerous appellate court decisions which

impact associations.

The primary community association laws are the Illinois

Condominium Property Act and the Common Interest Community

Association Act.

We have also included for your convenience and reference the

Community Association Manager Licensing and Disciplinary Act

and relevant portions of the Illinois General Not For Profit

Corporation Act and the Forcible Entry and Detainer Act.

Of course, this is not a substitute for legal advice since many of the

laws on the books are subject to interpretation and, in some

instances, differences of opinion. Further, all laws must be reviewed

in conjunction with each individual association’s Declaration, By-

Laws, and other covenants. Please contact us if you have any

questions.

We hope that you find this summary useful.

TABLE OF CONTENTS

Illinois Condominium Property Act ...................................... Page 1

Last update – January 1, 2019

Common Interest Community Association Act ..................... Page 64

Last update – January 1, 2019

Condominium and Common Interest Community

Ombudsperson Act ............................................... Page 82

Effective – January 1, 2019

Selected Sections from Illinois General Not-For-Profit

Corporation Act ..................................................... Page 90

Last update – January 1, 2019

Illinois Condominium Property Act - 1

ILLINOIS CONDOMINIUM PROPERTY ACT

(765 ILCS 605/1, et seq.)

Illinois Condominium Property Act - 2

ILLINOIS CONDOMINIUM PROPERTY ACT

INTRODUCTION

Originally drafted in 1963, and extensively and frequently revised since, the Illinois

Condominium Property Act is the primary document governing condominium

associations. Portions of this Act may even take precedence over the Declaration of

an association. Note that this statute only applies to those associations submitted to

the Act. You can tell if an association has been submitted to the Act by looking at

the title of the Declaration for the association. If it has the words "Declaration of

Condominium" in the title, you have come to the right place. If it says "Declaration

of Covenants", or anything else other than "Condominium", see Section II for the

Common Interest Community Association Act.

Master Associations are subject to Section 18.5 of the Illinois Condominium

Property Act.

FULL TEXT (as of January 1, 2019):

Title: An Act concerning the ownership in and rights and responsibilities of

parties under the condominium form of ownership of property.

Section 1. Short title.

This Act shall be known and may be cited as the "Condominium Property

Act."

Section 2. Definitions. As used in this Act, unless the context otherwise requires:

(a) "Declaration" means the instrument by which the property is

submitted to the provisions of this Act, as hereinafter provided, and such declaration

as from time to time amended.

(b) "Parcel" means the lot or lots, tract or tracts of land, described in the

declaration, submitted to the provisions of this Act.

parcel, all improvements and structures erected, constructed or contained therein or

thereon, including the building and all easements, rights and appurtenances

belonging thereto, and all fixtures and equipment intended for the mutual use,

benefit or enjoyment of the unit owners, submitted to the provisions of this Act.

(d) "Unit" means a part of the property designed and intended for any

type of independent use.

(e) "Common Elements" means all portions of the property except the

units, including limited common elements unless otherwise specified.

(f) "Person" means a natural individual, corporation, partnership, trustee

or other legal entity capable of holding title to real property.

(g) "Unit Owner" means the person or persons whose estates or interests,

individually or collectively, aggregate fee simple absolute ownership of a unit, or, in

Illinois Condominium Property Act - 3

the case of a leasehold condominium, the lessee or lessees of a unit whose leasehold

ownership of the unit expires simultaneously with the lease described in item (x) of

this Section.

(h) "Majority" or "majority of the unit owners" means the owners of

more than 50% in the aggregate in interest of the undivided ownership of the

common elements. Any specified percentage of the unit owners means such

percentage in the aggregate in interest of such undivided ownership. "Majority" or

"majority of the members of the board of managers" means more than 50% of the

total number of persons constituting such board pursuant to the bylaws. Any

specified percentage of the members of the board of managers means that

percentage of the total number of persons constituting such board pursuant to the

bylaws.

(i) "Plat" means a plat or plats of survey of the parcel and of all units in

the property submitted to the provisions of this Act, which may consist of a three-

dimensional horizontal and vertical delineation of all such units.

(j) "Record" means to record in the office of the recorder or, whenever

required, to file in the office of the Registrar of Titles of the county wherein the

property is located.

(k) "Conversion Condominium" means a property which contains

structures, excepting those newly constructed and intended for condominium

ownership, which are, or have previously been, wholly or partially occupied before

recording of condominium instruments by persons other than those who have

contracted for the purchase of condominiums.

(l) "Condominium Instruments" means all documents and authorized

amendments thereto recorded pursuant to the provisions of the Act, including the

declaration, bylaws and plat.

(m) "Common Expenses" means the proposed or actual expenses

affecting the property, including reserves, if any, lawfully assessed by the Board of

Managers of the Unit Owner's Association.

(n) "Reserves" means those sums paid by unit owners which are

separately maintained by the board of managers for purposes specified by the board

of managers or the condominium instruments.

(o) "Unit Owners' Association" or "Association" means the association

of all the unit owners, acting pursuant to bylaws through its duly elected board of

managers.

(p) "Purchaser" means any person or persons other than the Developer

who purchase a unit in a bona fide transaction for value.

(q) "Developer" means any person who submits property legally or

equitably owned in fee simple by the developer, or leased to the developer under a

lease described in item (x) of this Section, to the provisions of this Act, or any

person who offers units legally or equitably owned in fee simple by the developer,

or leased to the developer under a lease described in item (x) of this Section, for sale

in the ordinary course of such person's business, including any successor or

successors to such developers' entire interest in the property other than the purchaser

of an individual unit.

Illinois Condominium Property Act - 4

(r) "Add-on Condominium" means a property to which additional

property may be added in accordance with condominium instruments and this Act.

(s) "Limited Common Elements" means a portion of the common

elements so designated in the declaration as being reserved for the use of a certain

unit or units to the exclusion of other units, including but not limited to balconies,

terraces, patios and parking spaces or facilities.

(t) "Building" means all structures, attached or unattached, containing

one or more units.

(u) "Master Association" means an organization described in Section

18.5 whether or not it is also an association described in Section 18.3.

(v) "Developer Control" means such control at a time prior to the

election of the Board of Managers provided for in Section 18.2(b) of this Act.

(w) "Meeting of Board of Managers or Board of Master Association"

means any gathering of a quorum of the members of the Board of Managers or

Board of the Master Association held for the purpose of conducting board business.

(x) "Leasehold Condominium" means a property submitted to the

provisions of this Act which is subject to a lease, the expiration or termination of

which would terminate the condominium and the lessor of which is (i) exempt from

taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,

(ii) a limited liability company whose sole member is exempt from taxation under

Section 501 (c)(3) of the Internal Revenue Code of 1986, as amended, or (iii) a

Public Housing Authority created pursuant to the Housing Authorities Act that is

located in a municipality having a population in excess of 1,000,000 inhabitants.

(y) "Electronic transmission" means any form of communication, not

directly involving the physical transmission of paper, that creates a record that may

be retained, retrieved, and reviewed by a recipient and that may be directly

reproduced in paper form by the recipient through an automated process.

(z) "Acceptable technological means" includes, without limitation,

electronic transmission over the Internet or other network, whether by direct

connection, intranet, telecopier, electronic mail, and any generally available

technology that, by rule of the association, is deemed to provide reasonable security,

reliability, identification, and verifiability.

Section 2.1. Applicability. Unless otherwise expressly provided in another Section,

the provisions of this Act are applicable to all condominiums in this State. Any

provisions of a condominium instrument that contains provisions inconsistent with

the provisions of this Act are void as against public policy and ineffective.

Section 3. Submission of property. Whenever the owner or owners in fee simple,

or the sole lessee or all lessees of a lease described in item (x) of Section 2, of a

parcel intend to submit such property to the provisions of this Act, they shall do so

by recording a declaration, duly executed and acknowledged, expressly stating such

intent and setting forth the particulars enumerated in Section 4. If the condominium

is a leasehold condominium, then every lessor of the lease creating a leasehold

Illinois Condominium Property Act - 5

interest as described in item (x) of Section 2 shall also execute the declaration and

such lease shall be recorded prior to the recording of the declaration.

The execution of a declaration required under this Section by the lessor

under a lease as described in item (x) of Section 2 does not make the lessor a

developer for purposes of this Act.

Section 4. Declaration - Contents. The declaration shall set forth the following

particulars:

(a) The legal description of the parcel.

(b) The legal description of each unit, which may consist of the

identifying number or symbol of such unit as shown on the plat.

"Condominium" or be followed by the words "a Condominium".

(d) The name of the city and county or counties in which the

condominium is located.

(e) The percentage of ownership interest in the common elements

allocated to each unit. Such percentages shall be computed by taking as a basis the

value of each unit in relation to the value of the property as a whole, and having

once been determined and set forth as herein provided, such percentages shall

remain constant unless otherwise provided in this Act or thereafter changed by

agreement of all unit owners.

(f) If applicable, all matters required by this Act in connection with an

add-on condominium.

(g) A description of both the common and limited common elements, if

any, indicating the manner of their assignment to a unit or units.

(h) If applicable, all matters required by this Act in connection with a

conversion condominium.

(h-5) If the condominium is a leasehold condominium, then:

(1) The date of recording and recording document number for the

lease creating a leasehold interest as described in item (x) of Section 2;

(2) The date on which the lease is scheduled to expire;

(3) The legal description of the property subject to the lease;

(4) Any right of the unit owners to redeem the reversion and the

manner whereby those rights may be exercised, or a statement that the unit owners

do not have such rights;

(5) Any right of the unit owners to remove any improvements

within a reasonable time after the expiration or termination of the lease, or a

statement that the unit owners do not have such rights;

(6) Any rights of the unit owners to renew the lease and the

conditions of any renewal, or a statement that the unit owners do not have such

rights; and

Illinois Condominium Property Act - 6

(7) A requirement that any sale of the property pursuant to

Section 15 of this Act, or any removal of the property pursuant to Section 16 of this

Act, must be approved by the lessor under the lease.

(i) Such other lawful provisions not inconsistent with the provisions of

this Act as the owner or owners may deem desirable in order to promote and

preserve the cooperative aspect of ownership of the property and to facilitate the

proper administration thereof.

Section 4.1. Construction, interpretation, and validity of Condominium

Instruments.

(a) Except to the extent otherwise provided by the declaration or other

condominium instruments:

(1) The terms defined in Section 2 of this Act shall be deemed to

have the meaning specified therein unless the context otherwise requires.

(2) To the extent that perimeter and partition walls, floors or

ceilings are designated as the boundaries of the units or of any specified units, all

decorating, wall and floor coverings, paneling, molding, tiles, wallpaper, paint,

finished flooring and any other materials constituting any part of the finished

surfaces thereof, shall be deemed a part of such units, while all other portions of

such walls, floors or ceilings and all portions of perimeter doors and all portions of

windows in perimeter walls shall be deemed part of the common elements.

(3) If any chutes, flues, ducts, conduits, wires, bearing walls,

bearing columns, or any other apparatus lies partially within and partially outside of

the designated boundaries of a unit, any portions thereof serving only that unit shall

be deemed a part of that unit, while any portions thereof serving more than one unit

or any portion of the common elements shall be deemed a part of the common

elements.

(4) Subject to the provisions of paragraph (3) of subsection (a),

all space and other fixtures and improvements within the boundaries of a unit shall

be deemed a part of that unit.

(5) Any shutters, awnings, window boxes, doorsteps, porches,

balconies, patios, perimeter doors, windows in perimeter walls, and any other

apparatus designed to serve a single unit shall be deemed a limited common element

appertaining to that unit exclusively.

(6) All provisions of the declaration, bylaws and other

condominium instruments are severable.

(b) Except to the extent otherwise provided by the declaration or by other

condominium instruments recorded prior to the effective date of this amendatory

Act of 1984, in the event of a conflict between the provisions of the declaration and

the bylaws or other condominium instruments, the declaration prevails except to the

extent the declaration is inconsistent with this Act.

occupancy of a condominium unit to a person 55 years of age or older shall be valid

and deemed not to be in violation of Article 3 of the Illinois Human Rights Act

provided that the person or the immediate family of a person owning, renting or

Illinois Condominium Property Act - 7

lawfully occupying such unit prior to the recording of the initial declaration shall not

be deemed to be in violation of such age restriction so long as they continue to own

or reside in such unit.

Section 5. Plat to be recorded. Simultaneously with the recording of the

declaration there shall be recorded a plat as defined in Section 2, which plat shall be

made by a Registered Illinois Land Surveyor and shall set forth (1) all angular and

linear data along the exterior boundaries of the parcel; (2) the linear measurements

and location, with reference to said exterior boundaries, of any buildings

improvements and structures located on the parcel; and (3) the elevations at, above,

or below official datum of the finished or unfinished interior surfaces of the floors

and ceilings and the linear measurements of the finished or unfinished interior

surfaces of the perimeter walls, and lateral extensions thereof or other monumental

perimeter boundaries, where there are no wall surfaces, that part of every unit which

is in any building on the parcel, and the locations of such wall surfaces or unit

boundaries with respect to the exterior boundaries of the parcel projected vertically

upward; (4) the elevations at, above, or below official datum and the linear

measurements of the perimeter boundaries, of that part of the property which

constitute a unit or a part thereof outside any building on the parcel and the location

of the boundaries with respect to the exterior vertical boundaries of the parcel,

projected vertically upward. Every such unit shall be identified on the plat by a

distinguishing number or other symbol; (5) if the Registered Illinois Land Surveyor

does not certify that such plat accurately depicts the matters set forth in subsection

(3) and (4) above, such a certification for any particular unit or units as built shall be

recorded prior to the first conveyance of such particular unit or units as part of an

amended plat, thereby complying with the requirements of subsections (3) and (4) of

this Section; (6) when adding additional property to an add-on condominium, the

developer, or in the event of any other alteration in the boundaries or location of a

unit, any building on the parcel or the parcel authorized in this Act, the president of

the board of managers or other officer authorized and designated by the

condominium instruments shall record an amended plat of survey conforming to the

requirements of this Section, or shall provide a certificate of a plat previously

recorded that is in accordance with the certification requirements of this subsection.

Such amended plat or certificate shall be certified by a Registered Illinois Land

Surveyor as to accuracy in depicting changes in boundary or location in the portions

of the property set forth in subsections (1), (2), (3) and (4) above, and that such

changes have been completed.

Section 6. Recording - Effect. Upon compliance with the provisions of Sections 3,

4, and 5 and upon recording of the declaration and plat the property shall become

subject to the provisions of this Act, and all units shall thereupon be capable of

ownership in fee simple or any lesser estate, and may thereafter be conveyed, leased,

mortgaged or otherwise dealt with in the same manner as other real property, but

subject, however, to the limitations imposed by this Act.

Each unit owner shall be entitled to the percentage of ownership in the

common elements appertaining to such unit as computed and set forth in the

declaration pursuant to subsection (e) of Section 4 hereof, and ownership of such

unit and of the owner's corresponding percentage of ownership in the common

elements shall not be separated, except as provided in this Act, nor, except by the

recording of an amended declaration and amended plat approved in writing by all

Illinois Condominium Property Act - 8

unit owners, shall any unit, by deed, plat, judgment of a court or otherwise, be

subdivided or in any other manner separated into tracts or parcels different from the

whole unit as shown on the plat, except as provided in this Act.

The condominium instruments may contain provisions in accordance with

this Act providing for the reallocation and adjustment of the percentage of

ownership in the common elements appertaining to a unit or units in circumstances

relating to the following transactions: an add-on condominium; condemnation;

damage or destruction of all or a portion of the property; and the subdivision or

combination of units. Interests in the common elements shall be re-allocated, and the

transaction shall be deemed effective at the time of the recording of an amended plat

depicting same pursuant to Section 5 of this Act. Simultaneously with the recording

of the amended plat, the developer in the case of an add-on condominium, or the

President of the board of managers or other officer in other instances authorized in

this Act shall execute and record an amendment to the declaration setting forth all

pertinent aspects of the transaction including the reallocation or adjustment of the

common interest. The amendment shall contain legal descriptions sufficient to

indicate the location of any property involved in the transaction.

Section 7. Descriptions in deeds, etc. Every deed, lease, mortgage or other

instrument may legally describe a unit by its identifying number or symbol as shown

on the plat and as set forth in the declaration, and every such description shall be

deemed good and sufficient for all purposes, and shall be deemed to convey,

transfer, encumber or otherwise affect the owner's corresponding percentage of

ownership in the common elements even though the same is not expressly

mentioned or described therein.

Section 8. Partition of common elements prohibited. As long as the property is

subject to the provisions of this Act the common elements shall, except as provided

in Section 14 hereof, remain undivided, and no unit owner shall bring any action for

partition or division of the common elements. Any covenant or agreement to the

contrary shall be void.

Section 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.

(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 expenses by category as well as all anticipated assessments and

other income. The initial budget and common expense assessment based thereon

Illinois Condominium Property Act - 9

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 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.

(5) At the end of an association's fiscal year and after the

association has approved any end-of-year fiscal audit, if applicable, if the fiscal year

ended with a surplus of funds over actual expenses, including budgeted reserve fund

contributions, then, to the extent that there are not any contrary provisions in the

association's declaration and bylaws, the board of managers has the authority, in its

discretion, to dispose of the surplus in one or more of the following ways: (i)

contribute the surplus to the association's reserve fund; (ii) return the surplus to the

unit owners as a credit against the remaining monthly assessments for the current

fiscal year; (iii) return the surplus to the unit owners in the form of a direct payment

to the unit owners; or (iv) maintain the funds in the operating account, in which case

the funds shall be applied as a credit when calculating the following year's annual

budget. If the fiscal year ends in a deficit, then, to the extent that there are not any

contrary provisions in the association's declaration and bylaws, the board of

managers has the authority, in its discretion, to address the deficit by incorporating it

into the following year's annual budget. If 20% of the unit owners of the association

deliver a petition objecting to the action under this paragraph (5) within 30 days

after notice to the unit owners of the action, the board of managers shall call a

meeting of the unit owners within 30 days of the date of delivery of the petition. At

Illinois Condominium Property Act - 10

the meeting, the unit owners may vote to select a different option than the option

selected by the board of managers. Unless a majority of the total votes of the unit

owners are cast at the meeting to reject the board's selection and select a different

option, the board's decision is ratified.

(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.

(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 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

Illinois Condominium Property Act - 11

payment of common expenses, 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, 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 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 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 the assessments and the legal fees required

by 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 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 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.

Section 9.1. (a) Other liens; attachment and satisfaction. Subsequent to the recording

of the declaration, no liens of any nature shall be created or arise against any portion

Illinois Condominium Property Act - 12

of the property except against an individual unit or units. No labor performed or

materials furnished with the consent or at the request of a particular unit owner shall

be the basis for the filing of a mechanics' lien claim against any other unit. If the

performance of the labor or furnishing of the materials is expressly authorized by the

board of managers, each unit owner shall be deemed to have expressly authorized it

and consented thereto, and shall be liable for the payment of his unit's proportionate

share of any due and payable indebtedness as set forth in this Section.

Each mortgage and other lien, including mechanics liens, securing a debt

incurred in the development of the land submitted to the provisions of this Act for

the sale of units shall be subject to the provisions of this Act, subsequent to the

conveyance of a unit to the purchaser.

In the event any lien exists against 2 or more units and the indebtedness

secured by such lien is due and payable, the unit owner of any such unit so affected

may remove such unit and the undivided interest in the common elements

appertaining thereto from such lien by payment of the proportional amount of such

indebtedness attributable to such unit. In the event such lien exists against the units

or against the property, the amount of such proportional payment shall be computed

on the basis of the percentages set forth in the declaration. Upon payment as herein

provided, it is the duty of the encumbrancer to execute and deliver to the unit owner

a release of such unit and the undivided interest in the common elements

appertaining thereto from such lien, except that such proportional payment and

release shall not prevent the encumbrancer from proceeding to enforce his rights

against any unit or interest with respect to which such lien has not been so paid or

released.

The owner of a unit shall not be liable for any claims, damages, or

judgments, including but not limited to State or local government fees or fines,

entered as a result of any action or inaction of the board of managers of the

association other than for mechanics' liens as set forth in this Section. Unit owners

other than the developer, members of the board of managers other than the

developer or developer representatives, and the association of unit owners shall not

be liable for any claims, damages, or judgments, including but not limited to State or

local government fees or fines, entered as result of any action or inaction of the

developer other than for mechanics' liens as set forth in this Section. Each unit

owner's liability for any judgment entered against the board of managers or the

association, if any, shall be limited to his proportionate share of the indebtedness as

set forth in this Section, whether collection is sought through assessment or

otherwise. A unit owner shall be liable for any claim, damage or judgment entered

as a result of the use or operation of his unit, or caused by his own conduct. Before

conveying a unit, a developer shall record and furnish purchaser releases of all liens

affecting that unit and its common element interest which the purchaser does not

expressly agree to take subject to or assume, and the developer shall provide a surety

bond or substitute collateral for or insurance against liens for which a release is not

provided. After conveyance of such unit, no mechanics lien shall be created against

such unit or its common element interest by reason of any subsequent contract by

the developer to improve or make additions to the property.

Each mortgagee or other lienholder of the unit of a common interest

community or of a unit subject to the Condominium Property Act shall provide an

address to the unit owners' association at the time the lien or mortgage is recorded at

Illinois Condominium Property Act - 13

which address such unit owners' association shall send notice to such mortgagee or

lienholder of any eminent domain proceeding to which the association thereafter

becomes a party. If the mortgagee or lienholder has not provided an address for

notice purposes to the association, then such notice shall be sent to all mortgagees or

lienholders which are named insureds on the master policy of insurance which exists

or may exist on the common interest community or unit subject to the Condominium

Property Act.

(b) Board of Managers' standing and capacity. The board of managers

shall have standing and capacity to act in a representative capacity in relation to

matters involving the common elements or more than one unit, on behalf of the unit

owners, as their interests may appear.

Section 9.2. Other remedies.

(a) In the event of any default by any unit owner, his tenant, invitee or

guest in the performance of his obligations under this Act or under the declaration,

bylaws, or the rules and regulations of the board of managers, the board of managers

or its agents shall have such rights and remedies as provided in the Act or

condominium instruments including the right to maintain an eviction action against

such defaulting unit owner or his tenant for the benefit of all the other unit owners in

the manner prescribed by Article IX of the Code of Civil Procedure.

(b) Any attorneys' fees incurred by the Association arising out of a

default by any unit owner, his tenant, invitee or guest in the performance of any of

the provisions of the condominium instruments, rules and regulations or any

applicable statute or ordinance shall be added to, and deemed a part of, his

respective share of the common expense.

unit owner's financial obligation to the Association, including fees charged by a

manager or managing agent, shall be added to and deemed a part of an owner's

respective share of the common expenses unless: (i) the managing agent fees relate

to the costs to collect common expenses for the Association; (ii) the fees are set

forth in a contract between the managing agent and the Association; and (iii) the

authority to add the management fees to an owner's respective share of the common

expenses is specifically stated in the declaration or bylaws of the Association.

Section 9.3. Eminent domain proceedings; standing. The unit owners' association

shall be named as defendant on behalf of all unit owners in any eminent domain

proceeding to take or damage property which is a common element and which

includes no portions of any units or limited common elements. The association shall

act therein on behalf of all unit owners. Nothing contained herein shall bar a unit

owner or mortgagee or lienholder from intervening in the eminent domain

proceeding on his own behalf.

Section 9.4. Eminent domain proceedings; notice. After receipt of summons in an

action to take or damage a common element, the unit owners' association shall

provide to the plaintiff a list of the unit owners, mortgagees and lienholders, and the

plaintiff shall provide notice by certified mail to the unit owners, mortgagees and

lienholders.

The notice shall include the following:

Illinois Condominium Property Act - 14

(1) case name and number and jurisdiction in which the case is filed;

(2) date of filing;

(3) brief description of the nature of the case;

(4) description of the property being damaged or taken;

(5) statement that the unit owner may petition the court to intervene; and

(6) statement that the mortgagee or lienholder may petition the court to

intervene.

An immaterial error in providing notice shall not invalidate the legal effect of

the proceeding.

Section 9.5. Successor developers. Any assignment of a developer's interest in the

property is not effective until the successor: (i) obtains the assignment in writing;

and (ii) records the assignment.

Section 10. Separate taxation.

(a) Real property taxes, special assessments, and any other special taxes

or charges of the State of Illinois or of any political subdivision thereof, or other

lawful taxing or assessing body, which are authorized by law to be assessed against

and levied upon real property shall be assessed against and levied upon each unit

and the owner's corresponding percentage of ownership in the common elements as

a tract, and not upon the property as a whole. For purposes of property taxes, real

property owned and used for residential purposes by a condominium association,

including a master association, but subject to the exclusive right by easement,

covenant, deed or other interest of the owners of one or more condominium

properties and used exclusively by the unit owners for recreational or other

residential purposes shall be assessed at $1.00 per year. The balance of the value of

the property shall be assessed to the condominium unit owners. In counties

containing 1,000,000 or more inhabitants, any person desiring to establish or to

reestablish an assessment of $1.00 under this Section shall make application therefor

and be subject to the provisions of Section 10-35 of the Property Tax Code.

(b) Each condominium unit shall be only subject to the tax rate for those

taxing districts in which such unit is actually, physically located. The county clerk

shall not apply a rate which is an average of two or more different districts to any

condominium unit.

of managers or by the affirmative vote of not less than a majority of the unit owners

at a meeting duly called for such purpose, or upon such greater vote as may be

required by the declaration or bylaws, the board of managers acting on behalf of all

unit owners shall have the power to seek relief from or in connection with the

assessment or levy of any such taxes, special assessments or charges, and to charge

and collect all expenses incurred in connection therewith as common expenses.

Section 11. Tax deeds. In the event any person shall acquire or be entitled to the

issuance of a tax deed conveying the interest of any unit owner, the interest so

acquired shall be subject to all the provisions of this Act and to the terms,

Illinois Condominium Property Act - 15

provisions, covenants, conditions and limitations contained in the declaration, the

plat, the bylaws or any deed affecting such interest then in force.

Section 12. Insurance.

(a) Required coverage. No policy of insurance shall be issued or

delivered to a condominium association, and no policy of insurance issued to a

condominium association shall be renewed, unless the insurance coverage under the

policy includes the following:

(1) Property insurance. Property insurance (i) on the common

elements and the units, including the limited common elements and except as

otherwise determined by the board of managers, the bare walls, floors, and ceilings

of the unit, (ii) providing coverage for special form causes of loss, and (iii)

providing coverage, at the time the insurance is purchased and at each renewal date,

in a total amount of not less than the full insurable replacement cost of the insured

property, less deductibles, but including coverage sufficient to rebuild the insured

property in compliance with building code requirements subsequent to an insured

loss, including: Coverage B, demolition costs; and Coverage C, increased cost of

construction coverage. The combined total of Coverage B and Coverage C shall be

no less than 10% of each insured building value, or $500,000, whichever is less.

(2) General liability insurance. Commercial general liability

insurance against claims and liabilities arising in connection with the ownership,

existence, use, or management of the property in a minimum amount of $1,000,000,

or a greater amount deemed sufficient in the judgment of the board, insuring the

board, the association, the management agent, and their respective employees and

agents and all persons acting as agents. The developer must be included as an

additional insured in its capacity as a unit owner, manager, board member, or

officer. The unit owners must be included as additional insured parties but only for

claims and liabilities arising in connection with the ownership, existence, use, or

management of the common elements. The insurance must cover claims of one or

more insured parties against other insured parties.

(3) Fidelity bond; directors and officers coverage.

(A) An association with 6 or more dwelling units must

obtain and maintain a fidelity bond covering persons, including the managing agent

and its employees who control or disburse funds of the association, for the

maximum amount of coverage available to protect funds in the custody or control of

the association, plus the association reserve fund.

(B) All management companies that are responsible for

the funds held or administered by the association must be covered by a fidelity bond

for the maximum amount of coverage available to protect those funds. The

association has standing to make a loss claim against the bond of the managing

agent as a party covered under the bond.

bond must be in the full amount of association funds and reserves in the custody of

the association or the management company.

(D) The board of directors must obtain directors and

officers liability coverage at a level deemed reasonable by the board, if not

Illinois Condominium Property Act - 16

otherwise established by the declaration or bylaws. Directors and officers liability

coverage must extend to all contracts and other actions taken by the board in their

official capacity as directors and officers, but this coverage shall exclude actions for

which the directors are not entitled to indemnification under the General Not For

Profit Corporation Act of 1986 or the declaration and bylaws of the association. The

coverage required by this subparagraph (D) shall include, but not be limited to,

coverage of: defense of non-monetary actions; defense of breach of contract; and

defense of decisions related to the placement or adequacy of insurance. The

coverage required by this subparagraph (D) shall include as an insured: past, present,

and future board members while acting in their capacity as members of the board of

directors; the managing agent; and employees of the board of directors and the

managing agent.

(b) Contiguous units; improvements and betterments. The insurance

maintained under subdivision (a)(1) must include the units, the limited common

elements except as otherwise determined by the board of managers, and the common

elements. The insurance need not cover improvements and betterments to the units

installed by unit owners, but if improvements and betterments are covered, any

increased cost may be assessed by the association against the units affected.

Common elements include fixtures located within the unfinished interior

surfaces of the perimeter walls, floors, and ceilings of the individual units initially

installed by the developer. Common elements exclude floor, wall, and ceiling

coverings. "Improvements and betterments" means all decorating, fixtures, and

furnishings installed or added to and located within the boundaries of the unit,

including electrical fixtures, appliances, air conditioning and heating equipment,

water heaters, built-in cabinets installed by unit owners, or any other additions,

alterations, or upgrades installed or purchased by any unit owner.

case of a claim for damage to a unit or the common elements, (i) pay the deductible

amount as a common expense, (ii) after notice and an opportunity for a hearing,

assess the deductible amount against the owners who caused the damage or from

whose units the damage or cause of loss originated, or (iii) require the unit owners of

the units affected to pay the deductible amount.

(d) Other coverages. The declaration may require the association to carry

any other insurance, including workers compensation, employment practices,

environmental hazards, and equipment breakdown, the board of directors considers

appropriate to protect the association, the unit owners, or officers, directors, or

agents of the association.

(e) Insured parties; waiver of subrogation. Insurance policies carried

pursuant to subsections (a) and (b) must include each of the following provisions:

(1) Each unit owner and secured party is an insured person under

the policy with respect to liability arising out of the unit owner's interest in the

common elements or membership in the association.

(2) The insurer waives its right to subrogation under the policy

against any unit owner of the condominium or members of the unit owner's

household and against the association and members of the board of directors.

Illinois Condominium Property Act - 17

(3) The unit owner waives his or her right to subrogation under

the association policy against the association and the board of directors.

(f) Primary insurance. If at the time of a loss under the policy there is

other insurance in the name of a unit owner covering the same property covered by

the policy, the association's policy is primary insurance.

(g) Adjustment of losses; distribution of proceeds. Any loss covered by

the property policy under subdivision (a)(1) must be adjusted by and with the

association. The insurance proceeds for that loss must be payable to the association,

or to an insurance trustee designated by the association for that purpose. The

insurance trustee or the association must hold any insurance proceeds in trust for

unit owners and secured parties as their interests may appear. The proceeds must be

disbursed first for the repair or restoration of the damaged common elements, the

bare walls, ceilings, and floors of the units, and then to any improvements and

betterments the association may insure. Unit owners are not entitled to receive any

portion of the proceeds unless there is a surplus of proceeds after the common

elements and units have been completely repaired or restored or the association has

been terminated as trustee.

(h) Mandatory unit owner coverage. The board of directors may, under

the declaration and bylaws or by rule, require condominium unit owners to obtain

insurance covering their personal liability and compensatory (but not consequential)

damages to another unit caused by the negligence of the owner or his or her guests,

residents, or invitees, or regardless of any negligence originating from the unit. The

personal liability of a unit owner or association member must include the deductible

of the owner whose unit was damaged, any damage not covered by insurance

required by this subsection, as well as the decorating, painting, wall and floor

coverings, trim, appliances, equipment, and other furnishings.

(i) Certificates of insurance. Contractors and vendors (except public

utilities) doing business with a condominium association under contracts exceeding

$10,000 per year must provide certificates of insurance naming the association, its

board of directors, and its managing agent as additional insured parties.

(j) Non-residential condominiums. The provisions of this Section may

be varied or waived in the case of a condominium community in which all units are

restricted to nonresidential use.

(k) Settlement of claims. Any insurer defending a liability claim against

a condominium association must notify the association of the terms of the settlement

no less than 10 days before settling the claim. The association may not veto the

settlement unless otherwise provided by contract or statute.

(l) The changes to this Section made by this amendatory Act of the 98th

General Assembly apply only to insurance policies issued or renewed on or after

June 1, 2015.

Section 12.1. Insurance risk pooling trusts.

(a) This Section shall be known and may be cited as the Condominium

and Common Interest Community Risk Pooling Trust Act.

Illinois Condominium Property Act - 18

(b) The boards of managers or boards of directors, as the case may be, of

two or more condominium associations or common interest community associations,

are authorized to establish, with the unit owners and the condominium or common

interest community associations as the beneficiaries thereof, a trust fund for the

purpose of providing protection of the participating condominium and common

interest community associations against the risk of financial loss due to damage to,

destruction of or loss of property, or the imposition of legal liability as required or

authorized under this Act or the declaration of the condominium or common interest

community association.

instrument which shall be filed with and approved by the Director of Insurance prior

to its becoming effective.

(d) No association shall be a beneficiary of the trust fund unless it shall

be incorporated under the laws of this State.

(e) The trust fund is authorized to indemnify the condominium and

common interest community association beneficiaries thereof against the risk of loss

due to damage, destruction or loss to property or imposition of legal liability as

required or authorized under this Act or the declaration of the condominium or

common interest community association.

(f) Risks assumed by the trust fund may be pooled and shared with other

trust funds established under this Section.

(g) (Blank).

(h) (Blank).

(i) No trustee of the trust fund shall be paid a salary or receive other

compensation, except that the written trust instrument may provide for

reimbursement for actual expenses incurred on behalf of the trust fund.

(j) (Blank).

(k) (Blank).

(l) (Blank).

(m) Each trust fund shall file annually with the Director of Insurance a

full independently audited financial statement.

(n-r) (Blank).

(s) The Director of Insurance shall have with respect to trust funds

established under this Section the powers of examination conferred upon him

relative to insurance companies by Section 132 of the Illinois Insurance Code.

(t) (Blank).

(u) (Blank).

(v) Trust funds established under and which fully comply with this

Section shall not be considered member insurance companies or to be in the

business of insurance nor shall the provision of Article XXXIV of the Illinois

Insurance Code apply to any such trust fund established under this Section.

Illinois Condominium Property Act - 19

(w) (Blank).

(x) The Director of Insurance shall adopt reasonable rules pertaining to

the standards of coverage and administration of trust funds authorized under this

Section.

Section 13. Application of insurance proceeds to reconstruction. In case of fire

or any other disaster the insurance proceeds, if sufficient to reconstruct the building,

shall be applied to such reconstruction. Reconstruction of the building as used in this

and succeeding Section 14 of this Act, means restoring the building to substantially

the same condition in which it existed prior to the fire or other disaster, with each

unit and the common elements having the same vertical and horizontal boundaries as

before.

Section 14. Disposition of property where insurance proceeds are insufficient

for reconstruction.

(1) In case of fire or other disaster, if the insurance proceeds are

insufficient to reconstruct the building and the unit owners and all other parties in

interest do not voluntarily make provision for reconstruction of the building within

180 days from the date of damage or destruction, the board of managers may record

a notice setting forth such facts and upon the recording of such notice:

(a) The property shall be deemed to be owned in common by the

unit owners;

(b) The undivided interest in the property owned in common

which shall appertain to each unit owner shall be the percentage of undivided

interest previously owned by such owner in the common elements;

transferred in accordance with the existing priorities to the undivided interest of the

unit owner in the property as provided herein; and

(d) The property shall be subject to an action for partition at the

suit of any unit owner, in which event the net proceeds of sale, together with the net

proceeds of the insurance on the property, if any, shall be considered as one fund

and shall be divided among all the unit owners in a percentage equal to the

percentage of undivided interest owned by each owner in the property, after first

paying out of the respective shares of the unit owners, to the extent sufficient for the

purpose, all liens on the undivided interest in the property owned by each unit

owner.

(2) In the case of fire or other disaster in which fewer than 1/2 of the

units are rendered uninhabitable: the condominium instruments may provide for the

reconstruction of the building or other portion of the property, if the insurance

proceeds are insufficient to reconstruct, upon the affirmative vote of not fewer than

3/4 of the owners voting at a meeting called for that purpose. The meeting shall be

held within 30 days following the final adjustment of insurance claims, if any.

Otherwise, such meeting shall be held within 90 days of the occurrence. At such

meeting the board of managers, or its representative, shall present to the members

present an estimate of the cost of repair or reconstruction, and the estimated amount

of necessary assessments against each unit owner.

Illinois Condominium Property Act - 20

(3) In the case of fire or other disaster, the condominium instruments

may provide for the withdrawal of any portion of the property if the insurance

proceeds are insufficient to reconstruct the portion of the property affected. Upon

the withdrawal of any unit or portion thereof, the percentage of interest in the

common elements appurtenant to such unit or portion thereof shall be reallocated

among the remaining units on the basis of the percentage of interest of each

remaining unit. If only a portion of a unit is withdrawn, the percentage of interest

appurtenant to that unit shall be reduced accordingly, upon the basis of diminution in

market value of the unit, as determined by the board of managers. The payment of

just compensation, or the allocation of any insurance, or other proceeds to any

withdrawing or remaining unit owner shall be on an equitable basis, which need not

be a unit's percentage interest. Any insurance or other proceeds available in

connection with the withdrawal of any portion of the common elements, not

necessarily including the limited common elements, shall be allocated on the basis

of each unit owner's percentage interest therein. The declaration may provide that

proceeds available from the withdrawal of any limited common element will be

distributed in accordance with the interests of those entitled to their use. The

condominium instruments shall provide for the cessation of responsibility for the

payment of assessments for any unit or portion thereof withdrawn from the

condominium.

Section 14.1. Disposition or removal of any portion of the property.

(a) The condominium instruments may provide for the withdrawal of any

portion of the property in connection with eminent domain proceedings in

compliance with the provisions of this Act. Upon the withdrawal of any unit or

portion thereof, the percentage of interest in the common elements appurtenant to

such unit or portion thereof shall be reallocated among the remaining units on the

basis of the percentage of interest of each remaining unit. If only a portion of a unit

is withdrawn, the percentage of interest appurtenant to that unit shall be reduced

accordingly, upon the basis of diminution in market value of the unit, as determined

by the board of managers. The allocation of any condemnation award or other

proceeds to any withdrawing or remaining unit owner shall be on an equitable basis,

which need not be a unit's percentage interest. Any condemnation award or other

proceeds available in connection with the withdrawal of any portion of the common

elements, not necessarily including the limited common elements, shall be allocated

on the basis of each unit owner's percentage interest therein. The declaration may

provide that proceeds available from the withdrawal of any limited common element

will be distributed in accordance with the interests of those entitled to their use. The

condominium instruments shall provide for the cessation of responsibility for the

payment of assessments for any unit or portion thereof withdrawn from the

condominium. In the event that the unit owners' association is named as defendant in

an eminent domain proceeding on behalf of all unit owners, then the payment of the

proceeds of the eminent domain proceeding attributable to the taking or damaging of

the common element shall be according to this Section unless the condominium

instrument or declaration of a common interest community expressly provides for

different procedures. This Section shall also apply to eminent domain proceedings in

which the unit owners' association of a common interest community is named as a

defendant on behalf of all unit owners.

