Illinois

After years of discussions, coalition building, and drafting language, the Illinois Community Association Manager Act, SB 1579, was approved by Governor Patrick Quinn and became law on August 25, 2009 as Public Act 96-0726.

The Illinois Legislative Action Committee, with support from CAI and NBC-CAM, led the initiative to establish important consumer protections, set professional standards for managers, and distinguish the unique role managers play in community associations.

Background

Senate Bill 1579 follows a continuing collaborative effort with the realtors lobby on a codification of an association managers standards of professionalism and financial responsibility law (effective January 1, 2008; Public Act 095-0318; House Bill 1071). Background on that bill can be found at this link.

Key Provisions

A brief Illinois Manager Licensing FAQ sheet about this new law has been developed by Community Associations Institute to help members better understand key provisions.

This law becomes effective July 1, 2010. At that time, the State will appoint a Community Association Manager Licensing and Disciplinary Board (Board) to develop regulations to fully implement the requirements of the Act. Twelve months after the regulations are adopted, individuals will be unable to provide services as association managers without a state license. At this time, the earliest this requirement is likely to be effective will be July, 2011.

This law creates minimum qualifications for licensure, provides financial security to associations, imposes discipline for manager misconduct, and requires continuing education to renew a license.

• Community Association Manager is defined as an individual who administers for remuneration the financial, administrative, maintenance, or other duties for the community association, including the following services:
  1. Collecting, controlling or disbursing funds of the community association or having the authority to do so
  2. Preparing budgets or other financial documents for the community association
  3. Assisting in the conduct of community association meetings
  4. Maintaining association records
  5. Administrating association contracts, as stated in the declaration, bylaws, proprietary lease, declaration of covenants, or other governing document of the community association

     "Community association manager" does not mean support staff, including, but not limited to bookkeepers, administrative assistants, secretaries, property inspectors, or customer service representatives.

     "Community Association Management Agency" means a company, firm, corporation, limited liability company, or other entity that engages in the community association management business and employs, in addition to the licensee-in-charge, at least one other person in conducting such business.

  • Exemptions (Section 20)
    1. This Act does not apply to any of the following:
       1. Any director, officer, or member of a community association providing one or more of the services of a community association manager without compensation for such services to the association
       .
       2. Any person providing one or more of the services of a community association manager to a community association of 10 units or less.
       3. A licensed attorney acting solely as an incident to the practice of law.
       4. A 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.
       5. A person licensed in this State under any other Act from engaging the practice for which he or she is licensed.
    2. A person may act as, or provide services as, a community association manager without being licensed under this Act if the person
       1. is a community association manager regulated under the laws of another state or territory of the United States or another country and
       2. has applied in writing to the Department of Financial and Professional Regulation ("Department"), on forms prepared and furnished by the Department, for licensure under this Act, but only until the expiration of six months after the filing of his or her written application to the Department, his or her withdrawal of the application, he or she has received a notice of intent to deny the application from the Department, or the denial of the application by the Department.
  • Existing Service and Experience is addressed:

    The examination and initial education requirement ... shall not apply to any person who within six months from the effective date of the requirement for licensure, as set forth in Section 170, applies for a license by providing satisfactory evidence to the Department of qualifying experience or education, as may be set forth by rule, including without limitation evidence that he or she has

    1. Practiced community association management for a period of five years or
    2. Achieved a designation awarded by recognized community association management organizations in the state.

    The Act also recognizes continuing education credits for those persons who take courses to maintain their professional real estate license.

• A Community Association Manager Board ("Board") consisting of seven members will be appointed by the Secretary [of the Department]. Five members of the Board must be licensees under this Act, except that, initially, these members must meet the qualifications for licensure and have obtained a license within six months after the effective date of this Act. Two members of the Board shall be owners or shareholders of a unit in a community association at the time of appointment who are not licensees under this Act and have no direct affiliation or work experience with the community association manager. This Board shall act in an advisory capacity to the Department of Financial and Professional Regulation.
• Section 40, detailing the qualifications for licensure as a community association manager, includes a requirement of at least 20 classroom hours in community association management courses approved by the Board.
• The examination approved by the Department should utilize the basic principles of professional testing standards utilizing psychometric measurement. The examination shall use standards set forth by the National Organization for Competency Assurances and shall be approved by the Department.
• Section 55 details the fidelity insurance and segregation of accounts requirements, and the conditions that must be met to have access to and disbursement of community association funds.
  1. A community association manager or the Community Association Management Agency with which he or she is employed shall not have access to and disburse funds of a community association unless each of the following conditions occur:
     1. There is fidelity insurance in place to insure against loss for theft of community association funds.
     2. The fidelity insurance is not less than all moneys under the control of the community association manager or the employing Community Association Management Agency for the association.
     3. The fidelity insurance covers the community association manager and all partners, officers, and employees of the Community Association Management Agency with whom he or she is employed during the term of the insurance coverage, as well as the association officers, directors, and employees.
     4. The insurance company issuing the fidelity insurance may not cancel or refuse to renew the bond without giving at least 10 days' prior written notice.
     5. Unless an agreement between the community association and the community association manager or the Community Association Management Agency provides to the contrary, the Association secures and pays for the fidelity insurance. The community association manager and the Community Association Management Agency must be named as additional insured parties on the association policy.
  2. A community association manager or Community Association Management Agency that provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association or, with the consent of the association, combine the accounts of one or more associations, but in that event, separately account for the funds of each association. The funds shall not, in any event, be commingled with the community association manager's or Community Association Management Agency's funds. The maintenance of such accounts shall be custodial, and such accounts shall be in the name of the respective community association or community association manager or Community Association Management Agency as the agent for the association.
  3. The community association manager or Community Association Management Agency shall obtain the appropriate general liability and errors and omissions insurance, as determined by the Department, to cover any losses or claims against community association clients.
  • Endorsement (Section 75)

    The Department may issue a license as a licensed community association manager, without the required examination, to an applicant licensed under the laws of another state if the requirements for licensure in that state are, on the date of licensure, substantially equal to the requirements of this Act or to a person who, at the time of his or her application for licensure, possessed individual qualifications that were substantially equivalent to the requirements then in force in this State. An applicant under this Section shall pay all of the required fees.

  • Section 165, Home rule, states:

    The regulation and licensing of community association managers and Community Association Management Agencies are exclusive powers and functions of the State. A home rule unit may not regulate or license community association managers and Community Association Management Agencies. This Section is a denial and limitation of home rule powers and functions under subsection (h) of Section 6 of Article VII of the Illinois Constitution.

This law will come up for review (sunset) on January 1, 2020.

Legislation & State-Specific Requirements