2026 Legal Updates Impacting Illinois and Chicago Community Associations

Several Illinois-wide legislative changes taking effect in 2026 will directly impact how some community associations are governed. These updates address everything from receivership, correction of unlawful covenant language, composting, squatters, and more. Illinois board members and property managers should understand how these laws impact their association’s day-to-day operational responsibilities and legal exposure. 

Legal updates addressed in this summary: 

Part One: Legal Updates Impacting Illinois Community Associations 

• New USPS Postmark Changes
• Illinois Receivership Act 
• Restrictive Covenant Modification Fee Elimination 
• Condominium and Common Interest Community Ombudsperson Act Extension  

Part Two: 2026 Legal Updates Impacting City of Chicago Community Associations 

• Organic-Waste and Composting Ordinance 
• Expanded Additional Dwelling Unit (ADU) Ordinance 

Part Three: 2026 Legal Updates Impacting Illinois Community Associations Who Are Landlords 

• Criminal Trespass and “Squatter” Removal 
• Prohibition on Naming Minors in Evictions 
• Violence Against Women Act (VAWA) Lease Notice Requirements 

Part One: Legal Updates Impacting Illinois Community Associations 

Legal Update #1: New United States Postal Service (USPS) Postmark Changes and Impact to Community Associations

Community associations routinely rely on mailed notices to comply with statutory and governing-document requirements. These notices (ex. meeting notices, election materials, budget disclosures, and special assessment notices) are often required to be sent or postmarked within a specific timeframe. Effective December 24, 2025, USPS postmarks will reflect the date mail is first processed by automated equipment, not the date it is dropped in a mailbox or left at a post office. As a result, mail deposited on a particular day may receive a postmark one or more days later after it reaches a regional processing facility, and the postmark may not match the intended mailing date.

This creates potential risk when statutes or governing documents require notices to be mailed, postmarked, or delivered by a specific deadline.

Read the full article here: How Do The New USPS Postmark Changes Impact Community Associations? https://www.ksnlaw.com/blog/new-usps-postmark-changes-community-associations/

Legal Update #2: Illinois Receivership Act 

Beginning January 1, 2026, House Bill 0028 known as the Illinois Receivership Act (Public Act 104-0034), establishes a uniform process for appointing a receiver when an Illinois community association experiences severe operational or financial distress. While receivership has always existed as a legal remedy, this Act standardizes how and when it may be imposed while clarifying the scope of authority granted to a receiver. 

For association boards and property managers, this law underscores the importance of proactive governance, financial oversight, and timely intervention when problems arise. 

What Is a Receivership in the Community Associations? 

A receivership is a court remedy typically used when an association is unable or unwilling to properly manage its affairs. Under the Illinois Receivership Act, a court may appoint a receiver when issues such as financial mismanagement, chronic nonpayment of assessments, operational dysfunction, or serious property neglect threaten the health and value of the community. 

Once appointed, the receiver effectively steps into the role of the board and management to stabilize the association and protect the property. 

Powers and Responsibilities of a Court-Appointed Receiver 

Under the Act, a receiver assumes possession and control of the association’s operations. This authority is broad and may include: 

• Managing the association’s finances, including collecting assessments and paying obligations 

• Overseeing day-to-day operations and administration 

• Enforcing the association’s governing documents 

• Ensuring that required maintenance continues without interruption 

• Addressing deferred maintenance, structural issues, and code violations 

• Taking steps necessary to preserve or restore property value 

For board members, this means that decision-making authority may be fully transferred to the receiver for the duration of the court order. For property managers, it often means reporting to the receiver rather than the board, depending on how the receivership is structured. 

The Illinois Receivership Act generally excludes owner-occupied residential properties with one to six dwelling units, but that exemption is limited and subject to several important exceptions. Accordingly, boards and managers should not assume smaller or mixed-use properties are automatically exempt. 