Illinois Condominium Property Act - 21

(b) Notwithstanding anything to the contrary contained in this Section, in

a leasehold condominium, any allocation of any condemnation award or other

proceeds available in connection with the withdrawal of any portion of the property

shall include an equitable allocation to the lessor. The allocation shall take into

account any provisions of the lease described in item (x) of Section 2 of this Act

concerning such allocations.

Section 14.2. Street and utilities dedication. Unless the condominium instrument

expressly provides for a greater percentage or different procedures a two-thirds

majority of the unit owners at a meeting of unit owners duly called for such purpose

may elect to dedicate a portion of the common elements to a public body for use as,

or in connection with, a street or utility. Where such a dedication is made, nothing in

this Act or any other law shall be construed to require that the real property taxes of

every unit of the condominium must be paid prior to recordation of the dedication.

Section 14.3. Granting of easement for laying of cable television or high speed

Internet cable. Unless the condominium instrument expressly provides for a greater

percentage or different procedures a majority of more than 50% of the unit owners at

a meeting of unit owners duly called for such purpose may authorize the granting of

an easement for the laying of cable television or high speed Internet cable. The grant

of such easement shall be according to the terms and conditions of the local

ordinance providing for cable television or high speed Internet in the municipality.

Section 14.4. Granting of easement to a governmental body for protection

against water damage or erosion. Unless the condominium instrument expressly

provides for a greater percentage or different procedures, a majority of more than

50% of the unit owners at a meeting of unit owners duly called for such purpose

may authorize the granting of an easement to a governmental body for construction,

maintenance or repair of a project for protection against water damage or erosion.

Section 14.5. Distressed condominium property.

(a) As used in this Section:

(1) "Distressed condominium property" means a parcel

containing condominium units which are operated in a manner or have conditions

which may constitute a danger, blight, or nuisance to the surrounding community or

to the general public, including but not limited to 2 or more of the following

conditions:

(A) 50% or more of the condominium units are not

occupied by persons with a legal right to reside in the units;

(B) the building has serious violations of any applicable

local building code or zoning ordinance;

foreclosure or are units against which a judgment of foreclosure was entered within

the last 18 months;

(D) there has been a recording of more condominium units

on the parcel than physically exist;

Illinois Condominium Property Act - 22

(E) any of the essential utilities to the parcel or to 40% or

more of the condominium units is either terminated or threatened with termination;

(F) there is a delinquency on the property taxes for at least

60% of the condominium units.

(2) "Owner" means any unit owner or owner of record of the

condominium property.

(3) "Other party in interest" means any mortgagee of record, lien

holder of record, judgment creditor, tax purchaser, or other party of record, other

than the owner, having legal or equitable title or other interest in the distressed

condominium property or in a unit of the property.

(4) "Municipality" means a city, village, or incorporated town in

which the distressed condominium property is located.

(b) A proceeding under this Section shall be commenced by a

municipality filing a verified petition or verified complaint in the circuit court in the

county in which the property is located. The petition or complaint shall allege

conditions specified in paragraph (1) of subsection (a) of this Section and shall

request the relief available under this Section. All owners shall be named as

defendants in the petition or complaint and summons shall be issued and service

shall be had as in other civil cases. All known other parties in interest shall be

provided written notice and a copy of the petition or complaint either by United

States certified mail, return receipt requested, within 30 days of the issuance of the

summons or by personal service of the complaint. The hearing upon the suit shall be

expedited by the court and shall be given precedence over other actions.

property:

(1) the court may order the appointment of a receiver for the

property with the powers specified in this Section; or

(2) the court, after a hearing held upon giving notice to all

interested parties as provided in subsection (b), may appoint a receiver for the

property and if the court further finds that the property is not viable as a

condominium, then the court may declare:

(A) that the property is no longer a condominium;

(B) that the property shall be deemed to be owned in

common by the unit owners;

appertain to each unit owner shall be the percentage of undivided interest previously

owned by the owner in the common elements; and

(D) that any liens affecting any unit shall be deemed to be

attached to the undivided interest of the unit owner in the property as provided

herein.

A copy of the court's declaration under paragraph (2) of this subsection (c)

shall be recorded by the municipality in the office of the recorder of deeds in the

Illinois Condominium Property Act - 23

county where the property is located against both the individual units and owners

and the general property. The court's declaration shall be forwarded to the county

assessor's office in the county where the property is located.

(d) If a court finds that property is subject to paragraph (2) of subsection

other parties in interest as provided in subsection (b) and those parties having an

opportunity to be heard, authorize the receiver to enter into a sales contract and

transfer the title of the property on behalf of the owners of the property. In the event

of such a sale, the net proceeds of the sale, after payment of all the receiver's costs,

time, expenses, and fees as approved by the court, shall be deposited into an escrow

account. Proceeds in the escrow account shall be segregated into the respective

shares of each unit owner as determined under subparagraph (C) of paragraph (2) of

subsection (c) of this Section and shall be distributed from each respective share as

follows: (1) to pay taxes attributable to the unit owner; then (2) to pay other liens

attributable to the unit owner; and then (3) to pay each unit owner any remaining

sums from his or her respective share.

(e) A receiver appointed under this Section shall have possession of the

property and shall have full power and authority to operate, manage, and conserve

the property. A receiver appointed pursuant to this Section must manage the

property as would a prudent person. A receiver may, without an order of the court,

delegate managerial functions to a person in the business of managing real estate of

the kind involved who is financially responsible and prudently selected.

Without limiting the foregoing, a receiver during such time shall have the

power and authority to:

(1) secure, clean, board and enclose, and keep secure, clean,

boarded and enclosed, the property or any portion of the property;

(2) secure tenants and execute leases for the property, the

duration and terms of which are reasonable and customary for the type of use

involved, and the leases shall have the same priority as if made by the owner of the

property;

(3) collect the rents, issues, and profits, including assessments

which have been or may be levied;

(4) insure the property against loss by fire or other casualty;

(5) employ counsel, custodians, janitors, and other help;

(6) pay taxes which may have been or may be levied against the

property;

(7) maintain or disconnect, as appropriate, any essential utility to

the property;

(8) make repairs and improvements necessary to comply with

building, housing, and other similar codes;

(9) hold receipts as reserves as reasonably required for the

foregoing purposes; and

Illinois Condominium Property Act - 24

(10) exercise the other powers as are granted to the receiver by the

appointing court.

(f) If the court orders the appointment of a receiver, the receiver may use

the rents and issues of the property toward maintenance, repair, and rehabilitation of

the property prior to and despite any assignment of rents; and the court may further

authorize the receiver to recover the cost of any feasibility study, sale, management,

maintenance, repair, and rehabilitation by the issuance and sale of notes or receiver's

certificates bearing such interest as the court may fix, and the notes or certificates,

after their initial issuance and transfer by the receiver, shall be freely transferable

and when sold or transferred by the receiver in return for a valuable consideration in

money, material, labor, or services shall be a first lien upon the real estate and the

rents and issues thereof and shall be superior to all prior assignments of rents and all

prior existing liens and encumbrances, except taxes; provided, that within 90 days of

the sale or transfer for value by the receiver of a note or certificate, the holder

thereof shall file notice of the lien in the office of the recorder in the county in which

the real estate is located. The notice of the lien filed shall set forth (i) a description

of the real estate affected sufficient for the identification thereof, (ii) the face amount

of the receiver's note or certificate, together with the interest payable thereon, and

(iii) the date when the receiver's note or certificate was sold or transferred for value

by the receiver. Upon payment to the holder of the receiver's note or certificate of

the face amount thereof together with any interest thereon to the date of payment,

and upon the filing of record of a sworn statement of such payment, the lien of such

certificate shall be released. The lien may be enforced by proceedings to foreclose as

in the case of a mortgage or a mechanics lien, and the action to foreclose the lien

may be commenced at any time after the date of default. For the purposes of this

subsection, the date of default shall be deemed to occur 30 days from the date of

issuance of the receiver's certificate if at that time the certificate remains unpaid in

whole or in part. The receiver's lien shall be paid upon the sale of the property as set

forth in subsection (d) of this Section.

(g) The court may remove a receiver upon a showing of good cause, in

which case a new receiver may be appointed in accordance with this Section.

Section 15. Sale of property.

(a) Unless a greater percentage is provided for in the declaration or

bylaws, and notwithstanding the provisions of Sections 13 and 14 hereof, a majority

of the unit owners where the property contains 2 units, or not less than 66 2/3%

where the property contains three units, and not less than 75% where the property

contains 4 or more units may, by affirmative vote at a meeting of unit owners duly

called for such purpose, elect to sell the property. Such action shall be binding upon

all unit owners, and it shall thereupon become the duty of every unit owner to

execute and deliver such instruments and to perform all acts as in manner and form

may be necessary to effect such sale, provided, however, that any unit owner who

did not vote in favor of such action and who has filed written objection thereto with

the manager or board of managers within 20 days after the date of the meeting at

which such sale was approved shall be entitled to receive from the proceeds of such

sale an amount equivalent to the greater of: (i) the value of his or her interest, as

determined by a fair appraisal, less the amount of any unpaid assessments or charges

due and owing from such unit owner or (ii) the outstanding balance of any bona fide

debt secured by the objecting unit owner's interest which was incurred by such unit

Illinois Condominium Property Act - 25

owner in connection with the acquisition or refinance of the unit owner's interest,

less the amount of any unpaid assessments or charges due and owing from such unit

owner. The objecting unit owner is also entitled to receive from the proceeds of a

sale under this Section reimbursement for reasonable relocation costs, determined in

the same manner as under the federal Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970, as amended from time to time, and as

implemented by regulations promulgated under that Act.

(b) If there is a disagreement as to the value of the interest of a unit

owner who did not vote in favor of the sale of the property, that unit owner shall

have a right to designate an expert in appraisal or property valuation to represent

him, in which case, the prospective purchaser of the property shall designate an

expert in appraisal or property valuation to represent him, and both of these experts

shall mutually designate a third expert in appraisal or property valuation. The 3

experts shall constitute a panel to determine by vote of at least 2 of the members of

the panel, the value of that unit owner's interest in the property. The changes made

by this amendatory Act of the 100th General Assembly apply to sales under this

Section that are pending or commenced on and after the effective date of this

amendatory Act of the 100th General Assembly.

Section 16. Removal from provisions of this Act. All of the unit owners may

remove the property from the provisions of this Act by an instrument to that effect,

duly recorded, provided that the holders of all liens affecting any of the units

consent thereto or agree, in either case by instruments duly recorded, that their liens

be transferred to the undivided interest of the unit owner. Upon such removal the

property shall be deemed to be owned in common by all the owners. The undivided

interest in the property owned in common which shall appertain to each owner shall

be the percentage of undivided interest previously owned by such owner in the

common elements.

Section 17. Amendments to the declaration or bylaws.

(a) The administration of every property shall be governed by bylaws,

which may either be embodied in the declaration or in a separate instrument, a true

copy of which shall be appended to and recorded with the declaration. No

modification or amendment of the declaration or bylaws shall be valid unless the

same is set forth in an amendment thereof and such amendment is duly recorded. An

amendment of the declaration or bylaws shall be deemed effective upon recordation

unless the amendment sets forth a different effective date.

(b) Unless otherwise provided by this Act, amendments to condominium

instruments authorized to be recorded shall be executed and recorded by the

president of the association or such other officer authorized by the board of

managers.

Section 18. Contents of bylaws. The bylaws shall provide for at least the following:

(a) (1) The election from among the unit owners of a board of

managers, the number of persons constituting such board, and that the terms of at

least one-third of the members of the board shall expire annually and that all

members of the board shall be elected at large; if there are multiple owners of a

Illinois Condominium Property Act - 26

single unit, only one of the multiple owners shall be eligible to serve as a member of

the board at any one time;

(2) the powers and duties of the board;

(3) the compensation, if any, of the members of the board;

(4) the method of removal from office of members of the board;

(5) that the board may engage the services of a manager or

managing agent;

(6) that each unit owner shall receive, at least 25 days prior to the

adoption thereof by the board of managers, a copy of the proposed annual budget

together with an indication of which portions are intended for reserves, capital

expenditures or repairs or payment of real estate taxes;

(7) that the board of managers shall annually supply to all unit

owners an itemized accounting of the common expenses for the preceding year

actually incurred or paid, together with an indication of which portions were for

reserves, capital expenditures or repairs or payment of real estate taxes and with a

tabulation of the amounts collected pursuant to the budget or assessment, and

showing the net excess or deficit of income over expenditures plus reserves;

(8) (i) that each unit owner shall receive notice, in the same

manner as is provided in this Act for membership meetings, of any meeting of the

board of managers concerning the adoption of the proposed annual budget and

regular assessments pursuant thereto or to adopt a separate (special) assessment, (ii)

that except as provided in subsection (iv) below, if an adopted budget or any

separate assessment adopted by the board would result in the sum of all regular and

separate assessments payable in the current fiscal year exceeding 115% of the sum

of all regular and separate assessments payable during the preceding fiscal year, the

board of managers, upon written petition by unit owners with 20 percent of the votes

of the association delivered to the board within 21 days of the board action, shall call

a meeting of the unit owners within 30 days of the date of delivery of the petition to

consider the budget or separate assessment; unless a majority of the total votes of the

unit owners are cast at the meeting to reject the budget or separate assessment, it is

ratified, (iii) that any common expense not set forth in the budget or any increase in

assessments over the amount adopted in the budget shall be separately assessed

against all unit owners, (iv) that separate assessments for expenditures relating to

emergencies or mandated by law may be adopted by the board of managers without

being subject to unit owner approval or the provisions of item (ii) above or item (v)

below. As used herein, "emergency" means an immediate danger to the structural

integrity of the common elements or to the life, health, safety or property of the unit

owners, (v) that assessments for additions and alterations to the common elements or

to association-owned property not included in the adopted annual budget, shall be

separately assessed and are subject to approval of two-thirds of the total votes of all

unit owners, (vi) that the board of managers may adopt separate assessments payable

over more than one fiscal year. With respect to multi-year assessments not governed

by items (iv) and (v), the entire amount of the multi-year assessment shall be

deemed considered and authorized in the first fiscal year in which the assessment is

approved;

Illinois Condominium Property Act - 27

(9) (A) that every meeting of the board of managers shall be

open to any unit owner, except that the board may close any portion of a noticed

meeting or meet separately from a noticed meeting to: (i) discuss litigation when an

action against or on behalf of the particular association has been filed and is pending

in a court or administrative tribunal, or when the board of managers finds that such

an action is probable or imminent, (ii) discuss the appointment, employment,

engagement, or dismissal of an employee, independent contractor, agent, or other

provider of goods and services, (iii) interview a potential employee, independent

contractor, agent, or other provider of goods and services, (iv) discuss violations of

rules and regulations of the association, (v) discuss a unit owner's unpaid share of

common expenses, or (vi) consult with the association's legal counsel; that any vote

on these matters shall take place at a meeting of the board of managers or portion

thereof open to any unit owner;

(B) that board members may participate in and act at any

meeting of the board of managers in person, by telephonic means, or by use of any

acceptable technological means whereby all persons participating in the meeting can

communicate with each other; that participation constitutes attendance and presence

in person at the meeting;

meetings of the board of managers or portions thereof required to be open by this

Act by tape, film or other means, and that the board may prescribe reasonable rules

and regulations to govern the right to make such recordings;

(D) that notice of every meeting of the board of managers

shall be given to every board member at least 48 hours prior thereto, unless the

board member waives notice of the meeting pursuant to subsection (a) of Section

18.8; and

(E) that notice of every meeting of the board of managers

shall be posted in entranceways, elevators, or other conspicuous places in the

condominium at least 48 hours prior to the meeting of the board of managers except

where there is no common entranceway for 7 or more units, the board of managers

may designate one or more locations in the proximity of these units where the

notices of meetings shall be posted; that notice of every meeting of the board of

managers shall also be given at least 48 hours prior to the meeting, or such longer

notice as this Act may separately require, to: (i) each unit owner who has provided

the association with written authorization to conduct business by acceptable

technological means, and (ii) to the extent that the condominium instruments of an

association require, to each other unit owner, as required by subsection (f) of Section

18.8, by mail or delivery, and that no other notice of a meeting of the board of

managers need be given to any unit owner;

(10) that the board shall meet at least 4 times annually;

(11) that no member of the board or officer shall be elected for a

term of more than 2 years, but that officers and board members may succeed

themselves;

(12) the designation of an officer to mail and receive all notices

and execute amendments to condominium instruments as provided for in this Act

and in the condominium instruments;

Illinois Condominium Property Act - 28

(13) the method of filling vacancies on the board which shall

include authority for the remaining members of the board to fill the vacancy by two-

thirds vote until the next annual meeting of unit owners or for a period terminating

no later than 30 days following the filing of a petition signed by unit owners holding

20% of the votes of the association requesting a meeting of the unit owners to fill the

vacancy for the balance of the term, and that a meeting of the unit owners shall be

called for purposes of filling a vacancy on the board no later than 30 days following

the filing of a petition signed by unit owners holding 20% of the votes of the

association requesting such a meeting, and the method of filling vacancies among

the officers that shall include the authority for the members of the board to fill the

vacancy for the unexpired portion of the term;

(14) what percentage of the board of managers, if other than a

majority, shall constitute a quorum;

(15) provisions concerning notice of board meetings to members

of the board;

(16) the board of managers may not enter into a contract with a

current board member or with a corporation or partnership in which a board member

or a member of the board member's immediate family has 25% or more interest,

unless notice of intent to enter the contract is given to unit owners within 20 days

after a decision is made to enter into the contract and the unit owners are afforded an

opportunity by filing a petition, signed by 20% of the unit owners, for an election to

approve or disapprove the contract; such petition shall be filed within 30 days after

such notice and such election shall be held within 30 days after filing the petition;

for purposes of this subsection, a board member's immediate family means the board

member's spouse, parents, and children;

(17) that the board of managers may disseminate to unit owners

biographical and background information about candidates for election to the board

if (i) reasonable efforts to identify all candidates are made and all candidates are

given an opportunity to include biographical and background information in the

information to be disseminated; and (ii) the board does not express a preference in

favor of any candidate;

(18) any proxy distributed for board elections by the board of

managers gives unit owners the opportunity to designate any person as the proxy

holder, and gives the unit owner the opportunity to express a preference for any of

the known candidates for the board or to write in a name;

(19) that special meetings of the board of managers can be called

by the president or 25% of the members of the board;

(20) that the board of managers may establish and maintain a

system of master metering of public utility services and collect payments in

connection therewith, subject to the requirements of the Tenant Utility Payment

Disclosure Act; and

(21) that the board may ratify and confirm actions of the

members of the board taken in response to an emergency, as that term is defined in

subdivision (a)(8)(iv) of this Section; that the board shall give notice to the unit

owners of: (i) the occurrence of the emergency event within 7 business days after the

Illinois Condominium Property Act - 29

emergency event, and (ii) the general description of the actions taken to address the

event within 7 days after the emergency event.

The intent of the provisions of this amendatory Act of the 99th General Assembly

adding this paragraph (21) is to empower and support boards to act in emergencies.

(b) (1) What percentage of the unit owners, if other than 20%, shall

constitute a quorum provided that, for condominiums with 20 or more units, the

percentage of unit owners constituting a quorum shall be 20% unless the unit owners

holding a majority of the percentage interest in the association provide for a higher

percentage, provided that in voting on amendments to the association's bylaws, a

unit owner who is in arrears on the unit owner's regular or separate assessments for

60 days or more, shall not be counted for purposes of determining if a quorum is

present, but that unit owner retains the right to vote on amendments to the

association's bylaws;

(2) that the association shall have one class of membership;

(3) that the members shall hold an annual meeting, one of the

purposes of which shall be to elect members of the board of managers;

(4) the method of calling meetings of the unit owners;

(5) that special meetings of the members can be called by the

president, board of managers, or by 20% of unit owners;

(6) that written notice of any membership meeting shall be

mailed or delivered giving members no less than 10 and no more than 30 days’

notice of the time, place and purpose of such meeting except that notice may be sent,

to the extent the condominium instruments or rules adopted thereunder expressly so

provide, by electronic transmission consented to by the unit owner to whom the

notice is given, provided the director and officer or his agent certifies in writing to

the delivery by electronic transmission;

(7) that voting shall be on a percentage basis, and that the

percentage vote to which each unit is entitled is the percentage interest of the

undivided ownership of the common elements appurtenant thereto, provided that the

bylaws may provide for approval by unit owners in connection with matters where

the requisite approval on a percentage basis is not specified in this Act, on the basis

of one vote per unit;

(8) that, where there is more than one owner of a unit, if only one

of the multiple owners is present at a meeting of the association, he is entitled to cast

all the votes allocated to that unit, if more than one of the multiple owners are

present, the votes allocated to that unit may be cast only in accordance with the

agreement of a majority in interest of the multiple owners, unless the declaration

expressly provides otherwise, that there is majority agreement if any one of the

multiple owners cast the votes allocated to that unit without protest being made

promptly to the person presiding over the meeting by any of the other owners of the

unit;

(9) (A) except as provided in subparagraph (B) of this paragraph

(9) in connection with board elections, that a unit owner may vote by proxy

executed in writing by the unit owner or by his duly authorized attorney in fact; that

the proxy must bear the date of execution and, unless the condominium instruments

Illinois Condominium Property Act - 30

or the written proxy itself provide otherwise, is invalid after 11 months from the date

of its execution; to the extent the condominium instruments or rules adopted

thereunder expressly so provide, a vote or proxy may be submitted by electronic

transmission, provided that any such electronic transmission shall either set forth or

be submitted with information from which it can be determined that the electronic

transmission was authorized by the unit owner or the unit owner's proxy;

(B) that if a rule adopted at least 120 days before a board

election or the declaration or bylaws provide for balloting as set forth in this

subsection, unit owners may not vote by proxy in board elections, but may vote only

(i) by submitting an association-issued ballot in person at the election meeting or (ii)

by submitting an association-issued ballot to the association or its designated agent

by mail or other means of delivery specified in the declaration, bylaws, or rule; that

the ballots shall be mailed or otherwise distributed to unit owners not less than 10

and not more than 30 days before the election meeting, and the board shall give unit

owners not less than 21 days' prior written notice of the deadline for inclusion of a

candidate's name on the ballots; that the deadline shall be no more than 7 days

before the ballots are mailed or otherwise distributed to unit owners; that every such

ballot must include the names of all candidates who have given the board or its

authorized agent timely written notice of their candidacy and must give the person

casting the ballot the opportunity to cast votes for candidates whose names do not

appear on the ballot; that a ballot received by the association or its designated agent

after the close of voting shall not be counted; that a unit owner who submits a ballot

by mail or other means of delivery specified in the declaration, bylaws, or rule may

request and cast a ballot in person at the election meeting, and thereby void any

ballot previously submitted by that unit owner;

(B-5) that if a rule adopted at least 120 days before a board

election or the declaration or bylaws provide for balloting as set forth in this

subparagraph, unit owners may not vote by proxy in board elections, but may vote

only (i) by submitting an association-issued ballot in person at the election meeting;

or (ii) by any acceptable technological means as defined in Section 2 of this Act;

instructions regarding the use of electronic means for voting shall be distributed to

all unit owners not less than 10 and not more than 30 days before the election

meeting, and the board shall give unit owners not less than 21 days' prior written

notice of the deadline for inclusion of a candidate's name on the ballots; the deadline

shall be no more than 7 days before the instructions for voting using electronic or

acceptable technological means is distributed to unit owners; every instruction

notice must include the names of all candidates who have given the board or its

authorized agent timely written notice of their candidacy and must give the person

voting through electronic or acceptable technological means the opportunity to cast

votes for candidates whose names do not appear on the ballot; a unit owner who

submits a vote using electronic or acceptable technological means may request and

cast a ballot in person at the election meeting, thereby voiding any vote previously

submitted by that unit owner;

20% of the votes of the association is delivered to the board within 30 days after the

board's approval of a rule adopted pursuant to subparagraph (B) or subparagraph (B-

5) of this paragraph (9), the board shall call a meeting of the unit owners within 30

days after the date of delivery of the petition; that unless a majority of the total votes

of the unit owners are cast at the meeting to reject the rule, the rule is ratified;

Illinois Condominium Property Act - 31

(D) that votes cast by ballot under subparagraph (B) or

electronic or acceptable technological means under subparagraph (B-5) of this

paragraph (9) are valid for the purpose of establishing a quorum;

(10) that the association may, upon adoption of the appropriate

rules by the board of managers, conduct elections by secret ballot whereby the

voting ballot is marked only with the percentage interest for the unit and the vote

itself, provided that the board further adopt rules to verify the status of the unit

owner issuing a proxy or casting a ballot; and further, that a candidate for election to

the board of managers or such candidate's representative shall have the right to be

present at the counting of ballots at such election;

(11) that in the event of a resale of a condominium unit the

purchaser of a unit from a seller other than the developer pursuant to an installment

sales contract for purchase shall during such times as he or she resides in the unit be

counted toward a quorum for purposes of election of members of the board of

managers at any meeting of the unit owners called for purposes of electing members

of the board, shall have the right to vote for the election of members of the board of

managers and to be elected to and serve on the board of managers unless the seller

expressly retains in writing any or all of such rights. In no event may the seller and

purchaser both be counted toward a quorum, be permitted to vote for a particular

office or be elected and serve on the board. Satisfactory evidence of the installment

sales contract shall be made available to the association or its agents. For purposes

of this subsection, "installment sales contract" shall have the same meaning as set

forth in Section 5 of the Installment Sales Contract Act and Section 1 (e) of the

Dwelling Unit Installment Contract Act;

(12) the method by which matters subject to the approval of unit

owners set forth in this Act, or in the condominium instruments, will be submitted to

the unit owners at special membership meetings called for such purposes; and

(13) that matters subject to the affirmative vote of not less than 2/3

of the votes of unit owners at a meeting duly called for that purpose, shall include,

but not be limited to:

(i) merger or consolidation of the association;

(ii) sale, lease, exchange, or other disposition (excluding

the mortgage or pledge) of all, or substantially all of the property and assets of the

association; and

(iii) the purchase or sale of land or of units on behalf of all

unit owners.

preside over the meetings of the board of managers and of the unit owners.

(d) Election of a secretary from among the board of managers, who shall

keep the minutes of all meetings of the board of managers and of the unit owners

and who shall, in general, perform all the duties incident to the office of secretary.

(e) Election of a treasurer from among the board of managers, who shall

keep the financial records and books of account.

Illinois Condominium Property Act - 32

(f) Maintenance, repair and replacement of the common elements and

payments therefor, including the method of approving payment vouchers.

(g) An association with 30 or more units shall obtain and maintain

fidelity insurance covering persons who control or disburse funds of the association

for the maximum amount of coverage available to protect funds in the custody or

control of the association plus the association reserve fund. All management

companies which are responsible for the funds held or administered by the

association shall maintain and furnish to the association a fidelity bond for the

maximum amount of coverage available to protect funds in the custody of the

management company at any time. The association shall bear the cost of the fidelity

insurance and fidelity bond, unless otherwise provided by contract between the

association and a management company. The association shall be the direct obligee

of any such fidelity bond. A management company holding reserve funds of an

association shall at all times maintain a separate account for each association,

provided, however, that for investment purposes, the Board of Managers of an

association may authorize a management company to maintain the association's

reserve funds in a single interest bearing account with similar funds of other

associations. The management company shall at all times maintain records

identifying all moneys of each association in such investment account. The

management company may hold all operating funds of associations which it

manages in a single operating account but shall at all times maintain records

identifying all moneys of each association in such operating account. Such operating

and reserve funds held by the management company for the association shall not be

subject to attachment by any creditor of the management company.

For the purpose of this subsection a management company shall be defined

as a person, partnership, corporation, or other legal entity entitled to transact

business on behalf of others, acting on behalf of or as an agent for a unit owner, unit

owners or association of unit owners for the purpose of carrying out the duties,

responsibilities, and other obligations necessary for the day to day operation and

management of any property subject to this Act. For purposes of this subsection, the

term "fiduciary insurance coverage" shall be defined as both a fidelity bond and

directors and officers liability coverage, the fidelity bond in the full amount of

association funds and association reserves that will be in the custody of the

association, and the directors and officers liability coverage at a level as shall be

determined to be reasonable by the board of managers, if not otherwise established

by the declaration or by laws.

Until one year after September 21, 1985, if a condominium association has

reserves plus assessments in excess of $250,000 and cannot reasonably obtain 100%

fidelity bond coverage for such amount, then it must obtain a fidelity bond coverage

of $250,000.

(h) Method of estimating the amount of the annual budget, and the

manner of assessing and collecting from the unit owners their respective shares of

such estimated expenses, and of any other expenses lawfully agreed upon.

(i) That upon 10 days’ notice to the manager or board of managers and

payment of a reasonable fee, any unit owner shall be furnished a statement of his

account setting forth the amount of any unpaid assessments or other charges due and

owing from such owner.

Illinois Condominium Property Act - 33

(j) Designation and removal of personnel necessary for the maintenance,

repair and replacement of the common elements.

(k) Such restrictions on and requirements respecting the use and

maintenance of the units and the use of the common elements, not set forth in the

declaration, as are designed to prevent unreasonable interference with the use of

their respective units and of the common elements by the several unit owners.

(l) Method of adopting and of amending administrative rules and

regulations governing the operation and use of the common elements.

(m) The percentage of votes required to modify or amend the bylaws, but

each one of the particulars set forth in this section shall always be embodied in the

bylaws.

(n) (i) The provisions of this Act, the declaration, bylaws, other

condominium instruments, and rules and regulations that relate to the use of the

individual unit or the common elements shall be applicable to any person leasing a

unit and shall be deemed to be incorporated in any lease executed or renewed on or

after August 30, 1984. (ii) With regard to any lease entered into subsequent to July

1, 1990, the unit owner leasing the unit shall deliver a copy of the signed lease to the

board or if the lease is oral, a memorandum of the lease, not later than the date of

occupancy or 10 days after the lease is signed, whichever occurs first. In addition to

any other remedies, by filing an action jointly against the tenant and the unit owner,

an association may seek to enjoin a tenant from occupying a unit or seek to evict a

tenant under the provisions of Article IX of the Code of Civil Procedure for failure

of the lessor-owner to comply with the leasing requirements prescribed by this

Section or by the declaration, bylaws, and rules and regulations. The board of

managers may proceed directly against a tenant, at law or in equity, or under the

provisions of Article IX of the Code of Civil Procedure, for any other breach by

tenant of any covenants, rules, regulations or bylaws.

(o) The association shall have no authority to forbear the payment of

assessments by any unit owner.

(p) That when 30% or fewer of the units, by number, possess over 50%

in the aggregate of the votes in the association, any percentage vote of members

specified herein or in the condominium instruments shall require the specified

percentage by number of units rather than by percentage of interest in the common

elements allocated to units that would otherwise be applicable and garage units or

storage units, or both, shall have, in total, no more votes than their aggregate

percentage of ownership in the common elements; this shall mean that if garage

units or storage units, or both, are to be given a vote, or portion of a vote, that the

association must add the total number of votes cast of garage units, storage units, or

both, and divide the total by the number of garage units, storage units, or both, and

multiply by the aggregate percentage of ownership of garage units and storage units

to determine the vote, or portion of a vote, that garage units or storage units, or both,

have. For purposes of this subsection (p), when making a determination of whether

30% or fewer of the units, by number, possess over 50% in the aggregate of the

votes in the association, a unit shall not include a garage unit or a storage unit.

(q) That a unit owner may not assign, delegate, transfer, surrender, or

avoid the duties, responsibilities, and liabilities of a unit owner under this Act, the

condominium instruments, or the rules and regulations of the Association; and that

Illinois Condominium Property Act - 34

such an attempted assignment, delegation, transfer, surrender, or avoidance shall be

deemed void.

The provisions of this Section are applicable to all condominium instruments

recorded under this Act. Any portion of a condominium instrument which contains

provisions contrary to these provisions shall be void as against public policy and

ineffective. Any such instrument which fails to contain the provisions required by

this Section shall be deemed to incorporate such provisions by operation of law.

Section 18.1. (a) The owner or owners of the property, or the board of managers,

may cause to be incorporated a not-for-profit corporation under the General Not For

Profit Corporation Act of the State of Illinois for the purpose of facilitating the

administration and operation of the property.

(b) The Secretary of State shall include on the application of the Articles

of Incorporation under the General Not For Profit Corporation Act and the annual

report form and such other forms as he deems necessary a question asking whether

the corporation is a condominium association under the provisions of this Act.

profit corporations which are condominium associations in this State and their

current officers and members of the Board of Managers or Board of Directors, as

shown on the latest annual report or the articles of incorporation, whichever is more

current.

(d) The board of directors of such corporation shall constitute the board

of managers provided for in this Act, and all of the rights, titles, powers, privileges

and obligations vested in or imposed upon the board of managers in this Act and in

the declaration may be held or performed by such corporation or by the duly elected

members of the board of directors thereof and their successors in office.

(e) Nothing in this Section shall be construed to affect the ownership of

the property.

Section 18.2. Administration of property prior to election of initial board of

managers.

(a) Until election of the initial board of managers that is comprised of a

majority of unit owners other than the developer (first unit owner board of

managers), the same rights, titles, powers, privileges, trusts, duties and obligations

vested in or imposed upon the board of managers by this Act and in the declaration

and bylaws shall be held and performed by the developer.

(b) (i) The election of the first unit owner board of managers shall be

held not later than 60 days after the conveyance by the developer of 75% of the

units, or 3 years after the recording of the declaration, whichever is earlier. The

developer shall give at least 21 days’ notice of such meeting to elect the first unit

owner board of managers and shall provide to any unit owner within 3 working days

of the request, the names, addresses, and weighted vote of each unit owner entitled

to vote at such meeting. Any unit owner shall be provided with the same information

within 10 days of receipt of the request, with respect to each subsequent meeting to

elect members of the Board of Managers.

Illinois Condominium Property Act - 35

(ii) In the event the developer does not call a meeting for the

purpose of election of the board of managers within the time provided in this

subsection (b), unit owners holding 20% of the interest in the association may call a

meeting by filing a petition for such meeting with the developer, after which said

unit owners shall have authority to send notice of said meeting to the unit owners

and to hold such meeting.

established, the developer shall continue in office for a period of 30 days whereupon

written notice of his resignation shall be sent to all of the unit owners entitled to vote

at such election.

(d) Within 60 days following the election of the first unit owner board of

managers, the developer shall deliver to the board of managers:

(1) All original documents as recorded or filed pertaining to the

property, its administration, and the association, such as the declaration, by-laws,

articles of incorporation, other condominium instruments, annual reports, minutes

and rules and regulations, contracts, leases, or other agreements entered into by the

Association. If any original documents are unavailable, a copy may be provided if

certified by affidavit of the developer, or an officer or agent of the developer, as

being a complete copy of the actual document recorded as filed.

(2) A detailed accounting by the developer, setting forth the

source and nature of receipts and expenditures in connection with the management,

maintenance and operation of the property and copies of all insurance policies and a

list of any loans or advances to the association which are outstanding.

(3) Association funds, which shall have been at all times

segregated from any other moneys of the developer.

(4) A schedule of all real or personal property, equipment and

fixtures belonging to the association, including documents transferring the property,

warranties, if any, for all real and personal property and equipment, deeds, title

insurance policies, and all tax bills.

(5) A list of all litigation, administrative action and arbitrations

involving the association, any notices of governmental bodies involving actions

taken or which may be taken concerning the association, engineering and

architectural drawings and specifications as approved by any governmental

authority, all other documents filed with any other governmental authority, all

governmental certificates, correspondence involving enforcement of any association

requirements, copies of any documents relating to disputes involving unit owners,

originals of all documents relating to everything listed in this subparagraph.

(e) Upon election of the first unit owner board of managers, any contract,

lease, or other agreement made prior to the date of election of the first unit owner

board by or on behalf of unit owners, individually or collectively, the unit owners'

association, the board of managers, or the developer or its affiliates which extends

for a period of more than 2 years from the date of the election, shall be subject to

cancellation by a majority of the votes of the unit owners other than the developer

cast at a special meeting of members called for that purpose during the 180 day

period beginning on the date of the election of the first unit owner board. At least 60

days prior to the expiration of the 180 day cancellation period, the board of

Illinois Condominium Property Act - 36

managers shall send notice to every unit owner, notifying them of this provision,

what contracts, leases and other agreements are affected, and the procedure for

calling a meeting of the unit owners for the purpose of voting on termination of such

contracts, leases or other agreements. During the 180 day cancellation period the

other party to the contract, lease, or other agreement shall also have the right of

cancellation. The cancellation shall be effective 30 days after mailing notice by

certified mail, return receipt requested, to the last known address of the other parties

to the contract, lease, or other agreement.

(f) The statute of limitations for any actions in law or equity which the

condominium association may bring shall not begin to run until the unit owners have

elected a majority of the members of the board of managers.

(g) If the developer fails to fully comply with subsection (d) within the

60 days provided and fails to fully comply within 10 days of written demand mailed

by registered or certified mail to his or her last known address, the board may bring

an action to compel compliance with subsection (d). If the court finds that any of the

required deliveries were not made within the required period, the board shall be

entitled to recover its reasonable attorneys' fees and costs incurred from and after the

date of expiration of the 10 day demand.

Section 18.3. Unit Owners' Association. The unit owners' association is

responsible for the overall administration of the property through its duly elected

board of managers. Each unit owner shall be a member of the association. The

association, whether or not it is incorporated, shall have those powers and

responsibilities specified in the General Not For Profit Corporation Act of 1986 that

are not inconsistent with this Act or the condominium instruments, including but not

limited to the power to acquire and hold title to land. Such land is not part of the

common elements unless and until it has been added by an amendment of the

condominium instruments, properly executed and placed of record as required by

this Act. The association shall have and exercise all powers necessary or convenient

to effect any or all of the purposes for which the association is organized, and to do

every other act not inconsistent with law which may be appropriate to promote and

attain the purposes set forth in this Act or in the condominium instruments.

Section 18.4. Powers and duties of board of managers. The board of managers

shall exercise for the association all powers, duties and authority vested in the

association by law or the condominium instruments except for such powers, duties

and authority reserved by law to the members of the association. The powers and

duties of the board of managers shall include, but shall not be limited to, the

following:

(a) To provide for the operation, care, upkeep, maintenance, replacement

and improvement of the common elements. Nothing in this subsection (a) shall be

deemed to invalidate any provision in a condominium instrument placing limits on

expenditures for the common elements, provided, that such limits shall not be

applicable to expenditures for repair, replacement, or restoration of existing portions

of the common elements. The term "repair, replacement or restoration" means

expenditures to deteriorated or damaged portions of the property related to the

existing decorating, facilities, or structural or mechanical components, interior or

exterior surfaces, or energy systems and equipment with the functional equivalent of

the original portions of such areas. Replacement of the common elements may result

Illinois Condominium Property Act - 37

in an improvement over the original quality of such elements or facilities; provided

that, unless the improvement is mandated by law or is an emergency as defined in

item (iv) of subparagraph (8) of paragraph (a) of Section 18, if the improvement

results in a proposed expenditure exceeding 5% of the annual budget, the board of

managers, upon written petition by unit owners with 20% of the votes of the

association delivered to the board within 21 days of the board action to approve the

expenditure, shall call a meeting of the unit owners within 30 days of the date of

delivery of the petition to consider the expenditure. Unless a majority of the total

votes of the unit owners are cast at the meeting to reject the expenditure, it is

ratified.

(b) To prepare, adopt and distribute the annual budget for the property.

(d) To collect assessments from unit owners.

(e) To provide for the employment and dismissal of the personnel

necessary or advisable for the maintenance and operation of the common elements.

