A new Illinois law went into effect on January 1st, 2023 that impacts the required disclosures for a sale in a condominium association.
Along with a brief explanation of the applicable law, this article will provide board members and management with a summary of the 2023 update including legal requirements, fee limitations, and deadlines.
Disclosures and Documents
Several states require sellers in condominium, homeowner association, or townhome community associations to disclose information to prospective buyers.
These disclosures can include various documents including the association’s:
- Assessment status
- Rules and regulations
- Budget
- Reserve funding
- Status of any pending lawsuits
- Insurance coverage
Section 22.1 of the Illinois Condominium Property Act
The Illinois Condominium Property Act (ICPA) is a state law that governs the creation and operation of condominiums in Illinois. It establishes the legal framework for the ownership, management, and control of condominium properties. This includes rules for the establishment of condominium associations, the rights and responsibilities of condominium owners, and the procedures for resolving disputes.
Section 22.1 of the ICPA outlines the details of the required disclosures and deadlines along with consequences for violating the law.
Changes Effective January 1, 2023
On May 27, 2022, Illinois Governor, JB Pritzker signed a bill (HB5246) amending section 22.1 of the ICPA. The law goes into effect on January 1, 2023. Below is a summary of the changes:
- Information requests (in writing) must be completed within 10 business days of the request.
- The fee covering the direct out-of-pocket cost of providing and copying the requested information may not exceed $375.
- An association may charge an additional $100 for rush service completed within 72 hours.
Please note that there is similar language in Section 1-35(d) of the Common Interest Community Association Act (CICAA) that is applicable to certain homeowner and townhome community associations in Illinois. However, the changes in HB5246 do not apply to Common Interest Community Associations.
Legal Resource
Under the Illinois Condominium Property Act, condominium buyers are entitled to receive certain disclosures from the seller or developer before purchasing a unit. These disclosures typically include information about the financial health of the condominium association, any pending legal actions or disputes, and any defects or deficiencies in the common elements of the property.
The exact disclosures required may vary depending on the specific circumstances of the sale. It is important for buyers to carefully review these disclosures and seek legal advice if necessary, to ensure that they fully understand the condition of the property and their rights as owners.
Board members should work with their property manager, financial consultants, and legal counsel to compile and confirm information for real estate sales and refinancing transactions.
If KSN can assist your community association with 22.1 disclosures or other legal concerns, do not hesitate to contact our law firm.
Please call 855-537-0500 or visit www.ksnlaw.com.
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