Illinois SB3527 · Public Act 104-0734 · Collection policy requirement
Illinois condominium associations and most common interest community associations will need a written collection policy.
A new Illinois law makes a written collection policy a legal precondition to collecting delinquent assessments, unless a community association is exempt from the Common Interest Community Association Act (“CICAA”). Until now, adopting one was recommended but left to the board’s discretion. This page explains what the law requires, what the policy must include, and how a board can prepare.
Hirzel Law will prepare a new policy for a flat fee of $500.
Flat fee. We draft a new policy that complies with your governing documents and the new Condo and HOA collection policy law. Additional customization is available at hourly rates, but most associations do not need additional customization.
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Public Act 104-0734
A written collection policy moves from a recommended practice to a legal precondition for collecting delinquent assessments for most community associations.
Signed into law
Senate Bill 3527 was signed into law as Public Act 104-0734. It adds Section 18.4(t) to the Illinois Condominium Property Act and Section 1-45(j) to the Common Interest Community Association Act, making a written collection policy a precondition to collecting delinquent assessments. The requirement applies even where a declaration or bylaws say otherwise.
Condominium associations
All condominium associations must adopt a written collection policy at a properly noticed board meeting. The adoption of rules at the board meeting will require at least 10 days and no more than 30 days’ notice to the owners, even though the board ultimately votes on the rules.
Common interest community associations
Most homeowners associations, townhome associations, and other types of common interest community associations must adopt a collection policy if they are subject to CICAA. The adoption of rules at the board meeting is not subject to the same notice requirements as condominiums, but must still be done in accordance with the governing documents.
Effective date
From this date, all condominium associations and common interest community associations subject to CICAA should plan to have an adopted policy in place before taking legal action to collect. An association without a compliant, adopted policy risks a delinquent owner raising the missing policy as a defense.
A condominium or community association, subject to the new collection policy law, may not take legal action to collect delinquent assessments unless it has adopted a written collection policy. Adopting the policy is not enough: the association must also follow it.
The bill adds Section 18.4(t) to the Illinois Condominium Property Act (765 ILCS 605/18.4) and Section 1-45(j) to the Common Interest Community Association Act (765 ILCS 160/1-45). It controls even where a declaration or bylaws say otherwise.
The bill also amends the resale disclosure provisions of both statutes. A copy of the adopted policy is among the documents the association must make available to a prospective purchaser upon request.
What the policy must include
At a minimum, the statute requires that a collection policy specify each of the following.
Getting ready
An existing policy should be reviewed against the new requirements. If none exists, an Illinois community association attorney should review the governing documents and prepare one.
The policy becomes part of the rules and regulations, not an amendment to the declaration or bylaws, so the board may follow the rule adoption process. No owner vote is required.
Keep the adopted policy with the association’s rules, and follow it. The statute requires the association to follow its policy before pursuing an owner.
Add the policy to the documents provided to prospective purchasers so the association is prepared when a unit sells.
“What impressed me most was the time they took to understand the specific needs of our eight-unit association and tailor the documents accordingly, rather than simply taking a one-size-fits-all approach. The entire process went remarkably well. The work was thorough, the communication was excellent, and any questions or concerns we raised were addressed promptly and thoughtfully.”
Award-winning representation
Attorneys Kevin Hirzel and Matt Heron are Fellows of the College of Community Association Lawyers, a distinction held by fewer than 200 attorneys nationwide.
Frequently asked questions
Yes. An informal practice, or a condo or HOA collection policy adopted years ago, may not satisfy the specific content requirements. The safer course is a written policy reviewed against the required elements and formally adopted.
Public Act 104-0734 prohibits legal action by an Illinois condo or an HOA that is subject to CICAA unless the required collection policy is adopted. A delinquent owner could raise the missing policy as a defense, which can delay recovery and put an otherwise ordinary collection matter at risk.
A form that conflicts with your governing documents or misstates your late-fee structure can create new problems. Incorrect provisions about late fees, interest, payment plans, or collection remedies can create disputes and delay recovery of unpaid assessments. Simply having a written policy does not mean it complies with the new law. Similarly, AI-generated forms can be inaccurate and do not provide the board with the protection of the business judgment rule in relying on the advice of a community association attorney if something in the online template is incorrect or does not comply with the law.
No. The statute places the duty on the board. The board should adopt the policy at a properly noticed open meeting and confirm whether its own governing documents include any procedural requirements.
The Illinois Condominium Property Act requires all condominium associations to adopt a collection policy, no matter their size or budget. Homeowners and townhome associations subject to the Common Interest Community Association Act must also have a collection policy. However, CICAA exempts common interest community associations with 10 or less units or a budget that is $100,000 or less from complying with CICAA, unless the community association decides to opt in to CICAA’s requirements. Given that budgets can change over time, having a collection policy is always a good practice, and it is typically best for all community associations to have one.
Hirzel Law prepares a written collection policy for an Illinois association for a flat fee of $500.
Before January 1, 2027
A community association attorney reviews your governing documents and prepares a written policy for your board to adopt.
Flat fee
$500A new compliant collection policy.
Request a policyOr talk with a condo and HOA attorney
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Resources
Hirzel Law publishes free guidance for Illinois condominium and homeowners association board members. These are the three places to start.
Blog
Our community association attorneys write about the laws and court decisions that affect Illinois community associations, in plain language for board members and property managers.
Check out Hirzel Law’s article on Senate Bill 3527. It walks through the new requirements under the Illinois Condominium Property Act and CICAA, section by section, what the collection policy must contain, and the questions boards are asking.
Read the article →
Checklists
Five Illinois checklists walk a board through the legal work it faces most often. The collections checklist gives eight steps for recovering unpaid assessments, starting with adopting a written collection policy and running through demand letters and the statutory 30-day notice.
Each one lays out the steps in order, so the board knows what to do first and when to call its attorney.
View the collections checklist →
Book
How to Operate an Illinois Condo or HOA, now in its second edition, is Kevin Hirzel’s step-by-step guide to running a community association.
It covers finances, governance, meetings, and insurance, along with harder issues such as collections, bylaw enforcement, and amending governing documents.
See the handbook →