(f) To obtain adequate and appropriate kinds of insurance.

(g) To own, convey, encumber, lease, and otherwise deal with units

conveyed to or purchased by it.

(h) To adopt and amend rules and regulations covering the details of the

operation and use of the property, after a meeting of the unit owners called for the

specific purpose of discussing the proposed rules and regulations. Notice of the

meeting shall contain the full text of the proposed rules and regulations, and the

meeting shall conform to the requirements of Section 18(b) of this Act, except that

no quorum is required at the meeting of the unit owners unless the declaration,

bylaws or other condominium instrument expressly provides to the contrary.

However, no rule or regulation may impair any rights guaranteed by the First

Amendment to the Constitution of the United States or Section 4 of Article I of the

Illinois Constitution including, but not limited to, the free exercise of religion, nor

may any rules or regulations conflict with the provisions of this Act or the

condominium instruments. No rule or regulation shall prohibit any reasonable

accommodation for religious practices, including the attachment of religiously

mandated objects to the front-door area of a condominium unit.

(i) To keep detailed, accurate records of the receipts and expenditures

affecting the use and operation of the property.

(j) To have access to each unit from time to time as may be necessary

for the maintenance, repair or replacement of any common elements or for making

emergency repairs necessary to prevent damage to the common elements or to other

units.

(k) To pay real property taxes, special assessments, and any other special

taxes or charges of the State of Illinois or of any political subdivision thereof, or

other lawful taxing or assessing body, which are authorized by law to be assessed

and levied upon the real property of the condominium.

(l) To impose charges for late payment of a unit owner's proportionate

share of the common expenses, or any other expenses lawfully agreed upon, and

Illinois Condominium Property Act - 38

after notice and an opportunity to be heard, to levy reasonable fines for violation of

the declaration, by-laws, and rules and regulations of the association.

(m) By a majority vote of the entire board of managers, to assign the right

of the association to future income from common expenses or other sources, and to

mortgage or pledge substantially all of the remaining assets of the association.

(n) To record the dedication of a portion of the common elements to a

public body for use as, or in connection with, a street or utility where authorized by

the unit owners under the provisions of Section 14.2.

(o) To record the granting of an easement for the laying of cable

television or high speed Internet cable where authorized by the unit owners under

the provisions of Section 14.3; to obtain, if available and determined by the board to

be in the best interests of the association, cable television or bulk high speed Internet

service for all of the units of the condominium on a bulk identical service and equal

cost per unit basis; and to assess and recover the expense as a common expense and,

if so determined by the board, to assess each and every unit on the same equal cost

per unit basis.

(p) To seek relief on behalf of all unit owners when authorized pursuant

to subsection (c) of Section 10 from or in connection with the assessment or levying

of real property taxes, special assessments, and any other special taxes or charges of

the State of Illinois or of any political subdivision thereof or of any lawful taxing or

assessing body.

(q) To reasonably accommodate the needs of a unit owner who is a

person with a disability as required by the federal Civil Rights Act of 1968, the

Human Rights Act and any applicable local ordinances in the exercise of its powers

with respect to the use of common elements or approval of modifications in an

individual unit.

(r) To accept service of a notice of claim for purposes of the Mechanics

Lien Act on behalf of each respective member of the Unit Owners' Association with

respect to improvements performed pursuant to any contract entered into by the

Board of Managers or any contract entered into prior to the recording of the

condominium declaration pursuant to this Act, for a property containing more than 8

units, and to distribute the notice to the unit owners within 7 days of the acceptance

of the service by the Board of Managers. The service shall be effective as if each

individual unit owner had been served individually with notice.

(s) To adopt and amend rules and regulations (l) authorizing electronic

delivery of notices and other communications required or contemplated by this Act

to each unit owner who provides the association with written authorization for

electronic delivery and an electronic address to which such communications are to

be electronically transmitted; and (2) authorizing each unit owner to designate an

electronic address or a U.S. Postal Service address, or both, as the unit owner's

address on any list of members or unit owners which an association is required to

provide upon request pursuant to any provision of this Act or any condominium

instrument.

In the performance of their duties, the officers and members of the board,

whether appointed by the developer or elected by the unit owners, shall exercise the

care required of a fiduciary of the unit owners.

Illinois Condominium Property Act - 39

The collection of assessments from unit owners by an association, board of

managers or their duly authorized agents shall not be considered acts constituting a

collection agency for purposes of the Collection Agency Act.

The provisions of this Section are applicable to all condominium instruments

recorded under this Act. Any portion of a condominium instrument which contains

provisions contrary to these provisions shall be void as against public policy and

ineffective. Any such instrument that fails to contain the provisions required by this

Section shall be deemed to incorporate such provisions by operation of law.

Section 18.5. Master Associations.

(a) If the declaration, other condominium instrument, or other duly

recorded covenants provide that any of the powers of the unit owners associations

are to be exercised by or may be delegated to a nonprofit corporation or

unincorporated association that exercises those or other powers on behalf of one or

more condominiums, or for the benefit of the unit owners of one or more

condominiums, such corporation or association shall be a master association.

(b) There shall be included in the declaration, other condominium

instruments, or other duly recorded covenants establishing the powers and duties of

the master association the provisions set forth in subsections (c) through (h).

In interpreting subsections (c) through (h), the courts should interpret these

provisions so that they are interpreted consistently with the similar parallel

provisions found in other parts of this Act.

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

the board of the master association shall receive, at least 30 days prior to the

adoption thereof by the board of the master association, a copy of the proposed

annual budget.

(2) The board of the master association shall annually supply to

all unit owners of condominiums subject to the authority of the board of the master

association an itemized accounting of the common expenses for the preceding year

actually incurred or paid, together with a tabulation of the amounts collected

pursuant to the budget or assessment, and showing the net excess or deficit of

income over expenditures plus reserves.

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

the board of the master association shall receive written notice mailed or delivered

no less than 10 and no more than 30 days prior to any meeting of the board of the

master association concerning the adoption of the proposed annual budget or any

increase in the budget, or establishment of an assessment.

(4) Meetings of the board of the master association shall be open

to any unit owner in a condominium subject to the authority of the board of the

master association, except for the portion of any meeting held:

(A) to discuss litigation when an action against or on

behalf of the particular master association has been filed and is pending in a court or

administrative tribunal, or when the board of the master association finds that such

an action is probable or imminent,

Illinois Condominium Property Act - 40

(B) to consider information regarding appointment,

employment or dismissal of an employee, or

master association or unpaid common expenses owed to the master association.

Any vote on these matters shall be taken at a meeting or portion thereof open

to any unit owner of a condominium subject to the authority of the master

association.

Any unit owner may record the proceedings at meetings required to

be open by this Act by tape, film or other means; the board may prescribe reasonable

rules and regulations to govern the right to make such recordings. Notice of

meetings shall be mailed or delivered at least 48 hours prior thereto, unless a written

waiver of such notice is signed by the persons entitled to notice before the meeting

is convened. Copies of notices of meetings of the board of the master association

shall be posted in entranceways, elevators, or other conspicuous places in the

condominium at least 48 hours prior to the meeting of the board of the master

association. Where there is no common entranceway for 7 or more units, the board

of the master association may designate one or more locations in the proximity of

these units where the notices of meetings shall be posted.

(5) If the declaration provides for election by unit owners of

members of the board of directors in the event of a resale of a unit in the master

association, the purchaser of a unit from a seller other than the developer pursuant to

an installment sales contract for purchase shall, during such times as he or she

resides in the unit, be counted toward a quorum for purposes of election of members

of the board of directors at any meeting of the unit owners called for purposes of

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

members of the board of directors and to be elected to and serve on the board of

directors unless the seller expressly retains in writing any or all of those rights. In no

event may the seller and purchaser both be counted toward a quorum, be permitted

to vote for a particular office, or be elected and serve on the board. Satisfactory

evidence of the installment sales contract shall be made available to the association

or its agents. For purposes of this subsection, "installment sales contract" shall have

the same meaning as set forth in Section 5 of the Installment Sales Contract Act and

subsection (e) of Section 1 of the Dwelling Unit Installment Contract Act.

(6) The board of the master association shall have the authority to

establish and maintain a system of master metering of public utility services and to

collect payments in connection therewith, subject to the requirements of the Tenant

Utility Payment Disclosure Act.

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

community association shall have the power, after notice and an opportunity to be

heard, to levy and collect reasonable fines from members for violations of the

declaration, bylaws, and rules and regulations of the master association or the

common interest community association. Nothing contained in this subdivision (7)

shall give rise to a statutory lien for unpaid fines.

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

of a unit owner's financial obligation to the Association, including fees charged by a

manager or managing agent, shall be added to and deemed a part of an owner's

respective share of the common expenses unless: (i) the managing agent fees relate

Illinois Condominium Property Act - 41

to the costs to collect common expenses for the Association; (ii) the fees are set

forth in a contract between the managing agent and the Association; and (iii) the

authority to add the management fees to an owner's respective share of the common

expenses is specifically stated in the declaration or bylaws of the Association.

(d) Records.

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

following records of the association and make them available for examination and

copying at convenient hours of weekdays by any unit owners in a condominium

subject to the authority of the board or their mortgagees and their duly authorized

agents or attorneys:

(i) Copies of the recorded declaration, other

condominium instruments, other duly recorded covenants and bylaws and any

amendments, articles of incorporation of the master association, annual reports and

any rules and regulations adopted by the master association or its board shall be

available. Prior to the organization of the master association, the developer shall

maintain and make available the records set forth in this subdivision (d)(1) for

examination and copying.

(ii) Detailed and accurate records in chronological order

of the receipts and expenditures affecting the common areas, specifying and

itemizing the maintenance and repair expenses of the common areas and any other

expenses incurred, and copies of all contracts, leases, or other agreements entered

into by the master association, shall be maintained.

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

and the board of the master association shall be maintained for not less than 7 years.

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

election held for the board of the master association and for any other matters voted

on by the unit owners shall be maintained for not less than one year.

(v) Such other records of the master association as are

available for inspection by members of a not-for-profit corporation pursuant to

Section 107.75 of the General Not For Profit Corporation Act of 1986 shall be

maintained.

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

designates in writing a person to cast votes on behalf of the unit owner, the

designation shall remain in effect until a subsequent document is filed with the

association.

(2) Where a request for records under this subsection is made in

writing to the board of managers or its agent, failure to provide the requested record

or to respond within 30 days shall be deemed a denial by the board of directors.

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

its board for the cost of copying.

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

requested under subdivision (d)(1) within the time period provided in subdivision

(d)(2), the unit owner may seek appropriate relief, including an award of attorney's

fees and costs.

Illinois Condominium Property Act - 42

(e) The board of directors shall have standing and capacity to act in a

representative capacity in relation to matters involving the common areas of the

master association or more than one unit, on behalf of the unit owners as their

interests may appear.

(f) Administration of property prior to election of the initial board of

directors.

(1) Until the election, by the unit owners or the boards of

managers of the underlying condominium associations, of the initial board of

directors of a master association whose declaration is recorded on or after August

10, 1990, the same rights, titles, powers, privileges, trusts, duties and obligations

that are vested in or imposed upon the board of directors by this Act or in the

declaration or other duly recorded covenant shall be held and performed by the

developer.

(2) The election of the initial board of directors of a master

association whose declaration is recorded on or after August 10, 1990, by the unit

owners or the boards of managers of the underlying condominium associations, shall

be held not later than 60 days after the conveyance by the developer of 75% of the

units, or 3 years after the recording of the declaration, whichever is earlier. The

developer shall give at least 21 days’ notice of the meeting to elect the initial board

of directors and shall upon request provide to any unit owner, within 3 working days

of the request, the names, addresses, and weighted vote of each unit owner entitled

to vote at the meeting. Any unit owner shall upon receipt of the request be provided

with the same information, within 10 days of the request, with respect to each

subsequent meeting to elect members of the board of directors.

(3) If the initial board of directors of a master association whose

declaration is recorded on or after August 10, 1990 is not elected by the unit owners

or the members of the underlying condominium association board of managers at the

time established in subdivision (f)(2), the developer shall continue in office for a

period of 30 days, whereupon written notice of his resignation shall be sent to all of

the unit owners or members of the underlying condominium board of managers

entitled to vote at an election for members of the board of directors.

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

board of directors, other than the developer, by unit owners, the developer shall

deliver to the board of directors:

(i) All original documents as recorded or filed pertaining

to the property, its administration, and the association, such as the declaration,

articles of incorporation, other instruments, annual reports, minutes, rules and

regulations, and contracts, leases, or other agreements entered into by the

association. If any original documents are unavailable, a copy may be provided if

certified by affidavit of the developer, or an officer or agent of the developer, as

being a complete copy of the actual document recorded or filed.

(ii) A detailed accounting by the developer, setting forth

the source and nature of receipts and expenditures in connection with the

management, maintenance and operation of the property, copies of all insurance

policies, and a list of any loans or advances to the association which are outstanding.

Illinois Condominium Property Act - 43

(iii) Association funds, which shall have been at all times

segregated from any other moneys of the developer.

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

and fixtures belonging to the association, including documents transferring the

property, warranties, if any, for all real and personal property and equipment, deeds,

title insurance policies, and all tax bills.

(v) A list of all litigation, administrative action and

arbitrations involving the association, any notices of governmental bodies involving

actions taken or which may be taken concerning the association, engineering and

architectural drawings and specifications as approved by any governmental

authority, all other documents filed with any other governmental authority, all

governmental certificates, correspondence involving enforcement of any association

requirements, copies of any documents relating to disputes involving unit owners,

and originals of all documents relating to everything listed in this subparagraph.

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

paragraph (4) within the 60 days provided and fails to fully comply within 10 days

of written demand mailed by registered or certified mail to his or her last known

address, the board may bring an action to compel compliance with this paragraph

(4). If the court finds that any of the required deliveries were not made within the

required period, the board shall be entitled to recover its reasonable attorneys' fees

and costs incurred from and after the date of expiration of the 10 day demand.

(5) With respect to any master association whose declaration is

recorded on or after August 10, 1990, any contract, lease, or other agreement made

prior to the election of a majority of the board of directors other than the developer

by or on behalf of unit owners or underlying condominium associations, the

association or the board of directors, which extends for a period of more than 2 years

from the recording of the declaration, shall be subject to cancellation by more than

1/2 of the votes of the unit owners, other than the developer, cast at a special

meeting of members called for that purpose during a period of 90 days prior to the

expiration of the 2 year period if the board of managers is elected by the unit

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

managers. At least 60 days prior to the expiration of the 2 year period, the board of

directors, or, if the board is still under developer control, then the board of managers

or the developer shall send notice to every unit owner or underlying condominium

board of managers, notifying them of this provision, of what contracts, leases and

other agreements are affected, and of the procedure for calling a meeting of the unit

owners or for action by the underlying condominium board of managers for the

purpose of acting to terminate such contracts, leases or other agreements. During the

90 day period the other party to the contract, lease, or other agreement shall also

have the right of cancellation.

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

which the master association may bring shall not begin to run until the unit owners

or underlying condominium board of managers have elected a majority of the

members of the board of directors.

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

owner other than the developer, the owner shall obtain from the board of directors

Illinois Condominium Property Act - 44

and shall make available for inspection to the prospective purchaser, upon demand,

the following:

(1) A copy of the declaration, other 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.

(3) A statement of any capital expenditures anticipated by the

association within the current or succeeding 2 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 directors.

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

association for the last fiscal year for which such a statement is available.

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

which the association is a party.

(7) A statement setting forth what insurance coverage is provided

for all unit owners by the association.

(8) A statement that any improvements or alterations made to the

unit, or any part of the common areas assigned thereto, by the prior unit owner are in

good faith believed to be in compliance with the declaration of the master

association.

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 in writing, within 30 days of receiving the request.

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

providing such information may be charged by the association or its board of

directors to the unit seller for providing the information.

(g-1) The purchaser of a unit of a common interest community at a judicial

foreclosure sale, other than a mortgagee, who takes possession of a unit of a

common interest community pursuant to a court order or a purchaser who acquires

title from a mortgagee shall have the duty to pay the proportionate share, if any, of

the common expenses for the unit that 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 the court costs incurred by the

association in an action to enforce the collection that remain unpaid by the owner

during whose possession the assessments accrued. If the outstanding assessments

and the court costs incurred by the association in an action to enforce the collection

are paid at any time during any action to enforce the collection of assessments, the

purchaser shall have no obligation to pay any assessments that accrued before he or

she acquired title. The notice of sale of a unit of a common interest community

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 the assessments and

court costs required by this subsection (g-1).

Illinois Condominium Property Act - 45

(h) Errors and omissions.

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

instrument of the master association, the master association may correct the error or

omission by an amendment to the declaration or other instrument, as may be

required to conform it to this Act, to any other applicable statute, or to the

declaration. The amendment shall be adopted by vote of two-thirds of the members

of the board of directors or by a majority vote of the unit owners at a meeting called

for that purpose, unless the Act or the declaration of the master association

specifically provides for greater percentages or different procedures.

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

as owning an appropriate undivided share of the common areas or does not bear an

appropriate share of the common expenses, or if all of the common expenses or all

of the common elements in the condominium have not been distributed in the

declaration, so that the sum total of the shares of common areas which have been

distributed or the sum total of the shares of the common expenses fail to equal

100%, or if it appears that more than 100% of the common elements or common

expenses have been distributed, the error may be corrected by operation of law by

filing an amendment to the declaration, approved by vote of two-thirds of the

members of the board of directors or a majority vote of the unit owners at a meeting

called for that purpose, which proportionately adjusts all percentage interests so that

the total is equal to 100%, unless the declaration specifically provides for a different

procedure or different percentage vote by the owners of the units and the owners of

mortgages thereon affected by modification being made in the undivided interest in

the common areas, the number of votes in the unit owners association or the liability

for common expenses appertaining to the unit.

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

or other instrument is corrected by vote of two-thirds of the members of the board of

directors pursuant to the authority established in subdivisions (h)(1) or (h)(2) of this

Section, the board, upon written petition by unit owners with 20% of the votes of the

association or resolutions adopted by the board of managers or board of directors of

the condominium and common interest community associations which select 20% of

the members of the board of directors of the master association, whichever is

applicable, received within 30 days of the board action, shall call a meeting of the

unit owners or the boards of the condominium and common interest community

associations which select members of the board of directors of the master

association within 30 days of the filing of the petition or receipt of the condominium

and common interest community association resolution to consider the board action.

Unless a majority of the votes of the unit owners of the association are cast at the

meeting to reject the action, or board of managers or board of directors of

condominium and common interest community associations which select over 50%

of the members of the board of the master association adopt resolutions prior to the

meeting rejecting the action of the board of directors of the master association, it is

ratified whether or not a quorum is present.

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

(h) cannot be used if such an amendment would materially or adversely affect

property rights of the unit owners unless the affected unit owners consent in writing.

This Section does not restrict the powers of the association to otherwise amend the

declaration, bylaws, or other condominium instruments, but authorizes a simple

Illinois Condominium Property Act - 46

process of amendment requiring a lesser vote for the purpose of correcting defects,

errors, or omissions when the property rights of the unit owners are not materially or

adversely affected.

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

instruments that may not be corrected by an amendment procedure set forth in

subdivision (h)(1) or (h)(2) of this Section, then the circuit court in the county in

which the master association is located shall have jurisdiction to hear a petition of

one or more of the unit owners thereon or of the association, to correct the error or

omission, and the action may be a class action. The court may require that one or

more methods of correcting the error or omission be submitted to the unit owners to

determine the most acceptable correction. All unit owners in the association must be

joined as parties to the action. Service of process on owners may be by publication,

but the plaintiff shall furnish all unit owners not personally served with process with

copies of the petition and final judgment of the court by certified mail, return receipt

requested, at their last known address.

(6) Nothing contained in this Section shall be construed to

invalidate any provision of a declaration authorizing the developer to amend an

instrument prior to the latest date on which the initial membership meeting of the

unit owners must be held, whether or not it has actually been held, to bring the

instrument into compliance with the legal requirements of the Federal National

Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal

Housing Administration, the United States Veterans Administration or their

respective successors and assigns.

(i) The provisions of subsections (c) through (h) are applicable to all

declarations, other condominium instruments, and other duly recorded covenants

establishing the powers and duties of the master association recorded under this Act.

Any portion of a declaration, other condominium instrument, or other duly recorded

covenant establishing the powers and duties of a master association which contains

provisions contrary to the provisions of subsection (c) through (h) shall be void as

against public policy and ineffective. Any declaration, other condominium

instrument, or other duly recorded covenant establishing the powers and duties of

the master association which fails to contain the provisions required by subsections

(j) (Blank).

Section 18.6. Display of American flag or military flag.

(a) Notwithstanding any provision in the declaration, bylaws, rules,

regulations, or agreements or other instruments of a condominium association or a

master association or a common interest community association or a board's

construction of any of those instruments, a board may not prohibit the display of the

American flag or a military flag, or both, on or within the limited common areas and

facilities of a unit owner or on the immediately adjacent exterior of the building in

which the unit of a unit owner is located. A board may adopt reasonable rules and

regulations, consistent with Sections 4 through 10 of Chapter 1 of Title 4 of the

United States Code, regarding the placement and manner of display of the American

flag and a board may adopt reasonable rules and regulations regarding the placement

and manner of display of a military flag. A board may not prohibit the installation of

a flagpole for the display of the American flag or a military flag, or both, on or

Illinois Condominium Property Act - 47

within the limited common areas and facilities of a unit owner or on the immediately

adjacent exterior of the building in which the unit of a unit owner is located, but a

board may adopt reasonable rules and regulations regarding the location and size of

flagpoles.

(b) As used in this Section:

"American flag" means the flag of the United States (as defined in Section 1

of Chapter 1 of Title 4 of the United States Code and the Executive Orders entered

in connection with that Section) made of fabric, cloth, or paper displayed from a

staff or flagpole or in a window, but "American flag" does not include a depiction or

emblem of the American flag made of lights, paint, roofing, siding, paving

materials, flora, or balloons, or any other similar building, landscaping, or decorative

component.

"Board" includes a board of managers or a board of a master association or a

common interest community association.

"Military flag" means a flag of any branch of the United States armed forces

or the Illinois National Guard made of fabric, cloth, or paper displayed from a staff

or flagpole or in a window, but "military flag" does not include a depiction or

emblem of a military flag made of lights, paint, roofing, siding, paving materials,

flora, or balloons, or any other similar building, landscaping, or decorative

component.

Section 18.7. Standards for community association managers.

(a) "Community association" means an association in which membership

is a condition of ownership or shareholder interest of a unit in a condominium,

cooperative, townhouse, villa, or other residential unit that is part of a residential

development plan as a master association or common interest community and that is

authorized to impose an assessment and other costs that may become a lien on the

unit or lot.

(b) "Community association manager" means an individual who

administers for compensation the coordination of financial, administrative,

maintenance, or other duties called for in the management contract, including

individuals who are direct employees of a community association. A manager does

not include support staff, such as bookkeepers, administrative assistants, secretaries,

property inspectors, or customer service representatives.

manager, an individual must meet these requirements:

(1) shall have attained the age of 21 and be a citizen or legal

permanent resident of the United States;

(2) shall not have been convicted of forgery, embezzlement,

obtaining money under false pretenses, larceny, extortion, conspiracy to defraud or

other similar offense or offenses;

(3) shall have a working knowledge of the fundamentals of

community association management, including the Condominium Property Act, the

Illinois Not-for-Profit Corporation Act, and any other laws pertaining to community

association management; and

Illinois Condominium Property Act - 48

(4) shall not have engaged in the following activities: failure to

cooperate with any law enforcement agency in the investigation of a complaint; or

failure to produce any document, book, or record in the possession or control of the

community association manager after a request for production of that document,

book, or record in the course of an investigation of a complaint.

(d) Access to community association funds. For community associations

of 6 or more units, apartments, townhomes, villas or other residential units, a

community association manager or the firm with whom the manager is employed

shall not solely and exclusively have access to and disburse funds of a community

association unless:

(1) There is a fidelity bond in place.

(2) The fidelity bond is in an amount not less than all monies of

that association in the custody or control of the community association manager.

(3) The fidelity bond covers the community association manager

and all partners, officers, and employees of the firm with whom the community

association manager is employed during the term of the bond, as well as the

community association officers, directors, and employees of the community

association who control or disburse funds.

(4) The insurance company issuing the bond may not cancel or

refuse to renew the bond without giving not less than 10 days' prior written notice to

the community association.

(5) The community association shall secure and pay for the bond.

(e) A community association manager who provides community

association management services for more than one community association shall

maintain separate, segregated accounts for each community association. The funds

shall not, in any event, be commingled with funds of the community association

manager, the firm of the community association manager, or any other community

association. The maintenance of these accounts shall be custodial, and the accounts

shall be in the name of the respective community association.

(f) Exempt persons. Except as otherwise provided, this Section does not

apply to any person acting as a receiver, trustee in bankruptcy, administrator,

executor, or guardian acting under a court order or under the authority of a will or of

a trust instrument.

(g) Right of Action.

(1) Nothing in this amendatory Act of the 95th General Assembly

shall create a cause of action by a unit owner, shareholder, or community association

member against a community association manager or the firm of a community

association manager.

(2) This amendatory Act of the 95th General Assembly shall not

impair any right of action by a unit owner or shareholder against a community

association board of directors under existing law.

Illinois Condominium Property Act - 49

Section 18.8. Use of technology.

(a) Any notice required to be sent or received or signature, vote, consent,

or approval required to be obtained under any condominium instrument or any

provision of this Act may be accomplished using acceptable technological means.

This Section shall govern the use of technology in implementing the provisions of

any condominium instrument or any provision of this Act concerning notices,

signatures, votes, consents, or approvals.

(b) The association, unit owners, and other persons entitled to occupy a

unit may perform any obligation or exercise any right under any condominium

instrument or any provision of this Act by use of acceptable technological means.

any requirement for a signature under any condominium instrument or any provision

of this Act.

(d) Voting on, consent to, and approval of any matter under any

condominium instrument or any provision of this Act may be accomplished by any

acceptable technological means, provided that a record is created as evidence thereof

and maintained as long as the record would be required to be maintained in

nonelectronic form.

(e) Subject to other provisions of law, no action required or permitted by

any condominium instrument or any provision of this Act need be acknowledged

before a notary public if the identity and signature of the signatory can otherwise be

authenticated to the satisfaction of the board of directors or board of managers.

(f) If any person does not provide written authorization to conduct

business using acceptable technological means, the association shall, at its expense,

conduct business with the person without the use of acceptable technological means.

(g) This Section does not apply to any notices required: (i) under Article

IX of the Code of Civil Procedure; or (ii) in connection with foreclosure proceedings

in enforcement of any lien rights under this Act.

Section 18.9. Common elements; rights of board.

(a) Any provision in a condominium instrument is void as against public

policy and ineffective if it limits or restricts the rights of the board of managers by:

(1) requiring the prior consent of the unit owners in order for the

board of managers to take any action, including the institution of any action in court

or a demand for a trial by jury; or

(2) notwithstanding Section 32 of this Act, requiring the board of

managers to arbitrate or mediate a dispute with any one or more of all of the

declarants under the condominium instruments or the developer or any person not

then a unit owner prior to the institution of any action by the board of managers or a

demand for a trial by jury.

Illinois Condominium Property Act - 50

(b) A provision in a declaration which would otherwise be void and

ineffective under this Section may be enforced if it is approved by a vote of not less

than 75% of the unit owners at any time after the election of the first unit owner

board of managers.

Section 18.10. Generally accepted accounting principles.

An association subject to this Act that consists of 100 or more units shall use

generally accepted accounting principles in fulfilling any accounting obligations

under this Act.

Section 19. Records of the association; availability for examination.

(a) The board of managers of every association shall keep and maintain

the following records, or true and complete copies of these records, at the

association's principal office:

(1) the association's declaration, bylaws, and plats of survey, and

all amendments of these;

(2) the rules and regulations of the association, if any;

(3) if the association is incorporated as a corporation, the articles

of incorporation of the association and all amendments to the articles of

incorporation;

(4) minutes of all meetings of the association and its board of

managers for the immediately preceding 7 years;

(5) all current policies of insurance of the association;

(6) all contracts, leases, and other agreements then in effect to

which the association is a party or under which the association or the unit owners

have obligations or liabilities;

(7) a current listing of the names, addresses, email addresses,

telephone numbers, and weighted vote of all members entitled to vote;

(8) ballots and proxies related to ballots for all matters voted on

by the members of the association during the immediately preceding 12 months,

including but not limited to the election of members of the board of managers; and

(9) the books and records for the association's current and 10

immediately preceding fiscal years, including but not limited to itemized and

detailed records of all receipts, expenditures, and accounts.

(b) Any member of an association shall have the right to inspect,

examine, and make copies of the records described in subdivisions (1), (2), (3), (4),

(5), (6) and (9) of subsection (a) of this Section, in person or by agent, at any

reasonable time or times, at the association's principal office. In order to exercise

this right, a member must submit a written request to the association's board of

managers or its authorized agent, stating with particularity the records sought to be

examined. Failure of an association's board of managers to make available all

records so requested within 10 business days of receipt of the member's written

request shall be deemed a denial.

Illinois Condominium Property Act - 51

Any member who prevails in an enforcement action to compel examination

of records described in subdivision (1), (2), (3), (4), (5), (6) and (9) of subsection (a)

of this Section shall be entitled to recover reasonable attorney's fees and costs from

the association.

(c-d) (Blank).

(d-5) As used in this Section, "commercial purpose" means the use of any

part of a record or records described in subdivisions (7) and (8) of subsection (a) of

this Section, or information derived from such records, in any form for sale, resale,

or solicitation or advertisement for sales or services.

(e) Except as otherwise provided in subsection (g) of this Section, any

member of an association shall have the right to inspect, examine, and make copies

of the records described in subdivisions (7) and (8) of subsection (a) of this Section,

in person or by agent, at any reasonable time or times but only for a purpose that

relates to the association, at the association's principal office. In order to exercise

this right, a member must submit a written request, to the association's board of

managers or its authorized agent, stating with particularity the records sought to be

examined. As a condition for exercising this right, the board of managers or

authorized agent of the association may require the member to certify in writing that

the information contained in the records obtained by the member will not be used by

the member for any commercial purpose or for any purpose that does not relate to

the association. The board of managers of the association may impose a fine in

accordance with item (l) of Section 18.4 upon any person who makes a false

certification. Subject to the provisions of subsection (g) of this Section, failure of an

association's board of managers to make available all records so requested within 10

business days of receipt of the member's written request shall be deemed a denial;

provided, however, that the board of managers of an association that has adopted a

secret ballot election process as provided in Section 18 of this Act shall not be

deemed to have denied a member's request for records described in subdivision (8)

of subsection (a) of this Section if voting ballots, without identifying unit numbers,

are made available to the requesting member within 10 business days of receipt of

the member's written request.

Any member who prevails in an enforcement action to compel examination of

records described in subdivisions (7) or (8) of subsection (a) of this Section shall be

entitled to recover reasonable attorney's fees and costs from the association only if

the court finds that the board of directors acted in bad faith in denying the member's

request.

(f) The actual cost to the association of retrieving and making requested

records available for inspection and examination under this Section may be charged

by the association to the requesting member. If a member requests copies of records

requested under this Section, the actual costs to the association of reproducing the

records may also be charged by the association to the requesting member.

(g) Notwithstanding the provisions of subsection (e) of this Section,

unless otherwise directed by court order, an association need not make the following

records available for inspection, examination, or copying by its members:

(1) documents relating to appointment, employment, discipline,

or dismissal of association employees;

Illinois Condominium Property Act - 52

(2) documents relating to actions pending against or on behalf of

the association or its board of managers in a court or administrative tribunal;

(3) documents relating to actions threatened against, or likely to

be asserted on behalf of, the association or its board of managers in a court or

administrative tribunal;

(4) documents relating to common expenses or other charges

owed by a member other than the requesting member; and

(5) documents provided to an association in connection with the

lease, sale, or other transfer of a unit by a member other than the requesting member.

(h) The provisions of this Section are applicable to all condominium

instruments recorded under this Act. Any portion of a condominium instrument that

contains provisions contrary to these provisions shall be void as against public

policy and ineffective. Any condominium instrument that fails to contain the

provisions required by this Section shall be deemed to incorporate the provisions by

operation of law.

Section 20. Exemption from rules of property. It is expressly provided that the

rule of property known as the rule against perpetuities and the rule of property

known as the rule restricting unreasonable restraints on alienation shall not be

applied to defeat any of the provisions of this Act.

Section 21. Severability. If any provision of this Act or any section, sentence,

clause, phrase or word, or the application thereof in any circumstance, is held

invalid, the validity of the remainder of the Act and of the application of any such

provision, section, sentence, clause, phrase or word in any other circumstances shall

not be affected thereby.

Section 22. Full disclosure before sale. In relation to the initial sale or offering for

sale of any condominium unit, the seller must make full disclosure of, and provide

copies to the prospective buyer of, the following information relative to the

condominium project:

(a) the Declaration;

(b) the Bylaws of the association;

the prospective buyer, including full details concerning the estimated monthly

payments for the condominium unit, estimated monthly charges for maintenance or

management of the condominium property, and monthly charges for the use of

recreational facilities; and

(d) a floor plan of the apartment to be purchased by the prospective

buyer and the street address of the unit, if any, and if the unit has no unique street

address, the street address of the project.

(e) in addition, any developer of a conversion condominium shall include

the following information:

Illinois Condominium Property Act - 53

(1) A specific statement of the amount of any initial or special

condominium fee due from the purchaser on or before settlement of the purchase

contract and the basis of such fee;

(2) Information, if available, on the actual expenditures made on

all repairs, maintenance, operation, or upkeep of the subject building or buildings

within the last 2 years, set forth tabularly with the proposed budget of the

condominium and cumulatively, broken down on a per unit basis in proportion to the

relative voting strengths allocated to the units by the bylaws. If such building or

buildings have not been occupied for a period of 3 years then the information shall

be set forth for the last 2 year period such building or buildings have been occupied;

(3) A description of any provisions made in the budget for

reserves for capital expenditures and an explanation of the basis for such reserves,

or, if no provision is made for such reserves, a statement to that effect;

(4) For developments of more than 6 units for which the notice of

intent to convert is issued after the effective date of this amendatory Act of 1979, an

engineer's report furnished by the developer as to the present condition of all

structural components and major utility installations in the condominium, which

statement shall include the approximate dates of construction, installation, major

repairs and the expected useful life of such items, together with the estimated cost

(in current dollars) of replacing such items; and

(5) Any release, warranty, certificate of insurance, or surety

required by Section 9.1.

All of the information required by this Section which is available at the time

shall be furnished to the prospective buyer before execution of the contract for sale.

Thereafter, no changes or amendments may be made in any of the items furnished to

the prospective buyer which would materially affect the rights of the buyer or the

value of the unit without obtaining the approval of at least 75% of the buyers then

owning interest in the condominium. If all of the information is not available at the

time of execution of the contract for sale, then the contract shall be voidable at

option of the buyer at any time up until 5 days after the last item of required

information is furnished to the prospective buyer, or until the closing of the sale,

whichever is earlier. Failure on the part of the seller to make full disclosure as

required by this Section shall entitle the buyer to rescind the contract for sale at any

time before the closing of the contract and to receive a refund of all deposit moneys

paid with interest thereon at the rate then in effect for interest on judgments.

A sale is not an initial sale for the purposes of this Section if there is not a

bona fide transfer of the ownership and possession of the condominium unit for the

purpose of occupancy of such unit as the result of the sale or if the sale was entered

into for the purpose of avoiding the requirements of this Section. The buyer in the

first bona fide sale of any condominium unit has the rights granted to buyers under

this Section. If the buyer in any sale of a condominium unit asserts that such sale is

the first bona fide sale of that unit, the seller has the burden of proving that his

interest was acquired through a bona fide sale.

Section 22.1. (a) In the event of any resale of a condominium unit by a unit owner

other than the developer such owner shall obtain from the Board of Managers and

Illinois Condominium Property Act - 54

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.

(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.

(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 in writing and within 30 days of the request.

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 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.

Section 22.2. Resale approval. In the event of a sale of a condominium unit by a

unit owner, no condominium association shall exercise any right of refusal, option to

purchase, or right to disapprove the sale, on the basis that the purchaser's financing

is guaranteed by the Federal Housing Administration.

Illinois Condominium Property Act - 55

Section 23. Encroachments. If any portion of the common elements encroaches

upon any unit, or if any unit encroaches upon any portion of the common elements

or any other unit as a result of the construction, repair, reconstruction, settlement or

shifting of any building, a valid mutual easement shall exist in favor of the owners

of the common elements and the respective unit owners involved to the extent of the

encroachment. A valid easement shall not exist in favor of any owner who creates an

encroachment by his intentional, willful or negligent conduct or that of his agent.

Section 24. Deposits by Purchaser. Any deposit, payment or advance in the

payment of the purchase price for the initial sale of a unit, received by the developer

or his agent other than a payment made for extra work ordered in writing by the

purchaser of a unit, shall be held in an escrow account until title is conveyed to the

purchaser. The escrow funds shall be segregated in a separate account designated for

this purpose. The developer shall deposit all the payments in an interest bearing

account at a federally insured bank or savings and loan institution, which account

shall be maintained within applicable federal insurance limits, and all the interest is

to be credited to the purchaser on the purchase price of the unit. Such interest shall

accrue from the time of the deposit, payment or advance in the payment of the

purchase price of the unit. There shall be no interest however, if the transfer of title

takes place 45 days from the time the contract to purchase is entered. In the event of

a refund or default, the interest earned on such deposit, payment or advance shall

follow the disposition of the deposit, payment or advance. Escrow funds shall not be

subject to attachment by any creditor of a purchaser or of the developer or by the

holder of a lien against any portion of the property.

The provisions of this Section shall not apply to any payment received on

account for the purchase of a completed condominium unit under articles of

agreement for deed, installment agreement for deed, or lease with option to

purchase, if the agreement provides for conveyance of title more than one year after

the date of execution of the agreement.

Section 25. Add-on Condominiums. The developer may reserve the right to add

additional property to that which has been submitted to the provisions of this Act,

and in the event of any addition, to reallocate percentage interests in the common

elements in accordance with the provisions of this Act and the condominium

instruments by: recording an amended plat in accordance with the provisions of

Section 5 of this Act, together with an amendment to the declaration in accordance

with Section 6 of this Act. Notwithstanding any other provisions of this Act

requiring approval of unit owners, no approval shall be required if the developer

complies with the requirements of this Section.

If the developer wishes to reserve the right to add additional property, the

declaration shall contain:

(a) an explicit reservation of an option to add additional property to the

condominium;

(b) a statement of the method by which the reallocation of percentage

interests, adjustments to voting rights, and rights, and changes in liability for

common expenses shall be determined if additional units are added;

Illinois Condominium Property Act - 56

herein referred to as 'additional land' whether the units are occupied or not;

(d) a time limit of 10 years from the date of the recording of the

declaration, after which the option to add additional property shall no longer be in

effect and a statement of the circumstances, if any, under which it may terminate. In

all cases in which the option to add additional property is exercised, the contracts for

construction and delivery of such additional property shall contain a date for the

completion and delivery of the additional property to be constructed;

(e) a statement as to whether portions of the additional land may be

added to the property at different times, and as to whether there are any limitations

on the order thereof, or any limitations fixing the boundaries of these portions, or

whether any particular portion of it must be added;

(f) a statement concerning limitations, if any, on the locations of

improvements which may be made on the additional land added;

(g) a statement of the maximum number of units, if any, which may be

created on the additional land. If portions of the additional land may be added to the

property and the boundaries of those portions are fixed in accordance with paragraph

(e) of this Section, the declaration shall also state the maximum number of units that

may be created on each such portion to be added to the property. If portions of the

additional land may be added to the property and the boundaries of those portions

are not fixed in accordance with paragraph (e) of this Section, then the declaration

shall also state the largest number of units which may be created on each acre of any

portion added to the property;

(h) a statement of the extent to which structures, improvements,

buildings and units will be compatible with the configuration of the property in

relation to density, use, construction and architectural style; and

(i) any plat or site plans or other graphic material which the developer

may wish to set forth in order to supplement or explain the information provided.

