Can an Illinois community association sue a delinquent owner for delinquent assessments if it has never adopted a written collection policy? Under Senate Bill 3527 (SB3527), the answer will soon be no. The new Illinois law makes a written collection policy a legal precondition to collecting delinquent assessments for every Illinois condominium and homeowners association.
Assessments are the financial backbone of every Illinois community association, and the ability to collect delinquent assessments is essential to keeping an association solvent. For years, an association’s collection practices have been largely shaped by its declaration, bylaws, and collection policies, which, although highly recommended by attorneys, were at the board’s discretion to adopt.
Senate Bill 3527 (SB3527) changes that. The bill amends both the Illinois Condominium Property Act and the Common Interest Community Association Act (CICAA), making a written collection policy a legal precondition to pursuing collection litigation. This article summarizes what SB3527 requires, explains how it will affect Illinois community associations, answers questions boards are likely to have, and offers practical guidance for getting ahead of this legislation.
What Is the New Illinois HOA Collection Policy Requirement?
SB3527 adds a parallel subsection to the powers and duties of the board under each statute: new Section 18.4(t) of the Illinois Condominium Property Act (765 ILCS 605/18.4) and new Section 1-45(j) of CICAA (765 ILCS 160/1-45). The two provisions use nearly identical language and both direct that, to promote responsible governance, the board must adopt policies and procedures concerning the collection of unpaid assessments.
Under both amendments, an Illinois community association, or a holder or assignee of the association’s debt, may not take legal action to collect delinquent assessments unless it has adopted and follows a written policy governing the collection of unpaid assessments. The prohibition applies notwithstanding any provision in the community instruments to the contrary, meaning it controls even where a declaration or bylaw says otherwise. Adopting the policy is not enough: the community association must actually follow it before it can pursue a unit owner for delinquent assessments.
What Must the Collection Policy Include?
At a minimum, the policy must specify:
- The date on which common expenses must be paid and when an assessment is considered delinquent;
- Any late fees and interest that may be imposed on a delinquent owner’s account;
- Any returned-check charges that may be imposed;
- The circumstances, if any, under which an owner may enter into a payment plan, and the minimum terms of that plan;
- The amount owed, or the length of the delinquency, before the account is referred to an attorney for legal action;
- The method by which payments are applied to a delinquent account; and
- The legal remedies available to collect on a delinquent account under the association’s governing documents and Illinois law.
Collection Policies Become Part of Resale Disclosures
SB3527 also works the collection policy into the resale disclosure process. The bill amends the disclosure provisions of both Section 22.1 of the Illinois Condominium Property Act and Section 1-35 of CICAA so that a copy of the adopted collection policy becomes part of the packet that an Illinois community association must make available to a prospective purchaser on request.
When Does SB3527 Take Effect?
SB3527 passed both chambers of the Illinois General Assembly in May 2026. Accordingly, Illinois community associations should plan for an effective date of January 1, 2027.
Frequently Asked Questions About the New Collection Policy Requirement
We already collect delinquent assessments a certain way. Do we still need to do anything?
Yes, an informal practice, or a policy tucked into board meeting minutes years ago, may not satisfy the Illinois Condominium Property Act or CICAA’s specific content requirements. The safer course is to have a written policy reviewed against the required elements and formally adopted.
What happens if we file a collection case without a compliant policy?
The Illinois Condominium Property Act and CICAA prohibit legal action to collect common expenses in that circumstance. A delinquent unit owner could raise the absence of a policy as a defense, which can delay recovery and put an otherwise straightforward collection matter at risk.
Can we simply adopt a template we find online?
A generic template is, at best, a starting point. The policy must align with your association’s governing documents and with the additional requirements under the Illinois Condominium Property Act and the CICAA. A form that conflicts with the governing documents, the Illinois Condominium Property Act, or CICAA, or misstates your late-fee structure can create additional problems.
Do the owners have to vote on the policy?
No. The statute places the duty to adopt the policy on the board, so an owner’s vote is not required. That said, boards should adopt the policy at a properly noticed open meeting and confirm whether their own governing documents impose any additional procedure.
How Illinois Community Associations Should Prepare for SB3527
- Determine whether it has formally adopted a written collection policy or has relied on its governing documents when handling collection cases.
- Have an Illinois community association attorney prepare or review the policy. If the association has previously adopted a written collection policy, it should be reviewed by an Illinois community association attorney to confirm compliance with the new requirements under the Illinois Condominium Property Act or CICAA. If not, the association should retain an attorney to review the governing documents and prepare a written collection policy that complies with them and the new statutory requirements.
- Adopt the policy at a properly noticed board meeting. Because the collection policy will become part of the association’s rules and regulations and is not an amendment to the declaration and bylaws, the association may follow the rule adoption process. This process does not require a unit owner vote.
- Add the policy to the association’s rules and regulations.
- Add the collection policy to the documents provided to prospective purchasers so the association is prepared when a unit sells.
Conclusion
SB3527 elevates the collection policy from an optional internal document to a statutory prerequisite for collecting delinquent assessments in Illinois. Although the statutory language appears straightforward, Illinois community associations should coordinate with their legal counsel to review existing policies or prepare new collection policies that comply with Illinois state law. Given the importance of assessments to an Illinois community association’s financial health, it is vital that Illinois community associations properly adopt a written collection policy that complies with Illinois state law in the event the community association has to pursue a delinquent unit owner. The attorneys at Hirzel Law, PLC regularly counsel Illinois condominium and community associations on collections and can prepare or review a policy that complies with SB3527 while fitting the association’s governing documents and practices.
