The Clock Is Ticking: New Illinois Law Requires Associations to Adopt a Collection Policy Before 2027

By January 1, 2027, condominium and common interest community associations in Illinois must adopt a written collection policy. Under the new law, an association that has not adopted the required policy will be prohibited from initiating legal action to collect delinquent assessments and other common expenses as of January 1, 2027, until such a policy has been adopted. This requirement applies to all condominium associations governed by the Condominium Property Act (the “Condo Act”) as well as all common interest community associations not exempt from the Common Interest Community Association Act (“CICAA”).

Minimum Requirements for the Collection Policy:

At a minimum, the policy must include the following items, based on the association’s governing documents (declaration, bylaws, and rules & regulations): 

1. Assessment Due Date – the date by which an assessment must be paid and the date on which an unpaid assessment becomes delinquent;
2. Late Fees – any late fees and/or interest imposed on late assessments or other amounts owed on a delinquent unit owner’s account;
3. NSF Fees – any charges imposed when a check is returned by the payor’s financial institution;
4. Payment Plans – the circumstances, if any, under which a unit owner is entitled to enter into a payment plan with the association and the minimum terms of the payment plan;
5. Attorney Turnover – the minimum delinquency threshold or duration of time before the association refers a delinquent account pursuant to the governing documents and Illinois law;
6. Application of Payments – the method by which payments will be applied on the delinquent unit owner’s account; and
7. Legal Remedies to Collect – the legal remedies available to the association to collect on a delinquent unit owner’s account pursuant to the governing documents and Illinois law.

How to Adopt the Collection Policy:

Once it has been drafted and reviewed by the board, the policy must be adopted in the same manner as the rules and regulations pursuant to Section 18.4(h) of the Condo Act, the Association’s declaration, and if applicable, the provisions of CICAA. The steps are as follows (NOTE: please consult an attorney to ensure that your association’s governing documents do not have other specific requirements): 

1. Owners’ Meeting – the association must hold a properly-noticed owners’ meeting called for the specific purpose of discussing the new collection policy; a quorum of owners is not required at this meeting, and the owners do not vote on the policy; they can only comment on it;
2. Notice of the Owners’ Meeting – the notice of the meeting must include a copy of the proposed policy; it must be provided at least 10 and no more than 30 days prior to the meeting;
3. Board Meeting – immediately after the owners’ meeting, or sometime after, the board must hold a properly-noticed board meeting to vote to approve the policy;
4. Distribute and Attach to Rules – once the collection policy has been adopted, notice of its adoption must be sent to all unit owners; the notice must include a copy of the adopted policy, together with the signed board resolution approving it; the collection policy must also be attached to the association’s current rules and regulations; 
5. Provide with Closing Documents – beginning on January 1, 2027, a copy of the association’s adopted collection policy must also be included in the resale documents that the association is required to provide when a unit owner, other than the Developer, sells their unit under Section 22.1(a)(10) of the Condo Act and Section 1-35(d)(8) of CICAA, as applicable.

What Does This Mean for Your Association?

If your association has not adopted a written collection policy containing, at a minimum, the terms outlined above, it will be prohibited from pursuing collection of delinquent assessments, fines, late fees, or any other amounts owed under the association’s governing documents or applicable law beginning January 1, 2027, until a compliant policy is adopted. To avoid any interruption in collection efforts, the board should work with its property manager and legal counsel to adopt a compliant policy before the end of 2026.

The policy must be in place by January 1, 2027. The association must have the compliant policy drafted, send notice of, and hold, both an owners’ and board meeting, before it can adopt the requisite policy. If you need our legal assistance in adopting the requisite collection policy, please contact Robyn K. Kish at Lavelle Law (info below).

The new law (Public Act 104-0734), which amends the Condo Act in Sections 18.4(t) [the requirements for the policy] and 22.1 [disclosures when owner selling unit] and CICAA in Sections 1-45(j) [the requirements for the policy] and 1-35(d)(8) [disclosures when owner selling unit] can be viewed here: https://www.ilga.gov/Documents/Legislation/PublicActs/104/PDF/104-0734.pdf.

To learn more or for assistance in condominium law or HOA issues, contact Attorney Robyn Kish at 847-705-7555, x226, or rkish@lavellelaw.com.