Subject to any restrictions and limitations specified by the condominium

instruments, there shall be an appurtenant easement over and on the common

elements for the purpose of making improvements on the additional land, and for the

purpose of doing what is reasonably necessary and proper in conjunction therewith.

No provision of this Act shall be binding upon or obligate the developer to

exercise his option to make additions or bind the land described in the condominium

instruments. No provision of the condominium instruments shall be construed to be

binding upon or obligate the developer to exercise his option to make additions, and

the land legally described therein shall not be bound thereby, except in the case of

any covenant, restriction, limitation, or other representation or commitment in the

condominium instruments, or in any other agreement made with, or by, the

developer, requiring the developer to add all or any portion of the additional land, or

imposing any obligation with regard to anything that is or is not to be done thereon

or with regard thereto, or imposing any obligations with regard to anything that is or

is not to be done on or with regard to the property or any portion thereof, this

Section shall not be construed to nullify, limit, or otherwise affect any such

obligation.

Illinois Condominium Property Act - 57

Any amendment to the declaration adding additional land may contain such

complementary additions and modifications of the provisions of the declaration

affecting the additional land which are necessary to reflect the differences in

character, if any, of the additional land and the improvements thereto. In no event,

however, shall any such amendment to a declaration revoke, modify or add to the

covenants established by the declaration for the property already subject to the

declaration.

Section 26. Transfer of Limited Common Elements. The use of limited common

elements may be transferred between unit owners at their expense, provided that the

transfer may be made only in accordance with the condominium instruments and the

provision of this Act. Each transfer shall be made by an amendment to the

declaration executed by all unit owners who are parties to the transfer and consented

to by all other unit owners who have any right to use the limited common elements

affected. The amendment shall contain a certificate showing that a copy of the

amendment has been delivered to the board of managers. The amendment shall

contain a statement from the parties involved in the transfer which sets forth any

changes in the parties' proportionate shares. If the parties cannot agree upon a

reapportionment of their respective shares, the board of managers shall decide such

reapportionment. No transfer shall become effective until the amendment has been

recorded. Rights and obligations in respect to any limited common element shall not

be affected, nor shall any transfer of it be effective, unless a transaction is in

compliance with the requirements of this Section.

Each limited common element may be identified on the plat by the

distinguishing number or other symbol of the unit or units to which it is assigned,

and its location in respect to the unit or units may also be shown or may be

otherwise located in the declaration.

Section 27. Amendments.

(a) If there is any unit owner other than the developer, and unless

otherwise provided in this Act, the condominium instruments shall be amended only

as follows:

(i) upon the affirmative vote of 2/3 of those voting or upon the

majority specified by the condominium instruments, provided that in no event shall

the condominium instruments require more than a three-quarters vote of all unit

owners; and

(ii) with the approval of, or notice to, any mortgagees or other

lienholders of record, if required under the provisions of the condominium

instruments. If the condominium instruments require approval of any mortgagee or

lienholder of record and the mortgagee or lienholder of record receives a request to

approve or consent to the amendment to the condominium instruments, the

mortgagee or lienholder of record is deemed to have approved or consented to the

request unless the mortgagee or lienholder of record delivers a negative response to

the requesting party within 60 days after the mailing of the request. A request to

approve or consent to an amendment to the condominium instruments that is

required to be sent to a mortgagee or lienholder of record shall be sent by certified

mail.

Illinois Condominium Property Act - 58

(b) (1) If there is an omission, error, or inconsistency in a

condominium instrument, such that a provision of a condominium instrument does

not conform to this Act or to another applicable statute, the association may correct

the omission, error, or inconsistency to conform the condominium instrument to this

Act or to another applicable statute by an amendment adopted by vote of two-thirds

of the Board of Managers, without a unit owner vote. A provision in a condominium

instrument requiring or allowing unit owners, mortgagees, or other lienholders of

record to vote to approve an amendment to a condominium instrument, or for the

mortgagees or other lienholders of record to be given notice of an amendment to a

condominium instrument, is not applicable to an amendment to the extent that the

amendment corrects an omission, error, or inconsistency to conform the

condominium instrument to this Act or to another applicable statute.

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

as owning an appropriate undivided share of the common elements or does not bear

an appropriate share of the common expenses or that all the common expenses or all

of the common elements in the condominium have not been distributed in the

declaration, so that the sum total of the shares of common elements which have been

distributed or the sum total of the shares of the common expenses fail to equal

100%, or if it appears that more than 100% of the common elements or common

expenses have been distributed, the error may be corrected by operation of law by

filing an amendment to the declaration approved by vote of two-thirds of the

members of the Board of Managers or a majority vote of the unit owners at a

meeting called for this purpose which proportionately adjusts all percentage interests

so that the total is equal to 100% unless the condominium instruments specifically

provide for a different procedure or different percentage vote by the owners of the

units and the owners of mortgages thereon affected by modification being made in

the undivided interest in the common elements, the number of votes in the unit

owners association or the liability for common expenses appertaining to the unit.

(3) If an omission or error or a scrivener's error in the declaration,

bylaws or other condominium instrument is corrected by vote of two-thirds of the

members of the Board of Managers pursuant to the authority established in

paragraph (1) or (2) of this subsection (b), the Board upon written petition by unit

owners with 20 percent of the votes of the association filed within 30 days of the

Board action shall call a meeting of the unit owners within 30 days of the filing of

the petition to consider the Board action. Unless a majority of the votes of the unit

owners of the association are cast at the meeting to reject the action, it is ratified

whether or not a quorum is present.

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

(b) cannot be used if such an amendment would materially or adversely affect

property rights of the unit owners unless the affected unit owners consent in writing.

This Section does not restrict the powers of the association to otherwise amend the

declaration, bylaws, or other condominium instruments, but authorizes a simple

process of amendment requiring a lesser vote for the purpose of correcting defects,

errors, or omissions when the property rights of the unit owners are not materially or

adversely affected.

(5) If there is an omission or error in the declaration, bylaws, or

other condominium instruments, which may not be corrected by an amendment

procedure set forth in paragraphs (1) and (2) of this subsection (b) in the declaration

Illinois Condominium Property Act - 59

then the Circuit Court in the County in which the condominium is located shall have

jurisdiction to hear a petition of one or more of the unit owners thereon or of the

association, to correct the error or omission, and the action may be a class action.

The court may require that one or more methods of correcting the error or omission

be submitted to the unit owners to determine the most acceptable correction. All unit

owners in the association must be joined as parties to the action. Service of process

on owners may be by publication, but the plaintiff shall furnish all unit owners not

personally served with process with copies of the petition and final judgment of the

court by certified mail return receipt requested, at their last known address.

(6) Nothing contained in this Section shall be construed to

invalidate any provision of a condominium instrument authorizing the developer to

amend a condominium instrument prior to the latest date on which the initial

membership meeting of the unit owners must be held, whether or not it has actually

been held, to bring the instrument into compliance with the legal requirements of the

Federal National Mortgage Association, the Federal Home Loan Mortgage

Corporation, the Federal Housing Administration, the United States Veterans

Administration or their respective successors and assigns.

Section 29. Alterations within Units. A unit owner owning 2 or more units shall

have the right, subject to such reasonable limitations as the condominium

instruments may impose, to remove or otherwise alter any intervening partition, so

long as the action does not weaken, impair or endanger any common element or

unit. The unit owner shall notify the board of managers of the nature of the removal

or alteration at least 10 days prior to commencing work.

Section 30. Conversion condominiums; notice; recording.

(a)(1) No real estate may be submitted to the provisions of the Act

as a conversion condominium unless (i) a notice of intent to submit the real estate to

this Act (notice of intent) has been given to all persons who were tenants of the

building located on the real estate on the date the notice is given. Such notice shall

be given at least 30 days, and not more than 1 year prior to the recording of the

declaration which submits the real estate to this Act; and (ii) the developer executes

and acknowledges a certificate which shall be attached to and made a part of the

declaration and which provides that the developer, prior to the execution by him or

his agent of any agreement for the sale of a unit, has given a copy of the notice of

intent to all persons who were tenants of the building located on the real estate on

the date the notice of intent was given.

(2) If the owner fails to provide a tenant with notice of the intent

to convert as defined in this Section, the tenant permanently vacates the premises as

a direct result of non-renewal of his or her lease by the owner, and the tenant's unit

is converted to a condominium by the filing of a declaration submitting a property to

this Act without having provided the required notice, then the owner is liable to the

tenant for the following:

(A) the tenant's actual moving expenses incurred when

moving from the subject property, not to exceed $1,500;

(B) three month's rent at the subject property; and

Illinois Condominium Property Act - 60

(b) Any developer of a conversion condominium must, upon issuing the

notice of intent, publish and deliver along with such notice of intent, a schedule of

selling prices for all units subject to the condominium instruments and offer to sell

such unit to the current tenants, except for units to be vacated for rehabilitation

subsequent to such notice of intent. Such offer shall not expire earlier than 30 days

after receipt of the offer by the current tenant, unless the tenant notifies the

developer in writing of his election not to purchase the condominium unit.

whose tenancy expires (other than for cause) prior to the expiration of 120 days from

the date on which a copy of the notice of intent was given to the tenant shall have

the right to extend his tenancy on the same terms and conditions and for the same

rental until the expiration of such 120 day period by the giving of written notice

thereof to the developer within 30 days of the date upon which a copy of the notice

of intent was given to the tenant by the developer.

(d) Each lessee in a conversion condominium shall be informed by the

developer at the time the notice of intent is given whether his tenancy will be

renewed or terminated upon its expiration. If the tenancy is to be renewed, the tenant

shall be informed of all charges, rental or otherwise, in connection with the new

tenancy and the length of the term of occupancy proposed in conjunction therewith.

(e) For a period of 120 days following his receipt of the notice of intent,

any tenant who was a tenant on the date the notice of intent was given shall be given

the right to purchase his unit on substantially the same terms and conditions as set

forth in a duly executed contract to purchase the unit, which contract shall

conspicuously disclose the existence of, and shall be subject to, the right of first

refusal. The tenant may exercise the right of first refusal by giving notice thereof to

the developer prior to the expiration of 30 days from the giving of notice by the

developer to the tenant of the execution of the contract to purchase the unit. The

tenant may exercise such right of first refusal within 30 days from the giving of

notice by the developer of the execution of a contract to purchase the unit,

notwithstanding the expiration of the 120 day period following the tenant's receipt of

the notice of intent, if such contract was executed prior to the expiration of the 120

day period. The recording of the deed conveying the unit to the purchaser which

contains a statement to the effect that the tenant of the unit either waived or failed to

exercise the right of first refusal or option or had no right of first refusal or option

with respect to the unit shall extinguish any legal or equitable right or interest to the

possession or acquisition of the unit which the tenant may have or claim with respect

to the unit arising out of the right of first refusal or option provided for in this

Section. The foregoing provision shall not affect any claim which the tenant may

have against the landlord for damages arising out of the right of first refusal

provided for in this Section.

(f) During the 30 day period after the giving of notice of an executed

contract in which the tenant may exercise the right of first refusal, the developer

shall grant to such tenant access to any portion of the building to inspect any of its

features or systems and access to any reports, warranties, or other documents in the

possession of the developer which reasonably pertain to the condition of the

building. Such access shall be subject to reasonable limitations, including as to

hours. The refusal of the developer to grant such access is a business offense

Illinois Condominium Property Act - 61

punishable by a fine of $500. Each refusal to an individual lessee who is a potential

purchaser is a separate violation.

(g) Any notice provided for in this Section shall be deemed given when a

written notice is delivered in person or mailed, certified or registered mail, return

receipt requested to the party who is being given the notice.

(h) Prior to their initial sale, units offered for sale in a conversion

condominium and occupied by a tenant at the time of the offer shall be shown to

prospective purchasers only a reasonable number of times and at appropriate hours.

Units may only be shown to prospective purchasers during the last 90 days of any

expiring tenancy.

(i) Any provision in any lease or other rental agreement, or any

termination of occupancy on account of condominium conversion, not authorized

herein, or contrary to or waiving the foregoing provisions, shall be deemed to be

void as against public policy.

(j) A tenant is entitled to injunctive relief to enforce the provisions of

subsections (a) and (c) of this Section.

(k) A non-profit housing organization, suing on behalf of an aggrieved

tenant under this Section, may also recover compensation for reasonable attorney's

fees and court costs necessary for filing such action.

(l) Nothing in this Section shall affect any provision in any lease or

rental agreement in effect before this Act becomes law.

(m) Nothing in this amendatory Act of 1978 shall be construed to imply

that there was previously a requirement to record the notice provided for in this

Section.

Section 30.5. Conversion of apartments. In the case of the conversion of an

apartment building into condominium units, a municipality shall have the right to

inspect the apartment building prior to the conversion to condominium units and

may require that each new proposed condominium unit comply with the current life

safety, building, and zoning codes of the municipality.

Section 31. Subdivision or combination of units.

(a) As used in this Section, "combination of any units" means any 2 or

more residential units to be used as a single unit as shown on the plat or amended

plat, which may involve, without limitation, additional exclusive use of a portion of

the common elements within the building adjacent to the combined unit (for

example, without limitation, the use of a portion of an adjacent common hallway).

(b) Unless the condominium instruments expressly prohibit the

subdivision or combination of any units, and subject to additional limitations

provided by the condominium instruments, the owner or owners may, at their own

expense, subdivide or combine and locate or relocate common elements affected or

required thereby, in accordance with the provisions of the condominium instruments

and the requirements of this Act. The owner or owners shall make written

application to the board of managers, requesting an amendment to the condominium

instruments, setting forth in the application a proposed reallocation to the new units

Illinois Condominium Property Act - 62

of the percentage interest in the common elements, and setting forth whether the

limited common elements, if any, previously assigned to the unit to be subdivided

should be assigned to each new unit or to fewer than all of the new units created and

requesting, if desired in the event of a combination of any units, that the new unit be

granted the exclusive right to use as a limited common element, a portion of the

common elements within the building adjacent to the new unit. If the transaction is

approved by a majority of the board of managers, it shall be effective upon (1)

recording of an amendment to condominium instruments in accordance with the

provisions of Sections 5 and 6 of this Act, and (2) execution by the owners of the

units involved.

subsection (b) may grant the owner of the combined unit the exclusive right to use,

as a limited common element, a portion of the common elements within the building

adjacent to the new unit. The request for the amendment shall be granted and the

amendment shall grant this exclusive right to use as a limited common element if the

following conditions are met:

(1) the common element for which the exclusive right to use as a

limited common element is sought is not necessary or practical for use by the

owners of any units other than the owner or owners of the combined unit; and

(2) the owner or owners of the combined unit are responsible for

any and all costs associated with the renovation, modification, or other adaptation

performed as a result of the granting of the exclusive right to use as a limited

common element.

(d) If the combined unit is divided, part of the original combined unit is

sold, and the grant of the exclusive right to use as a limited common element is no

longer necessary, practical, or appropriate for the use and enjoyment of the owner or

owners of the original combined unit, the board may terminate the grant of the

exclusive right to use as a limited common element and require that the owner or

owners of the original combined unit restore the common area to its condition prior

to the grant of the exclusive right to use as a limited common element. If the

combined unit is sold without being divided, the grant of the exclusive right to use

as a limited common element shall apply to the new owner or owners of the

combined unit, who shall assume the rights and responsibilities of the original owner

or owners.

(e) Under this Section, the exclusive right to use as a limited common

element any portion of the common elements that is not necessary or practical for

use by the owners of any other units is not a diminution of the ownership interests of

all other unit owners requiring unanimous consent of all unit owners under

subsection (e) of Section 4 of this Act or any percentage set forth in the

condominium instruments.

(f) Notwithstanding Section 27 of this Act and any other amendment

provisions set forth in the condominium instruments, an amendment pursuant to this

Section is effective if it meets the requirements set forth in this Section.

Illinois Condominium Property Act - 63

Section 32. Alternate dispute resolution; mediation; arbitration.

(a) The declaration or bylaws of a condominium association may require

mediation or arbitration of disputes in which the matter in controversy has either no

specific monetary value or a value of $10,000 or less, other than the levying and

collection of assessments, or that arises out of violations of the declaration, bylaws,

or rules and regulations of the condominium association. A dispute not required to

be mediated or arbitrated by an association pursuant to its powers under this Section,

that is submitted to mediation or arbitration by the agreement of the disputants, is

also subject to this Section.

(b) The Illinois Uniform Arbitration Act shall govern all arbitrations

proceeding under this Section.

(b-5) The Uniform Mediation Act shall govern all mediations proceeding

under this Section.

mediation or arbitration.

Section 35. Compliance with the Condominium and Common Interest

Community Ombudsperson Act. Every unit owners' association must comply

with the Condominium and Common Interest Community Ombudsperson Act and is

subject to all provisions of the Condominium and Common Interest Community

Ombudsperson Act. This Section is repealed July 1, 2022.

Common Interest Community Association Act - 64

COMMON INTEREST

COMMUNITY ASSOCIATION ACT

(765 ILCS 160/1-1, et seq.)

Common Interest Community Association Act - 65

COMMON INTEREST

COMMUNITY ASSOCIATION ACT

INTRODUCTION

Prior to July 29, 2010, homeowner and townhome associations were only governed

by the Illinois General Not For Profit Corporation Act and a portion of the Illinois

Condominium Property Act. Illinois is now one of the few states that has a separate

law governing these associations. This law provides a governing statute for what

used to be an area of the law that was controlled by each association’s governing

document, with little standardization.

Master Associations are not subject to the Common Interest Community Association

Act.

FULL TEXT (as of January 1, 2019):

ARTICLE 1

Section 1-1. Short title. This Article may be cited as the Common Interest

Community Association Act, and references in this Article to "this Act" mean this

Article.

Section 1-5. Definitions. As used in this Act, unless the context otherwise requires:

"Acceptable technological means" includes, without limitation, electronic

transmission over the Internet or other network, whether by direct connection,

intranet, telecopier, electronic mail, and any generally available technology that, by

rule of the association, is deemed to provide reasonable security, reliability,

identification, and verifiability.

"Association" or "common interest community association" means the

association of all the members of a common interest community, acting pursuant to

bylaws or an operating agreement through its duly elected board of managers or

board of directors.

"Board" means a common interest community association's board of

managers or board of directors, whichever is applicable.

"Board member" or "member of the board" means a member of the board of

managers or the board of directors, whichever is applicable.

"Board of directors" means, for a common interest community that has been

incorporated as an Illinois not-for-profit corporation, the group of people elected by

the members of a common interest community as the governing body to exercise for

the members of the common interest community association all powers, duties, and

authority vested in the board of directors under this Act and the common interest

community association's declaration and bylaws.

"Board of managers" means, for a common interest community that is an

unincorporated association or organized as a limited liability company, the group of

people elected by the members of a common interest community as the governing

Common Interest Community Association Act - 66

body to exercise for the members of the common interest community association all

powers, duties, and authority vested in the board of managers under this Act and the

common interest community association's declaration, bylaws, or operating

agreement.

"Building" means all structures, attached or unattached, containing one or

more units.

"Common areas" means the portion of the property other than a unit.

"Common expenses" means the proposed or actual expenses affecting the

property, including reserves, if any, lawfully assessed by the common interest

community association.

"Common interest community" means 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. "Common interest

community" may include, but not be limited to, an attached or detached townhome,

villa, or single-family home. A "common interest community" does not include a

master association.

"Community instruments" means all documents and authorized amendments

thereto recorded by a developer or common interest community association,

including, but not limited to, the declaration, bylaws, operating agreement, plat of

survey, and rules and regulations.

"Declaration" means any duly recorded instruments, however designated,

that have created a common interest community and any duly recorded amendments

to those instruments.

"Developer" means any person who submits property legally or equitably

owned in fee simple by the person to the provisions of this Act, or any person who

offers units legally or equitably owned in fee simple by the person for sale in the

ordinary course of such person's business, including any successor to such person's

entire interest in the property other than the purchaser of an individual unit.

"Developer control" means such control at a time prior to the election of the

board of the common interest community association by a majority of the members

other than the developer.

"Electronic transmission" means any form of communication, not directly

involving the physical transmission of paper, that creates a record that may be

retained, retrieved, and reviewed by a recipient and that may be directly reproduced

in paper form by the recipient through an automated process.

"Majority" or "majority of the members" means the owners of more than

50% in the aggregate in interest of the undivided ownership of the common

elements. Any specified percentage of the members means such percentage in the

aggregate in interest of such undivided ownership. "Majority" or "majority of the

members of the board of the common interest community association" means more

than 50% of the total number of persons constituting such board pursuant to the

bylaws or operating agreement. Any specified percentage of the members of the

Common Interest Community Association Act - 67

common interest community association means that percentage of the total number

of persons constituting such board pursuant to the bylaws or operating agreement.

"Management company" or "community association manager" means a

person, partnership, corporation, or other legal entity entitled to transact business on

behalf of others, acting on behalf of or as an agent for an association for the purpose

of carrying out the duties, responsibilities, and other obligations necessary for the

day to day operation and management of any property subject to this Act.

"Meeting of the board" or "board meeting" means any gathering of a quorum

of the members of the board of the common interest community association held for

the purpose of conducting board business.

"Member" means the person or entity designated as an owner and entitled to

one vote as defined by the community instruments. The terms "member" and "unit

owner" may be used interchangeably as defined by the community instruments,

except in situations in which a matter of legal title to the unit is involved or at issue,

in which case the term "unit owner" would be the applicable term used.

"Membership" means the collective group of members entitled to vote as

defined by the community instruments.

"Parcel" means the lot or lots or tract or tracts of land described in the

declaration as part of a common interest community.

"Person" means a natural individual, corporation, partnership, trustee, or

other legal entity capable of holding title to real property.

"Plat" means a plat or plats of survey of the parcel and of all units in the

common interest community, which may consist of a three-dimensional horizontal

and vertical delineation of all such units, structures, easements, and common areas

on the property.

"Prescribed delivery method" means mailing, delivering, posting in an

association publication that is routinely mailed to all members, electronic

transmission, or any other delivery method that is approved in writing by the

member and authorized by the community instruments.

"Property" means all the land, property, and space comprising the parcel, all

improvements and structures erected, constructed or contained therein or thereon,

including any building and all easements, rights, and appurtenances belonging

thereto, and all fixtures and equipment intended for the mutual use, benefit, or

enjoyment of the members, under the authority or control of a common interest

community association.

"Purchaser" means any person or persons, other than the developer, who

purchase a unit in a bona fide transaction for value.

"Record" means to record in the office of the recorder of the county wherein

the property is located.

"Reserves" means those sums paid by members which are separately

maintained by the common interest community association for purposes specified by

the declaration and bylaws of the common interest community association.

Common Interest Community Association Act - 68

"Unit" means a part of the property designed and intended for any type of

independent use.

"Unit owner" means the person or persons whose estates or interests,

individually or collectively, aggregate fee simple absolute ownership of a unit.

Section 1-10. Applicability. Unless expressly provided otherwise herein, the

provisions of this Act are applicable to all common interest community associations

in this State.

Section 1-15. Construction, interpretation, and validity of community

instruments.

(a) Except to the extent otherwise provided by the declaration or other

community instruments, the terms defined in Section 1-5 of this Act shall be deemed

to have the meaning specified therein unless the context otherwise requires.

(b) (Blank).

occupancy of a unit to a person 55 years of age or older shall be valid and deemed

not to be in violation of Article 3 of the Illinois Human Rights Act provided that the

person or the immediate family of a person owning, renting, or lawfully occupying

such unit prior to the recording of the initial declaration shall not be deemed to be in

violation of such age restriction so long as they continue to own or reside in such

unit.

(d) Every common interest community association shall define a member

and its relationship to the units or unit owners in its community instruments.

Section 1-20. Amendments to the declaration, bylaws, or operating agreement.

(a) The administration of every property shall be governed by the

declaration and bylaws or operating agreement, which may either be embodied in

the declaration or in a separate instrument, a true copy of which shall be appended to

and recorded with the declaration. No modification or amendment of the declaration,

bylaws, or operating agreement shall be valid unless the same is set forth in an

amendment thereof and such amendment is duly recorded. An amendment of the

declaration, bylaws, or operating agreement shall be deemed effective upon

recordation, unless the amendment sets forth a different effective date.

(b) Unless otherwise provided by this Act, amendments to community

instruments authorized to be recorded shall be executed and recorded by the

president of the board or such other officer authorized by the common interest

community association or the community instruments.

bylaws, or rules and regulations to prohibit leasing, nothing in this Act or the

declarations, bylaws, rules and regulations of an association shall prohibit a unit

owner incorporated under 26 USC 501(c)(3) which is leasing a unit at the time of

the prohibition from continuing to do so until such time that the unit owner

voluntarily sells the unit; and no special fine, fee, dues, or penalty shall be assessed

against the unit owner for leasing its unit.

Common Interest Community Association Act - 69

(d) No action to incorporate a common interest community as a

municipality shall commence until an instrument agreeing to incorporation has been

signed by two-thirds of the members.

(e) If the community instruments require approval of any mortgagee or

lienholder of record and the mortgagee or lienholder of record receives a request to

approve or consent to the amendment to the community instruments, the mortgagee

or lienholder of record is deemed to have approved or consented to the request

unless the mortgagee or lienholder of record delivers a negative response to the

requesting party within 60 days after the mailing of the request. A request to

approve or consent to an amendment to the community instruments that is required

to be sent to a mortgagee or lienholder of record shall be sent by certified mail.

Section 1-25. Board of managers, board of directors, duties, elections, and

voting.

(a) Elections shall be held in accordance with the community

instruments, provided that an election shall be held no less frequently than once

every 24 months, for the board of managers or board of directors from among the

membership of a common interest community association.

(b) (Blank).

the community instruments indicate otherwise.

(d) No member of the board or officer shall be elected for a term of more

than 4 years, but officers and board members may succeed themselves.

(e) If there is a vacancy on the board, the remaining members of the

board may fill the vacancy by a two-thirds vote of the remaining board members

until the next annual meeting of the membership or until members holding 20% of

the votes of the association request a meeting of the members to fill the vacancy for

the balance of the term. A meeting of the members shall be called for purposes of

filling a vacancy on the board no later than 30 days following the filing of a petition

signed by membership holding 20% of the votes of the association requesting such a

meeting.

(f) There shall be an election of a:

(1) president from among the members of the board, who shall

preside over the meetings of the board and of the membership;

(2) secretary from among the members of the board, who shall

keep the minutes of all meetings of the board and of the membership and who shall,

in general, perform all the duties incident to the office of secretary; and

(3) treasurer from among the members of the board, who shall

keep the financial records and books of account.

(g) If no election is held to elect board members within the time period

specified in the bylaws, or within a reasonable amount of time thereafter not to

exceed 90 days, then 20% of the members may bring an action to compel

compliance with the election requirements specified in the bylaws or operating

agreement. If the court finds that an election was not held to elect members of the

Common Interest Community Association Act - 70

board within the required period due to the bad faith acts or omissions of the board

of managers or the board of directors, the members shall be entitled to recover their

reasonable attorney's fees and costs from the association. If the relevant notice

requirements have been met and an election is not held solely due to a lack of a

quorum, then this subsection (g) does not apply.

(h) Where there is more than one owner of a unit and there is only one

member vote associated with that unit, if only one of the multiple owners is present

at a meeting of the membership, he or she is entitled to cast the member vote

associated with that unit.

(h-5) A member may vote:

(1) by proxy executed in writing by the member or by his or her

duly authorized attorney in fact, provided, however, that the proxy bears the date of

execution. Unless the community instruments or the written proxy itself provide

otherwise, proxies will not be valid for more than 11 months after the date of its

execution; or

(2) by submitting an association-issued ballot in person at the

election meeting; or

(3) by submitting an association-issued ballot to the association

or its designated agent by mail or other means of delivery specified in the

declaration or bylaws; or

(4) by any electronic or acceptable technological means.

Votes cast under any paragraph of this subsection (h-5) are valid for the purpose of

establishing a quorum.

(i) The association may, upon adoption of the appropriate rules by the

board, conduct elections by electronic or acceptable technological means. Members

may not vote by proxy in board elections. Instructions regarding the use of

electronic means or acceptable technological means for voting shall be distributed to

all members not less than 10 and not more than 30 days before the election meeting.

The instruction notice must include the names of all candidates who have given the

board or its authorized agent timely written notice of their candidacy and must give

the person voting through electronic or acceptable technological means the

opportunity to cast votes for candidates whose names do not appear on the ballot.

The board rules shall provide and the instructions provided to the member shall state

that a member who submits a vote using electronic or acceptable technological

means may request and cast a ballot in person at the election meeting, and thereby

void any vote previously submitted by that member.

(j) Upon proof of purchase, the purchaser of a unit from a seller other

than the developer pursuant to an installment contract for purchase shall, during

such times as he or she resides in the unit, be counted toward a quorum for purposes

of election of members of the board at any meeting of the membership called for

purposes of electing members of the board, shall have the right to vote for the

members of the board of the common interest community association and to be

elected to and serve on the board unless the seller expressly retains in writing any or

all of such rights.

Common Interest Community Association Act - 71

Section 1-30. Board duties and obligations; records.

(a) The board shall meet at least 4 times annually.

(b) A common interest community association may not enter into a

contract with a current board member, or with a corporation, limited liability

company, or partnership in which a board member or a member of his or her

immediate family has 25% or more interest, unless notice of intent to enter into the

contract is given to members within 20 days after a decision is made to enter into the

contract and the members are afforded an opportunity by filing a petition, signed by

20% of the membership, for an election to approve or disapprove the contract; such

petition shall be filed within 20 days after such notice and such election shall be held

within 30 days after filing the petition. For purposes of this subsection, a board

member's immediate family means the board member's spouse, parents, siblings, and

children.

maintenance, repair, and replacement of the common areas and payments therefor,

including the method of approving payment vouchers.

(d) (Blank).

(e) The association may engage the services of a manager or

management company.

(f) The association shall have one class of membership unless the

declaration, bylaws, or operating agreement provide otherwise; however, this

subsection (f) shall not be construed to limit the operation of subsection (c) of

Section 1-20 of this Act.

(g) The board shall have the power, after notice and an opportunity to be

heard, to levy and collect reasonable fines from members or unit owners for

violations of the declaration, bylaws, operating agreement, and rules and regulations

of the common interest community association.

(h) Other than attorney's fees and court or arbitration costs, no fees

pertaining to the collection of a member's or unit owner's financial obligation to the

association, including fees charged by a manager or managing agent, shall be added

to and deemed a part of a member's or unit owner's respective share of the common

expenses unless: (i) the managing agent fees relate to the costs to collect common

expenses for the association; (ii) the fees are set forth in a contract between the

managing agent and the association; and (iii) the authority to add the management

fees to a member's or unit owner's respective share of the common expenses is

specifically stated in the declaration, bylaws, or operating agreement of the

association.

(i) Board records.

(1) The board shall maintain the following records of the

association and make them available for examination and copying at convenient

hours of weekdays by any member or unit owner in a common interest community

subject to the authority of the board, their mortgagees, and their duly authorized

agents or attorneys:

Common Interest Community Association Act - 72

(i) Copies of the recorded declaration, other community

instruments, other duly recorded covenants and bylaws and any amendments,

articles of incorporation, articles of organization, annual reports, and any rules and

regulations adopted by the board shall be available. Prior to the organization of the

board, the developer shall maintain and make available the records set forth in this

paragraph (i) for examination and copying.

(ii) Detailed and accurate records in chronological order

of the receipts and expenditures affecting the common areas, specifying and

itemizing the maintenance and repair expenses of the common areas and any other

expenses incurred, and copies of all contracts, leases, or other agreements entered

into by the board shall be maintained.

(iii) The minutes of all meetings of the board which shall

be maintained for not less than 7 years.

(iv) With a written statement of a proper purpose, ballots

and proxies related thereto, if any, for any election held for the board and for any

other matters voted on by the members, which shall be maintained for not less than

one year.

(v) With a written statement of a proper purpose, such

other records of the board as are available for inspection by members of a not-for-

profit corporation pursuant to Section 107.75 of the General Not For Profit

Corporation Act of 1986 shall be maintained.

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

trust, or other legal entity, the trustee, officer, or manager of the entity may

designate, in writing, a person to cast votes on behalf of the member or unit owner

and a designation shall remain in effect until a subsequent document is filed with the

association.

(2) Where a request for records under this subsection is made in

writing to the board or its agent, failure to provide the requested record or to respond

within 30 days shall be deemed a denial by the board.

(3) A reasonable fee may be charged by the board for the cost of

retrieving and copying records properly requested.

(4) If the board fails to provide records properly requested under

paragraph (1) of this subsection (i) within the time period provided in that paragraph

(1), the member may seek appropriate relief and shall be entitled to an award of

reasonable attorney's fees and costs if the member prevails and the court finds that

such failure is due to the acts or omissions of the board of managers or the board of

directors.

(j) The board shall have standing and capacity to act in a representative

capacity in relation to matters involving the common areas or more than one unit, on

behalf of the members or unit owners as their interests may appear.

Section 1-35. Member powers, duties, and obligations.

(a) The provisions of this Act, the declaration, bylaws, other community

instruments, and rules and regulations that relate to the use of an individual unit or

the common areas shall be applicable to any person leasing a unit and shall be

deemed to be incorporated in any lease executed or renewed on or after the effective

date of this Act. Unless otherwise provided in the community instruments, with

Common Interest Community Association Act - 73

regard to any lease entered into subsequent to the effective date of this Act, the unit

owner leasing the unit shall deliver a copy of the signed lease to the association or if

the lease is oral, a memorandum of the lease, not later than the date of occupancy or

10 days after the lease is signed, whichever occurs first.

(b) If there are multiple owners of a single unit, only one of the multiple

owners shall be eligible to serve as a member of the board at any one time, unless

the unit owner owns another unit independently.

director at a duly called special meeting.

(d) In the event of any resale of a unit in a common interest community

association by a member or unit owner other than the developer, the board shall

make available for inspection to the prospective purchaser, upon demand, the

following:

(1) A copy of the declaration, other 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.

(3) A statement of any capital expenditures anticipated by the

association within the current or succeeding 2 fiscal years.

(4) A statement of the status and amount of any reserve or

replacement fund and any other fund specifically designated for association projects.

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

association for the last fiscal year for which such a statement is available.

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

which the association is a party.

(7) A statement setting forth what insurance coverage is provided

for all members or unit owners by the association for common properties.

The principal officer of the board or such other officer as is specifically

designated shall furnish the above information within 30 days after receiving a

written request for such information.

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

providing such information may be charged by the association or the board to the

unit seller for providing the information.

Section 1-40. Meetings.

(a) Notice of any membership meeting shall be given detailing the time,

place, and purpose of such meeting no less than 10 and no more than 30 days prior

to the meeting through a prescribed delivery method.

(b) Meetings.

(1) Twenty percent of the membership shall constitute a quorum,

unless the community instruments indicate a lesser amount.

Common Interest Community Association Act - 74

(2) The membership shall hold an annual meeting. The board of

directors may be elected at the annual meeting.

(3) Special meetings of the board may be called by the president,

by 25% of the members of the board, or by any other method that is prescribed in

the community instruments. Special meetings of the membership may be called by

the president, the board, 20% of the membership, or any other method that is

prescribed in the community instruments.

(4) Except to the extent otherwise provided by this Act, the board

shall give the members notice of all board meetings at least 48 hours prior to the

meeting by sending notice by using a prescribed delivery method or by posting

copies of notices of meetings in entranceways, elevators, or other conspicuous

places in the common areas of the common interest community at least 48 hours

prior to the meeting except where there is no common entranceway for 7 or more

units, the board may designate one or more locations in the proximity of these units

where the notices of meetings shall be posted. The board shall give members notice

of any board meeting, through a prescribed delivery method, concerning the

adoption of (i) the proposed annual budget, (ii) regular assessments, or (iii) a

separate or special assessment within 10 to 60 days prior to the meeting, unless

otherwise provided in Section 1-45 (a) or any other provision of this Act.

(5) Meetings of the board shall be open to any unit owner, except

that the board may close any portion of a noticed meeting or meet separately from a

noticed meeting: (i) to discuss litigation when an action against or on behalf of the

particular association has been filed and is pending in a court or administrative

tribunal, or when the common interest community association finds that such an

action is probable or imminent, (ii) to discuss third party contracts or information

regarding appointment, employment, engagement, or dismissal of an employee,

independent contractor, agent, or other provider of goods and services, (iii) to

interview a potential employee, independent contractor, agent, or other provider of

goods and services, (iv) to discuss violations of rules and regulations of the

association, (v) to discuss a member's or unit owner's unpaid share of common

expenses, or (vi) to consult with the association's legal counsel. Any vote on these

matters shall be taken at a meeting or portion thereof open to any member.

(6) The board must reserve a portion of the meeting of the board

for comments by members; provided, however, the duration and meeting order for

the member comment period is within the sole discretion of the board.

Section 1-45. Finances.

(a) Each member shall receive through a prescribed delivery method, at

least 30 days but not more than 60 days prior to the adoption thereof by the board, a

copy of the proposed annual budget together with an indication of which portions

are intended for reserves, capital expenditures or repairs or payment of real estate

taxes.

(b) The board shall provide all members with a reasonably detailed

summary of the receipts, common expenses, and reserves for the preceding budget

year. The board shall (i) make available for review to all members an itemized

accounting of the common expenses for the preceding year actually incurred or paid,

together with an indication of which portions were for reserves, capital expenditures

Common Interest Community Association Act - 75

or repairs or payment of real estate taxes and with a tabulation of the amounts

collected pursuant to the budget or assessment, and showing the net excess or deficit

of income over expenditures plus reserves or (ii) provide a consolidated annual

independent audit report of the financial status of all fund accounts within the

association.

would result in the sum of all regular and separate assessments payable in the

current fiscal year exceeding 115% of the sum of all regular and separate

assessments payable during the preceding fiscal year, the common interest

community association, upon written petition by members with 20% of the votes of

the association delivered to the board within 14 days of the board action, shall call a

meeting of the members within 30 days of the date of delivery of the petition to

consider the budget or separate assessment; unless a majority of the total votes of the

members are cast at the meeting to reject the budget or separate assessment, it shall

be deemed ratified.

(d) If total common expenses exceed the total amount of the approved

and adopted budget, the common interest community association shall disclose this

variance to all its members and specifically identify the subsequent assessments

needed to offset this variance in future budgets.

(e) Separate assessments for expenditures relating to emergencies or

mandated by law may be adopted by the board without being subject to member

approval or the provisions of subsection (c) or (f) of this Section. As used herein,

"emergency" means a danger to or a compromise of the structural integrity of the

common areas or any of the common facilities of the common interest community.

"Emergency" also includes a danger to the life, health or safety of the membership.

(f) Assessments for additions and alterations to the common areas or to

association-owned property not included in the adopted annual budget, shall be

separately assessed and are subject to approval of a simple majority of the total

members at a meeting called for that purpose.

(g) The board may adopt separate assessments payable over more than

one fiscal year. With respect to multi-year assessments not governed by subsections

(e) and (f) of this Section, the entire amount of the multi-year assessment shall be

deemed considered and authorized in the first fiscal year in which the assessment is

approved.

