Current through Register Vol. 48, No. 38, September 20, 2024
a)
Association Accounts
1) "Association Accounts"
means all accounts under the care and control of the Community Association
Management Firm or an unaffiliated Community Association Manager, and with
respect to which a Community Association Management Firm or unaffiliated
Community Association Manager has signatory authority, that are deposited with
or maintained by the Community Association Management Firm or the unaffiliated
Community Association Manager for the benefit of the community associations
represented. The maintenance of such accounts shall be custodial, and
such accounts shall be in the name of the respective community
association. [225 ILCS
427/55(b)]
2) Community Association Management Firms or
unaffiliated Community Association Managers who accept moneys shall maintain
and deposit in an Association Account, separate and apart from personal or
other business accounts, all community association moneys entrusted to them
while acting as the Community Association Management Firm or as the
unaffiliated Community Association Manager.
3) A Community Association Management Firm or
unaffiliated Community Association Manager shall maintain a separate segregated
Association Account for each association for which they provide community
association management services.
4)
Every Association Account shall be maintained at a federally insured depository
unless otherwise directed in writing by the community association.
5) Commingling Prohibited
Each Community Association Management Firm or unaffiliated
Community Association Manager shall deposit only Association Account funds
received in connection with a community association in an Association Account.
The funds shall not be commingled with the Community Association Management
Firm's funds, the unaffiliated Community Association Manager's funds or the
funds of any other community association.
6) The Community Association Management Firm
or the unaffiliated Community Association Manager shall provide a receipt to
the payor of any cash constituting Association Account funds and shall retain a
copy of the receipt.
b)
Association Account Records
Each Community Association Management Firm or unaffiliated
Community Association Manager that accepts community association funds shall
maintain in their office or place of business a bookkeeping system in
accordance with sound accounting principles. Without limiting the foregoing,
the system shall consist of at least the following Association Account
Records:
1) Ledger
A ledger shall be maintained for each Association Account. The
ledger shall show the chronological sequence in which funds are received and
disbursed by the Community Association Manager.
A) For funds received, the ledger shall
include the date the funds were received, the name of the person or entity on
whose behalf the funds were delivered or means by which they were collected,
the check or transaction number and the amount delivered.
B) For funds disbursed, the ledger shall
include the date the funds were disbursed, the payee, the check or transaction
number and the amount disbursed.
C)
A running balance shall be shown after each entry (receipt or
disbursement).
2) Monthly
Reconciliation Statement
Each Community Association Management Firm or unaffiliated
Community Association Manager shall reconcile, within 30 days after receipt of
the monthly bank statement, or within such other time as established in a
management agreement between a Community Association Management Firm or an
unaffiliated Community Association Manager and a community association, but in
no event no less than quarterly, each Association Account except when there has
been no transactional activity during the previous month. Reconciliation shall
include a written or electronic work sheet comparing the balances as shown on
the depository statement and the ledger, respectively, to ensure agreement
between the Association Account and the ledger entries with respect to the
Association Account. Each reconciliation shall be kept for a t least 5 years
from the last day of the month covered by the reconciliation.
3) Master Association Account Log
Each Community Association Management Firm or unaffiliated
Community Association Manager shall maintain a Master Association Account Log
identifying all Association Accounts, the account type, and the name and
address of the depository where the Association Accounts are located. The
Master Association Account Log must specifically include all bank accounts
opened for a community association even if the account falls under another
umbrella account.
4) A
Community Association Management Firm, an unaffiliated Community Association
Manager or a third-part vendor may employ a more sophisticated bookkeeping
system based on sound accounting principles, including a system of electronic
data processing equipment. However, any such system must contain or produce
printed records containing the information required by this Section, although
it need not be in the same format as provided for in this Section. Compliance
with the bookkeeping duties remains the responsibility of the Community
Association Management Firm or the unaffiliated Community Association Manager.
The Community Association Management Firm or the unaffiliated Community
Association Manager is ultimately responsible for the proper administration of
the Association Accounts pursuant to this Section regardless of whether a
designated Community Association Manager has been delegated by a Community
Association Management Firm signatory or signing authority on Association
Accounts.
5) If association funds
are transferred from an Association Account to another account for
disbursement, the Community Association Management Firm or unaffiliated
Community Association Manager must maintain a copy of all records reflecting a
disbursement from the other accounts.
6) Pursuant to Section 85 of the Act, any
books, records, documents, or forms requested by the Department must be made
available by the Community Association Management Firm or unaffiliated
Community Association Manager within 30 days of such request.
7) Each Community Association Management Firm
and unaffiliated Community Association Manager shall institute a written office
policy to ensure that the community association management firm deposits and
maintains Association Account funds in compliance with this Section.
8) Each Community Association Management
Firm, and each Community Association Manager not associated with a Community
Association Management Firm at the time of the original application for
licensure and at the time of renewal of licensure shall file with the
Department, on forms provided by the Department, the following information:
A) whether the applicant maintains
Association Accounts;
B) the
average number of Association Accounts so maintained during the most recent
calendar year; and
C) whether the
applicant maintains crime/fidelity insurance for such maintained Association
Accounts.
9) Unless
otherwise specifically set forth in a management agreement or other contract
between a Community Association Management Firm or between an unaffiliated
Community Association Manager and a community association, the Community
Association Management Firm or unaffiliated Community Association Manager
shall, within 10 days following receipt of the written request of a duly
authorized representative of the association's board of directors, make
available to the community association's board of directors, or its duly
authorized designee, all of its Association Account Records.
10) Unless otherwise specifically set forth
in a management agreement or other contract between a Community Association
Management Firm and a community association or between an unaffiliated
Community Association Manager and a community association, the Community
Association Management Firm or unaffiliated Community Association Manager shall
provide to the party identified and authorized by the community association's
board of managers all Association Accounts, funds, ledgers and monthly
reconciliation statements with 10 days of a written request by the community
association to transition such accounts, funds and records.
c) Pursuant to Section 105 of the
Act, the Department shall have the power to subpoena documents, books, records,
or other materials and to bring before it any person and to take testimony
either orally, by written interrogatory or any combination thereof, in order to
enforce this Section.
d) Violations
Any licensee who violates any of the provisions of this Section
may be deemed to have endangered the public interest pursuant to Section 85 of
the Act and may be subject to discipline pursuant to Section 85 of the
Act.
