Illinois Community Associations Should Prepare for New Assessment Collection Policy Requirements

Illinois condominium and common interest community associations should begin preparing now for a
significant change to assessment collection procedures. Senate Bill 3527 has passed both houses of the Illinois
General Assembly and was sent to the Governor on June 18, 2026. If signed or otherwise allowed to become
law, the bill is expected to take effect on January 1, 2027.
The bill does not eliminate an association’s right to collect assessments. In fact, assessments remain the financial
lifeblood of every condominium, townhome, and homeowners association. What the bill does is require
associations to adopt and follow a written collection policy before taking legal action to collect unpaid common
expenses.
This is an important change because many associations currently rely on informal collection practices,
management company procedures, attorney recommendations, or past custom. Under the new law, that will
not be enough. Associations will need a clear written policy adopted by the Board that explains when
assessments are due, when an account becomes delinquent, what charges may be added, when payment plans
are available, when accounts are referred to counsel, how payments are applied, and what legal remedies may
be pursued.
Associations Covered by the Bill
SB3527 applies to both:
Condominium associations governed by the Illinois Condominium Property Act; and Common interest
community associations governed by the Illinois Common Interest Community Association Act. This means
the new requirements will apply broadly to Illinois condominium associations, townhome associations, and
homeowners associations that are subject to either of these statutes.
The Central Requirement: Adopt and Follow a Written Collection Policy
The most important provision of SB3527 is that an association may not take legal action to collect unpaid
common expenses unless it has adopted and follows a written policy governing the collection of unpaid
assessments.
This requirement applies even if the association’s declaration, bylaws, rules, or other governing documents say
something different. In other words, the statute will control over inconsistent provisions in the governing
documents.
For boards, the practical takeaway is simple: before January 1, 2027, every covered association should adopt a
formal written assessment collection policy and make sure that management, the Board, and legal counsel follow
it consistently.
What the Collection Policy Must Include
The new law requires the collection policy to address at least seven subjects.
First, the policy must state the date on which assessments and common expenses must be paid and when an
account is considered delinquent. For example, the policy should state whether assessments are due on the first
day of the month and whether they are considered delinquent after the 10th, 15th, or another specific date.
Second, the policy must identify any late fees and interest the association is entitled to impose on a delinquent
owner’s account. Associations should confirm that the amount of any late fee or interest charge is authorized
by the declaration, bylaws, rules, or applicable law.
Third, the policy must identify any returned-check or returned-payment charges the association is entitled to
impose. This should include returned checks, rejected ACH payments, credit card chargebacks, or other failed
payments, if the association intends to charge for them.
Fourth, the policy must explain the circumstances, if any, under which an owner is entitled to enter into a
payment plan and the minimum terms of that payment plan. The new law does not appear to require every
association to offer payment plans in every situation. However, if payment plans are available, the policy must
explain when they are available and what minimum terms apply.
Fifth, the policy must state the amount or length of time before a delinquent account is referred to an attorney
for legal action. Associations should avoid vague standards and instead use an objective trigger, such as a specific
number of days delinquent or a balance equal to a certain number of months of assessments.
Sixth, the policy must explain how payments may be applied to a delinquent owner’s account. For example,
the policy should state whether payments are applied first to the oldest outstanding charges, attorneys’ fees,
costs, late fees, interest, regular assessments, special assessments, or some other order of priority.
Seventh, the policy must identify the legal remedies available to the association under its governing documents
and Illinois law. These remedies may include demand letters, liens, lawsuits, eviction or possession actions
where authorized, foreclosure, money judgments, post-judgment collection, recovery of attorneys’ fees and
costs, and other remedies available under the applicable statute and governing documents.
The New Law Also Affects Resale Disclosures
SB3527 also adds the association’s collection policy to the resale disclosure materials that must be provided in
connection with the sale of a unit. For condominium associations, the policy will become part of the Section
22.1 disclosure package. For common interest community associations, the policy will become part of the resale
disclosure materials required under Section 1-35 of the Common Interest Community Association Act. This
means associations and management companies should update their resale disclosure checklists and closing
procedures before the law takes effect.
What Boards Should Do Before January 1, 2027
Every association should take the following steps before the anticipated January 1, 2027 effective date.
First, review the association’s declaration, bylaws, rules, management agreement, existing collection practices,
and attorney referral procedures.
Second, confirm the amount of any late fees, interest, returned-payment charges, attorneys’ fees, and collection
costs that may be imposed.
Third, adopt a written collection policy at a properly noticed open Board meeting, if you don’t have one already.
Fourth, provide the policy to management, accounting staff, and legal counsel so that collection activity is
handled consistently.
Fifth, update owner account statements, delinquency notices, attorney referral procedures, and resale disclosure
packets.
Sixth, consider distributing the policy to all owners so that expectations are clear before disputes arise.
Seventh, review the policy annually and update it when the law, governing documents, management practices,
or collection procedures change.
Why This Matters
Assessment collection is one of – if not the most - important Board fiduciary responsibilities. Associations rely
on assessments to pay insurance, utilities, maintenance, repairs, reserves, management fees, and other common
expenses. When one owner does not pay, the financial burden shifts to the rest of the community.
At the same time, collection procedures should be predictable, transparent, and consistently applied. SB3527 is
designed to make sure associations have written rules in place before pursuing legal remedies.
A well-drafted collection policy will help associations protect their cash flow, treat owners consistently, reduce
disputes, and preserve the ability to take legal action when necessary.
Associations should not wait until a delinquency arises in 2027 to review their collection policy. Boards should
work with legal counsel and management now to adopt a compliant collection policy before the new law takes
effect.
Contact Shifrin Legal today at MJS@shifrinlegal.com or by phone at (312) 470-2276 to have your collection
policy reviewed and, if necessary, updated to comply with this new law.