(h) The board of a common interest community association shall have

the authority to establish and maintain a system of master metering of public utility

services to collect payments in conjunction therewith, subject to the requirements of

the Tenant Utility Payment Disclosure Act.

(i) An association subject to this Act that consists of 100 or more units

shall use generally accepted accounting principles in fulfilling any accounting

obligations under this Act.

Section 1-47. Successor developers. Any assignment of a developer's interest in

the property is not effective until the successor: (i) obtains the assignment in writing;

and (ii) records the assignment.

Common Interest Community Association Act - 76

Section 1-50. Administration of property prior to election of the initial board of

directors.

(a) Until the election of the initial board whose declaration is recorded

on or after the effective date of this Act, the same rights, titles, powers, privileges,

trusts, duties, and obligations that are vested in or imposed upon the board by this

Act or in the declaration or other duly recorded covenant shall be held and

performed by the developer.

(b) The election of the initial board, whose declaration is recorded on or

after the effective date of this Act, shall be held not later than 60 days after the

conveyance by the developer of 75% of the units, or 3 years after the recording of

the declaration, whichever is earlier. The developer shall give at least 21 days' notice

of the meeting to elect the initial board of directors and shall upon request provide to

any member, within 3 working days of the request, the names, addresses, and

weighted vote of each member entitled to vote at the meeting. Any member shall,

upon receipt of the request, be provided with the same information, within 10 days

after the request, with respect to each subsequent meeting to elect members of the

board of directors.

whose declaration is recorded on or after the effective date of this Act is not elected

by the time established in subsection (b), the developer shall continue in office for a

period of 30 days, whereupon written notice of his or her resignation shall be sent to

all of the unit owners or members.

(d) Within 60 days following the election of a majority of the board,

other than the developer, by members, the developer shall deliver to the board:

(1) All original documents as recorded or filed pertaining to the

property, its administration, and the association, such as the declaration, articles of

incorporation, articles of organization, other instruments, annual reports, minutes,

rules and regulations, and contracts, leases, or other agreements entered into by the

association. If any original documents are unavailable, a copy may be provided if

certified by affidavit of the developer, or an officer or agent of the developer, as

being a complete copy of the actual document recorded or filed.

(2) A detailed accounting by the developer, setting forth the

source and nature of receipts and expenditures in connection with the management,

maintenance, and operation of the property, copies of all insurance policies, and a

list of any loans or advances to the association which are outstanding.

(3) Association funds, which shall have been at all times

segregated from any other moneys of the developer.

(4) A schedule of all real or personal property, equipment, and

fixtures belonging to the association, including documents transferring the property,

warranties, if any, for all real and personal property and equipment, deeds, title

insurance policies, and all tax bills.

(5) A list of all litigation, administrative action, and arbitrations

involving the association, any notices of governmental bodies involving actions

taken or which may be taken concerning the association, engineering and

architectural drawings and specifications as approved by any governmental

Common Interest Community Association Act - 77

authority, all other documents filed with any other governmental authority, all

governmental certificates, correspondence involving enforcement of any association

requirements, copies of any documents relating to disputes involving members or

unit owners, and originals of all documents relating to everything listed in this

paragraph.

(6) If the developer fails to fully comply with this subsection (d)

within the 60 days provided and fails to fully comply within 10 days after written

demand mailed by registered or certified mail to his or her last known address, the

board may bring an action to compel compliance with this subsection (d). If the

court finds that any of the required deliveries were not made within the required

period, the board shall be entitled to recover its reasonable attorney's fees and costs

incurred from and after the date of expiration of the 10-day demand.

(e) With respect to any common interest community association whose

declaration is recorded on or after the effective date of this Act, any contract, lease,

or other agreement made prior to the election of a majority of the board other than

the developer by or on behalf of members or underlying common interest

community association, the association or the board, which extends for a period of

more than 2 years from the recording of the declaration, shall be subject to

cancellation by more than one-half of the votes of the members, other than the

developer, cast at a special meeting of members called for that purpose during a

period of 90 days prior to the expiration of the 2-year period if the board is elected

by the members, otherwise by more than one-half of the underlying common interest

community association board. At least 60 days prior to the expiration of the 2-year

period, the board or, if the board is still under developer control, the developer shall

send notice to every member notifying them of this provision, of what contracts,

leases, and other agreements are affected, and of the procedure for calling a meeting

of the members or for action by the board for the purpose of acting to terminate such

contracts, leases or other agreements. During the 90-day period the other party to the

contract, lease, or other agreement shall also have the right of cancellation.

(f) The statute of limitations for any actions in law or equity that the

board may bring shall not begin to run until the members have elected a majority of

the members of the board.

Section 1-55. Fidelity insurance. An association with 30 or more units shall obtain

and maintain fidelity insurance covering persons who control or disburse funds of

the association for the maximum amount of coverage that is commercially available

or reasonably required to protect funds in the custody or control of the association.

All management companies which are responsible for the funds held or administered

by the association shall maintain and furnish to the association a fidelity bond for the

maximum amount of coverage that is commercially available or reasonably required

to protect funds in the custody of the management company at any time. The

association shall bear the cost of the fidelity insurance and fidelity bond, unless

otherwise provided by contract between the association and a management

company.

Section 1-60. Errors, omissions, and inconsistencies.

(a) If a provision of the community instruments does not conform to this

Act or to another applicable law because of an error, omission, or inconsistency in

Common Interest Community Association Act - 78

the community instruments of the association, the association may correct the error,

omission, or inconsistency to conform the community instruments to this Act or to

another applicable law by an amendment adopted by vote of two-thirds of the board

of directors, without a membership vote. A provision in the community instruments

requiring members of record to vote to approve an amendment to the community

instruments, or for the members of record to be given notice of an amendment to the

community instruments, does not apply to an amendment that corrects an omission,

error, or inconsistency to conform the community instruments to this Act or to

another applicable law.

(b) If, through a scrivener's error, a unit has not been designated as

owning an appropriate undivided share of the common areas or does not bear an

appropriate share of the common expenses, or if all of the common expenses or all

of the common elements have not been distributed in the declaration, so that the sum

total of the shares of common areas which have been distributed or the sum total of

the shares of the common expenses fail to equal 100%, or if it appears that more

than 100% of the common elements or common expenses have been distributed, the

error may be corrected by operation of law by filing an amendment to the

declaration, approved by vote of two-thirds of the members of the board or a

majority vote of the members at a meeting called for that purpose, which

proportionately adjusts all percentage interests so that the total is equal to 100%,

unless the declaration specifically provides for a different procedure or different

percentage vote by the owners of the units and the owners of mortgages thereon

affected by modification being made in the undivided interest in the common areas,

the number of votes in the association or the liability for common expenses

appertaining to the unit.

corrected by vote of two-thirds of the members of the board pursuant to the authority

established in subsection (a) or subsection (b), the board, upon written petition by

members with 20% of the votes of the association received within 30 days of the

board action, shall call a meeting of the members within 30 days of the filing of the

petition to consider the board action. Unless a majority of the votes of the members

of the association are cast at the meeting to reject the action, it is ratified whether or

not a quorum is present.

(d) Nothing contained in this Section shall be construed to invalidate any

provision of a declaration authorizing the developer to amend an instrument prior to

the latest date on which the initial membership meeting of the members must be

held, whether or not it has actually been held, to bring the instrument into

compliance with the legal requirements of the Federal National Mortgage

Association, the Federal Home Loan Mortgage Corporation, the Federal Housing

Administration, the United States Department of Veterans Affairs, or their

respective successors and assigns.

Section 1-65. Management company. A management company holding reserve

funds of an association shall at all times maintain a separate account for each

association, unless by contract the board of managers of the association authorizes a

management company to maintain association reserves in a single account with

other associations for investment purposes. With the consent of the board of

managers of the association, the management company may hold all operating funds

of associations which it manages in a single operating account, but shall at all times

Common Interest Community Association Act - 79

maintain records identifying all moneys of each association in such operating

account. Such operating and reserve funds held by the management company for the

association shall not be subject to attachment by any creditor of the management

company. A management company that provides common interest community

association management services for more than one common interest community

association shall maintain separate, segregated accounts for each common interest

community association. The funds shall not, in any event, be commingled with

funds of the management company, the firm of the management company, or any

other common interest community association. The maintenance of these accounts

shall be custodial, and the accounts shall be in the name of the respective common

interest community association.

Section 1-70. Display of American flag or military flag.

(a) Notwithstanding any provision in the declaration, bylaws, community

instruments, rules, regulations, or agreements or other instruments of a common

interest community association or a board's construction of any of those instruments,

a board may not prohibit the display of the American flag or a military flag, or both,

on or within the limited common areas and facilities of a unit owner or on the

immediately adjacent exterior of the building in which the unit of a unit owner is

located. A board may adopt reasonable rules and regulations, consistent with

Sections 4 through 10 of Chapter 1 of Title 4 of the United States Code, regarding

the placement and manner of display of the American flag and a board may adopt

reasonable rules and regulations regarding the placement and manner of display of a

military flag. A board may not prohibit the installation of a flagpole for the display

of the American flag or a military flag, or both, on or within the limited common

areas and facilities of a unit owner or on the immediately adjacent exterior of the

building in which the unit of a unit owner is located, but a board may adopt

reasonable rules and regulations regarding the location and size of flagpoles.

(b) As used in this Section:

"American flag" means the flag of the United States (as defined in Section 1

of Chapter 1 of Title 4 of the United States Code and the Executive Orders entered

in connection with that Section) made of fabric, cloth, or paper displayed from a

staff or flagpole or in a window, but "American flag" does not include a depiction or

emblem of the American flag made of lights, paint, roofing, siding, paving

materials, flora, or balloons, or any other similar building, landscaping, or decorative

component.

"Military flag" means a flag of any branch of the United States armed forces

or the Illinois National Guard made of fabric, cloth, or paper displayed from a staff

or flagpole or in a window, but "military flag" does not include a depiction or

emblem of a military flag made of lights, paint, roofing, siding, paving materials,

flora, or balloons, or any other similar building, landscaping, or decorative

component.

Section 1-75. Exemptions for small common interest communities.

(a) A common interest community association organized under the

General Not for Profit Corporation Act of 1986 and having either (i) 10 units or less

or (ii) annual budgeted assessments of $100,000 or less shall be exempt from this

Common Interest Community Association Act - 80

Act unless the association affirmatively elects to be covered by this Act by a

majority of its directors or members.

(b) Common interest community associations which in their declaration,

bylaws, or other governing documents provide that the association may not use the

courts or an arbitration process to collect or enforce assessments, fines, or similar

levies and common interest community associations (i) of 10 units or less or (ii)

having annual budgeted assessments of $50,000 or less shall be exempt from

subsection (a) of Section 1-30, subsections (a) and (b) of Section 1-40, and Section

1-55 but shall be required to provide notice of meetings to members in a manner and

at a time that will allow members to participate in those meetings.

Section 1-80. Compliance.

A common interest community association shall be in full compliance with

the provisions of this Act no later than January 1, 2012.

Section 1-85. Use of technology.

(a) Any notice required to be sent or received or signature, vote, consent,

or approval required to be obtained under any community instrument or any

provision of this Act may be accomplished using acceptable technological means.

This Section governs the use of technology in implementing the provisions of any

community instrument or any provision of this Act concerning notices, signatures,

votes, consents, or approvals.

(b) The common interest community association, unit owners, and other

persons entitled to occupy a unit may perform any obligation or exercise any right

under any community instrument or any provision of this Act by use of acceptable

technological means.

any requirement for a signature under any community instrument or any provision of

this Act.

(d) Voting on, consent to, and approval of any matter under any

community instrument or any provision of this Act may be accomplished by any

acceptable technological means, provided that a record is created as evidence thereof

and maintained as long as the record would be required to be maintained in

nonelectronic form.

(e) Subject to other provisions of law, no action required or permitted by

any community instrument or any provision of this Act need be acknowledged

before a notary public if the identity and signature of the signatory can otherwise be

authenticated to the satisfaction of the board of directors.

(f) If any person does not provide written authorization to conduct

business using acceptable technological means, the common interest community

association shall, at its expense, conduct business with the person without the use of

acceptable technological means.

Common Interest Community Association Act - 81

(g) This Section does not apply to any notices required: (i) under Article

IX of the Code of Civil Procedure; or (ii) in connection with foreclosure proceedings

in enforcement of any lien rights under this Act.

Section 1-90. Compliance with the Condominium and Common Interest

Community Ombudsperson Act. Every common interest community association,

except for those exempt from this Act under Section 1-75, must comply with the

Condominium and Common Interest Community Ombudsperson Act and is subject

to all provisions of the Condominium and Common Interest Community

Ombudsperson Act. This Section is repealed July 1, 2022.

Condominium and Common Interest Community Ombudsperson Act - 82

CONDOMINIUM AND COMMON INTEREST

COMMUNITY OMBUDSPERSON ACT

(765 ILCS 615/1, et seq.)

Condominium and Common Interest Community Ombudsperson Act - 83

CONDOMINIUM AND COMMON INTEREST

COMMUNITY OMBUDSPERSON ACT

INTRODUCTION

FULL TEXT (as of January 1, 2019):

Section 1. Short title. This Act may be cited as the Condominium and Common

Interest Community Ombudsperson Act.

Section 5. Applicability. This Act applies to all condominium associations

governed by the Condominium Property Act and all common interest community

associations governed by the Common Interest Community Association Act.

Section 10. Findings. The General Assembly finds as follows:

(1) Managing condominium property or common interest community

property is a complex responsibility. Unit owners and persons charged with

managing condominium property or common interest community property may have

little or no prior experience in managing real property, operating a not-for-profit

association or corporation, complying with the laws governing condominium

property or common interest community property, and interpreting and enforcing

restrictions and rules imposed by applicable instruments or covenants. Unit owners

may not fully understand their rights and obligations under the law or applicable

instruments or covenants. Mistakes and misunderstandings are inevitable and may

lead to serious, costly, and divisive problems. This Act seeks to educate unit owners,

condominium associations, common interest community associations, boards of

managers, and boards of directors about the Condominium Property Act and the

Common Interest Community Association Act. Effective education can prevent or

reduce the severity of problems within a condominium or common interest

community.

(2) Anecdotal accounts of abuses within condominiums and common

interest communities create continuing public demand for reform of condominium

and common interest community property law. This results in frequent changes to

the law, making it difficult to understand and apply, and imposes significant

transitional costs on these communities statewide. By collecting empirical data on

the nature and incidence of problems within these communities, this Act will

provide a sound basis for prioritizing reform efforts, thereby increasing the stability

of condominium and common interest community property law.

Section 15. Definitions. As used in this Act:

"Association" means a condominium association or common interest

community association as defined in this Act.

"Board of managers" or "board of directors" means:

(1) a common interest community association's board of

managers or board of directors, whichever is applicable; or

Condominium and Common Interest Community Ombudsperson Act - 84

(2) a condominium association's board of managers or board of

directors, whichever is applicable.

"Common interest community" means a property governed by the Common

Interest Community Association Act.

"Common interest community association" has the meaning ascribed to it in

Section 1-5 of the Common Interest Community Association Act.

"Condominium" means a property governed by the Condominium Property

Act.

"Condominium association" means a unit owners' association as defined in

subsection (o) of Section 2 of the Condominium Property Act or a master

association as defined in subsection (u) of Section 2 of the Condominium Property

Act.

"Declaration" has the meaning ascribed to it in:

(1) Section 1-5 of the Common Interest Community Association

Act; or

(2) Section 2 of the Condominium Property Act.

"Department" means the Department of Financial and Professional

Regulation.

"Director" means the Director of the Division of Real Estate.

"Division" means the Division of Real Estate within the Department of

Financial and Professional Regulation.

"Office" means the Office of the Condominium and Common Interest

Community Ombudsperson established under Section 20 of this Act.

"Ombudsperson" means the Condominium and Common Interest

Community Ombudsperson named under Section 20 of this Act.

"Person" includes a natural person, firm, association, organization,

partnership, business trust, corporation, limited liability company, or public entity.

"Secretary" means the Secretary of the Department of Financial and

Professional Regulation.

"Unit" means a part of the condominium property or common interest

community property designed and intended for any type of independent use.

"Unit owner" has the meaning ascribed to it in:

(1) subsection (g) of Section 2 of the Condominium Property Act;

(2) Section 1-5 of the Common Interest Community

Association Act.

Section 20. Office of the Condominium and Common Interest Community

Ombudsperson.

Condominium and Common Interest Community Ombudsperson Act - 85

(a) There is created in the Division of Real Estate within the Department

of Financial and Professional Regulation, under the supervision and control of the

Secretary, the Office of the Condominium and Common Interest Community

Ombudsperson.

(b) The Department shall name an Ombudsperson and other persons as

necessary to discharge the requirements of this Act. The Ombudsperson shall have

the powers delegated to him or her by the Department, in addition to the powers set

forth in this Act.

authority to consider matters that may constitute grounds for charges or complaints

under the Illinois Human Rights Act or that are properly brought before the

Department of Human Rights or the Illinois Human Rights Commission, before a

comparable department or body established by a county, municipality, or township

pursuant to an ordinance prohibiting discrimination and established for the purpose

of investigating and adjudicating charges or complaints of discrimination under the

ordinance, or before a federal agency or commission that administers and enforces

federal anti-discrimination laws and investigates and adjudicates charges or

complaints of discrimination under such laws.

(d) Information and advice provided by the Ombudsperson has no

binding legal effect and is not subject to the provisions of the Illinois Administrative

Procedure Act.

Section 25. Training and education. On or before July 1, 2017, the Ombudsperson

shall offer training, outreach, and educational materials, and may arrange for the

offering of courses to unit owners, associations, boards of managers, and boards of

directors in subjects relevant to: (i) the operation and management of condominiums

and common interest communities; and (ii) the Condominium Property Act and the

Common Interest Community Association Act.

Section 30. Website; toll-free number.

(a) The Office shall maintain on the Department's website the following

information:

(1) the text of this Act, the Condominium Property Act, the

Common Interest Community Association Act, and any other statute, administrative

rule, or regulation that the Ombudsperson determines is relevant to the operation and

management of a condominium association or common interest community

association;

(2) information concerning non-judicial resolution of disputes

that may arise within a condominium or common interest community, including, but

not limited to, alternative dispute resolution programs and contacts for locally-

available dispute resolution programs;

(3) a description of the services provided by the Ombudsperson

and information on how to contact the Ombudsperson for assistance; and

(4) any other information that the Ombudsperson determines is

useful to unit owners, associations, boards of managers, and boards of directors.

Condominium and Common Interest Community Ombudsperson Act - 86

(b) The Office may make available during regular business hours a

statewide toll-free telephone number to provide information and resources on

matters relating to condominium property and common interest community

property.

Section 35. Written policy for resolving complaints.

(a) Each association, except for those outlined in subsection (b) of this

Section, shall adopt a written policy for resolving complaints made by unit owners.

The association shall make the policy available to all unit owners upon request. The

policy must include:

(1) a sample form on which a unit owner may make a

complaint to the association;

(2) a description of the process by which complaints shall be

delivered to the association;

(3) the association's timeline and manner of making final

determinations in response to a unit owner's complaint; and

(4) a requirement that the final determination made by the

association in response to a unit owner's complaint be:

(i) made in writing;

(ii) made within 180 days after the association received the

unit owner's original complaint; and

(iii) marked clearly and conspicuously as "final".

(b) Common interest community associations exempt from the Common

Interest Community Association Act are not required to have a written policy for

resolving complaints.

identified in subsection (b) of this Section, must establish and adopt the policy

required under this Section.

(d) Associations first created after January 1, 2019, except for those

identified in subsection (b) of this Section, must establish and adopt the policy

required under this Section within 180 days following creation of the association.

(e) A unit owner may not bring a request for assistance under Section 40

of this Act for an association's lack of or inadequacy of a written policy to resolve

complaints, but may notify the Department in writing of the association's lack of or

inadequacy of a written policy.

Section 40. Dispute resolution.

(a) Beginning on July 1, 2020, and subject to appropriation, unit owners

meeting the requirements of this Section may make a written request, as outlined in

subsection (f) of this Section, to the Ombudsperson for assistance in resolving a

dispute between a unit owner and an association that involves a violation of the

Condominium Property Act or the Common Interest Community Association Act.

Condominium and Common Interest Community Ombudsperson Act - 87

(b) The Ombudsperson shall not accept requests for resolutions of

disputes with community association managers, supervising community association

managers, or community association management firms, as defined in the

Community Association Manager Licensing and Disciplinary Act.

disputes for which there is a pending complaint filed in any court or administrative

tribunal in any jurisdiction or for which arbitration or alternative dispute resolution

is scheduled to occur or has previously occurred.

(d) The assistance described in subsection (a) of this Section is available

only to unit owners. In order for a unit owner to receive the assistance from the

Ombudsperson described in subsection (a) of this Section, the unit owner must:

(1) owe no outstanding assessments, fees, or funds to the

association, unless the assessments, fees, or funds are central to the dispute;

(2) allege a dispute that was initiated, or initially occurred, within

the 2 calendar years preceding the date of the request;

(3) have made a written complaint pursuant to the unit owner's

association's complaint policy, as outlined in Section 35, which alleged violations of

the Condominium Property Act or the Common Interest Community Association

Act;

(4) have received a final and adverse decision from the

association and attach a copy of the association's final adverse decision marked

"final" to the request to the Ombudsperson; and

(5) have filed the request within 30 days after the receipt of the

association's final adverse decision.

(e) A unit owner who has not received a response, marked "final", to his

or her complaint from the association within a reasonable time may request

assistance from the Ombudsperson pursuant to subsection (a) of this Section if the

unit owner meets the requirements of items (1), (2), and (3) of subsection (d) of this

Section. A unit owner may not request assistance from the Ombudsperson until at

least 90 days after the initial written complaint was submitted to the association. The

Ombudsperson may decline a unit owner's request for assistance on the basis that a

reasonable time has not yet passed.

(f) The request for assistance shall be in writing, on forms provided

electronically by the Office, and include the following:

(1) the name, address, and contact information of the unit owner;

(2) the name, address, and contact information of the association;

(3) the applicable association governing documents unless the

absence of governing documents is central to the dispute;

(4) the date of the final adverse decision by the association;

(5) a copy of the association's written complaint policy required

under Section 35 of this Act;

Condominium and Common Interest Community Ombudsperson Act - 88

(6) a copy of the unit owner's complaint to the association with a

specific reference to the alleged violations of the Condominium Property Act or the

Common Interest Community Association Act;

(7) documentation verifying the unit owner's ownership of a unit,

such as a copy of a recorded deed or other document conferring title; and

(8) a copy of the association's adverse decision marked "final", if

applicable.

(g) On receipt of a unit owner's request for assistance that the

Department determines meets the requirements of this Section, the Ombudsperson

shall, within the limits of the available resources, confer with the interested parties

and assist in efforts to resolve the dispute by mutual agreement of the parties.

(h) The Ombudsperson shall assist only opposing parties who mutually

agree to participate in dispute resolution.

(i) A unit owner is limited to one request for assistance per dispute. The

meaning of dispute is to be broadly interpreted by the Department.

(j) The Department has the authority to determine whether or not a final

decision is adverse under paragraph (4) of subsection (d) of this Section.

(k) The Department shall, on or before July 1, 2020, establish rules

describing the time limit, method, and manner for dispute resolution.

(l) (Blank)

Section 45. Confidentiality.

(a) All information collected by the Department in the course of

addressing a request for assistance or for any other purpose pursuant to this Act shall

be maintained for the confidential use of the Department and shall not be disclosed.

The Department shall not disclose the information to anyone other than law

enforcement officials or regulatory agencies that have an appropriate regulatory

interest as determined by the Secretary. Information and documents disclosed to a

federal, State, county, or local law enforcement agency shall not be disclosed by that

agency for any purpose to any other agency or person.

(b) A request for information made to the Department, or the

Ombudsperson, under this Act does not constitute a request under the Freedom of

Information Act.

educational, training, and outreach material, statistical data, or operational

information maintained by the Department in administering this Act.

Section 50. Reports.

The Department shall submit an annual written report on the activities of the

Office to the General Assembly. The Department shall submit the first report no

later than July 1, 2018. Beginning in 2019, the Department shall submit the report

no later than October 1 of each year. The report shall include all of the following:

(1) annual workload and performance data, including (i) the

number of requests for information; (ii) training, education, or other information

Condominium and Common Interest Community Ombudsperson Act - 89

provided; (iii) the manner in which education and training was conducted; and (iv)

the staff time required to provide the training, education, or other information. For

each category of data, the report shall provide subtotals based on the type of

question or dispute involved in the request; and

(2) where relevant information is available, analysis of the most

common and serious types of concerns within condominiums and common interest

communities, along with any recommendations for statutory reform to reduce the

frequency or severity of those disputes.

Section 55. (Repealed).

Section 60. Rules. The Department may, from time to time, adopt such rules as are

necessary for the administration and enforcement of any provision of this Act. Any

rule adopted under this Act is subject to the rulemaking provisions of the Illinois

Administrative Procedure Act.

Section 65. State Lawsuit Immunity Act. Nothing in this Act shall be construed to

constitute a waiver of the immunity of the State, Department, Division, Office, or

Ombudsperson, or any officer, employee, or agent thereof under the State Lawsuit

Immunity Act.

Section 70. Repeal. This Act is repealed on July 1, 2022.

Section 999. Effective date. This Act takes effect January 1, 2017.

Illinois General Not-For-Profit Corporation Act - 90

SELECTED SECTIONS FROM

ILLINOIS GENERAL NOT FOR PROFIT

CORPORATION ACT OF 1986

(beginning at 805 ILCS 105/101.01)

Illinois General Not-For-Profit Corporation Act - 91

SELECTED SECTIONS FROM

ILLINOIS GENERAL NOT-FOR-PROFIT

CORPORATION ACT OF 1986

INTRODUCTION

The provisions of the Illinois General Not-For-Profit Corporation Act of 1986

generally govern all types of associations, including condominium, homeowner, and

townhome associations. A corporation organized under this Act should not be

confused with a corporation which has been granted tax exempt status from the IRS.

A not for profit association is responsible for payment of taxes. Please consult with

your Association accountant for a more detailed explanation of these differences.

A close review of the Illinois General Not-For-Profit Corporation Act will reveal

many similarities with the other Acts governing associations. However, in the event

of a conflict, the more specific Illinois Condominium Property Act and Common

Interest Community Association Act generally take precedence over the general

provisions of the Illinois General Not-For-Profit Corporation Act.

SELECTED SECTIONS (as of January 1, 2019)

The full Not-For-Profit Act can be found on our website – www.ksnlaw.com.

ARTICLE 1. GENERAL PROVISIONS

Section 101.01. Short title. This Act shall be known and may be cited as the

"General Not For Profit Corporation Act of 1986".

Section 101.05. Powers of Secretary of State. The Secretary of State shall have the

power and authority reasonably necessary to administer this Act efficiently and to

perform the duties therein imposed.

Section 101.10. Forms, execution, acknowledgment and filing.

(a) All reports required by this Act to be filed in the office of the

Secretary of State shall be made on forms which shall be prescribed and furnished

by the Secretary of State. Forms for all other documents to be filed in the office of

the Secretary of State shall be furnished by the Secretary of State on request

therefor, but the use thereof, unless otherwise specifically prescribed in this Act,

shall not be mandatory.

(b) Whenever any provision of this Act specifically requires any

document to be executed by the corporation in accordance with this Section, unless

otherwise specifically stated in this Act and subject to any additional provisions of

this Act, such document shall be executed, in ink, as follows:

(1) The articles of incorporation shall be signed by the

incorporator or incorporators.

(2) All other documents shall be signed:

Illinois General Not-For-Profit Corporation Act - 92

(i) By the president, a vice-president, the secretary, an

assistant secretary, the treasurer, or other officer duly authorized by the board of

directors of the corporation to execute the document and verified by him or her; or

(ii) If it shall appear from the document that there are no

such officers, then by a majority of the directors or by such directors as may be

designated by the board; or

(iii) If it shall appear from the document that there are no

such officers or directors, then by the members, or such of them as may be

designated by the members at a lawful meeting; or

(iv) If the corporate assets are in the possession of a

receiver, trustee or other court-appointed officer, then by the fiduciary or the

majority of them if there are more than one.

he or she signs shall be stated beneath or opposite his or her signature.

(d) Whenever any provision of this Act requires any document to be

verified, such requirement is satisfied by either:

(1) The formal acknowledgment by the person or one of the

persons signing the instrument that it is his or her act and deed or the act and deed of

the corporation, as the case may be, and that the facts stated therein are true. Such

acknowledgment shall be made before a person who is authorized by the law of the

place of execution to take acknowledgments of deeds and who, if he or she has a

seal of office, shall affix it to the instrument; or

(2) The signature, without more, of the person or persons signing

the instrument, in which case such signature or signatures shall constitute the

affirmation or acknowledgment of the signatory, under penalties of perjury, that the

instrument is his or her act and deed or the act and deed of the corporation, as the

case may be, and that the facts stated therein are true.

(e) Whenever any provision of this Act requires any document to be filed

with the Secretary of State or in accordance with this Section, such requirement

means that:

(1) The original signed document, and if in duplicate as provided

by this Act, one true copy, which may be signed, or carbon or photocopy shall be

delivered to the office of the Secretary of State.

(2) All fees and charges authorized by law to be collected by the

Secretary of State in connection with the filing of the document shall be tendered to

the Secretary of State.

(3) If the Secretary of State finds that the document conforms to

law, he or she shall, when all fees and charges have been paid as in this Act

prescribed:

(i) Endorse on the original and on the true copy, if any,

the word "filed" and the month, day and year thereof;

(ii) File the original in his or her office;

(iii) (Blank); and

Illinois General Not-For-Profit Corporation Act - 93

(iv) If the filing is in duplicate, he or she shall return the

copy to the corporation or its representative.

(f) If another Section of this Act specifically prescribes a manner of

filing or executing a specified document which differs from the corresponding

provisions of this Section, then the provisions of such other Section shall govern.

Section 101.11. Electronic filing. Documents or reports submitted for filing

electronically must include the name of the person making the submission. The

inclusion shall constitute the affirmation or acknowledgement of the person, under

penalties of perjury, that the instrument is his or her act and deed or the act and deed

of the corporation, as the case may be, and that the facts stated therein are true.

Compliance with this Section shall satisfy the signature provisions of Section 101.10

of this Act, which shall otherwise apply.

Section 101.50. Administrative Procedure Act. The Illinois Administrative

Procedure Act is expressly adopted and incorporated herein as if all of the

provisions of that Act were included in this Act, except that the provision of

subsection (d) of Section 10-65 of the Illinois Administrative Procedure Act which

provides that at hearing the licensee has the right to show compliance with all lawful

requirements for retention, continuation or renewal of the license is specifically

excluded. For the purposes of this Act the notice required under Section 10-25 of the

Illinois Administrative Procedure Act is deemed sufficient when mailed to the last

known address of a party.

Section 101.70. Application of Act.

(a) Except as otherwise provided in this Act, the provisions of this Act

relating to domestic corporations shall apply to:

(1) All corporations organized hereunder;

(2) All corporations heretofore organized under the "General Not

for Profit Corporation Act", approved July 17, 1943, as amended;

(3) All not-for-profit corporations heretofore organized under

Sections 29 to 34, inclusive, of an Act entitled "An Act Concerning Corporations"

approved April 18, 1872, in force July 1, 1872, as amended;

(4) Each not-for-profit corporation, without shares or capital

stock, heretofore organized under any general law or created by Special Act of the

Legislature of this State for a purpose or purposes for which a corporation may be

organized under this Act, but not otherwise entitled to the rights, privileges,

immunities and franchises provided by this Act, which shall elect to accept this Act

as hereinafter provided; and

(5) Each corporation having shares or capital stock, heretofore

organized under any general law or created by Special Act of the Legislature of this

State prior to the adoption of the Constitution of 1870, for a purpose or purposes for

which a corporation may be organized under this Act, which shall elect to accept

this Act as hereinafter provided.

(b) Except as otherwise provided by this Act, the provisions of this Act

relating to foreign corporations shall apply to:

Illinois General Not-For-Profit Corporation Act - 94

(1) All foreign corporations which procure authority hereunder to

conduct affairs in this State;

(2) All foreign corporations heretofore having authority to

conduct affairs in this State under the "General Not for Profit Corporation Act",

approved July 17, 1943, as amended; and

(3) All foreign not-for-profit corporations conducting affairs in

this State for a purpose or purposes for which a corporation might be organized

under this Act.

relating to revival of the articles of incorporation and extension of the period of

corporate duration of a domestic corporation shall apply to all corporations

organized under the "General Not for Profit Corporation Act", approved July 17,

1943, as amended, and whose period of duration has expired.

(d) The provisions of Section 112.45 of this Act relating to reinstatement

following administrative dissolution of a domestic corporation shall apply to all

corporations involuntarily dissolved after June 30, 1974, by the Secretary of State,

pursuant to Section 50a of the "General Not for Profit Corporation Act", approved

July 17, 1943, as amended.

(e) The provisions of Section 113.60 of this Act relating to reinstatement

following revocation of authority of a foreign corporation shall apply to all foreign

corporations which had their authority revoked by the Secretary of State pursuant to

Section 84 or Section 84a of the "General Not for Profit Corporation Act", approved

July 17, 1943, as amended.

Section 101.75. Election to Accept Act.

(a) Any not-for-profit corporation without shares or capital stock

heretofore organized under any General Law or created by Special Act of the

Legislature of this State, or any corporation having shares or capital stock organized

under any General Law or created by Special Act of the Legislature of this State

prior to the adoption of the Constitution of 1870, for a purpose or purposes for

which a corporation may be organized under this Act, or any corporation formed for

religious purposes under An Act Concerning Corporations, effective July 1, 1872, as

amended, may elect to accept this Act in the following manner:

(1) Unless the articles of incorporation or the equivalent or the

bylaws provide otherwise, where there are members or shareholders entitled to vote,

the board of directors shall adopt a resolution recommending that the corporation

accept this Act and directing that the question of such acceptance be submitted to a

vote at a meeting of the members or shareholders entitled to vote, which may be

either an annual or a special meeting. The members or shareholders entitled to vote

may elect that such corporation accept this Act by the affirmative vote of at least

two-thirds of the votes present and voted either in person or by proxy.

(2) Unless the articles of incorporation or the equivalent or the

bylaws provide otherwise, where there are no members or shareholders having

voting rights, election to accept this Act may be made at a meeting of the board of

directors pursuant to a majority vote of the directors present and voting at a meeting

at which a quorum is present.

Illinois General Not-For-Profit Corporation Act - 95

(b) Upon complying with Subsection (a), the corporation shall execute

and file in duplicate a statement, in accordance with Section 101.10 of this Act, and

shall also file a copy of its articles of incorporation, if any, and all amendments

thereto. Such statement shall set forth:

(1) A corporate name for the corporation that satisfies the

requirements of this Act;

(2) The specific purpose or purposes for which the corporation is

organized, from among the purposes authorized in Section 103.05 of this Act;

(3) The address of the corporation's registered office and the

name of its registered agent at that office;

(4) The names and respective addresses of its officers and

directors;

(5) A statement that the attached copy, if any, of the articles of

incorporation of the corporation is true and correct;

(6) A statement by the corporation that it has elected to accept

this Act and that all reports have been filed and all fees, taxes and penalties due to

the State of Illinois, accruing under any Act to which the corporation has theretofore

been subject, have been paid;

(7) Where there are members or shareholders having voting

rights, a statement setting forth the date of the meeting of the members or

shareholders at which the election to accept this Act was made; that a quorum was

present at such meeting, and that such acceptance was authorized either by the

affirmative vote of at least two-thirds of the votes present and voted either in person

or by proxy, or in compliance with any different provision of the articles of

incorporation or their equivalent or of the bylaws.

(8) Where there are no members or shareholders having voting

rights, a statement of such fact, the date of the meeting of the board of directors at

which the election to accept this Act was made, that a quorum was present at such

meeting, and that such acceptance was authorized by majority vote of the directors

present and voting at such meeting;

(9) A statement that, in addition, the corporation followed the

requirements of its articles of incorporation and bylaws so far as applicable in

effecting such acceptance;

(10) Where the corporation has issued shares of stock, a statement

of such fact, including the number of shares theretofore authorized, the number

issued and outstanding; and a statement that all issued and outstanding shares of

stock have been delivered to the corporation to be canceled upon the acceptance of

this Act by the corporation becoming effective and that from and after the effective

date of said acceptance, the authority to issue shares shall be thereby terminated.

Secretary of State shall file the statement of acceptance.

(d) Upon the filing of a statement of acceptance, the election of the

corporation to accept this Act shall become effective, and such corporation shall

have the same powers and privileges, and be subject to the same duties, restrictions,

Illinois General Not-For-Profit Corporation Act - 96

penalties and liabilities as though such corporation had been originally organized

hereunder, and shall also be subject to any duty or obligation expressly imposed

upon such corporation by its special charter; provided, however,

(1) That no amendment to the articles of incorporation adopted

after such election to accept this Act shall release or terminate any duty or obligation

expressly imposed upon any such corporation under and by virtue of such special

charter, or enlarge any right, power, or privilege granted any such corporation under

a special charter except to the extent that such right, power or privilege might have

been included in the articles of incorporation of a corporation organized under this

Act; and

(2) That in the case of any corporation with issued shares of

stock, the holders of such issued shares who surrender them to the corporation to be

canceled upon the acceptance of this Act by the corporation becoming effective,

shall have such rights as the election to accept this Act provides.

Section 101.80. Definitions. As used in this Act, unless the context otherwise

requires, the words and phrases defined in this Section shall have the meanings set

forth herein.

(a) "Anniversary" means that day each year exactly one or more years

after:

(1) The date of filing the articles of incorporation prescribed by

Section 102.10 of this Act, in the case of a domestic corporation;

(2) The date of filing the application for authority prescribed by

Section 113.15 of this Act in the case of a foreign corporation;

(3) The date of filing the statement of acceptance prescribed by

Section 101.75 of this Act, in the case of a corporation electing to accept this Act; or

(4) The date of filing the articles of consolidation prescribed by

Section 111.25 of this Act in the case of a consolidation.

(b) "Anniversary month" means the month in which the anniversary of

the corporation occurs.

incorporation including the articles of incorporation of a new corporation set forth in

the articles of consolidation or set forth in a statement of election to accept this Act,

and all amendments thereto, whether evidenced by articles of amendment, articles of

merger or statement of correction affecting articles. Restated articles of

incorporation shall supersede the original articles of incorporation and all

amendments thereto prior to the effective date of filing the articles of amendment

incorporating the restated articles of incorporation. In the case of a corporation

created by a Special Act of the Legislature, "Articles of incorporation" means the

special charter and any amendments thereto made by Special Act of the Legislature

or pursuant to general laws.

(d) "Board of directors" means the group of persons vested with the

management of the affairs of the corporation irrespective of the name by which such

group is designated.

Illinois General Not-For-Profit Corporation Act - 97

(e) "Bylaws" means the code or codes of rules adopted for the regulation

or management of the affairs of the corporation irrespective of the name or names by

which such rules are designated.

(f) "Corporation" or "domestic corporation" means a domestic not-for-

profit corporation subject to the provisions of this Act, except a foreign corporation.

(g) "Delivered," for the purpose of determining if any notice required by

this Act is effective, means:

(1) Transferred or presented to someone in person;

(2) Deposited in the United States mail addressed to the person at

his, her or its address as it appears on the records of the corporation, with sufficient

first-class postage prepaid thereon;

(3) Posted at such place and in such manner or otherwise

transmitted to the person's premises as may be authorized and set forth in the articles

of incorporation or the bylaws; or

(4) Transmitted by electronic means to the e-mail address,

facsimile number, or other contact information appearing on the records of the

corporation as may be authorized or approved in the articles of incorporation or the

bylaws.

