Illinois manager licensing was four months from lapsing; SB 3897 moved it to 2032
Illinois manager licensing was four months from lapsing; SB 3897 moved it to 2032
2026-09-10 · Illinois · Legislation
What happened. The Community Association Manager Licensing and Disciplinary Act, 225 ILCS 427, was scheduled to repeal itself on January 1, 2027. SB 3897, signed and effective July 31, 2026 as Public Act 104-0746, moved that date to January 1, 2032 — and rewrote eleven sections of the Act on the way through.1
Every section of 225 ILCS 427 now carries the header “(Section scheduled to be repealed on January 1, 2032).” The Act also moved within the Regulatory Sunset Act itself, out of 5 ILCS 80/4.37 and into 4.42, alongside six other licensing statutes given the same five-year reprieve.
The non-event that prevented an event
It is worth being plain about what a lapse would have meant. Without SB 3897, licensure of Illinois community association managers, the CAM Licensing and Disciplinary Board, and the administrative rules at 68 Ill. Adm. Code 1445 would all have expired in the middle of the current renewal cycle, which runs to August 31, 2027. Firms that had been planning around a 2027 wind-down should stop.
Six changes that actually alter practice
1. Crime insurance now satisfies the fidelity requirement. Section 55 is retitled “Insurance; segregation of accounts; records” and reads “fidelity or crime insurance” throughout, with an express rule that nothing requires fidelity coverage “when a crime insurance policy with equivalent or broader coverage is already in place.” The mechanics are unchanged: maximum available coverage; the policy must cover the designated manager, the firm, all licensed managers, the firm's partners, officers and employees, and the association's officers, directors and employees; at least 10 days' written notice before cancellation or non-renewal; certificates furnished within 10 days of request.
2. IDFPR can now audit the books directly. New Section 55(c-5): the Department “shall have the authority to audit or inspect any electronic or physical record, account, document, book, form, or file required to be created or maintained by this Act.” That is a materially different regulator from the one that existed in June 2026.
3. The support-staff carve-out moved. The sentence excluding bookkeepers, administrative assistants, secretaries, property inspectors and customer service representatives is struck from the definition of “community association manager” in Section 10 and re-enacted as a licensure exemption in Section 20(a)(6), reframed as “an unlicensed owner who does not perform a licensed activity and the unlicensed owner's support staff.” Firms should re-paper support-staff arrangements against the new language rather than assume the old definition carries over.
4. Lapse and restoration got far more forgiving. Section 60 now sets tiers: renewal without examination for up to 2 years past expiration (application, evidence of all approved CE for the lapsed period, fees); restoration without examination between 2 and 5 years past expiration (same, plus any rule-based requirements); and beyond 5 years, the requirements of a new license. The Department may now also require pre-license education, not only continuing education.
5. The citation window halved. Section 85.1 cuts the response period from 60 days to 30.
6. Discipline tightened and procedure clarified. Section 85 adds non-payment of workers' compensation as grounds to refuse, suspend or revoke without a hearing, and adds a “may result in significant harm to the public” qualifier. Section 86 now requires notice and a Section 95 hearing before discipline predicated on a civil or criminal finding or administrative order — while barring the licensee from re-litigating the merits of that underlying finding.
What boards can do
Two questions for your manager at the next meeting. Is the coverage fidelity or crime? If the firm switched to a crime policy on the strength of the new Section 55, confirm it is “equivalent or broader,” and confirm the association and its directors are still named — the naming requirement did not change. Does the management agreement's insurance clause still track the statute? A contract that says “fidelity bond” and a firm that carries crime coverage are now in technical conflict even though the statute permits it.
The audit power is a reason to care about your manager's recordkeeping in a way boards previously did not. Records the Act requires the manager to maintain include association funds handling and account segregation; an IDFPR inspection that finds problems is a problem for the association's money, not only for the licensee.
One thing to disregard
Three other 2026 Public Acts — 104-0532, 104-0730 and 104-0796 — recite the CAM Act inside amended Regulatory Sunset Act lists without changing 225 ILCS 427 itself. Competing versions of those lists were reconciled by the First 2026 General Revisory Act. The operative date is January 1, 2032, as the Act's own section headers now say.
What to watch next
Whether IDFPR amends 68 Ill. Adm. Code 1445 to implement the new audit and lapse provisions. That Part has not been amended since June 2, 2023, and the statutory changes above are the kind that normally pull rulemaking behind them.
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