Best Practices for Board Members and Community Association Managers 

Receivership is costly, disruptive, and often avoidable. To reduce the risk of receivership and face court intervention under the Illinois Receivership Act, associations should consider: 

• Conducting regular financial reviews and audits 

• Maintaining realistic budgets and adequately funded reserves 

• Pursuing assessment delinquencies consistently and early 

• Addressing maintenance and structural issues before they escalate 

• Consulting legal counsel when governance or financial problems arise 

While intended as a tool to stabilize distressed properties, this new law also serves as a clear warning: failure to govern effectively can result in court-imposed control. Board members and property managers who prioritize transparency, financial responsibility, and proactive maintenance will be best positioned to avoid the need for receivership and protect their communities long-term. 

Legal Update #3: Restrictive Covenant Modification Fee Elimination 

Effective January 1, 2026, House Bill 1575 (Public Act 104-0187 amends the Counties Code (55 ILCS 5/3-5048)) removes financial and procedural barriers for Illinois community associations seeking to eliminate discriminatory and unlawful language from their governing documents. The law reflects a continued statewide effort to ensure that recorded covenants comply with modern fair housing standards and public policy while directly impacts how associations may correct outdated restrictions related to race, religion, national origin, and similar protected characteristics. 

What is the Impact on Illinois Community Associations?  

HB 1575 eliminates filing fees and copy fees charged by county recorders for amendments that solely remove discriminatory or otherwise unlawful restrictive covenants from an association’s declaration or governing documents. By removing these fees, the legislature has reduced cost-based disincentives that previously delayed or discouraged corrective amendments. 

The law also streamlines the approval process. Under HB 1575, an association’s board of directors may approve these amendments by a simple majority vote, without obtaining a majority vote of the ownership. This is a significant departure from the typical amendment process, which often requires owner approval and can be difficult to achieve. 

This authority is limited to amendments that remove discriminatory or unlawful language only. Boards may not use this streamlined process to make substantive governance changes unrelated to eliminating prohibited restrictions. 

Best Practices for Board Members and Community Association Managers 

This new Illinois law removes both financial and procedural obstacles for Illinois community associations seeking to eliminate discriminatory restrictions from their governing documents. Boards and managers should consider: 

• Reviewing declarations and covenants for outdated or discriminatory language 

• Working with legal counsel to ensure amendments are narrowly tailored 

• Adopting amendments through a properly noticed board vote 

• Recording the amendment properly and without incurring county filing or copy fees 

Taking proactive action reduces legal risk and demonstrates compliance with fair housing principles. 

Legal Update #4: Condominium and Common Interest Community Ombudsperson Act Extension (“Ombudsperson Act”) 

The Condominium and Common Interest Community Ombudsperson Act is an Illinois statute originally created effective January 1, 2017. It established an Office of the Ombudsperson to educate unit owners and associations about condominium and common interest community law and provide a resource for compliance assistance. 

Effective August 15, 2025, a new law (SB1383) extends the repeal date of the Ombudsperson Act from January 1, 2026, to January 1, 2029, and ensures that compliance requirements remain in effect for an additional three years.  

Public Act 104-0377 amends the Common Interest Community Association Act, the Condominium Property Act, and the Condominium and Common Interest Community Ombudsperson Act. 

Part Two: 2026 Legal Updates Impacting City of Chicago Community Associations 

Several City of Chicago specific legislative changes taking effect in 2026 that will directly impact how some community associations are governed. These updates address everything from composting, Additional Dwelling Units (ADU), and more. Chicago board members and property managers should understand how these laws impact their association’s day-to-day operational responsibilities and legal exposure. 

Legal Update #1: Organic-Waste and Composting Ordinance 

On October 16, 2025, the City of Chicago adopted a new organic-waste and composting ordinance (SO2025-0018160) that modifies how composting and organic-waste collection are regulated within the city. The new rules carry important implications for condominium, homeowner (HOA), and townhome community associations in the City of Chicago, Illinois. 