(h) "Foreign corporation" means a not-for-profit corporation as defined

and organized under the laws other than the laws of this State, for a purpose or

purposes for which a corporation may be organized under this Act.

(i) "Incorporator" means one of the signers of the original articles of

incorporation.

(j) "Insolvent" means that a corporation is unable to pay its debts as they

become due in the usual course of the conduct of its affairs.

(k) "Member" means a person or any organization, whether not for profit

or otherwise, having membership rights in a corporation in accordance with the

provisions of its articles of incorporation or bylaws.

(l) "Net assets," for the purpose of determining the authority of a

corporation to make distributions, is equal to the difference between the assets of the

corporation and the liabilities of the corporation.

(m) "Not-for-profit corporation" means a corporation subject to this Act

and organized solely for one or more of the purposes authorized by Section 103.05

of this Act.

(n) "Registered office" means that office maintained by the corporation

in this State, the address of which is on file in the office of the Secretary of State, at

which any process, notice or demand required or permitted by law may be served

upon the registered agent of the corporation.

(o) "Special charter" means the charter granted to a corporation created

by special act of the Legislature whether or not the term "charter" or "special

charter" is used in such special act.

Illinois General Not-For-Profit Corporation Act - 98

(p) Unless otherwise prohibited by the articles of incorporation or the

bylaws of the corporation, actions required to be "written", to be "in writing", to

have "written consent", to have "written approval" and the like by or of members,

directors, or committee members shall include any communication transmitted or

received by electronic means.

ARTICLE 2. FORMATION OF CORPORATIONS

Section 102.05. Incorporators. One or more incorporators may organize a

corporation under this Act. Each incorporator shall be either a corporation, domestic

or foreign, whether not for profit or otherwise, or a natural person of the age of 18

years or more.

Section 102.10. Articles of Incorporation. The articles of incorporation shall be

executed and filed in duplicate in accordance with Section 101.10 of this Act.

(a) The articles of incorporation must set forth:

(1) A corporate name for the corporation that satisfies the

requirements of this Act;

(2) The specific purpose or purposes for which the corporation is

organized, from among the purposes authorized in Section 103.05 of this Act;

(3) The address of the corporation's initial registered office and

the name of its initial registered agent at that office;

(4) The name and address of each incorporator;

(5) The number of directors constituting the first board of

directors and the names and addresses of each such director;

(6) With respect to any organization a purpose of which is to

function as a club, as defined in Section 1-3.24 of "The Liquor Control Act of

1934", as now or hereafter amended, a statement that it will comply with the State

and local laws and ordinances relating to alcoholic liquors;

(7) Whether the corporation is a condominium association as

established under the Condominium Property Act, a cooperative housing corporation

defined in Section 216 of the Internal Revenue Code of 1954 or a homeowner

association which administers a common-interest community as defined in

subsection (c) of Section 9-102 of the Code of Civil Procedure.

(b) The articles of incorporation may set forth:

(1) Provisions not inconsistent with law with respect to:

(i) Managing and regulating the affairs of the corporation,

including any provision for distribution of assets on final dissolution;

(ii) Providing that the corporation shall have no members,

or shall have one or more classes of members;

(iii) Limiting, enlarging or denying the right of the

members of any class or classes of members, to vote;

Illinois General Not-For-Profit Corporation Act - 99

(iv) Defining, limiting, and regulating the rights, powers

and duties of the corporation, its officers, directors and members; or

(v) Superseding any provision of this Act that requires for

approval of corporation action a two-thirds vote of members or class of members

entitled to vote by specifying any smaller or larger vote requirement not less than a

majority of the votes which members entitled to vote on a matter shall vote, either in

person or by proxy, at a meeting at which there is a quorum.

(2) Any provision that under this Act is required or permitted to

be set forth in the articles of incorporation or bylaws.

powers enumerated in this Act.

(d) The duration of a corporation is perpetual unless otherwise specified

in the articles of incorporation.

(e) When the provisions of this Section have been complied with, the

Secretary of State shall file the articles of incorporation.

Section 102.15. Effect of incorporation. Upon the filing of articles of incorporation

by the Secretary of State, the corporate existence shall begin, and such filing shall be

conclusive evidence, except as against the State, that all conditions precedent

required to be performed by the incorporators have been complied with and that the

corporation has been incorporated under this Act.

Section 102.20. Organization of Corporation.

(a) After filing the articles of incorporation, the first meeting of the board

of directors shall be held at the call of a majority of the incorporators or of the

directors for the purpose of:

(1) Adopting bylaws;

(2) Electing officers; and

(3) Such other purposes as may come before the meeting.

In lieu of a meeting, director action may be taken by consent in writing,

pursuant to Section 108.45 of this Act.

(b) If the corporation has members, a first meeting of the members may

be held at the call of an officer or of a majority of the directors, for such purposes as

shall be stated in the notice of the meeting.

If the corporation has members entitled to vote, then in lieu of a meeting,

member action may be taken by consent in writing, pursuant to Section 107.10 of

this Act.

be given unless the persons entitled to such notice waive the same in writing, either

before or after such meeting. An organizational meeting may be held either within or

without this State.

Illinois General Not-For-Profit Corporation Act - 100

Section 102.25. Bylaws. The initial bylaws of a corporation shall be adopted by its

board of directors. The power to alter, amend or repeal the bylaws or adopt new

bylaws shall be vested in the board of directors unless otherwise provided in the

articles of incorporation or the bylaws. The bylaws may contain any provisions for

the regulation and management of the affairs of a corporation not inconsistent with

law or the articles of incorporation.

Section 102.35. Incorporation of an association or society.

(a) When an unincorporated association or society, organized for any of

the purposes for which a corporation could be formed under this Act, authorizes the

incorporation of the association or society by the same procedure and affirmative

vote of its voting members or delegates as its constitution, bylaws, or other

fundamental agreement requires for an amendment to its fundamental agreement or,

if no such vote is specified, by a majority vote of the voting members present at a

duly convened meeting the purpose of which is stated in the notice of the meeting,

then following the filing of articles of incorporation under Section 102.10 setting

forth those facts and that the required vote has been obtained and upon the filing of

the articles of incorporation, the association or society shall become a corporation

and the members of the association or society shall become members of the

corporation in accordance with provisions in the articles to that effect.

(b) Upon incorporation, all the rights, privileges, immunities, powers,

franchise, authority, and property of the unincorporated association or society shall

pass to and vest in the corporation, and all obligations of the unincorporated

association or society shall become obligations of the corporation.

ARTICLE 3. PURPOSES AND POWERS

Section 103.05. Purposes and authority of corporations; particular purposes;

exemptions.

(a) Not-for-profit corporations may be organized under this Act for any

one or more of the following or similar purposes:

(1) Charitable.

(2) Benevolent.

(3) Eleemosynary.

(4) Educational.

(5) Civic.

(6) Patriotic.

(7) Political.

(8) Religious.

(9) Social.

(10) Literary.

(11) Athletic.

(12) Scientific.

(13) Research.

(14) Agricultural.

(15) Horticultural.

(16) Soil improvement.

(17) Crop improvement.

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(18) Livestock or poultry improvement.

(19) Professional, commercial, industrial, or trade association.

(20) Promoting the development, establishment, or expansion of

industries.

(21) Electrification on a cooperative basis.

(22) Telephone service on a mutual or cooperative basis.

(23) Ownership and operation of water supply facilities for

drinking and general domestic use on a mutual or cooperative basis.

(24) Ownership or administration of residential property on a

cooperative basis.

(25) Administration and operation of property owned on a

condominium basis or by a homeowner association.

(26) Administration and operation of an organization on a

cooperative basis producing or furnishing goods, services, or facilities primarily for

the benefit of its members who are consumers of those goods, services, or facilities.

(27) Operation of a community mental health board or center

organized pursuant to the Community Mental Health Act for the purpose of

providing direct patient services.

(28) Provision of debt management services as authorized by the

Debt Management Service Act.

(29) Promotion, operation, and administration of a ridesharing

arrangement as defined in Section 1-176.1 of the Illinois Vehicle Code.

(30) The administration and operation of an organization for the

purpose of assisting low-income consumers in the acquisition of utility and

telephone services.

(31) Any purpose permitted to be exempt from taxation under

Sections 501(c) or 501(d) of the United States Internal Revenue Code, as now in or

hereafter amended.

(32) Any purpose that would qualify for tax-deductible gifts under

the Section 170(c) of the United States Internal Revenue Code, as now or hereafter

amended. Any such purpose is deemed to be charitable under subsection (a)(1) of

this Section.

(33) Furnishing of natural gas on a cooperative basis.

(34) Ownership and operation of agriculture-based biogas

(anaerobic digester) systems on a cooperative basis including the marketing and sale

of products produced from these, including but not limited to methane gas,

electricity, and compost.

(b) A corporation may be organized hereunder to serve in an area that

adjoins or borders (except for any intervening natural watercourse) an area located

in an adjoining state intended to be similarly served, and the corporation may join

any corporation created by the adjoining state having an identical purpose and

organized as a not-for-profit corporation. Whenever any corporation organized

under this Act so joins with a foreign corporation having an identical purpose, the

corporation shall be permitted to do business in Illinois as one corporation; provided

(1) that the name, bylaw provisions, officers, and directors of each corporation are

identical, (2) that the foreign corporation complies with the provisions of this Act

relating to the admission of foreign corporation, and (3) that the Illinois corporation

files a statement with the Secretary of State indicating that it has joined with a

foreign corporation setting forth the name thereof and the state of its incorporation.

Illinois General Not-For-Profit Corporation Act - 102

Section 103.10. General powers. Each corporation shall have power:

(a) To have perpetual succession by its corporate name unless a limited

period of duration is stated in its articles of incorporation;

(b) To sue and be sued, complain and defend, in its corporate name, and

shall have standing to sue when one or more of its members would otherwise have

standing to sue in his or her own right, providing the interests it seeks to protect are

germane to the corporation's purposes, and neither the claim asserted nor the relief

requested requires the participation of individual members in the lawsuit;

the same by causing it, or a facsimile thereof, to be impressed or affixed or in any

other manner reproduced, provided that the affixing of a corporate seal to an

instrument shall not give the instrument additional force or effect, or change the

construction thereof, and the use of a corporate seal is not mandatory;

(d) To purchase, take, receive, lease as lessee, take by gift, devise, or

bequest, or otherwise acquire, and to own, hold, hold as trustee, use, and otherwise

deal in and with any real or personal property, or any interest therein, situated in or

out of this State;

(e) To sell and convey, mortgage, pledge, lease as lessor, and otherwise

dispose of all or any part of its property and assets;

(f) To lend money to its officers, employees and agents except as limited

by Section 108.80 of this Act;

(g) To purchase, take, receive, subscribe for, or otherwise acquire, own,

hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of, and

otherwise use and deal in and with, shares or other interests in, or obligations of,

other domestic or foreign corporations, whether for profit or not for profit,

associations, partnerships or individuals;

(h) To incur liabilities, to borrow money for its corporate purposes at

such rates of interest as the corporation may determine without regard to the

restrictions of any usury law of this State, to issue its notes, bonds and other

obligations; to secure any of its obligations by mortgage, pledge, or deed of trust of

all or any of its property, franchises, and income; and to make contracts, including

contracts of guaranty and suretyship;

(i) To invest its funds from time to time and to lend money for its

corporate purposes, and to take and hold real and personal property as security for

the payment of funds so invested or loaned;

(j) To conduct its affairs, carry on its operations, and have offices within

and without this State and to exercise in any other state, territory, district, or

possession of the United States, or in any foreign country, the powers granted by this

Act;

(k) To elect or appoint officers and agents of the corporation, and define

their duties and fix their compensations;

(l) To make and alter bylaws, not inconsistent with its articles of

incorporation or with the laws of this State, except as provided in Section 102.30 of

this Act, for the administration and regulation of the affairs of the corporation;

Illinois General Not-For-Profit Corporation Act - 103

(m) To make donations in furtherance of any of its purposes; to lend

money to the State or Federal government; and to conduct any lawful affairs in aid

of the United States;

(n) To cease its corporate activities and surrender its corporate franchise;

(o) To establish deferred compensation plans, pension plans, and other

incentive plans for its directors, officers and employees and to make the payments

provided for therein;

(p) To indemnify its directors, officers, employees or agents in

accordance with and to the extent permitted by Section 108.75 of this Act and other

applicable provisions of law;

(q) To be a promoter, partner, member, associate or manager of any

partnership, joint venture or other enterprise; and

(r) To have and exercise all powers necessary or convenient to effect any

or all of the purposes for which the corporation is formed.

Section 103.15. Defense of Ultra Vires. No act of a corporation and no conveyance

or transfer of real or personal property to or by a corporation shall be invalid by

reason of the fact that the corporation was without capacity or power to do such act

or to make or receive such conveyance or transfer, but such lack of capacity or

power may be asserted:

(a) In a proceeding by a member entitled to vote or by a director against

the corporation to enjoin the doing of any act or acts or the transfer of real or

personal property by or to the corporation. If the unauthorized acts or transfer sought

to be enjoined are being, or are to be, performed or made pursuant to any contract to

which the corporation is a party, the court may, if all of the parties to the contract are

parties to the proceeding and if it deems the same to be equitable, set aside and

enjoin the performance of such contract, and in so doing shall allow to the

corporation or the other parties, as the case may be, compensation for the loss or

damage sustained by either of them which may result from the action of the court in

setting aside and enjoining the performance of such contract, but anticipated profits

to be derived from the performance of the contract shall not be awarded by the court

as a loss or damage sustained;

(b) In a proceeding by the corporation, whether acting directly or through

a receiver, trustee, or other legal representative, or, to the extent provided for by

Section 107.80 of this Act, through a member in a representative suit, against the

officers or directors of the corporation for exceeding their authority; or

corporation, or in a proceeding by the State to enjoin the corporation from the

transaction of unauthorized affairs.

Section 103.20. Unauthorized assumption of corporate powers. All persons who

assume to exercise corporate powers without authority to so do shall be jointly and

severally liable for all debts and liabilities incurred or arising as a result thereof.

Illinois General Not-For-Profit Corporation Act - 104

Section 103.30. Homeowners' association; American flag or military flag.

(a) Notwithstanding any provision in the association's declaration,

covenants, bylaws, rules, regulations, or other instruments or any construction of

any of those instruments by an association's board of directors, a homeowners'

association incorporated under this Act may not prohibit the outdoor display of the

American flag or a military flag, or both, by a homeowner on that homeowner's

property if the American flag is displayed in a manner consistent with Sections 4

through 10 of Chapter 1 of Title 4 of the United States Code and a military flag is

displayed in accordance with any reasonable rules and regulations adopted by the

association. An association may adopt reasonable rules and regulations, consistent

with Sections 4 through 10 of Chapter 1 of Title 4 of the United States Code,

regarding the placement and manner of display of the American flag and an

association may adopt reasonable rules and regulations regarding the placement and

manner of display of a military flag. An association may not prohibit the installation

of a flagpole for the display of the American flag or a military flag, or both, but the

association may adopt reasonable rules and regulations regarding the location and

size of flagpoles.

(b) As used in this Section:

"American flag" means the flag of the United States (as defined in Section 1

of Chapter 1 of Title 4 of the United States Code and the Executive Orders entered

in connection with that Section) made of fabric, cloth, or paper displayed from a

staff or flagpole or in a window, but "American flag" does not include a depiction or

emblem of the American flag made of lights, paint, roofing, siding, paving

materials, flora, or balloons, or any other similar building, landscaping, or decorative

component.

"Homeowners' association" includes a property owners' association,

townhome association, and any similar entity, and "homeowner" includes a

townhome owner.

"Military flag" means a flag of any branch of the United States armed forces

or the Illinois National Guard made of fabric, cloth, or paper displayed from a staff

or flagpole or in a window, but "military flag" does not include a depiction or

emblem of a military flag made of lights, paint, roofing, siding, paving materials,

flora, or balloons, or any other similar building, landscaping, or decorative

component.

Section 103.35. Unemployment insurance; notice. A not-for-profit corporation

that is excluded from the definition of "nonprofit organization" under Section 211.2

of the Unemployment Insurance Act because it does not have in employment 4 or

more individuals within each of 20 or more calendar weeks must provide a written

notice to each employee, either in each employee's employment contract or in a

written notice provided to employees who do not have employment contracts, and to

each member of the board of directors that the employees of the not-for-profit

corporation are not eligible to receive unemployment insurance benefits on the basis

of their employment for the not-for-profit corporation.

Illinois General Not-For-Profit Corporation Act - 105

ARTICLE 5. OFFICE AND AGENT

Section 105.05. Registered office and registered agent.

(a) Each domestic corporation and each foreign corporation having

authority to conduct affairs in this State shall have and continuously maintain in this

State:

(1) A registered office which may be, but need not be, the same

as its place of business in this State.

(2) A registered agent, which agent may be either an individual,

resident in this State, whose business office is identical with such registered office,

or a for profit domestic or foreign corporation, limited liability company, limited

partnership, or limited liability partnership authorized to transact business in this

State that is authorized by its statement of purpose to act as such agent, having a

business office identical with such registered office.

(b) The address, including street and number, if any, of the initial

registered office, and the name of the initial registered agent of each corporation

organized under this Act shall be stated in its articles of incorporation; and of each

foreign corporation shall be stated in its application for authority to conduct affairs

in this State.

administrative, or judicial, the registered agent and the registered office of the

corporation on record with the Secretary of State on the date of the issuance of the

certificate or judgment of dissolution shall be an agent of the corporation upon

whom claims can be served or service of process can be had during the two year

post-dissolution period provided in Section 112.80 of this Act, unless such agent

resigns or the corporation properly reports a change of registered office or registered

agent.

(d) In the event of revocation of authority of a foreign corporation, the

registered agent and the registered office of the corporation on record with the

Secretary of State on the date of the issuance of the certificate of revocation shall be

an agent of the corporation upon whom claims can be served or service of process

can be had, unless such agent resigns.

Section 105.10. Change of registered office or registered agent.

(a) A domestic corporation or a foreign corporation may from time to

time change the address of its registered office. A domestic corporation or a foreign

corporation shall change its registered agent if the office of registered agent shall

become vacant for any reason, or if its registered agent becomes disqualified or

incapacitated to act, or if the corporation revokes the appointment of its registered

agent.

(b) A domestic corporation or a foreign corporation may change the

address of its registered office or change its registered agent, or both, by executing

and filing in duplicate, in accordance with Section 101.10 of this Act, a statement

setting forth:

(1) the name of the corporation;

Illinois General Not-For-Profit Corporation Act - 106

(2) the address, including street and number, or rural route

number, of its then registered office;

(3) if the address of its registered office be changed, the address,

including street and number, or rural route number, to which the registered office is

to be changed;

(4) the name of its then registered agent;

(5) if its registered agent be changed, the name of its successor

registered agent;

(6) that the address of its registered office and the address of the

business office of its registered agent, as changed, will be identical;

(7) that such change was authorized by resolution duly adopted

by the board of directors.

(c-d) (Blank).

(e) The change of address of the registered office, or the change of

registered agent, or both, as the case may be, shall become effective upon the filing

of such statement by the Secretary of State.

Section 105.15. Resignation of registered agent. (a) A registered agent may at any

time resign by filing in the office of the Secretary of State written notice thereof, and

by mailing a copy thereof to the corporation at its principal office as such is known

to said resigning agent, such notice to be mailed at least 10 days prior to the date of

filing thereof with the Secretary of State.

(b) The notice shall set forth:

(1) The name of the corporation for which the registered agent is

acting;

(2) The name of the registered agent;

(3) The address, including street and number, or rural route

number, of the corporation's then registered office in this State;

(4) That the registered agent resigns;

(5) The effective date thereof which shall not be less than 30 days

after the date of filing;

(6) The address of the principal office of the corporation as such

is known to the registered agent;

(7) A statement that a copy of this notice has been sent to the

principal office within the time and in the manner prescribed by this Section.

individual, or, if a business entity, in the manner authorized by the governing statute.

Section 105.20. Change of Address of Registered Agent.

(a) A registered agent may change the address of the registered office of

the domestic corporation or of the foreign corporation, for which he or she or it is

Illinois General Not-For-Profit Corporation Act - 107

registered agent, to another address in this State, by filing, in duplicate, in

accordance with Section 101.10 of this Act a statement setting forth:

(1) the name of the corporation;

(2) the address, including street and number, or rural route

number, of its then registered office;

(3) the address, including street and number, or rural route

number, to which the registered office is to be changed;

(4) the name of its registered agent;

(5) that the address of its registered office and the address of the

business office of its registered agent, as changed, will be identical.

(b) Such statement shall be executed by the registered agent.

upon the filing of such statement by the Secretary of State.

Section 105.25. Service of process on domestic or foreign corporation.

(a) Any process, notice, or demand required or permitted by law to be

served upon a domestic corporation or a foreign corporation having authority to

conduct affairs in this State may be served either upon the registered agent

appointed by the corporation or upon the Secretary of State as provided in this

Section.

(b) The Secretary of State shall be irrevocably appointed as an agent of a

domestic corporation or of a foreign corporation having authority upon whom any

process, notice or demand may be served:

(1) Whenever the corporation shall fail to appoint or maintain a

registered agent in this State; or

(2) Whenever the corporation's registered agent cannot with

reasonable diligence be found at the registered office in this State; or

(3) When a domestic corporation has been dissolved, the

conditions of paragraph (1) or paragraph (2) exist, and an action, suit or proceeding

is instituted against or affecting the corporation within the two years after the

dissolution or the filing of a judgment of dissolution; or

(3.5) When a domestic corporation has been dissolved, the

conditions of paragraph (1) or (2) exist, and a criminal proceeding has been

instituted against or affecting the corporation; or

(4) When the authority of a foreign corporation to transact

business has been revoked or withdrawn.

(1) Service on the Secretary of State, or on any clerk having

charge of the corporation division at his or her office, of a copy of the process,

notice or demand, together with any papers required by law to be delivered in

Illinois General Not-For-Profit Corporation Act - 108

connection with service, and a fee as prescribed by subsection (b) of Section 115.15

of this Act;

(2) Transmittal by the person instituting the action, suit or

proceeding of notice of the service on the Secretary of State and a copy of the

process, notice or demand and accompanying papers to the corporation being

served, by registered or certified mail:

(i) At the last registered office of the corporation as shown by

the records on file in the office of the Secretary of State; or

(ii) At such address the use of which the person instituting the

action, suit or proceeding knows or, on the basis of reasonable inquiry, has reason to

believe is most likely to result in actual notice; and

(3) Appendage by the person instituting the action, suit or

proceeding of an affidavit of compliance with this Section in substantially such form

as the Secretary of State may by rule or regulation prescribe, to the process, notice

or demand.

(d) Nothing herein contained shall limit or affect the right to serve any

process, notice, or demand required or permitted by law to be served upon a

corporation in any other manner now or hereafter permitted by law.

(e) The Secretary of State shall keep a record of all processes, notices,

and demands served upon him or her under this Section, and shall record therein the

time of such service and his or her action with reference thereto but shall not be

required to retain such information for a period longer than five years from his or

her receipt of the service.

Section 105.30. Service of process on foreign corporation not authorized to

conduct affairs in Illinois.

If any foreign corporation conducts affairs in this State without having

authority to conduct affairs, it shall be deemed that such corporation has designated

and appointed the Secretary of State as an agent for process upon whom any notice,

process or demand may be served. Service on the Secretary of State shall be made in

the manner set forth in subsection (c) of Section 105.25 of this Act.

ARTICLE 7. MEMBERS

Section 107.03. Members.

(a) A corporation may have one or more classes of members or may have

no members.

(b) If the corporation has one or more classes of members, the

designation of the class or classes and the qualifications and rights of the members

of each class shall be set forth in the articles of incorporation or the bylaws. The

articles of incorporation or the bylaws may provide for representatives or delegates

of members and may establish their qualifications and rights.

the articles of incorporation or the bylaws.

Illinois General Not-For-Profit Corporation Act - 109

(d) A corporation may issue certificate evidencing membership therein.

(e) The transfer of a certificate of membership in a not-for-profit

corporation in which assets are held for a charitable, religious, eleemosynary,

benevolent or educational purpose, shall be without payment of any consideration of

money or property of any kind or value to the transferor in respect to such transfer.

Any transfer in violation of this Section shall be void.

(f) Where the articles of incorporation or bylaws provide that a

corporation shall have no members, or where a corporation has under its articles of

incorporation, bylaws or in fact no members entitled to vote on a matter, any

provision of this Act requiring notice to, the presence of, or the vote, consent or

other action by members of the corporation in connection with such matter shall be

satisfied by notice to, the presence of, or the vote, consent or other action of the

directors of the corporation.

(g) A residential cooperative not-for-profit corporation containing 50 or

more single family units with individual unit legal descriptions based upon a

recorded plat of a subdivision and located in a county with a population between

780,000 and 3,000,000 shall specifically set forth the qualifications and rights of its

members in the Articles of Incorporation and the bylaws.

Section 107.05. Meeting of members.

(a) Meetings of members may be held either within or without this State,

as may be provided in the bylaws or in a resolution of the board of directors

pursuant to authority granted in the bylaws. In the absence of any such provision, all

meetings shall be held at the registered office of the corporation in this State.

(b) An annual meeting of the members entitled to vote may be held at

such time as may be provided in the bylaws or in a resolution of the board of

directors pursuant to authority granted in the bylaws. Failure to hold the annual

meeting at the designated time shall not work a forfeiture or dissolution of the

corporation nor affect the validity of corporate action. If an annual meeting has not

been held within the earlier of six months after the end of the corporation's fiscal

year or fifteen months after its last annual meeting and if, after a request in writing

directed to the president of the corporation, a notice of meeting is not delivered to

members entitled to vote within 60 days of such request, then any member entitled

to vote at an annual meeting may apply to the circuit court of the county in which

the registered office or principal place of business of the corporation is located for

an order directing that the meeting be held and fixing the time and place of the

meeting. The court may issue such additional orders as may be necessary or

appropriate for the holding of the meeting.

by the board of directors. Special meetings of the members may also be called by

such other officers or persons or number or proportion of members entitled to vote

as may be provided in the articles of incorporation or the bylaws. In the absence of a

provision fixing the number or proportion of members entitled to vote who are

entitled to call a meeting, a special meeting of members entitled to vote may be

called by such members having one-twentieth of the votes entitled to be cast at such

meeting.

Illinois General Not-For-Profit Corporation Act - 110

(d) Unless specifically prohibited by the articles of incorporation or

bylaws, a corporation may allow members entitled to vote to participate in and act at

any meeting through the use of a conference telephone or interactive technology,

including but not limited to electronic transmission, Internet usage, or remote

communication, by means of which all persons participating in the meeting can

communicate with each other. Participation in such meeting shall constitute

attendance and presence in person at the meeting of the person or persons so

participating.

(e) For meetings of a not-for-profit corporation organized for the purpose

of residential cooperative housing, consisting of 50 or more single family dwellings

with individual unit legal descriptions based upon a recorded plat of a subdivision,

and located in a county containing a population between 780,000 and 3,000,000

inhabitants, any member may record by tape, film, or other means the proceedings at

the meetings. The board or the membership may prescribe reasonable rules and

regulations to govern the making of the recordings. The portion of any meeting held

to discuss violations of rules and regulations of the corporation by a residential

shareholder shall be recorded only with the affirmative assent of that shareholder.

Section 107.10. Informal action by members entitled to vote.

(a) Unless otherwise provided in the articles of incorporation or the

bylaws, except for the dissolution of a not-for-profit corporation organized for the

purpose of ownership or administration of residential property on a cooperative

basis, any action required by this Act to be taken at any annual or special meeting of

the members entitled to vote, or any other action which may be taken at a meeting of

the members entitled to vote, may be taken by ballot without a meeting in writing by

mail, e-mail, or any other electronic means pursuant to which the members entitled

to vote thereon are given the opportunity to vote for or against the proposed action,

and the action receives approval by a majority of the members casting votes, or such

larger number as may be required by the Act, the articles of incorporation, or the

bylaws, provided that the number of members casting votes would constitute a

quorum if such action had been taken at a meeting. Voting must remain open for not

less than 5 days from the date the ballot is delivered; provided, however, in the case

of a removal of one or more directors, a merger, consolidation, dissolution or sale,

lease or exchange of assets, the voting must remain open for not less than 20 days

from the date the ballot is delivered.

(b) Such informal action by members shall become effective only if, at

least 5 days prior to the effective date of such informal action, a notice in writing of

the proposed action is delivered to all of the members entitled to vote with respect to

the subject matter thereof.

required the filing of a certificate under any other Section of this Act if such action

had been voted on by the members at a meeting thereof, the certificate filed under

such other Section shall state, in lieu of any statement required by such Section

concerning any vote of members, that an informal vote has been conducted in

accordance with the provisions of this Section and that written notice has been

delivered as provided in this Section.

(d) In addition, unless otherwise provided in the articles of incorporation

or the bylaws, any action required by this Act to be taken at any annual or special

Illinois General Not-For-Profit Corporation Act - 111

meeting of the members entitled to vote, or any other action which may be taken at a

meeting of members entitled to vote, may also be taken without a meeting and

without a vote if a consent in writing, setting forth the action so taken, shall be

approved by all the members entitled to vote with respect to the subject matter

thereof.

Section 107.15. Notice of members' meetings. Written notice stating the place,

day, and hour of the meeting and, in the case of a special meeting, the purpose or

purposes for which the meeting is called, shall be delivered not less than 5 nor more

than 60 days before the date of the meeting, or in the case of a removal of one or

more directors, a merger, consolidation, dissolution or sale, lease or exchange of

assets not less than 20 nor more than 60 days before the date of the meeting, by or at

the direction of the president, or the secretary, or the officer or persons calling the

meeting, to each member of record entitled to vote at such meeting. A residential

cooperative not-for-profit corporation containing 50 or more single family units with

individual unit legal descriptions based upon a recorded plat of a subdivision and

located in a county with a population between 780,000 and 3,000,000 shall, in

addition to the other requirements of this Section, post notice of member's meetings

in conspicuous places in the residential cooperative at least 48 hours prior to the

meeting of the members.

Section 107.20. Waiver of notice. Whenever any notice whatever is required to be

given under the provisions of this Act or under the provisions of the articles of

incorporation or bylaws of any corporation, a waiver thereof in writing signed by the

person or persons entitled to such notice, whether before or after the time stated

therein, shall be deemed equivalent to the giving of such notice. Attendance at any

meeting shall constitute waiver of notice thereof unless the person at the meeting

objects to the holding of the meeting because proper notice was not given.

Section 107.25. Fixing record date for voting. For the purpose of determining

members entitled to notice of or to vote at any meeting of members, or in order to

make a determination of members for any other proper purpose, the board of

directors of a corporation may fix in advance a date as the record date for any such

determination of members, such date in any case to be not more than 60 days and,

for a meeting of members, not less than 5 days, or in the case of a merger,

consolidation, dissolution or sale, lease or exchange of assets, not less than 20 days,

immediately preceding such meeting. If no record date is fixed for the determination

of members entitled to notice of or to vote at a meeting of members, the date on

which notice of the meeting is delivered shall be the record date for such

determination of members. When a determination of members entitled to vote at any

meeting of members has been made as provided in this Section, such determination

shall apply to any adjournment thereof. In lieu of the board of directors from time to

time establishing record dates, the bylaws of the corporation may establish a

mechanism for determining record dates in all or specified instances.

Section 107.35. Inspectors. At any meeting of members, the chairman of the

meeting may, or upon the request of any members shall, appoint one or more

persons as inspectors for such meeting, unless an inspector or inspectors shall have

been previously appointed for such meeting in the manner provided by the bylaws of

the corporation.

Illinois General Not-For-Profit Corporation Act - 112

Such inspectors shall ascertain and report the number of votes represented at

the meeting, based upon their determination of the validity and effect of proxies;

count all votes and report the results; and do such other acts as are proper to conduct

the election and voting with impartiality and fairness to all the members.

Each report of an inspector shall be in writing and signed by him or her or by

a majority of them if there be more than one inspector acting at such meeting. If

there is more than one inspector, the report of a majority shall be the report of the

inspectors. The report of the inspector or inspectors on the number of votes

represented at the meeting and the results of the voting shall be prima facie evidence

thereof.

Section 107.40. Voting.

(a) The right of the members, or any class or classes of members, to vote

may be limited, enlarged or denied to the extent specified in the articles of

incorporation or the bylaws. Unless so limited, enlarged or denied, each member,

regardless of class, shall be entitled to one vote on each matter submitted to a vote of

members.

(b) The articles of incorporation or the bylaws may provide that in all

elections for directors every member entitled to vote shall have the right to cumulate

his or her vote and to give one candidate a number of votes equal to his or her vote

multiplied by the number of directors to be elected, or to distribute such votes on the

same principle among as many candidates as he or she shall think fit.

with respect to a particular matter, the directors shall have the sole voting power

with respect to such matter.

Section 107.50. Proxies. A member entitled to vote may vote in person or, unless

the articles of incorporation or bylaws explicitly prohibit, by proxy executed in

writing by the member or by that member's duly authorized attorney-in-fact. No

proxy shall be valid after 11 months from the date of its execution, unless otherwise

provided in the proxy. Unless otherwise prohibited by the articles of incorporation

or bylaws, the election of directors, officers, or representatives by members may be

conducted by mail, e-mail, or any other electronic means as set forth in subsection

(a) of Section 107.10.

Section 107.60. Quorum of members entitled to vote. Unless otherwise provided

by the articles of incorporation or the bylaws, members holding one-tenth of the

votes entitled to be cast on a matter, represented in person or by proxy, shall

constitute a quorum for consideration of such matter at a meeting of members. If a

quorum is present, the affirmative vote of a majority of the votes present and voted,

either in person or by proxy, shall be the act of the members, unless the vote of a

greater number or voting by classes is required by this Act, the articles of

incorporation or the bylaws. The articles of incorporation or bylaws may require any

number or percent greater or smaller than one-tenth up to and including a

requirement of unanimity to constitute a quorum.

Section 107.70. Voting agreements. (a) Members entitled to vote may provide for

the casting of their votes by signing an agreement for that purpose.

Illinois General Not-For-Profit Corporation Act - 113

(b) A voting agreement created under this Section is specifically

enforceable in accordance with the principles of equity.

Section 107.75. Books and records.

(a) Each corporation shall keep correct and complete books and records

of account and shall also keep minutes of the proceedings of its members, board of

directors and committees having any of the authority of the board of directors; and

shall keep at its registered office or principal office a record giving the names and

addresses of its members entitled to vote. Any voting member shall have the right to

examine, in person or by agent, at any reasonable time or times, the corporation's

books and records of account and minutes, and to make extracts therefrom, but only

for a proper purpose. In order to exercise this right, a voting member must make

written demand upon the corporation, stating with particularity the records sought to

be examined and the purpose therefor. If the corporation refuses examination, the

voting member may file suit in the circuit court of the county in which either the

registered agent or principal office of the corporation is located to compel by

mandamus or otherwise such examination as may be proper. If a voting member

seeks to examine books or records of account the burden of proof is upon the voting

member to establish a proper purpose. If the purpose is to examine minutes, the

burden of proof is upon the corporation to establish that the voting member does not

have a proper purpose.

(b) A residential cooperative not-for-profit corporation containing 50 or

more single family units with individual unit legal descriptions based upon a

recorded plat of a subdivision and located in a county with a population between

780,000 and 3,000,000 shall keep an accurate and complete account of all transfers

of membership and shall, on a quarterly basis, record all transfers of membership

with the county clerk of the county in which the residential cooperative is located.

Additionally, a list of all transfers of membership shall be available for inspection by

any member of the corporation.

Section 107.80. Derivative suits by voting members. Nothing in this Act shall be

construed to affect any pre-existing common law right of a voting member to bring

an action in this State in the right of such corporation, nor shall this Act be construed

to create any such right that did not exist prior to the effective date of this Act.

Section 107.85. Nonliability of members. The members of a corporation shall not

be personally liable for any debt or obligation of the corporation.

Section 107.90. Not-for-profit residential cooperative.

(a) As used in this Section:

"Member" includes the plural "members", where a membership is

jointly held.

"Membership agreement" means the contract and other documents

that define the rights of the member to occupy, use, or possess a portion or all of a

parcel of real estate exclusively.

"Class of membership" means a grouping of members based on the

same privileges, rights, and manner of treatment by the corporation.

Illinois General Not-For-Profit Corporation Act - 114

(b) The provisions of this Section apply only to a not-for-profit

corporation organized for the purpose of residential cooperative housing consisting

of 50 or more single family dwellings with individual unit legal descriptions based

upon a recorded plat of a subdivision, located in a county containing a population

between 780,000 and 3,000,000 inhabitants, and for which the title to one or more

member's parcels is held by the corporation.

a membership agreement is held by or is transferred to that member; (ii) more than

one class of membership exists; or (iii) the corporation fails to obtain recognition or

loses recognition as a Cooperative Housing Corporation under Section 216 of the

Internal Revenue Code of 1954, as amended, then:

(1) The board of directors shall issue notice to the members

within 10 days after obtaining knowledge of (i), (ii), or (iii), or within 10 days after

the effective date of this amendatory Act of the 91st General Assembly, if the board

obtained such knowledge before the effective date of this amendatory Act of the

91st General Assembly.

(2) At the member's option, any member may receive a warranty

deed for full title to the real property that he or she occupies issued by the not-for-

profit corporation, upon presentation of a notarized and written request to the

corporation, provided that the corporation holds the title.

(3) The member may withdraw from the corporation, at the

member's option. The member shall retain his or her interest in any common

property held by the corporation or may transfer his or her interest to the corporation

for fair value, at the member's option.

ARTICLE 8. DIRECTORS AND OFFICERS

Section 108.05. Board of directors.

(a) Each corporation shall have a board of directors, and except as

provided in articles of incorporation, the affairs of the corporation shall be managed

by or under the direction of the board of directors.

(b) A director need not be a resident of this State or a member of the

corporation unless the articles of incorporation or bylaws so prescribe. The articles

of incorporation or the bylaws may prescribe other qualifications for directors.

the board of directors, by the affirmative vote of a majority of the directors then in

office, shall have authority to establish reasonable compensation of all directors for

services to the corporation as directors, officers or otherwise, notwithstanding the

provisions of Section 108.60 of this Act.

(d) No director may act by proxy on any matter.

Section 108.10. Number, election and resignation of directors.

(a) The board of directors of a corporation shall consist of three or more

directors. The number of directors shall be fixed by the bylaws, except the number

of initial directors shall be fixed by the incorporators in the articles of incorporation.

Illinois General Not-For-Profit Corporation Act - 115

In the absence of a bylaw fixing the number of directors, the number shall be the

same as that fixed in the articles of incorporation. The number of directors may be

increased or decreased from time to time by amendment to the bylaws.

(b) The bylaws may establish a variable range for the size of the board

by prescribing a minimum and maximum (which may not be less than 3 or exceed

the minimum by more than 5) number of directors. If a variable range is established,

unless the bylaws otherwise provide, the number of directors may be fixed or

changed from time to time, within the minimum and maximum, by the directors

without further amendment to the bylaws.

of directors following their election unless their terms are staggered under

subsection (e). The term of a director elected to fill a vacancy expires at the next

annual meeting of the members entitled to vote at which his or her predecessor's

term would have expired or in accordance with Section 108.30 of this Act. The term

of a director elected as a result of an increase in the number of directors expires at

the next annual meeting of members entitled to vote unless the term is staggered

under subsection (e).

