Illinois Legislature Approves New Collections Policy Requirement – What do Condominiums and Community Associations Need to Know?

The Illinois legislature recently approved amendments to the Illinois Condominium Property Act (“ICPA”) and Common Interest Community Association Act (“CICAA”) that will significantly impact how condominium and common interest community associations pursue collection of unpaid assessments.

What Does the Legislation Do?

The approved legislation requires Illinois condominium and community associations to adopt a policy “concerning the collection of unpaid assessments” and requires that such policy be delivered to prospective purchasers of units. Failure to have a properly adopted policy will be an impediment to an association from successfully pursuing legal action to collect unpaid assessments.

For a condominium association, a copy of the collection policy must be provided with the 22.1 disclosure, and for a community association, a copy of the collection policy must be provided with the disclosures pursuant to the Section 1-35 of CICAA.

Note: The legislation does not apply to residential co-operatives

What is the Status of the Legislation? When Will It Take Effect?

To date, the amendments to ICPA and CICAA have been approved by the Illinois legislature. The legislation will become law if it is either signed by the Governor or not vetoed by the Governor by August 17, 2026. It is expected the legislation will become law shortly and the effective date for the new law will be January 1, 2027.

What Must be Included in an Assessment Collection Policy?

At a minimum, the policy must address:

• When assessments are due and when they are considered late;
• Late fees and interest charges;
• Fees for returned checks;
• Payment plan availability and terms (if offered);
• The timeline before referral to legal counsel;
• How payments are applied to outstanding balances; and
• A description of the association’s legal remedies for unpaid assessments.

The policy must also be consistent with the condominium or community association’s governing documents. It is therefore recommended that boards consult with their association legal counsel to ensure that its assessment collection policy complies with the requirements pursuant to the legislation when it becomes law as well as the association’s own governing documents.

Note: While many associations have existing rules and regulations regarding assessment payments, common language used in existing rules do not meet all of the new statutory collection policy requirements; therefore, most existing assessment payment rules will need to be amended and/or a new policy adopted that complies with the new legislation.

Where Can I Find Text of the Proposed Legislation?

Text of the proposed legislation (SB3527), which has been approved by the legislature and is awaiting the Governor’s signature, is available here. 

Key Takeaways

• While the proposed legislation was approved overwhelmingly by the Illinois legislature, it has not yet been enacted into law, but it is expected to become law in the coming weeks/months.

• For now, condominium and community associations should begin working with their legal counsel to prepare and adopt an assessment collection policy in compliance with the new statutory requirements in advance of the anticipated January 1, 2027 enactment deadline.

LP is committed to keeping our community association clients updated, informed, and prepared to navigate any changes in the law. For questions regarding the new assessment collection policy requirements approved by the legislature for Illinois condominium and community associations, or other issues facing your condominium or community association, please contact Howard Dakoff, Laura Marinelli, Adam Kahn, or Molly Mackey of LP’s Community Association Group.