SB 3401 — CONDO-RESERVE STUDY

*LRB10418964JRC32409b* SB3401 104THEngrossed GENERALLRB104 ASSEMBLY18964 StateJRC of32409 Illinoisb andAN 2026ACT SB3401concerning Introducedcivil 2/4/2026,law. by Sen.

Robert F.

Martwick SYNOPSIS AS INTRODUCED:

ILCS 160/1-32 new ILCS 160/1-35 ILCS 605/18.5 from Ch.

30, par.

318.5 ILCS 605/18.13 new ILCS 605/22.1 from Ch.

30, par.

322.1 Amends the Common Interest Community Association Act.

Requires a common interest association to conduct and update a reserve study every 5 years.

"Reserve study" means an analysis of the reserves required for future major maintenance, repairs, and replacements of the common elements.

Grants a 5-year window for an association to conduct a reserve study or update a current study.

Requires a reserve study to be made available to any prospective purchaser of a unit upon request for a resale of any unit in the community.

Exempts an association with 15 or fewer units but still requires the board to comply with the budgeting and reserve requirements elsewhere in the Act.

Amends the Condominium Property Act to make similar changes.

LRB104 18964 JRC 32409 b A BILL FOR SB3401 LRB104 18964 JRC 32409 b AN ACT concerning civil law.

SB3401 Engrossed - 2 - LRB104 18964 JRC 32409 b (1) identifies each structural, mechanical, electrical, and plumbing component of the common areas and any other components that are the responsibility of the association to maintain, repair, and replace;

(d) Any association with major shared components or significant infrastructure that has not had a reserve study conducted on or after January 1, 2024, shall require that a reserve study be conducted on or before January 1, 2028, and SB3401 Engrossed - 3 - LRB104 18964 JRC 32409 b shall update the study every 5 years for purposes of assessing the condition of and planning for maintenance, repair and replacement of the common areas.

however, the board still must comply with budgeting and reserve requirements set forth SB3401 Engrossed - 4 - LRB104 18964 JRC 32409 b in this Act or in the community instruments.

(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 SB3401 Engrossed - 5 - LRB104 18964 JRC 32409 b following:

A reasonable fee covering the direct out-of-pocket cost of SB3401 Engrossed - 6 - LRB104 18964 JRC 32409 b copying and providing such information may be charged by the association or the board to the unit seller for providing the information.

In interpreting subsections (c) through (h), the courts should interpret these provisions so that they are interpreted SB3401 Engrossed - 7 - LRB104 18964 JRC 32409 b consistently with the similar parallel provisions found in other parts of this Act.

(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, SB3401 Engrossed - 8 - LRB104 18964 JRC 32409 b except for the portion of any meeting held:

Where there is no SB3401 Engrossed - 9 - LRB104 18964 JRC 32409 b 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.

SB3401 Engrossed - 10 - LRB104 18964 JRC 32409 b (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.

SB3401 Engrossed - 11 - LRB104 18964 JRC 32409 b (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:

SB3401 Engrossed - 12 - LRB104 18964 JRC 32409 b (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.

(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 SB3401 Engrossed - 13 - LRB104 18964 JRC 32409 b attorney's fees and costs.

The developer shall give at least 21 days notice of the meeting to elect the initial board of directors and shall SB3401 Engrossed - 14 - LRB104 18964 JRC 32409 b 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.

(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, SB3401 Engrossed - 15 - LRB104 18964 JRC 32409 b or other agreements entered into by the association.

(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 SB3401 Engrossed - 16 - LRB104 18964 JRC 32409 b 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.

(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 SB3401 Engrossed - 17 - LRB104 18964 JRC 32409 b 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.

(g) In the event of any resale of a unit in a master SB3401 Engrossed - 18 - LRB104 18964 JRC 32409 b association by a unit owner other than the developer, the owner shall obtain from the board of directors and shall make available for inspection to the prospective purchaser, upon demand, the following:

(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 SB3401 Engrossed - 19 - LRB104 18964 JRC 32409 b believed to be in compliance with the declaration of the master association.

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 SB3401 Engrossed - 20 - LRB104 18964 JRC 32409 b assessments, the purchaser shall have no obligation to pay any assessments that accrued before he or she acquired title.

(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 SB3401 Engrossed - 21 - LRB104 18964 JRC 32409 b 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 SB3401 Engrossed - 22 - LRB104 18964 JRC 32409 b 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.

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 SB3401 Engrossed - 23 - LRB104 18964 JRC 32409 b the property rights of the unit owners are not materially or adversely affected.

(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 SB3401 Engrossed - 24 - LRB104 18964 JRC 32409 b 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.

"Major shared components or significant infrastructure" means structural, mechanical, electrical, and plumbing components of the common areas and any other components that are the responsibility of the association SB3401 Engrossed - 25 - LRB104 18964 JRC 32409 b to maintain, restore, repair, and replace, or infrastructure including, but not limited to, roads, street lighting, hardscape, landscape, ponds and lakes, water features, pools, and accessory buildings, if applicable, with a restoration or replacement cost exceeding $10,000, which are capital expenses as identified in the federal tax code and generally accepted accounting principles.

(4) Any association with major shared components or significant infrastructure that has not had a reserve study conducted on or after January 1, 2024, shall require that a reserve study be conducted on or before January 1, SB3401 Engrossed - 26 - LRB104 18964 JRC 32409 b 2028, and shall update the study every 5 years for purposes of assessing the condition of and planning for maintenance, repair and replacement of the common areas.