- Community Associations, Legal Updates, Finances
- Illinois
Illinois Senate Bill SB3527 would require condominium, homeowner (HOA), and townhome associations subject to the Illinois Condominium Property Act and the Common Interest Community Association Act to adopt and follow a formal, written collection policy before collecting delinquent assessments.
While the legislation would take effect on January 1, 2027, many board members and property managers have questions about what the bill would require, how it may affect existing collection practices, and what steps associations should consider taking now.
Below are answers to some of the most frequently asked questions regarding SB3527 and the legislation’s collection policy requirements for Illinois community associations.
FAQ #1: What is SB3527?
SB3527 is proposed Illinois legislation that would require community associations to adopt and follow a written collection policy before pursuing legal action to collect delinquent assessments. The bill amends both the Illinois Condominium Property Act and the Common Interest Community Association Act. It unanimously passed both chambers of the Illinois General Assembly and is expected to take effect on January 1, 2027.
FAQ #2: What must be included in an association’s collection policy?
Under SB3527, a collection policy needs to address specific collection-related procedures, including assessment due dates, late fees, payment plans, referral thresholds, how payments are applied, and other collection practices. The legislation establishes minimum legal requirements that associations must include in their written policies.
FAQ #3: Can an association still collect delinquent assessments without a written collection policy?
Under this new Illinois legislation, an association would be prohibited from pursuing legal collection remedies unless it has first adopted a compliant written collection policy.
FAQ #4: What happens if an association already has a collection policy?
Associations with existing collection policies should not assume they automatically comply with SB3527. Existing policies may need to be reviewed and revised to ensure they contain all provisions required by the new legislation and are consistent with the association’s current collection procedures.
FAQ #5: Can an association use a generic collection policy template?
While SB3527 identifies certain legal provisions that must be included, a collection policy should also be tailored to the association’s governing documents and collection procedures. A generic template or incomplete policy that conflicts with the association’s documents could create unnecessary challenges when collecting delinquent assessments.
FAQ #6: Will an association’s collection policy become part of the resale disclosure process?
Yes. Under SB3527, associations would be required to provide a copy of their collection policy as part of the resale disclosure documents given to prospective purchasers. As a result, purchasers, lenders, attorneys, brokers, and other parties involved in the transaction may review the policy. Because the policy will become part of the association’s formal disclosure package, associations should ensure it is professionally prepared and legally compliant.
FAQ #7: When should Illinois community associations begin preparing for these new requirements?
Although the anticipated effective date is January 1, 2027, associations should consider beginning the review process well in advance. Drafting, reviewing, adopting, distributing, and implementing a new collection policy may take significant time, particularly if the board wishes to coordinate with management, legal counsel, and owners.
FAQ #8: Should associations have their attorney review their collection policy?
Yes. Collection policies directly impact an association’s ability to recover unpaid assessments and enforce owner obligations. Legal counsel can help ensure the policy complies with the new statutory requirements, aligns with the association’s governing documents, and reflects the association’s collection goals and practices.
How Can the Association’s Attorney Assist Board Members and Managers?
Not all collection policies are created equal. Some associations may already have collection policies in place, but those policies may not contain all of the provisions required by the proposed legislation. Other associations may have collection procedures that have evolved over time but were never formally adopted as a written policy.
Because collection policies directly impact an association’s ability to recover assessments, boards should work with an experienced community association lawyer to review existing policies or prepare new policies that comply with applicable legal requirements.
An attorney who regularly represents condominium, homeowner (HOA), and townhome associations can help ensure that the policy is consistent with the association’s governing documents, collection practices, the requirements of Illinois law and the individual requirements of local jurisdictions.
To help Illinois community associations prepare for SB3527, KSN has developed CLEAR or Community Legal Evaluation for Assessment Recovery.
Through CLEAR, KSN attorneys can assist Illinois association board members and managers by:
- Determining whether a formal written delinquent assessment collection policy already exists
- Identifying any procedural and legal inconsistencies between the association’s current collection practices and governing documents
- Preparing legally compliant collection policies and association documents
- Satisfying the requirements of the proposed legislation in anticipation of the January 1, 2027 effective date
Legal Resource
With SB3527 expected to take effect on January 1, 2027, Illinois community associations should begin evaluating their collection procedures now rather than waiting until the last minute.
A compliant collection policy requires more than simply adopting a document. It must be consistent with the association’s governing documents, current collection practices, and applicable Illinois law.
Through CLEAR (Community Legal Evaluation for Assessment Recovery), KSN attorneys can help boards and managers identify potential compliance issues, develop legally compliant collection policies, and implement procedures that preserve the association’s ability to collect delinquent assessments.
Early legal review can help reduce risk, avoid owner challenges, and ensure associations are prepared before the new requirements become effective.
Questions about this proposed law, delinquent assessment collection, owner disputes, or other legal issues?
Please call 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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