(d) Despite the expiration of a director's term, he or she continues to

serve until the next meeting of members or directors entitled to vote on directors at

which directors are elected. An amendment to the bylaws decreasing the number of

directors or eliminating the position of a director elected or appointed by persons or

entities other than the members may shorten the terms of incumbent directors;

provided, however, such amendment has been approved by the party with the

authority to elect or appoint such directors.

(e) The articles of incorporation or the bylaws may provide that directors

may be divided into classes and the terms of office of several classes need not be

uniform. Each director shall hold office for the term for which he is elected and until

his successor shall have been elected and qualified.

(f) If the articles of incorporation or bylaws authorize dividing the

members into classes, the articles or bylaws may also authorize the election of all or

a specified number or percentage of directors by one or more authorized classes of

members.

(g) A director may resign at any time by written notice delivered to the

board of directors, its chairman, or to the president or secretary of the corporation. A

resignation is effective when the notice is delivered unless the notice specifies a

future date. The pending vacancy may be filled before the effective date, but the

successor shall not take office until the effective date.

Section 108.15. Quorum of directors. (a) Unless otherwise provided in the articles

of incorporation or the bylaws, a majority of the directors then in office shall

constitute a quorum; provided, that in no event shall a quorum consist of less than

one-third of the directors then in office.

(b) The act of the majority of the directors present at a meeting at which

a quorum is present shall be the act of the board of directors, unless the act of a

greater number is required by the articles of incorporation or the bylaws.

Illinois General Not-For-Profit Corporation Act - 116

bylaws, directors or nondirector committee members may participate in and act at

any meeting of such board or committee through the use of a conference telephone

or other communications equipment by means of which all persons participating in

the meeting can communicate with each other. Participation in such meeting shall

constitute attendance and presence in person at the meeting of the person or persons

so participating.

Section 108.20. Place of directors' meetings. Regular or special meetings of the

board of directors may be held either within or without this State.

Section 108.21. Meetings of the board of directors of a not-for-profit homeowners

association or residential cooperative not-for-profit corporation shall be open to any

member, except for the portion of any meeting held (i) to discuss litigation when an

action against or on behalf of the corporation has been filed and is pending in a court

or administrative tribunal, or when the board of directors finds that such an action is

probable or imminent, (ii) to consider information regarding appointment,

employment or dismissal of an employee, or (iii) to discuss violations of rules and

regulations of the corporation. Any member may record by tape, film or other means

the proceedings at such meetings or portions thereof required to be open by this

Section. The board may prescribe reasonable rules and regulations to govern the

right to make such recordings. Notice of such meetings shall be mailed or delivered

at least 48 hours prior thereto, unless a written waiver of such notice is signed by the

person or persons entitled to such notice pursuant to the articles of incorporation,

bylaws, other instrument before the meeting is convened. Copies of notices of

meetings of the board of directors shall be posted in entranceways, elevators, or

other conspicuous places at least 48 hours prior to the meeting of the board of

directors. If there is no common entranceway for 7 or more units, the board of

directors may designate one or more locations in the proximity of such units where

the notices of meetings shall be posted. For purposes of this Section, "meeting of the

board of directors" means any gathering of a quorum of the members of the board of

directors held for the purpose of discussing business of the homeowners association

or cooperative. The provisions of this Section shall apply to any homeowners

association or residential cooperative situated in the State of Illinois regardless of

where it may be incorporated.

Section 108.25. Notice of directors' meetings. Meetings of the board of directors

shall be held upon such notice as the bylaws may prescribe. Attendance of a director

at any meeting shall constitute a waiver of notice of such meeting except where a

director attends a meeting for the express purpose of objecting to the transaction of

any business because the meeting is not lawfully called or convened. Unless

provided otherwise in the articles of incorporation or the bylaws, neither the

business to be transacted at, nor the purpose of, any regular or special meeting of the

board of directors need be specified in the notice or waiver of notice of such

meeting, except that no special meeting of directors may remove a director under

Section 108.35(b) of this Act unless written notice of the proposed removal is

delivered to all directors at least twenty days prior to such meeting.

Section 108.30. Vacancies. Any vacancy occurring in the board of directors and any

directorship to be filled by reason of an increase in the number of directors may be

filled by the board of directors unless the articles of incorporation or the bylaws

Illinois General Not-For-Profit Corporation Act - 117

provide that a vacancy or directorship so created shall be filled in some other

manner, in which case such provision shall control. A director elected or appointed,

as the case may be, to fill a vacancy shall be elected or appointed for the unexpired

term of his or her predecessor in office.

Section 108.35. Removal of directors.

(a) One or more of the directors may be removed, with or without cause.

In the case of a corporation having a board of directors which is classified in

accordance with subsection 108.10(e) of this Act, the articles of incorporation or

bylaws may provide that such directors may only be removed for cause.

(b) In the case of a corporation with no members or with no members

entitled to vote on directors, a director may be removed by the affirmative vote of a

majority of the directors then in office present and voting at a meeting of the board

of directors at which a quorum is present.

directors, no director may be removed, except as follows:

(1) A director may be removed by the affirmative vote of two-

thirds of the votes present and voted, either in person or by proxy.

(2) No director shall be removed at a meeting of members

entitled to vote unless the written notice of such meeting is delivered to all members

entitled to vote on removal of directors. Such notice shall state that a purpose of the

meeting is to vote upon the removal of one or more directors named in the notice.

Only the named director or directors may be removed at such meeting.

(3) In the case of a corporation having cumulative voting, if less

than the entire board is to be removed, no director may be removed, with or without

cause, if the votes cast against his or her removal would be sufficient to elect him or

her if then cumulatively voted at an election of the entire board of directors.

(4) If a director is elected by a class of voting members entitled to

vote, directors or other electors, that director may be removed only by the same class

of members entitled to vote, directors or electors which elected the director.

(d) The provisions of subsections (a), (b) and (c) shall not preclude the

Circuit Court from removing a director of the corporation from office in a

proceeding commenced either by the corporation or by members entitled to vote

holding at least 10 percent of the outstanding votes of any class if the court finds (1)

the director is engaged in fraudulent or dishonest conduct or has grossly abused his

or her position to the detriment of the corporation, and (2) removal is in the best

interest of the corporation. If the court removes a director, it may bar the director

from reelection for a period prescribed by the court. If such a proceeding is

commenced by a member entitled to vote, such member shall make the corporation a

party defendant.

Section 108.40. Committees.

(a) If the articles of incorporation or bylaws so provide, a majority of the

directors may create one or more committees and appoint directors or such other

persons as the board designates, to serve on the committee or committees. Each

Illinois General Not-For-Profit Corporation Act - 118

committee shall have two or more directors, a majority of its membership shall be

directors, and all committee members shall serve at the pleasure of the board.

However, committees appointed by the board or otherwise authorized by the bylaws

relating to the election, nomination, qualification, or credentials of directors or other

committees involved in the process of electing directors may be composed entirely

of non-directors.

(b) Unless the appointment by the board of directors requires a greater

number, a majority of any committee shall constitute a quorum, and a majority of

committee members present and voting at a meeting at which a quorum is present is

necessary for committee action. A committee may act by unanimous consent in

writing without a meeting and, subject to the provisions of the bylaws or action by

the board of directors, the committee by majority vote of its members shall

determine the time and place of meetings and the notice required therefor.

incorporation or bylaws, each committee may exercise the authority of the board of

directors under Section 108.05 of this Act; provided, however, a committee may not:

(1) Adopt a plan for the distribution of the assets of the

corporation, or for dissolution;

(2) Approve or recommend to members any act this Act requires

to be approved by members, except that committees appointed by the board or

otherwise authorized by the bylaws relating to the election, nomination,

qualification, or credentials of directors or other committees involved in the process

of electing directors may make recommendations to the members relating to electing

directors;

(3) Fill vacancies on the board or on any of its committees;

(4) Elect, appoint or remove any officer or director or member of

any committee, or fix the compensation of any member of a committee;

(5) Adopt, amend, or repeal the bylaws or the articles of

incorporation;

(6) Adopt a plan of merger or adopt a plan of consolidation with

another corporation, or authorize the sale, lease, exchange or mortgage of all or

substantially all of the property or assets of the corporation; or

(7) Amend, alter, repeal or take action inconsistent with any

resolution or action of the board of directors when the resolution or action of the

board of directors provides by its terms that it shall not be amended, altered or

repealed by action of a committee.

(d) The board of directors may create and appoint persons to a

commission, advisory body or other such body which may or may not have directors

as members, which body may not act on behalf of the corporation or bind it to any

action but may make recommendations to the board of directors or to the officers.

Section 108.45. Informal action by directors.

(a) Unless specifically prohibited by the articles of incorporation or

bylaws, any action required by this Act to be taken at a meeting of the board of

Illinois General Not-For-Profit Corporation Act - 119

directors of a corporation, or any other action which may be taken at a meeting of

the board of directors or a committee thereof, may be taken without a meeting if a

consent in writing, setting forth the action so taken, shall be approved in writing by

all of the directors and all of any nondirector committee members entitled to vote

with respect to the subject matter thereof, or by all the members of such committee,

as the case may be.

(b) The consent shall be evidenced by one or more written approvals,

each of which sets forth the action taken and provides a written record of approval .

All the approvals evidencing the consent shall be delivered to the secretary to be

filed in the corporate records. The action taken shall be effective when all the

directors or the committee members, as the case may be, have approved the consent

unless the consent specifies a different effective date.

committee members, as the case may be, shall have the same effect as a unanimous

vote and may be stated as such in any document filed with the Secretary of State

under this Act.

Section 108.50. Officers. (a) A corporation shall have such officers as shall be

provided in the bylaws. Officers and assistant officers and agents as may be deemed

necessary may be elected or appointed by the board of directors or chosen in such

other manner as may be prescribed by the bylaws. If the bylaws so provide, any two

or more offices may be held by the same person. One officer, in this Act generally

referred to as the secretary, shall have the authority to certify the bylaws, resolutions

of the members and board of directors and committees thereof, and other documents

of the corporation as true and correct copies thereof.

(b) All officers and agents of the corporation, as between themselves and

the corporation, shall have such express authority and perform such duties in the

management of the property and affairs of the corporation as may be provided in the

bylaws, or as may be determined by resolution of the board of directors not

inconsistent with the bylaws and such implied authority as recognized by the

common law from time to time.

or more officers of the corporation or any other person holding a particular office

outside the corporation shall be a director or directors while he or she holds that

office. Unless the articles of incorporation or the bylaws provide otherwise, such

director or directors shall have the same rights, duties and responsibilities as other

directors.

Section 108.55. Removal of Officers. Any officer or agent may be removed by the

board of directors or other persons authorized to elect or appoint such officer or

agent but such removal shall be without prejudice to the contract rights, if any, of

the person so removed. Election or appointment of an officer or agent shall not of

itself create any contract rights.

Section 108.60. Director conflict of interest.

(a) If a transaction is fair to a corporation at the time it is authorized,

approved, or ratified, the fact that a director of the corporation is directly or

indirectly a party to the transaction is not grounds for invalidating the transaction.

Illinois General Not-For-Profit Corporation Act - 120

(b) In a proceeding contesting the validity of a transaction described in

subsection (a), the person asserting validity has the burden of proving fairness

unless:

(1) The material facts of the transaction and the director's interest

or relationship were disclosed or known to the board of directors or a committee

consisting entirely of directors and the board or committee authorized, approved or

ratified the transaction by the affirmative votes of a majority of disinterested

directors, even though the disinterested directors be less than a quorum; or

(2) The material facts of the transaction and the director's interest

or relationship were disclosed or known to the members entitled to vote, if any, and

they authorized, approved or ratified the transaction without counting the vote of

any member who is an interested director.

the transaction described in subsection (a), or a director who is otherwise not

disinterested, may be counted in determining whether a quorum is present but may

not be counted when the board of directors or a committee of the board takes action

on the transaction.

(d) For purposes of this Section, a director is "indirectly" a party to a

transaction if the other party to the transaction is an entity in which the director has a

material financial interest or of which the director is an officer, director or general

partner; except that if a director is an officer or director of both parties to a

transaction involving a grant or contribution, without consideration, from one entity

to the other, that director is not "indirectly" a party to the transaction provided the

director does not have a material financial interest in the entity that receives the

grant or contribution.

(e) (Blank).

Section 108.65. Liability of directors in certain cases. (a) In addition to any other

liabilities imposed by law upon directors of a corporation, they are liable as follows:

(1) The directors of a corporation who vote for or assent to any

distribution not authorized by Section 109.10 or Article 12 of this Act shall be

jointly and severally liable to the corporation for the amount of such distribution.

(2) If a dissolved corporation shall proceed to bar any known

claims against it under Section 112.75 of this Act, the directors of such corporation

who fail to take reasonable steps to cause the notice required by Section 112.75 of

this Act to be given to any known creditor of such corporation shall be jointly and

severally liable to such creditor for all loss and damage occasioned thereby.

(3) Unless dissolution is subsequently revoked pursuant to

Section 112.25 of this Act, the directors of a corporation that conducts its affairs

after the filing by the Secretary of State of articles of dissolution with respect to a

voluntary dissolution authorized as provided by this Act, otherwise than as

necessary or appropriate to wind up and liquidate its affairs, shall be jointly and

severally liable to the creditors of such corporation for all debts and liabilities of the

corporation incurred in so conducting its affairs. Directors of a corporation that

conducts its affairs during a period of administrative dissolution shall not be liable

under this paragraph (a)(3) if the Secretary of State subsequently files an application

Illinois General Not-For-Profit Corporation Act - 121

for reinstatement under subsection (c) of Section 112.45, which reinstatement shall

have the effect described in subsection (d) of Section 112.45.

(b) A director of a corporation who is present at a meeting of its board of

directors at which action on any corporate matter is taken is conclusively presumed

to have assented to the action taken unless his or her dissent or abstention is entered

in the minutes of the meeting or unless he or she files his or her written dissent or

abstention to such action with the person acting as the secretary of the meeting

before the adjournment thereof or forwards such dissent or abstention by registered

or certified mail to the secretary of the corporation immediately after the

adjournment of the meeting. Such right to dissent or abstain does not apply to a

director who voted in favor of such action.

in excess of the amount authorized by Section 109.10 or Article 12 of this Act if he

or she relied and acted in good faith upon a balance sheet and profit and loss

statement of the corporation represented to him or her to be correct by the president

or the officer of such corporation having charge of its books of account, or certified

by an independent public or certified public accountant or firm of such accountants

to fairly reflect the financial condition of such corporation, nor shall he or she be so

liable if in good faith in determining the amount available for any such distribution

he or she considered the assets to be of their book value.

(d) Any director against whom a claim is asserted under this Section and

who is held liable thereon, is entitled to contribution from the other directors who

are likewise liable thereon. Any director against whom a claim is asserted for the

improper distribution of assets of a corporation, and who is held liable thereon, is

entitled to contribution from the persons who knowingly accepted or received any

such distribution in proportion to the amounts received by them respectively.

Section 108.70. Limited Liability of directors, officers, board members, and

persons who serve without compensation.

(a) No director or officer serving without compensation, other than

reimbursement for actual expenses, of a corporation organized under this Act or any

predecessor Act and exempt, or qualified for exemption, from taxation pursuant to

Section 501(c) of the Internal Revenue Code of 1986, as amended, shall be liable,

and no cause of action may be brought, for damages resulting from the exercise of

judgment or discretion in connection with the duties or responsibilities of such

director or officer unless the act or omission involved willful or wanton conduct.

(b) No director of a corporation organized under this Act or any

predecessor Act for the purposes identified in items (14), (19), (21) and (22) of

subsection (a) of Section 103.05 of this Act, and exempt or qualified for exemption

from taxation pursuant to Section 501(c) of the Internal Revenue Code of 1986, as

amended, shall be liable, and no cause of action may be brought for damages

resulting from the exercise of judgment or discretion in connection with the duties or

responsibilities of such director, unless: (1) such director earns in excess of $25,000

per year from his duties as director, other than reimbursement for actual expenses; or

(2) the act or omission involved willful or wanton conduct.

(b-5) Except for willful and wanton conduct, no volunteer board member

serving without compensation, other than reimbursement for actual expenses, of a

Illinois General Not-For-Profit Corporation Act - 122

corporation organized under this Act or any predecessor Act and exempt, or

qualified for exemption, from taxation pursuant to Section 501(c)(3) of the Internal

Revenue Code of 1986, as amended, shall be liable, and no action may be brought,

for damages resulting from any action of the executive director concerning the false

reporting of or intentional tampering with financial records of the organization,

where the actions of the executive director result in legal action.

This subsection (b-5) shall not apply to any action taken by the Attorney

General (i) in the exercise of his or her common law or statutory power and duty to

protect charitable assets or (ii) in the exercise of his or her authority to enforce the

laws of this State that apply to trustees of a charity, as that term is defined in the

Charitable Trust Act and the Solicitation for Charity Act.

actual expenses, renders service to or for a corporation organized under this Act or

any predecessor Act and exempt or qualified for exemption from taxation pursuant

to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, shall be

liable, and no cause of action may be brought, for damages resulting from an act or

omission in rendering such services, unless the act or omission involved willful or

wanton conduct.

(d) (Blank).

(e) Nothing in this Section is intended to bar any cause of action against

the corporation or change the liability of the corporation arising out of an act or

omission of any director, officer or person exempt from liability for negligence

under this Section.

Section 108.75. Indemnification of officers, directors, employees and agents;

insurance.

(a) A corporation may indemnify any person who was or is a party, or is

threatened to be made a party to any threatened, pending or completed action, suit or

proceeding, whether civil, criminal, administrative or investigative (other than an

action by or in the right of the corporation) by reason of the fact that he or she is or

was a director, officer, employee or agent of the corporation, or who is or was

serving at the request of the corporation as a director, officer, employee or agent of

another corporation, partnership, joint venture, trust or other enterprise, against

expenses (including attorneys' fees), judgments, fines and amounts paid in

settlement actually and reasonably incurred by such person in connection with such

action, suit or proceeding, if such person acted in good faith and in a manner he or

she reasonably believed to be in, or not opposed to, the best interests of the

corporation, and, with respect to any criminal action or proceeding, had no

reasonable cause to believe his or her conduct was unlawful. The termination of any

action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea

of nolo contendere or its equivalent, shall not, of itself, create a presumption that the

person did not act in good faith and in a manner which he or she reasonably believed

to be in or not opposed to the best interests of the corporation or, with respect to any

criminal action or proceeding, that the person had reasonable cause to believe that

his or her conduct was unlawful.

(b) A corporation may indemnify any person who was or is a party, or is

threatened to be made a party to any threatened, pending or completed action or suit

Illinois General Not-For-Profit Corporation Act - 123

by or in the right of the corporation to procure a judgment in its favor by reason of

the fact that such person is or was a director, officer, employee or agent of the

corporation, or is or was serving at the request of the corporation as a director,

officer, employee or agent of another corporation, partnership, joint venture, trust or

other enterprise, against expenses (including attorneys' fees) actually and reasonably

incurred by such person in connection with the defense or settlement of such action

or suit, if such person acted in good faith and in a manner he or she reasonably

believed to be in, or not opposed to, the best interests of the corporation, provided

that no indemnification shall be made in respect of any claim, issue or matter as to

which such person shall have been adjudged to be liable for negligence or

misconduct in the performance of his or her duty to the corporation, unless, and only

to the extent that the court in which such action or suit was brought shall determine

upon application that, despite the adjudication of liability, but in view of all the

circumstances of the case, such person is fairly and reasonably entitled to indemnity

for such expenses as the court shall deem proper.

a corporation has been successful, on the merits or otherwise, in the defense of any

action, suit or proceeding referred to in subsections (a) and (b), or in defense of any

claim, issue or matter therein, such person shall be indemnified against expenses

(including attorneys' fees) actually and reasonably incurred by such person in

connection therewith, if that person acted in good faith and in a manner he or she

reasonably believed to be in, or not opposed to, the best interests of the corporation.

(d) Any indemnification under subsections (a), (b), or (c) (unless ordered

by a court) shall be made by the corporation only as authorized in the specific case,

upon a determination that indemnification of the present or former director, officer,

employee or agent is proper in the circumstances because he or she has met the

applicable standard of conduct set forth in subsections (a), (b), or (c). Such

determination shall be made with respect to a person who is a director or officer of

the corporation at the time of the determination: (1) by the majority vote of the

directors who are not parties to such action, suit or proceeding, even though less

than a quorum, (2) by a committee of such directors, even though less than a

quorum, designated by a majority vote of such directors, (3) if there are no such

directors, or if such directors so direct, by independent legal counsel in a written

opinion, or (4) by the members entitled to vote, if any.

(e) Expenses (including attorney's fees) incurred by an officer or director

of the corporation in defending a civil or criminal action, suit or proceeding may be

paid by the corporation in advance of the final disposition of such action, suit or

proceeding, as authorized by the board of directors in the specific case, upon receipt

of an undertaking by or on behalf of such director or officer to repay such amount,

unless it shall ultimately be determined that such person is entitled to be indemnified

by the corporation as authorized in this Section. Such expenses (including attorney's

fees) incurred by former directors and officers or other employees and agents of the

corporation or by persons serving at the request of the corporation as directors,

officers, employees or agents of another corporation, partnership, joint venture, trust

or other enterprise may be so paid on such terms and conditions, if any, as the

corporation deems appropriate.

(f) The indemnification and advancement of expenses provided by or

granted under the other subsections of this Section shall not be deemed exclusive of

Illinois General Not-For-Profit Corporation Act - 124

any other rights to which those seeking indemnification or advancement of expenses

may be entitled under any by-law, agreement, vote of members or disinterested

directors, or otherwise, both as to action in his or her official capacity and as to

action in another capacity while holding such office. A right to indemnification or to

advancement of expenses arising under a provision of the articles of incorporation or

a by-law shall not be eliminated or impaired by an amendment to such provision

after the occurrence of the act or omission that is the subject of the civil, criminal,

administrative or investigative action, suit or proceeding for which indemnification

or advancement of expenses is sought, unless the provision in effect at the time of

such act or omission explicitly authorizes such elimination or impairment after such

act or omission has occurred.

(g) A corporation may purchase and maintain insurance on behalf of any

person who is or was a director, officer, employee or agent of the corporation, or

who is or was serving at the request of the corporation as a director, officer,

employee or agent of another corporation, partnership, joint venture, trust or other

enterprise, against any liability asserted against such person and incurred by such

person in any such capacity, or arising out of his or her status as such, whether or

not the corporation would have the power to indemnify such person against such

liability under the provisions of this Section.

(h) In the case of a corporation with members entitled to vote, if a

corporation indemnifies or advances expenses under subsection (b) of this Section to

a director or officer, the corporation shall report the indemnification or advance in

writing to the members entitled to vote with or before the notice of the next meeting

of the members entitled to vote.

(i) For purposes of this Section, references to "the corporation" shall

include, in addition to the surviving corporation, any merging corporation (including

any corporation having merged with a merging corporation) absorbed in a merger

which, if its separate existence had continued, would have had the power and

authority to indemnify its directors, officers, employees or agents, so that any person

who was a director, officer, employee or agent of such merging corporation, or was

serving at the request of such merging corporation as a director, officer, employee or

agent of another corporation, partnership, joint venture, trust or other enterprise,

shall stand in the same position under the provisions of this Section with respect to

the surviving corporation as such person would have with respect to such merging

corporation if its separate existence had continued.

(j) For purposes of this Section, references to "other enterprises" shall

include employee benefit plans; references to "fines" shall include any excise taxes

assessed on a person with respect to an employee benefit plan; and references to

"serving at the request of the corporation" shall include any service as a director,

officer, employee or agent of the corporation which imposes duties on, or involves

services by such director, officer, employee, or agent with respect to an employee

benefit plan, its participants, or beneficiaries. A person who acted in good faith and

in a manner he or she reasonably believed to be in the best interests of the

participants and beneficiaries of an employee benefit plan shall be deemed to have

acted in a manner "not opposed to the best interests of the corporation" as referred to

in this Section.

(k) The indemnification and advancement of expenses provided by or

granted under this Section shall, unless otherwise provided when authorized or

Illinois General Not-For-Profit Corporation Act - 125

ratified, continue as to a person who has ceased to be a director, officer, employee,

or agent and shall inure to the benefit of the heirs, executors and administrators of

that person.

(l) The changes to this Section made by this amendatory Act of the 92nd

General Assembly apply only to actions commenced on or after the effective date of

this amendatory Act of the 92nd General Assembly.

Section 108.80. Prohibited loans to directors and officers. Except as permitted by

subsection (e) of Section 108.75, no loan shall be made by a corporation to a

director or officer except that a loan may be made to a director or officer who is

employed by the corporation if authorized by a majority of the non-employed

directors and either (a) in the case of a corporation organized for and holding

property for any charitable, religious, eleemosynary, benevolent, educational or

similar purpose, the purpose of such loan is to provide financing for the principal

residence of the employed director of officer upon receipt of adequate collateral

consisting of marketable real estate or securities readily capable of valuation or (b)

the loan is otherwise in furtherance of the purposes of the corporation and in the

ordinary course of its affairs. The directors of a corporation who vote for or assent to

the making of a loan to any non-employed director or non-employed officer of the

corporation, or otherwise prohibited by this Section, and any other person

knowingly participating in the making of such loan, shall be jointly and severally

liable to the corporation for the amount of such loan until the repayment thereof.

Section 108.85. Act not exclusive. This Act is not an exclusive statement of the

duties and responsibilities of directors and officers. Directors and officers are subject

to common law and other statutory duties and responsibilities.

ARTICLE 10. AMENDMENTS

Section 110.05. Authority to amend articles of incorporation.

(a) A corporation may amend its articles of incorporation at any time and

from time to time to add a new provision or to change or remove an existing

provision, provided that the articles as amended contain only such provisions as are

required or permitted in original articles of incorporation at the time of amendment.

The articles as amended must contain all the provisions required by subsection (a) of

Section 102.10 of this Act except that the names and addresses of the initial

directors may be omitted and the names of the initial registered agent or the address

of the initial registered office may be omitted.

(b) A corporation whose period of duration as provided in the articles of

incorporation has expired may amend its articles of incorporation to revive its

articles and extend the period of corporate duration, including making the duration

perpetual, at any time within 5 years after the date of expiration.

Section 110.15. Amendment by Directors. Where a corporation has no members,

or no members entitled to vote on amendments, one or more amendments shall be

adopted by the board of directors upon receiving the affirmative vote of a majority

of the directors in office.

Illinois General Not-For-Profit Corporation Act - 126

Section 110.20. Amendments by Directors and Members. Where a corporation

has members entitled to vote on amendments, one or more amendments shall be

adopted in the following manner:

(a) The board of directors shall adopt a resolution setting forth the

proposed amendment and directing that it be submitted to a vote at a meeting of

members entitled to vote on amendments which may be either an annual or a special

meeting;

(b) Written or printed notice setting forth the proposed amendment or a

summary of the changes to be effected thereby shall be given to each member

entitled to vote on amendments at such meeting within the time and in the manner

provided in this Act for the giving of notice of meetings of members. If such

meeting be an annual meeting, the proposed amendment, or a summary as aforesaid,

may be included in the notice of such annual meeting;

the members entitled to vote on the proposed amendment shall be taken. The

proposed amendment shall be adopted by receiving the affirmative vote of at least

2/3 of the votes present and voted either in person or by proxy, unless any class of

members is entitled to vote as a class in respect thereof, in which event the proposed

amendment shall be adopted by receiving the affirmative vote of at least two-thirds

of the votes of the class present and voted either in person or by proxy;

(d) The articles of incorporation or the bylaws of a corporation may

supersede the two-thirds vote requirement of subsection (c) by specifying any

smaller or larger vote requirement not less than a majority of the votes which

members entitled to vote on such amendment shall vote, either in person or by

proxy, at a meeting at which there is a quorum.

Section 110.30. Articles of amendment.

(a) Except as provided in Section 110.40 of this Act, the articles of

amendment shall be executed and filed in duplicate in accordance with Section

101.10 of this Act and shall set forth:

(1) The name of the corporation;

(2) The text of each amendment adopted;

(3) If the amendment was adopted pursuant to Section 110.15 of

this Act:

(i) A statement that the amendment received the

affirmative vote of a majority of the directors in office, at a meeting of the board of

directors, and the date of the meeting; or

(ii) A statement that the amendment was adopted by

written consent, signed by all the directors in office, in compliance with Section

108.45 of this Act;

(4) If the amendment was adopted pursuant to Section 110.20 of

this Act:

(i) A statement that the amendment was adopted at a

meeting of members entitled to vote by the affirmative vote of the members having

Illinois General Not-For-Profit Corporation Act - 127

not less than the minimum number of votes necessary to adopt such amendment, as

provided by this Act, the articles of incorporation or the bylaws, and the date of the

meeting; or

(ii) A statement that the amendment was adopted by

members entitled to vote having not less than the minimum number of votes

necessary to adopt such amendment, as provided by this Act, the articles of

incorporation, or the bylaws, in compliance with Section 107.10 of this Act.

(5) If the amendment restates the articles of incorporation, the

amendment shall so state and shall set forth:

(i) The text of the articles as restated;

(ii) The date of incorporation, the name under which the

corporation was incorporated, subsequent names, if any, that the corporation

adopted pursuant to amendment of its articles of incorporation, and the effective

date of any such amendments;

(iii) The address of the registered office and the name of

the registered agent on the date of filing the restated articles.

The articles as restated must include all the information

required by subsection (a) of Section 102.10 of this Act, except that the articles need

not set forth the information required by paragraphs 3, 4 or 5 thereof. If any

provision of the articles of incorporation is amended in connection with the

restatement, the articles of amendment shall clearly identify such amendment.

(6) If, pursuant to Section 110.35 of this Act, the amendment is to

become effective subsequent to the date on which the articles of amendment are

filed, the date on which the amendment is to become effective.

(7) If the amendment revives the articles of incorporation and

extends the period of corporate duration, the amendment shall so state and shall set

forth:

(i) The date the period of duration expired under the

articles of incorporation;

(ii) A statement that the period of duration will be

perpetual, or, if a limited duration is to be provided, the date to which the period of

duration is to be extended; and

(iii) A statement that the corporation has been in

continuous operation since before the date of expiration of its original period of

duration.

(b) When the provisions of this Section have been complied with, the

Secretary of State shall file the articles of amendment.

Section 110.35. Effect of amendment.

(a) The amendment shall become effective and the articles of

incorporation shall be deemed to be amended accordingly, as of the later of:

(1) The filing of the articles of amendment by the Secretary of

State; or

Illinois General Not-For-Profit Corporation Act - 128

(2) The time established under the articles of amendment, not to

exceed 30 days after the filing of the articles of amendment by the Secretary of

State.

(b) If the amendment is made in accordance with the provisions of

Section 110.40 of this Act, upon the filing of the articles of amendment by the

Secretary of State, the amendment shall become effective and the articles of

incorporation shall be deemed to be amended accordingly, without any action

thereon by the directors or members of the corporation and with the same effect as if

the amendments had been adopted by unanimous action of the directors and

members of the corporation.

articles of incorporation shall, upon such amendment becoming effective, supersede

and stand in lieu of the corporation's preexisting articles of incorporation.

(d) If the amendment revives the articles of incorporation and extends the

period of corporate duration, upon the filing of the articles of amendment by the

Secretary of State, the amendment shall become effective and the corporate

existence shall be deemed to have continued without interruption from the date of

expiration of the original period of duration, and the corporation shall stand revived

with such powers, duties and obligations as if its period of duration had not expired;

and all acts and proceedings of its officers, directors and members, acting or

purporting to act as such, which would have been legal and valid but for such

expiration, shall stand ratified and confirmed.

(e) No amendment of the articles of incorporation of a corporation shall

affect any existing cause of action in favor of or against such corporation, or any

pending suit in which such corporation shall be a party, or the existing rights of

persons other than members; and, in the event the corporate name shall be changed

by amendment, no suit brought by or against such corporation under its former name

shall be abated for that reason.

Section 110.40. Amendment pursuant to reorganization. (a) The articles of

incorporation of a corporation may be amended without director or member action

to carry out a plan of reorganization ordered by a court of competent jurisdiction

pursuant to any applicable statute of the United States if the articles after

amendment contain only provisions required or permitted by Section 102.10 of this

Act.

(b) The individual or individuals designated by the court shall execute,

verify and deliver to the Secretary of State for filing in accordance with Section

101.10 of this Act, articles of amendment setting forth:

(1) The name of the corporation;

(2) The text of each amendment approved by the court;

(3) The date of the court's order approving the articles of

amendment;

(4) The title of the reorganization proceeding in which the order

was entered; and

Illinois General Not-For-Profit Corporation Act - 129

(5) A statement that the court had jurisdiction of the proceeding

under federal statute.

ARTICLE 11. MERGER AND CONSOLIDATION

Section 111.05. Right to merge or consolidate. Any two or more corporations may

merge into one such corporation or consolidate into a new corporation by adopting a

plan of merger or consolidation setting forth:

(a) The names of the corporations proposing to merge or consolidate,

and in the case of a merger, the name of the corporation into which they propose to

merge, which is hereinafter designated as the surviving corporation, or in the case of

a consolidation, the name of the new corporation into which they propose to

consolidate, which is hereinafter designated as the new corporation;

(b) The terms and conditions of the proposed merger or consolidation;

incorporation of the surviving corporation to be effected by such merger, or in the

case of a consolidation and with respect to the new corporation, all of the statements

required to be set forth in articles of incorporation for corporations organized under

this Act; and

(d) Such other provisions with respect to the proposed merger or

consolidation as are deemed necessary or desirable, including provisions, if any,

under which the proposed merger or consolidation may be abandoned prior to the

filing of articles of merger or articles of consolidation by the Secretary of State.

Section 111.10. Merger of Domestic Corporation into Body Corporate and

Politic. A domestic corporation which carries on athletic sports and promotes

athletic interests among students of a State university with which it is affiliated may

be merged into a body corporate and politic which manages and governs the State

university. The domestic not-for-profit corporation and the body corporate and

politic may accomplish such merger by adopting a plan of merger setting forth:

(a) The names of the domestic corporation and the body corporate and politic

which propose to merge; and the name of the body corporate and politic into which

they propose to merge, which is hereinafter designated as the surviving corporation;

(b) The terms and conditions of the proposed merger; and

deemed necessary or desirable, including provisions, if any, under which the

proposed merger may be abandoned prior to the filing of Articles of Merger in the

office of the Secretary of State.

Section 111.15. Merger or consolidation by directors. Where a corporation has no

members or no members entitled to vote on mergers or consolidations, a plan thereof

shall be adopted at a meeting of the board of directors upon receiving the affirmative

vote of a majority of the directors in office.

Section 111.20. Merger or consolidation by directors and members. Where a

corporation has members entitled to vote on mergers or consolidations, a plan

thereof shall be adopted in the following manner:

Illinois General Not-For-Profit Corporation Act - 130

(a) The board of directors shall adopt a resolution approving the plan and

directing that it be submitted to a vote at a meeting of members entitled to vote on

mergers or consolidations, which may be either an annual or a special meeting.

(b) Written or printed notice setting forth the proposed plan or a

summary thereof shall be given to each member entitled to vote at such meeting

within the time and in the manner provided in this Act for the giving of notice of

meetings of members. If such meeting be an annual meeting, the proposed plan, or a

summary as aforesaid, may be included in the notice of such annual meeting.

the members entitled to vote on the proposed plan shall be taken. The proposed plan

shall be adopted by receiving the affirmative vote of at least two-thirds of the votes

present and voted either in person or by proxy, unless any class of members is

entitled to vote as a class in respect thereof, in which event the proposed plan shall

be adopted by receiving the affirmative vote of at least 2/3 of the votes of the class

present and voted either in person or by proxy.

(d) The articles of incorporation or the bylaws of a corporation may

supersede the two-thirds vote requirement of subsection (c) by specifying any

smaller or larger vote requirement not less than a majority of the votes which

members entitled to vote on such merger or consolidation shall vote, either in person

or by proxy, at a meeting at which there is a quorum.

Section 111.25. Articles of merger or consolidation.

(a) Articles of merger or consolidation shall be executed by each

corporation and filed in duplicate in accordance with Section 101.10 of this Act and

shall set forth:

(1) the name of each corporation;

(2) the plan of merger or consolidation;

(3) as to each corporation where the plan of merger or

consolidation was adopted pursuant Section 111.15 of this Act:

(i) a statement that the plan received the affirmative vote

of a majority of the directors in office, at a meeting of the board of directors, and the

date of the meeting; or

(ii) a statement that the plan was adopted by written

consent, signed by all the directors in office, in compliance with Section 108.45 of

this Act; and

(4) as to each corporation where the plan of merger or consolidation

was adopted pursuant Section 111.20 of this Act:

(i) a statement that the plan was adopted at a meeting of

members by the affirmative vote of members having not less than the minimum

number of votes necessary to adopt the plan, as provided by this Act, the articles of

incorporation, or the bylaws, and the date of the meeting; or

(ii) a statement that the plan was adopted by written

consent, signed by members having not less than the minimum number of votes

Illinois General Not-For-Profit Corporation Act - 131

necessary to adopt the plan, as provided by this Act, the articles of incorporation or

the bylaws, in compliance with Section 107.10 of this Act.

(b) When the provisions of this Section have been complied with, the

Secretary of State shall file the articles of merger or consolidation.

Section 111.35. Merger or consolidation of domestic and foreign corporations.

One or more domestic corporations and one or more foreign corporations may be

merged or consolidated in the following manner, provided such merger or

consolidation is permitted by the laws of the State or country under which each such

foreign corporation is organized:

(a) Each domestic corporation shall comply with the provisions of this

Act with respect to the merger or consolidation, as the case may be, of domestic

corporations and each foreign corporation shall comply with the applicable

provisions of the laws of the State or country under which it is organized.

(b) If the surviving or new corporation, as the case may be, is to be

governed by the laws of any State or country other than this State, it shall comply

with the provisions of this Act with respect to foreign corporations if it is to conduct

its affairs in this State, and in every case it shall file with the Secretary of State of

this State:

(1) An agreement that it may be served with process in this State

in any proceeding for the enforcement of any obligation of any domestic corporation

which is a party to such merger or consolidation; and

(2) An irrevocable appointment of the Secretary of State of this

State as its agent to accept service of process in any such proceeding.

case of the merger or consolidation of domestic corporations, except, if the surviving

or new corporation is to be governed by the laws of any State or country other than

this State, only to the extent that the laws of such other State or country shall

otherwise provide.

Section 111.37. Merger of domestic corporations and domestic or foreign

corporations for profit.

(a) One or more domestic corporations and one or more domestic or

foreign corporations for profit may merge into one of such domestic corporations or

consolidate into a new domestic corporation, provided that such merger or

consolidation is permitted by the laws of the state or country under which each such

foreign corporation for profit is organized.

(b) Each domestic corporation shall comply with the provisions of this

Act with respect to the merger or consolidation of domestic corporations, each

domestic corporation for profit shall comply with the provisions of the Business

Corporation Act of 1983, as amended, with respect to merger or consolidation of

domestic corporations for profit, each foreign corporation for profit shall comply

with the laws of the State or country under which it is organized, and each foreign

corporation for profit having a certificate of authority to transact business in this

State under the provisions of the Business Corporation Act of 1983, as amended,

Illinois General Not-For-Profit Corporation Act - 132

shall comply with the provisions of such Act with respect to merger or consolidation

of foreign corporations for profit.

matters required by Section 111.05 of this Act, the manner and basis of converting

shares of each merging or consolidating domestic or foreign corporation for profit

into membership or other interests of the surviving domestic corporation, or into

cash, or into property, or into any combination of the foregoing.