Here’s a summary of the key provisions of the ordinance and how they apply in an association setting: 

Ban on “unreasonable restrictions”: The ordinance provides that property managers or building owners may no longer enforce blanket prohibitions on tenants composting, dropping off organic waste at certified facilities, or contracting with licensed private haul-away providers provided the systems meet the ordinance’s requirements (ex. fully enclosed, pest-controlled, leak-resistant containers). 

Requirements for containers and control of odor/pests/leaks: The ordinance mandates that compost/organic-waste containers must be fully enclosed, have openings no larger than ¼ inch (or equivalent seal), control odor/pests, be leak-resistant, and operate in a safe, sanitary manner. 

Impact on Chicago Community Associations 

Here are several practical recommendations for boards, property managers, and unit owners: 

• An association cannot adopt or maintain a rule that simply says “no resident may compost or participate in an organic-waste collection program” if the resident’s plan complies with the container-and-collection requirements. 

• Boards must review governing documents and rules/regulations for any overly broad prohibitions and revise them to allow compliance with the ordinance, subject to “reasonable restrictions” (ex. container size, location, odor, control, pest control). 

• Particularly in condo or townhome settings where units share building systems or common-area waste systems, the association must balance unit-owner rights (to compost/organic-waste drop-off) with common-area responsibilities (waste containment, collection, maintenance). 

• The association should consider creating or updating a policy spelling out acceptable containers, locations, maintenance standards, and inspection rights to avoid odor/pest issues that affect the common areas or other residents. 

• In shared-building scenarios (ex. condos with shared garbage rooms or service corridors), the board should review whether the existing waste-receptacle setup permits safe composting or whether additional infrastructure (ex. odor-seal lids, pest-proof bins, dedicated drop-off area) is needed. 

Fines, Legal Challenges, and Enforcement 

The ordinance allows individuals to seek injunctive or declaratory relief if their rights under the ordinance are violated. The City of Chicago has enforcement authority with fines of roughly $300–$600 per offense. Non-compliant operations, especially those causing nuisances, may be fined and ordered to stop or remedy the condition. 

Board members and management should be aware that, if community rules are overly restrictive or applied in a way that effectively prohibits composting in compliant containers, unit owners may challenge the association. 

On contrast, the association itself may face liability or regulatory enforcement if composting and/or organic-waste containers are improperly placed, maintained or become a nuisance (ex. odor, pests, leaks) in the common areas or service areas. 

It’s prudent for Chicago community associations to adopt an internal compliance plan that establishes inspections, outlines notice requirements, defines violation procedures for composting misuse, and details remediation steps for problem containers or misuse. 

Legal Update #2: Expanded Additional Dwelling Unit (ADU) Ordinance 

Effective April 1, 2026, the City of Chicago will significantly expand its Additional Dwelling Unit (ADU) Ordinance, allowing new residential units in attics, basements, and accessory structures such as coach houses.  

The amendment to Section 17-7 of the Chicago Zoning Ordinance is intended to increase housing availability, support multigenerational living, and provide homeowners with additional rental income opportunities. The ordinance also creates a formal pathway to legalize existing units that were previously built without proper zoning approval or building permits. 

What This Means for Chicago Community Associations 

The number of ADUs permitted depends on the size of the property: 

• Properties with 1 to 4 legal units may add one coach house or one conversion unit (for buildings at least 20 years old). 

• Properties with 5 or more units may not add coach houses but may create conversion units equal to up to 33% of the existing legal units. 

For City of Chicago community associations, zoning approval does not override governing documents. Declarations, bylaws, and rules may still restrict additional units, alterations, or changes in use. 

