Important Amendment to the IL Community Association Manager Licensing Act.

Compliments of CAI

caiThe Illinois Community Association Manager Licensing and Disciplinary Act was amended this legislative session to provide for the additional licensing of community association management firms and supervising community association managers. Governor Pat Quinn signed HB 595 into law August 16, 2013; the provisions will become effective January 1, 2014.

Below is a brief summary of the significant changes to the Act.

Community Association Management Firms
Starting January 1, 2014, community association management firms will be required to hold a license issued by the Illinois Department of Financial and Professional Regulation. Additionally, each firm must designate a licensed supervising manager to supervise and manage the firm, and the firm must have a designee at all times.

Qualifications for Licensure as a Supervising Community Association Manager
A “supervising community association manager” means an individual licensed as a community association manager who manages and supervises a firm. Below are additional qualifications for a supervising community association manager. Supervising community association managers must:
1. Be 21 years of age.
2. Be licensed at least 1 out of the last 2 years as a manager.
3. Have completed 30 hours of community association management courses; 20 must be prelicensure credits required to obtain a community association manager license, and 10 additional hours completed the year before the filing for a supervising community association manager license.
4. Pass an examination authorized by the Department.
5. Not have committed an act that would violate the Licensing and Disciplinary Act.
6. Be in good moral character.
7. Have not been declared incompetent.
8. Comply with additional qualifications determined by rules.

Applicants who can prove they have 7 years of practicing community association management are exempt from the initial education and examination requirement. Applicants are required to complete the application process within 3 years.

Fidelity Insurance
Provisions relating to fidelity insurance and the segregation of accounts have changed. Now supervising managers or the firm shall not have access to and disburse association funds unless:
1. There is fidelity insurance in place to insure against loss for theft of funds.
2. The fidelity insurance is not less than all moneys under the control of the supervising manager or firm.
3. The fidelity insurance must cover the manager, supervising manager, and the firm during the term of the insurance, and must be at least for the same term as the service agreement between the firm or supervising manager as well the association’s officers, directors, and employees.*
The supervising manager and the firm must also obtain the appropriate general liability and errors and omissions insurance to cover any losses or claims against the supervising manager or firm.

*An issue with provision 3 of the section on Fidelity Insurance has come to light following the bill’s enactment. The provision unintentionally assumes fidelity insurance terms, contract service terms, as well as officer terms are all executed simultaneously and in similar intervals. CAI’s Illinois LAC and other key stakeholders are working with the sponsor of the legislation to file a correction amendment.

Visit www.caionline.org for more information on Illinois Community Association Manager Licensing requirements, or click here. Please contact Matthew Green at mgreen@caionline.org with any questions regarding this alert.

The Illinois Community Association Manager Licensing and Disciplinary Act was amended this legislative session to provide for the additional licensing of community association management firms and supervising community association managers. Governor Pat Quinn signed HB 595 into law August 16, 2013; the provisions will become effective January 1, 2014.

Below is a brief summary of the significant changes to the Act.

Community Association Management Firms
Starting January 1, 2014, community association management firms will be required to hold a license issued by the Illinois Department of Financial and Professional Regulation. Additionally, each firm must designate a licensed supervising manager to supervise and manage the firm, and the firm must have a designee at all times.

Qualifications for Licensure as a Supervising Community Association Manager
A “supervising community association manager” means an individual licensed as a community association manager who manages and supervises a firm. Below are additional qualifications for a supervising community association manager. Supervising community association managers must:
1. Be 21 years of age.
2. Be licensed at least 1 out of the last 2 years as a manager.
3. Have completed 30 hours of community association management courses; 20 must be prelicensure credits required to obtain a community association manager license, and 10 additional hours completed the year before the filing for a supervising community association manager license.
4. Pass an examination authorized by the Department.
5. Not have committed an act that would violate the Licensing and Disciplinary Act.
6. Be in good moral character.
7. Have not been declared incompetent.
8. Comply with additional qualifications determined by rules.

Applicants who can prove they have 7 years of practicing community association management are exempt from the initial education and examination requirement. Applicants are required to complete the application process within 3 years.

Fidelity Insurance
Provisions relating to fidelity insurance and the segregation of accounts have changed. Now supervising managers or the firm shall not have access to and disburse association funds unless:
1. There is fidelity insurance in place to insure against loss for theft of funds.
2. The fidelity insurance is not less than all moneys under the control of the supervising manager or firm.
3. The fidelity insurance must cover the manager, supervising manager, and the firm during the term of the insurance, and must be at least for the same term as the service agreement between the firm or supervising manager as well the association’s officers, directors, and employees.*
The supervising manager and the firm must also obtain the appropriate general liability and errors and omissions insurance to cover any losses or claims against the supervising manager or firm.

*An issue with provision 3 of the section on Fidelity Insurance has come to light following the bill’s enactment. The provision unintentionally assumes fidelity insurance terms, contract service terms, as well as officer terms are all executed simultaneously and in similar intervals. CAI’s Illinois LAC and other key stakeholders are working with the sponsor of the legislation to file a correction amendment.

Visit www.caionline.org for more information on Illinois Community Association Manager Licensing requirements, or click here.

 

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