(d) The effect of a merger or consolidation under this Section shall be the

same as in the case of a merger or consolidation of domestic corporations.

Section 111.40. Effective date of merger or consolidation. The merger or

consolidation shall become effective upon the filing of the articles of merger or

consolidation by the Secretary of State or on a later specified date, not more than 30

days subsequent to the filing of the articles of merger or consolidation by the

Secretary of State, as may be provided for in the plan.

Section 111.45. (Repealed).

Section 111.50. Effect of merger or consolidation. When such merger or

consolidation has been effected:

(a) The several corporations parties to the plan of merger or

consolidation shall be a single corporation, which, in the case of a merger, is that

corporation designated in the plan of merger as the surviving corporation, and, in the

case of a consolidation, is the new corporation provided for in the plan of

consolidation.

(b) The separate existence of all corporations parties to the plan of

merger or consolidation, except the surviving or new corporation, shall cease.

immunities, and powers and is subject to all the duties and liabilities of a corporation

organized under this Act; however, this subsection (c) does not apply to a surviving

corporation which manages and governs a State university.

(d) Such surviving or new corporation shall thereupon and thereafter

possess all the rights, privileges, immunities, and franchises, of a public or private

nature, of each of the merging or consolidating corporations; and all property, real,

personal, and mixed, and all debts due on whatever account, and all other choses in

action, and all and every other interest, of or belonging to or due to each of the

corporations so merged or consolidated, shall be taken and deemed to be transferred

to and vested in such single corporation without further act or deed; and the title to

any real estate, or any interest therein, vested in any of such corporations shall not

revert or be in any way impaired by reason of such merger or consolidation.

(e) Such surviving or new corporation shall thenceforth be responsible

and liable for all the liabilities and obligations of each of the corporations so merged

or consolidated; and any claim existing or action or proceeding pending by or

against any of such corporations may be prosecuted to judgment as if such merger or

consolidation had not taken place, or such surviving or new corporation may be

substituted in its place. Neither the rights of creditors nor any liens upon the

Illinois General Not-For-Profit Corporation Act - 133

property of any such corporations shall be impaired by such merger or

consolidation.

(f) In case of a merger, the articles of incorporation of the surviving

corporation are deemed to be amended to the extent, if any, that changes in its

articles are stated in the articles of merger; and, in the case of a consolidation, the

articles of incorporation of the new corporation are set forth in the articles of

consolidation.

Section 111.55. Sale, lease or exchange of assets in usual and regular conduct of

its affairs; mortgage or pledge of assets. The sale, lease, exchange or other

disposition of all, or substantially all, the property and assets of a corporation, when

made in the usual and regular course of the conduct of the affairs of the corporation,

and a pledge or mortgage of the property and assets of a corporation, may be made

upon such terms and conditions and for such considerations, which may consist, in

whole or in part, of money or property, real or personal, including shares of any

other corporation for profit, domestic or foreign, as shall be authorized by its board

of directors; and in such case no authorization or consent of the members entitled to

vote shall be required.

Section 111.60. Sale, lease or exchange of assets, other than in usual and regular

conduct of its affairs. A sale, lease, exchange, or other disposition of all, or

substantially all, the property and assets, with or without the good will, of a

corporation, if not made in the usual and regular course of the conduct of the affairs

of the corporation, may be made upon such terms and conditions and for such

consideration, which may consist, in whole or in part, of money or property, real or

personal, including shares of any other corporation, domestic or foreign, as may be

authorized in the following manner:

(a) Where a corporation has no members or no members entitled to vote

on the sale, lease or exchange of assets, such action may be adopted by the board of

directors upon receiving the affirmative vote of a majority of the directors in office.

(b) Where a corporation has members entitled to vote on the sale, lease

or exchange of assets, such action may be adopted if:

(1) The board of directors shall adopt a resolution recommending

such sale, lease, exchange, or other disposition and directing the submission thereof

to a vote at a meeting of members entitled to vote which may be either an annual or

a special meeting.

(2) Written notice stating that the purpose, or one of the purposes,

of such meeting is to consider the sale, lease, exchange, or other disposition of all, or

substantially all, the property and assets of the corporation shall be given to each

member entitled to vote within the time and in the manner provided by this Act for

the giving of notice of meetings of members. If such meeting be an annual meeting,

such purpose may be included in the notice of such annual meeting.

(3) At such meeting the members entitled to vote on such matter

may authorize such sale, lease, exchange, or other disposition and fix, or may

authorize the board of directors to fix, any or all of the terms and conditions thereof

and the consideration to be received by the corporation therefor. Such authorization

shall require the affirmative vote of two-thirds of the votes present and voted either

Illinois General Not-For-Profit Corporation Act - 134

in person or by proxy unless any class of members is entitled to vote at a class in

respect thereof, in which event the proposed action shall be adopted by receiving the

affirmative vote of at least two-thirds of the votes of the class present and voted

either in person or by proxy.

(4) After such authorization by a vote of members, the board of

directors nevertheless, in its discretion, may abandon such sale, lease, exchange, or

other disposition of assets, subject to the rights of third parties under any contracts

relating thereto, without further action or approval by members entitled to vote.

(5) The articles of incorporation or the bylaws of a corporation

may supersede the two-thirds vote requirement of this Section by specifying any

smaller or larger vote requirement not less than a majority of the votes which

members entitled to vote on the matter shall vote, either in person or by proxy, at a

meeting at which there is a quorum.

ARTICLE 12. DISSOLUTION

Section 112.05. Voluntary dissolution by directors. Where a corporation has no

members or no members entitled to vote on dissolution, the dissolution of a

corporation may be authorized by a majority of the directors provided that:

(a) No debts of the corporation remain unpaid.

(b) Written notice of the election to dissolve the corporation has been

given to all directors, not less than three days before the execution of articles of

dissolution.

Section 112.10. Voluntary dissolution by written consent of members entitled to

vote. Except for the dissolution of a not-for-profit corporation organized for the

purpose of ownership or administration of residential property on a cooperative

basis, when a corporation has members entitled to vote on dissolution, the

dissolution of a corporation may be authorized pursuant to Section 107.10 of this

Act. Dissolution pursuant to this Section does not require any vote of the directors of

the corporation.

Section 112.12. Dissolution of residential cooperative housing corporations.

When a not-for-profit corporation organized for the purpose of ownership or

administration of residential property on a cooperative basis has members entitled to

vote on dissolution, there must be an open meeting and vote of those members

before a dissolution may be authorized.

Section 112.15. Voluntary dissolution by vote of members entitled to vote.

Where a corporation has members entitled to vote on dissolution, the dissolution of a

corporation may be authorized by a vote of members entitled to vote in the

following manner:

(a) The board of directors shall adopt a resolution, which may be with or

without their recommendation, proposing that the corporation be dissolved

voluntarily, and directing that the question of such dissolution be submitted to a vote

at a meeting of members entitled to vote on dissolution, if any, which may be either

an annual or special meeting.

Illinois General Not-For-Profit Corporation Act - 135

(b) Written notice stating that the purpose, or one of the purposes, of the

meeting is to consider the voluntary dissolution of the corporation, shall be given to

each member entitled to vote on dissolution within the time and in the manner

provided in this Act for the giving of notice of meetings of members. If such

meeting be an annual meeting, such purpose may be included in the notice of such

annual meeting.

shall be taken on the resolution to dissolve voluntarily the corporation. The

resolution shall be adopted by receiving the affirmative vote of at least two-thirds of

the votes present and voted either in person or by proxy, unless any class of

members is entitled to vote as a class in respect thereof, in which event the proposed

action shall be adopted by receiving the affirmative vote of at least two-thirds of the

votes of the class present and voted either in person or by proxy.

(d) The articles of incorporation or the bylaws of any corporation may

supersede the two-thirds vote requirement of subsection (c) by specifying any

smaller or larger vote requirement not less than majority of the votes which

members entitled to vote on dissolution shall vote, either in person or by proxy, at a

meeting at which there is a quorum.

Section 112.16. Distribution of assets. The assets of a corporation in the process of

dissolution shall be applied and distributed as follows:

(a) All liabilities and obligations of the corporation shall be paid,

satisfied and discharged, or adequate provision shall be made therefor;

(b) Assets held by the corporation upon condition requiring return,

transfer or conveyance, which condition occurs by reason of the dissolution, shall be

returned, transferred or conveyed in accordance with such requirements;

educational or similar use, but not held upon a condition requiring return, transfer or

conveyance by reason of the dissolution, shall be transferred or conveyed to one or

more domestic or foreign corporations, societies or organizations engaged in

activities substantially similar to those of the dissolving corporation, pursuant to a

plan of distribution adopted as provided in this Act;

(d) To the extent that the articles of incorporation or bylaws determine

the distributive rights of members, or any class or classes of members, or provide for

distribution to others, other assets, if any, shall be distributed in accordance with

such provisions;

(e) Any remaining assets may be distributed to such societies,

organizations or domestic or foreign corporations, whether for profit or not for

profit, as may be specified in a plan of distribution adopted as provided in Section

112.17 of this Act.

Section 112.17. Plan of distribution. A plan providing for the distribution of assets,

not inconsistent with the provisions of this Act, may be adopted by a corporation in

the process of dissolution and shall be adopted by a corporation for the purpose of

authorizing any transfer or conveyance of assets for which this Act requires a plan of

distribution, in the following manner:

Illinois General Not-For-Profit Corporation Act - 136

(a) Where there are members having voting rights on dissolution, the

board of directors shall adopt a resolution recommending a plan of distribution and

directing the submission thereof to a vote at a meeting of members having voting

rights, which may be either an annual or a special meeting. Written or printed notice

setting forth the proposed plan of distribution or a summary thereof shall be

delivered to each member entitled to vote at such meeting, within the time and in the

manner provided in this Act for the giving of notice of meetings of members. Such

plan of distribution shall be adopted upon receiving the affirmative vote of at least

two-thirds of the votes present and voted either in person or by proxy, unless any

class of member is entitled to vote as a class in respect thereof, in which event the

proposed plan of distribution shall be adopted by receiving the affirmative vote of at

least two-thirds of the votes of the class present and voted either in person or by

proxy. The articles of incorporation or the bylaws may supersede the two-thirds vote

requirement of this subsection by specifying any smaller or larger vote requirement

not less than a majority of the votes which members entitled to vote on such matters

shall vote, either in person or by proxy at a meeting at which there is a quorum.

(b) Where there are no members having voting rights, a plan of

distribution shall be adopted at a meeting of the board of directors upon receiving

the vote of a majority of the directors in office.

Section 112.20. Articles of dissolution.

(a) When a voluntary dissolution has been authorized as provided by this

Act, articles of dissolution shall be executed and filed in duplicate in accordance

with Section 101.10 of this Act and shall set forth:

(1) The name of the corporation.

(2) The date dissolution was authorized.

(3) A post-office address to which may be mailed a copy of any

process against the corporation that may be served on the Secretary of State.

(4) Where dissolution is authorized pursuant to Section 112.05 of

this Act:

(i) A statement that the dissolution received the

affirmative vote of a majority of the directors in office, at a meeting of the board of

directors, and the date of the meeting; or

(ii) A statement that the dissolution was adopted by

written consent, signed by all the directors in office, in compliance with Section

108.45 of this Act.

(5) If the dissolution was adopted pursuant to Section 112.10 or

112.15 of this Act:

(i) A statement that the dissolution was adopted at a

meeting of members by the affirmative vote of the members having not less than the

minimum number of votes necessary to adopt the dissolution, as provided by this

Act, the articles of incorporation, or the bylaws, and the date of the meeting; or

(ii) A statement that the dissolution was adopted by

written consent, signed by members having not less than the minimum number of

Illinois General Not-For-Profit Corporation Act - 137

votes necessary to adopt the dissolution, as provided by this Act, the articles of

incorporation, or the bylaws, in compliance with Section 107.10 of this Act.

(b) When the provisions of this Section have been complied with, the

Secretary of State shall file the articles of dissolution.

thereof by the Secretary of State.

Section 112.25. Revocation of Dissolution.

(a) A corporation may revoke its dissolution within 60 days of its

effective date if the corporation has not begun to distribute its assets or has not

commenced a proceeding for court supervision of its winding up under Section

112.50 of this Act.

(b) The corporation's board of directors may revoke the dissolution

without action by members entitled to vote on dissolution.

corporation, articles of revocation of dissolution shall be executed and filed in

duplicate in accordance with Section 101.10 of this Act and shall set forth:

(1) The name of the corporation;

(2) The effective date of the dissolution that was revoked;

(3) A statement that the corporation has not begun to distribute its

assets nor has it commenced a proceeding for court supervision of its winding up;

(4) The date the revocation of dissolution was authorized;

(5) A statement that the corporation's board of directors revoked

the dissolution.

(d) When the provisions of this Section have been complied with, the

Secretary of State shall file the articles of revocation of dissolution. Failure to file

the revocation of dissolution as required in subsection (c) hereof shall not be

grounds for the Secretary of State to reject the filing, but the corporation filing

beyond the time period shall pay a penalty as prescribed by this Act.

(e) The revocation of dissolution is effective on the date of the filing of

the articles thereof by the Secretary of State and shall relate back and take effect as

of the date of dissolution and the corporation may resume conducting affairs as if

dissolution had never occurred.

Section 112.30. Effect of dissolution. (a) Dissolution of a corporation terminates its

corporate existence and a dissolved corporation shall not thereafter conduct any

affairs except that necessary to wind up and liquidate its affairs, including:

(1) Collecting its assets;

(2) Disposing of its assets that will not be distributed in kind;

(3) Giving notice in accordance with Section 112.75 of this Act

and discharging or making provision for discharging its liabilities;

Illinois General Not-For-Profit Corporation Act - 138

(4) Distributing its remaining assets in accordance with this Act;

and

(5) Doing such other acts as are necessary to wind up and

liquidate its affairs.

(b) After dissolution, a corporation may transfer good and merchantable

title to its assets as authorized by its board of directors or in accordance with its

bylaws.

(1) Transfer title to the corporation's assets;

(2) Effect any change in the bylaws of the corporation or

otherwise affect the regulation of the affairs of the corporation except that all action

shall be directed to winding up the affairs of the corporation;

(3) Prevent suit by or against the corporation in its corporate

name;

(4) Abate or suspend a proceeding pending by or against the

corporation on the effective date of dissolution.

Section 112.35. Grounds for administrative dissolution. The Secretary of State

may dissolve any corporation administratively if:

(a) It has failed to file its annual report as required by this Act before the

first day of the anniversary month of the corporation of the year in which such

annual report becomes due;

(b) It has failed to file in the office of the Secretary of State any report

after the expiration of the period prescribed in this Act for filing such report;

(d) It has failed to appoint and maintain a registered agent in this State;

(e) It has misrepresented any material matter in any application, report,

affidavit, or other document filed by the corporation pursuant to this Act;

(f) The Secretary of State receives notification from a local liquor

commissioner, pursuant to Section 4-4(3) of "The Liquor Control Act of 1934," as

now or hereafter amended, that an organization incorporated under this Act and

functioning as a club has violated that Act by selling or offering for sale at retail

alcoholic liquors without a retailer's license; or

(g) It has failed to elect and maintain at least 3 directors in accordance

with Section 108.10 of this Act.

Section 112.40. Procedure for administrative dissolution.

(a) After the Secretary of State determines that one or more grounds

exist under Section 112.35 of this Act for the administrative dissolution of a

corporation, he or she shall send by regular mail to each delinquent corporation a

Notice of Delinquency to its registered office, or, if the corporation has failed to

maintain a registered office, then to the president or other principal officer at the last

Illinois General Not-For-Profit Corporation Act - 139

known office of said officer. Failure to receive such notice shall not relieve the

corporation of its obligation to pay the filing fee and any penalties due or invalidate

the validity thereof.

(b) If the corporation does not correct the default within 90 days

following such notice, the Secretary of State shall thereupon dissolve the corporation

by issuing a certificate of dissolution that recites the ground or grounds for

dissolution and its effective date. The Secretary of State shall file the original of the

certificate in his or her office and mail one copy to the corporation at its registered

office or, if the corporation has failed to maintain a registered office, then to the

president or other principal officer at the last known office of said officer.

corporate existence and such a dissolved corporation shall not thereafter carry on

any affairs, provided however, that such a dissolved corporation may take all action

authorized under Section 112.75 of this Act or as otherwise necessary or appropriate

to wind up and liquidate its affairs under Section 112.30 of this Act.

Section 112.43. Administrative dissolution; corporate name. The Secretary of

State shall not allow another corporation to use the name of a domestic corporation

that has been administratively dissolved until 3 years have elapsed following the

date of issuance of the certificate of dissolution. If the domestic corporation that has

been administratively dissolved is reinstated within 3 years after the date of issuance

of the certificate of dissolution, the domestic corporation shall continue under its

previous name without impacting its continuous legal status, unless the corporation

petitions to change its name upon reinstatement.

Section 112.45. Reinstatement following administrative dissolution.

(a) A domestic corporation administratively dissolved under Section

112.40 of this Act may be reinstated by the Secretary of State following the date of

issuance of the certificate of dissolution upon:

(1) The filing of an application for reinstatement;

(2) The filing with the Secretary of State by the corporation of all

reports then due and theretofore becoming due;

(3) The payment to the Secretary of State by the corporation of

all fees and penalties then due and theretofore becoming due.

(b) The application for reinstatement shall be executed and filed in

duplicate in accordance with Section 101.10 of this Act and shall set forth:

(1) The name of the corporation at the time of the issuance of the

certificate of dissolution;

(2) If such name is not available for use as determined by the

Secretary of State at the time of filing the application for reinstatement, the name of

the corporation as changed; provided, however, that any change of name is properly

effected pursuant to Section 110.05 and Section 110.30 of this Act;

(3) The date of the issuance of the certificate of dissolution;

Illinois General Not-For-Profit Corporation Act - 140

(4) The address, including street and number, or rural route

number, of the registered office of the corporation upon reinstatement thereof, and

the name of its registered agent at such address upon the reinstatement of the

corporation, provided however, that any change from either the registered office or

the registered agent at the time of dissolution is properly reported pursuant to

Section 105.10 of this Act.

this Section, the Secretary of State shall file the application for reinstatement.

(d) Upon the filing of the application for reinstatement, the corporate

existence for all purposes shall be deemed to have continued without interruption

from the date of the issuance of the certificate of dissolution, and the corporation

shall stand revived with such powers, duties and obligations as if it had not been

dissolved; and all acts and proceedings of its shareholders, members, officers,

employees, and agents , acting or purporting to act in that capacity , and which

would have been legal and valid but for such dissolution, shall stand ratified and

confirmed.

(e) Without limiting the generality of subsection (d), upon filing of the

application for reinstatement, no shareholder, director, or officer shall be personally

liable, under Section 108.65 of this Act or otherwise, for the debts and liabilities of

the corporation incurred during the period of administrative dissolution by reason of

the fact that the corporation was administratively dissolved at the time the debts or

liabilities were incurred.

Section 112.50. Grounds for judicial dissolution. A Circuit Court may dissolve a

corporation:

(a) In an action by the Attorney General, if it is established that:

(1) the corporation filed its articles of incorporation through

fraud;

(2) the corporation has continued to exceed or abuse the authority

conferred upon it by law, or has continued to violate the law, after notice of the same

has been given to such corporation, either personally or by registered mail;

(3) any interrogatory propounded by the Secretary of State to the

corporation, its officers or directors, as provided in this Act, has been answered

falsely or has not been answered fully within 30 days after the mailing of such

interrogatories by the Secretary of State or within such extension of time as shall

have been authorized by the Secretary of State;

(4) the corporation has solicited money and failed to use the

money for the purpose which it was solicited, or has fraudulently solicited money or

fraudulently used the money solicited; or

(5) the corporation has substantially and willfully violated the

provisions of the Consumer Fraud and Deceptive Business Practices Act.

(b) In an action by a member entitled to vote, or a director, if it is

established that:

Illinois General Not-For-Profit Corporation Act - 141

(1) the directors are deadlocked, whether because of even

division in the number thereof or because of greater than majority voting

requirements in the articles of incorporation or the bylaws, in the management of the

corporate affairs; the members are unable to break the deadlock; and irreparable

injury to the corporation is thereby caused or threatened;

(2) the directors or those in control of the corporation have acted,

are acting, or will act in a manner that is illegal, oppressive or fraudulent;

(3) the corporate assets are being misapplied or wasted; or

(4) the corporation is unable to carry out its purposes.

(1) the creditor's claim has been reduced to judgment, the

judgment has been returned unsatisfied, and the corporation is insolvent; or

(2) the corporation has admitted in writing that the creditor's

claim is due and owing, and the corporation is insolvent.

(d) In an action by the corporation to dissolve under court supervision, if

it is established that the corporation is unable to carry out its purposes.

Section 112.55. Alternative remedies to judicial dissolution. (a) In either an

action for dissolution pursuant to Section 112.50 of this Act or in an action which

alleges the grounds for dissolution set forth in Section 112.50 of this Act but which

does not seek dissolution, the Circuit Court, in lieu of dismissing the action or

ordering dissolution, may retain jurisdiction and:

(1) Appoint a provisional director; or

(2) Appoint a custodian.

(b) A provisional director may be appointed in the discretion of the court

if it appears that such action by the court will remedy the grounds alleged by the

complaining director or member entitled to vote to support the jurisdiction of the

court under Section 112.50 of this Act. A provisional director may be appointed

notwithstanding the fact that there is no vacancy on the board of directors and shall

have all the rights and powers of a duly elected director, including the right to notice

of and to vote at meetings of directors, until such time as the provisional director is

removed by order of court or, unless otherwise ordered by court, removed by a vote

of the members sufficient either to elect a majority of the board of directors or if

greater than majority voting is required by the articles of incorporation or the

bylaws, to elect the requisite number of directors needed to take action.

appears that such action by the court will remedy the grounds alleged by the

complaining director or member entitled to vote to support the jurisdiction of the

court under Section 112.50 of this Act. Subject to any limitations which the court

imposes, a custodian shall be entitled to exercise all the powers of the corporation's

board of directors and officers to the extent necessary to manage the affairs of the

corporation to the general advantage of its creditors and in furtherance of its

purposes, until such time as such custodian shall be removed by order of court or,

unless otherwise ordered by the court, removed by a vote of the members sufficient

Illinois General Not-For-Profit Corporation Act - 142

either to elect a majority of the board of directors or, if greater than majority voting

is required by the articles of incorporation or the bylaws, to elect the requisite

number of directors needed to take action. Such powers may be exercised directly,

or through or in conjunction with the corporation's board of directors or officers, in

the discretion of the custodian or as the court may order.

(d) Any custodian or provisional director shall report from time to time

to the court concerning the matter complained of, or the status of the deadlock, if

any, and of the status of the corporation's affairs, as the court shall direct. No

custodian or provisional director shall be liable for any action taken or decision

made in good faith. In addition, the custodian or provisional director shall submit to

the court, if so directed, recommendations as to the appropriate disposition of the

action. Whenever a custodian or provisional director is appointed, any officer or

director of the corporation may, from time to time, petition the court for instructions

clarifying the duties and responsibilities of such officer or director.

(e) In any proceeding under this Section, the court shall allow reasonable

compensation to the custodian or provisional director for services rendered and

reimbursement or direct payment of reasonable costs and expenses, which amounts

shall be paid by the corporation.

(f) If the court determines that any party in an action commenced under

Section 112.50 of this Act has acted arbitrarily, vexatiously, or not in good faith in

such action or in connection with any alternative relief provided in this Section, the

court may, in its discretion, award attorneys' fees and other reasonable expenses to

the other parties to the action who have been affected adversely thereby.

Section 112.60. Practice in actions for judicial dissolution or removal and for

alternative remedies. (a) The practice in actions for judicial dissolution or removal

shall be the same as in other civil actions except as may be otherwise provided in

this Act. Every action for judicial dissolution or removal shall be commenced in the

Circuit Court of the county in which either the registered office or principal office of

the corporation is located. Summons shall issue and be served as in other civil

actions.

(b) In an action brought by the Attorney General under subsection (a) of

Section 112.50 of this Act, if process is returned not found, the Attorney General

shall cause publication to be made as in other civil actions in a newspaper of general

circulation published in the county in which the action is filed. The publication shall

contain a notice of the pendency of such action, the title of the court, the title of the

case, and the date on or after which default may be entered. The Attorney General

may include in one notice the names of any number of corporations against which

actions are then pending in the same court. The Attorney General shall cause a copy

of such notice to be mailed to the corporation at its registered office within 10 days

after the first publication thereof. The certificate of the Attorney General of the

mailing of such notice shall be prima facie evidence thereof. Such notice shall be

published at least once each week for two consecutive weeks and the first

publication thereof may begin at any time after summons has been returned. Unless

a corporation shall have been served with summons, no default shall be taken

against it earlier than 30 days after the first publication of such notice.

judicially dissolved parties to any such action or proceeding unless relief is sought

Illinois General Not-For-Profit Corporation Act - 143

against them personally. The court, in its discretion, may order that the members be

made parties.

(d) The circuit court in an action for judicial dissolution may issue

injunctions, appoint an interim receiver with such powers and duties as the court,

from time to time, may direct, and take such other action as is necessary or desirable

to preserve the corporate assets and carry on the affairs of the corporation until a full

hearing can be had.

(e) Upon a hearing and after finding that grounds for judicial dissolution

exist, and after such notice as the court may direct to be given to all parties to the

proceeding and to any other parties in interest designated by the court, the court may

appoint a liquidating receiver or receivers with authority to collect the assets of the

corporation, including all amounts owing to the corporation by members. Such

liquidating receiver shall have authority, subject to order of court, to sell, convey,

and dispose of all or any part of the assets of the corporation, either at public or

private sale, and to take such other action as is necessary to wind up and liquidate

the corporation's affairs under Section 112.30 of this Act and to notify known

claimants under Section 112.75 of this Act. The order appointing such liquidating

receiver shall state his or her powers and duties. Such powers and duties may be

increased or diminished at any time during the proceedings.

(f) A receiver of a corporation appointed under the provisions of this

Section shall have authority to sue and defend in all courts in his or her own name as

receiver of such corporation.

(g) A receiver shall in all cases be a resident of this State or a corporation

authorized to act as receiver, which corporation may be a domestic corporation or a

foreign corporation authorized to conduct affairs in this State, and shall give such

bond as the court may direct with such sureties as the court may require.

(h) During the pendency of the action, the court may redesignate a

receiver as a custodian, or a custodian as a receiver, if such would be to the general

advantage of the corporation or its creditors.

(i) The court shall allow reasonable compensation to the receiver for

services rendered and reimbursement or direct payment of reasonable expenses from

the assets of the corporation or the proceeds of sale of the assets.

(j) The assets of the corporation or the proceeds resulting from a sale,

conveyance, or other disposition thereof shall be applied and distributed as follows:

(1) All costs and expenses of the court proceedings and all

liabilities and obligations of the corporation shall be paid, satisfied and discharged,

or adequate provision shall be made therefor;

(2) Assets held by the corporation upon condition requiring

return, transfer or conveyance, which condition occurs by reason of the dissolution

or liquidation, shall be returned, transferred or conveyed in accordance with such

requirements;

(3) Assets held for a charitable, religious, eleemosynary,

benevolent, educational or similar use, but not held upon a condition requiring

return, transfer or conveyance by reason of the dissolution or liquidation, shall be

transferred or conveyed to one or more domestic or foreign corporations, societies or

Illinois General Not-For-Profit Corporation Act - 144

organizations engaged in activities substantially similar to those of the dissolving or

liquidating corporation as the court may direct;

(4) To the extent that the articles of incorporation or the bylaws

determine the distributive rights of members, or any class or classes of members, or

provide for distribution to others, other assets, if any, shall be distributed in

accordance with such provisions;

(5) Any remaining assets may be distributed to such persons,

societies, organizations or domestic or foreign corporations, whether for profit or not

for profit, specified in the plan of distribution adopted as provided in this Act, or

where no plan of distribution has been adopted, as the court may direct.

Section 112.65. Order of dissolution. (a) If, after a hearing, the court determines

that one or more grounds for judicial dissolution described in Section 112.50 of this

Act exists, it may enter an order dissolving the corporation and the clerk of the court

shall deliver a certified copy of the order to the Secretary of State, who shall file the

order.

(b) After entering the order of dissolution, the court shall direct the

winding up and liquidation of the corporation's affairs in accordance with Sections

112.16 and 112.30 of this Act and the notification of its known claimants in

accordance with Section 112.75 of this Act and shall retain jurisdiction until the

same is complete.

Section 112.70. Deposit of amount due. Upon the distribution of the assets of a

corporation, the distributive portion to which a person would be entitled who is

unknown or cannot be found, or who is under disability and there is no person

legally competent to receive such distributive portion, shall be presumed abandoned

and reported and delivered to the State Treasurer and become subject to the Revised

Uniform Unclaimed Property Act. In the event such distribution is made other than

in cash, such distributive portion of the assets shall be reduced to cash before being

so reported and delivered.

Section 112.75. Known claims against dissolved corporation. (a) A dissolved

corporation may bar any known claim against it, its directors, officers, employees or

agents, or its members, by following the procedures set forth in subsections (b) and

established pursuant to subsection (b) or that does not file suit by the deadline

established pursuant to subsection (c) shall have no further rights against the

dissolved corporation, its directors, officers, employees or agents, or its members.

(b) Within 60 days from the effective date of dissolution, the dissolved

corporation shall send a notification to the claimant setting forth the following

information:

(1) The corporation has been dissolved and the effective date

thereof;

(2) The mailing address to which the claimant must send its claim

and the essential information to be submitted with the claim;

(3) The deadline, not less than 120 days from the effective date of

dissolution, by which the dissolved corporation must receive the claim; and

Illinois General Not-For-Profit Corporation Act - 145

(4) A statement that the claim will be barred if not received by

the deadline.

corporation rejects the claim in whole or in part, the dissolved corporation shall

notify the claimant of such rejection and shall also notify the claimant that the claim

shall be barred unless the claimant files suit to enforce the claim within a deadline

not less than 90 days from the date of the rejection notice.

(d) For purposes of this Section, "claim" does not include any contingent

liability or a claim arising after the effective date of dissolution or a claim arising

from the failure of the corporation to pay any tax, penalty, or interest related to any

tax or penalty.

Section 112.80. Survival of remedy after dissolution. The dissolution of a

corporation either (1) by filing articles of dissolution in accordance with Section

112.20 of this Act, (2) by the issuance of a certificate of dissolution in accordance

with Section 112.40 of this Act, (3) by a judgment of dissolution by a Circuit Court

of this State, or (4) by expiration of its period of duration, shall not take away nor

impair any remedy available to or against such corporation, its directors, members or

persons receiving distributions, for any right or claim existing, or any liability

incurred, prior to such dissolution if action or other proceeding thereon is

commenced within two years after the date of such dissolution. Any such action or

proceeding by or against the corporation may be prosecuted or defended by the

corporation in its corporate name.

ARTICLE 14. REPORTS

Section 114.05. Annual report of domestic or foreign corporation. Each

domestic corporation organized under this Act, and each foreign corporation

authorized to conduct affairs in this State, shall file, within the time prescribed by

this Act, an annual report setting forth:

(a) The name of the corporation.

(b) The address, including street and number, or rural route number, of

its registered office in this State, and the name of its registered agent at such address.

office.

(d) The names and respective addresses, including street and number, or

rural route number, of its directors and officers.

(e) A brief statement of the character of the affairs which the corporation

is actually conducting from among the purposes authorized in Section 103.05 of this

Act.

(f) Whether the corporation is a Condominium Association as

established under the Condominium Property Act, a Cooperative Housing

Corporation defined in Section 216 of the Internal Revenue Code of 1954 or a

Homeowner Association which administers a common-interest community as

defined in subsection (c) of Section 9-102 of the Code of Civil Procedure.

Illinois General Not-For-Profit Corporation Act - 146

(g) Such additional information as may be necessary or appropriate in

order to enable the Secretary of State to administer this Act and to verify the proper

amount of fees payable by the corporation.

Such annual report shall be made on forms prescribed and furnished by the

Secretary of State, and the information therein required by subsections (a) to (d),

both inclusive, of this Section, shall be given as of the date of the execution of the

annual report. It shall be executed by the corporation by any authorized officer and

verified by him or her, or, if the corporation is in the hands of a receiver or trustee, it

shall be executed on behalf of the corporation and verified by such receiver or

trustee.

Section 114.10. Filing of annual report of domestic or foreign corporation. Such

annual report together with all fees and charges as prescribed by this Act, shall be

delivered to the Secretary of State within 60 days immediately preceding the first

day of the anniversary month of the corporation each year. Proof to the satisfaction

of the Secretary of State that prior to the first day of the anniversary month of the

corporation such report together with all fees and charges as prescribed by this Act,

was deposited in the United States mail in a sealed envelope, properly addressed,

with postage prepaid, shall be deemed a compliance with this requirement. If the

Secretary of State finds that such report conforms to the requirements of this Act, he

or she shall file the same. If he or she finds that it does not so conform, he or she

shall promptly return the same to the corporation for any necessary corrections, in

which event the penalties hereinafter prescribed for failure to file such report within

the time hereinabove provided shall not apply, if such report is corrected to conform

to the requirements of this Act and returned to the Secretary of State within 30 days

of the date the report was returned for corrections.

ARTICLE 15. FEES AND CHARGES

Section 115.05. Fees and charges to be collected by Secretary of State. The

Secretary of State shall charge and collect in accordance with the provisions of this

Act:

(a) Fees for filing documents.

(b) Miscellaneous charges.

Section 115.10. Fees for filing documents. The Secretary of State shall charge and

collect for:

(a) Filing articles of incorporation, $50.

(b) Filing articles of amendment, $25, unless the amendment is a

restatement of the articles of incorporation, in which case the fee shall be $100.

(d) Filing articles of dissolution, $5.

(e) Filing application to reserve a corporate name, $25.

Illinois General Not-For-Profit Corporation Act - 147

(f) Filing a notice of transfer or cancellation of a reserved corporate

name, $25.

(g) Filing statement of change of address of registered office or change

of registered agent, or both, $5.

(h) Filing an application of a foreign corporation for authority to conduct

affairs in this State, $50.

(i) Filing an application of a foreign corporation for amended authority

to conduct affairs in this State, $25.

(j) Filing a copy of amendment to the articles of incorporation of a

foreign corporation holding authority to conduct affairs in this State, $25, unless the

amendment is a restatement of the articles of incorporation, in which case the fee

shall be $100.

(k) Filing a copy of articles of merger of a foreign corporation holding

authority to conduct affairs in this State, $25.

(l) Filing an application for withdrawal and final report or a copy of

articles of dissolution of a foreign corporation, $5.

(m) Filing an annual report of a domestic or foreign corporation, $10, of

which $5 must be deposited into the Charitable Trust Stabilization Fund.

(n) Filing an application for reinstatement of a domestic or a foreign

corporation, $25.

(o) Filing an application for use of an assumed corporate name, $150 for

each year or part thereof ending in 0 or 5, $120 for each year or part thereof ending

in 1 or 6, $90 for each year or part thereof ending in 2 or 7, $60 for each year or part

thereof ending in 3 or 8, $30 for each year or part thereof ending in 4 or 9, and a

renewal fee for each assumed corporate name, $150.

(p) Filing an application for change or cancellation of an assumed

corporate name, $5.

(q) Filing an application to register the corporate name of a foreign

corporation, $50; and an annual renewal fee for the registered name, $50.

(r) Filing an application for cancellation of a registered name of a

foreign corporation, $5.

(s) Filing a statement of correction, $25.

(t) Filing an election to accept this Act, $25.

(u) Filing any other statement or report, $5.

Section 115.15. Miscellaneous charges. The Secretary of State shall charge and

collect:

(a) For furnishing a copy or certified copy of any document, instrument,

or paper relating to a corporation, or for a certificate, $5.

(b) At the time of any service of process, notice or demand on him or her

as resident agent of a corporation, $10, which amount may be recovered as taxable

Illinois General Not-For-Profit Corporation Act - 148

costs by the party to the suit or action causing such service to be made if such party

prevails in the suit or action.

Section 115.20. Expedited service fees.

(a) The Secretary of State may charge and collect a fee for expedited

services as follows:

Certificates of good standing or fact, $10;

All filings, copies of documents, annual reports filed on or after January 1,

1984, and copies of documents of dissolved corporations having a file number over

5199, $25.

(b) Expedited services shall not be available for a statement of correction

or any request for copies involving annual reports filed before January 1, 1984 or

involving dissolved corporations with a file number below 5200.

Department of Business Services Special Operations Fund. No other fees or taxes

collected under this Act shall be deposited into that Fund.

(d) As used in this Section, "expedited services" has the meaning

ascribed thereto in Section 15.95 of the Business Corporation Act of 1983.

Section 115.85. Effect of nonpayment of fees or taxes. (a) The Secretary of State

shall not file any articles, statements, certificates, reports, applications, notices, or

other papers relating to any corporation, domestic or foreign, organized under or

subject to the provisions of this Act until all fees and charges provided to be paid in

connection therewith shall have been paid to him or her, or while the corporation is

in default in the payment of any fees, charges or penalties herein provided to be paid

by or assessed against it, or when the Illinois Department of Revenue has given

notice that the corporation is in default in the filing of a return or the payment of any

final assessment of tax, penalty or interest as required by any tax Act administered

by the Department.

(b) The Secretary of State shall not file, with respect to any domestic or

foreign corporation, any document required or permitted to be filed by this Act,

which has an effective date other than the date of filing until there has been paid by

such corporation to the Secretary of State all fees and charges due and payable on or

before said effective date.

maintain any civil action until all such penalties have been paid in full.

ARTICLE 16. PENALTIES

Section 116.05. Penalties imposed upon corporations. (a) Each corporation,

domestic or foreign, that fails or refuses to file its annual report prior to the first day

of its anniversary month shall pay a penalty of $3.

(b) Any corporation, domestic or foreign, failing to pay the prescribed

fee for assumed corporate name renewal when due and payable shall be given notice

of such nonpayment by the Secretary of State by regular mail; and if such fee

Illinois General Not-For-Profit Corporation Act - 149

together with a penalty fee of $5 is not paid within 90 days after such notice is

mailed, the right to use such assumed name shall cease.

assuming any name other than that by which it is incorporated or otherwise

authorized by law to act or (ii) violates Section 103.25, shall be guilty of a Class C

misdemeanor and shall be deemed guilty of an additional offense for each day it

shall continue to so offend.

(d) Each corporation, domestic or foreign, that fails or refuses (1) to

answer truthfully and fully within the time prescribed by this Act interrogatories

propounded by the Secretary of State in accordance with this Act, or (2) to perform

any other act required by this Act to be performed by the corporation, is guilty of a

Class C misdemeanor.

(e) Each corporation that fails or refuses to file articles of revocation of

dissolution within the time period prescribed by this Act is subject to a penalty for

each calendar month or part of the month that it is delinquent in the amount of

$25.00.

Section 116.10. Penalties imposed upon officers and directors. Each officer and

director of a corporation, domestic or foreign, who fails or refuses within the time

prescribed by this Act to answer truthfully and fully interrogatories propounded to

him or her by the Secretary of State in accordance with the provisions of this Act, or

who signs any report or statement filed with the Secretary of State which is known

to such officer or director to be false in any material statement or representation, or

who votes for or consents to or otherwise knowingly participates in the making of a

loan prohibited by Section 108.80 of this Act, commits a Class C misdemeanor.

ARTICLE 17. REPEALER

117.05. Specific repealer. The "General Not for Profit Corporation Act", approved

July 17, 1943, as amended, is repealed.

NOTES

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