Best Practices for Boards and Property Managers 

In advance of receiving owner requests regarding ADUs, boards and property managers should consider: 

• Reviewing governing documents to determine whether ADUs are permitted or restricted 

• Coordinating with legal counsel before approving any ADU-related requests 

• Ensuring compliance with architectural standards, building access, parking, and utility considerations 

• Monitoring enforcement consistency to avoid selective approval claims 

Part Three: 2026 Legal Updates Impacting Illinois Community Associations Who Are Landlords 

An Illinois community association may function as a landlord. This scenario can occur by: 

• Leasing association-owned units 

• Renting common areas or commercial spaces 

• Operating gatehouses or offices with residential components (ex. living quarters for association staff, security personnel, etc.) 

• Temporarily taking possession of units through foreclosure, receivership, or assessment enforcement 

When an association steps into the role of a landlord, it becomes subject to state and local landlord-tenant laws just like any other property owner. As a result, legal updates affecting evictions, tenant protections, and law enforcement authority can directly impact association operations. Board members and property managers must understand these changes to avoid costly missteps, litigation exposure, and compliance violations when managing association-owned or controlled rental property. 

Legal Update #1: Criminal Trespass and “Squatter” Removal 

Effective January 1, 2026, Senate Bill 1563 (Public Act 104-0029 amends 735 ILCS 5/9-102) clarifies that Illinois eviction laws do not prevent law enforcement from enforcing criminal trespass statutes. Under this law, nothing in the Eviction Article may be interpreted to prohibit police from removing individuals who are unlawfully occupying property when criminal trespass is established. 

For associations acting as landlords, this is particularly relevant when dealing with unauthorized occupants, abandoned units, or non-tenant individuals occupying association-owned property. Once the association can provide proof of ownership, law enforcement may immediately remove a trespasser without requiring the association to initiate a formal eviction proceeding. Boards and property managers should still proceed carefully, ensuring the situation truly involves trespass, not a tenancy, to avoid improper removal and liability. 

Legal Update #2: Prohibition on Naming Minors in Evictions 

Effective January 1, 2026, House Bill 3566 (Public Act 104-0317 amends 735 ILCS 5/9-106 and 735 ILCS 5/9-106-121) significantly changes eviction procedure by prohibiting minors from being named as defendants in eviction cases. If a minor is included in the case caption, even unintentionally, the entire eviction action must be dismissed and immediately sealed. 

The consequences for associations are substantial. If an association deliberately names a minor, the child may be entitled to attorney’s fees, actual damages, and $1,000 in liquidated damages. Boards and property managers must ensure that eviction filings name only legally responsible adult tenants. This update reinforces the need for careful coordination with legal counsel before filing eviction actions involving association-owned or leased units. 

Legal Update #3: Violence Against Women Act (VAWA) Lease Notice Requirements 

Beginning January 1, 2026, Illinois law will require Violence Against Women Act (VAWA) summaries to be included with all residential leases, including those used by community associations acting as landlords. These requirements apply regardless of whether the association owns a single unit or manages multiple rental properties. 

For boards and property managers, this means lease templates must be reviewed and updated to ensure proper VAWA disclosures and tenant rights summaries are included.  

Failure to comply can expose associations to enforcement actions and tenant claims. Associations leasing units (ex. long-term, temporary, due to foreclosure or receivership) should work with experienced legal counsel to ensure all lease documents meet the new statutory requirements. 

Best Practices for Boards and Property Managers 

When an Illinois community association acts as a landlord, it is fully subject to evolving landlord-tenant laws. From distinguishing criminal trespass from eviction to properly structuring eviction filings, to ensuring lease compliance with federal and state tenant protections, boards and property managers must approach association-owned or controlled rental property with heightened care. Proactive review of policies, lease documents, and enforcement procedures in coordination with legal counsel will be critical to managing risk and maintaining compliance with these legal updates. 

Legal Resource 

Do not hesitate to contact KSN if you are an Illinois board member, property manager, or community association leader with questions about these recent legislative updates. 

Please contact our law firm by calling 855-537-0500 or visit www.ksnlaw.com. 

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collections, landlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin. 

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