New administrative Rules governing Community Association Managers and Community Association Management Firms (68 Ill. Adm. Code 1445) became effective June 2, 2023. The new Rule represents a major overhaul to the prior Rule, which was adopted in October 2011.
The Rule:
(1) Requires community association management firms engaging in the business in Illinois, regardless of when they were formed, to be licensed;
(2) Establishes the requirements and curriculum for continuing education;
(3) Sets forth the process for the Division's approval of continuing education providers, also known as education sponsors, and their courses;
(4) Defines the term "supervision" and how it applies to designated community association managers of firms;
(5) Articulates requirements for the insurance coverage required of designated community association managers or community association management firms; and
(6) Provides additional grounds for discipline to ensure the protection of the public and to maintain the integrity of the profession.
What are the requirements for a Community Association Management Firm to operate in Illinois?
Community association management firms must be authorized to conduct business in the State of Illinois through the Secretary of State, apply to the Department on forms provided, and pay a non-refundable fee in the amount of $650.00 to become licensed.
An applicant for a community association management firm license must also provide evidence that the community association management firm has a licensed and designated community association manager. (Section 1445.35)
Community Association Management Firm licenses have a two-year term. Every Community Association Management Firm license will expire on August 31 of odd-numbered years. Licenses first issued in 2023 will expire August 31, 2025. The renewal fee for a Community Association Management Firm license is $650.00 for a two-year term. (Section 1445.70)
What are the requirements of a Designated Community Association Manager for a firm?
A designated community association manager (“DCAM”) must be a licensed community association manager. No community association manager may be the DCAM for more than one community association management firm, and the firm must only have one DCAM.
A DCAM must:
(1) Have an ownership interest in or is employed by a community association management firm to act as a controlling person; and
(2) Be the authorized signatory for the firm on community association accounts; and
(3) Supervise, manage, and be responsible for the firm's community association manager activities.
The DCAM is responsible for managing and supervising all licensed and unlicensed employees acting on behalf of a community association management firm.
“Supervision” includes:
(1) Implementing and communicating office policies and procedures;
(2) Training of licensees and unlicensed employees;
(3) Supervising those association accounts over which the Community Association Management Firm has delegated responsibility to the DCAM;
(4) Supervising all advertising or any community association management service;
(5) Training licensees on the requirements of federal, State, and local laws relating to the practice of community association management; and
(6) Overseeing compliance with the Rules by licensees and offices under their supervision. (Section 1445.110)
What are the continuing education requirements?
Beginning with the renewal period ending August 31, 2025, each Community Association Manager must complete 12 credit hours of continuing education (“CE”) for each renewal period.
CE credit may be earned for verified attendance at or participation in a course offered by an approved CE sponsor that is as follows:
(1) Community Association Managers International Certification Board (“CAMICB”);
(2) Community Associations Institute (“CAI”);
(3) Apartment Building Owners and Managers Association (“ABOMA”);
(4) Institute of Real Estate Managers (“IREM”);
(5) Association of Condominium, Townhouse and Homeowners Associations (“ACTHA”);
(6) Any Illinois-accredited school, college, or university; and
(7) Any Illinois-approved education sponsor offering courses relating to the curriculum set forth in the Rule.
Courses may be offered through distance education, an interactive delivery method, or a webinar. (Section 1445.200)
What about insurance?
The Rule provides that, in order for a DCAM or the Community Association Management Firm that employs them to have access to or disburse community association funds, there must be fidelity insurance in place to insure against loss of theft of community association funds.
The fidelity insurance must be in the maximum amount of coverage available to protect funds in the control of the DCAM or the Community Association Management Firm providing services to the association. It must cover the DCAM, the firm, all community association managers, partners, officers, employees, officers, directors, and employees of the Community Association Management Firm.
The DCAM or their Firm must also obtain general liability and errors and omissions insurance to cover any losses or claims against a Community Association Manager, the DCAM, or the Firm. (Section 1445.105)
Are there any new grounds for discipline?
The Rule adds grounds for discipline intended to enhance the protection of the public and the professionalism of Community Association Managers and Firms.
Among them are:
(1) Failing to disclose any affiliation agreements, including their terms, which are binding on a client association;
(2) Failing to return to a community association all original records that are the property of the community association within 30 days following termination of a management agreement or other contract;
(3) Charging fees not disclosed to a community association at the time of execution, amendment to, or renewal of, a management agreement or other contract; and
(4) converting, diverting, or expending funds from a community association account without written authorization other than to pay expenses incurred by or on behalf of the community association. (Section 1445.300)
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CAI - Illinois Chapter
The Illinois Chapter of Community Associations Institute serves the educational, business, and networking needs of community associations in the Chicagoland Area. Members include condominium, cooperative, and homeowner...
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