Is Your Illinois Community a Condominium or a Common Interest Community Association? Why the Difference Matters

Is your Illinois community a condominium or a common interest community? The answer determines which statute governs your association, and getting it wrong can expose the board to real risk. Many owners, and even some board members, assume that every association is “an HOA” and that the same rules apply everywhere. In Illinois, that is not the case. Illinois condominiums are governed by the Illinois Condominium Property Act (765 ILCS 605/1 et seq.). Most homeowner associations, townhome associations, and other planned communities are governed by the Illinois Common Interest Community Association Act (765 ILCS 160/1-1 et seq.) (“CICAA”).

The two statutes overlap in some areas, but they differ on budget notices, voting thresholds, board terms, records requests, insurance, and collections. A board that follows the wrong statute may adopt a budget, levy an assessment, or deny a records request in a way that will not hold up if challenged. This article explains how an Illinois community association can determine which statute governs it and highlights several key differences between the Illinois Condominium Property Act and CICAA.

How to Tell Whether Your Community Association Is a Condominium or a Common Interest Community

The answer is found in the association’s recorded documents, not in how the buildings look. A townhome development can be a condominium, and a community of detached homes can be one too. Boards should review the following:

1. Review the Recorded Declaration

Under 765 ILCS 605/3 of the Illinois Condominium Property Act, property becomes a condominium only when the owner records a declaration “expressly stating” the intent to submit the property to the Illinois Condominium Property Act. If the declaration contains that language, the community is a condominium. 765 ILCS 605/4(c) of the Illinois Condominium Property Act also requires the name of a condominium to include the word “Condominium” or to be followed by the words “a Condominium.”

2. Look for Percentage Interests in the Common Elements

765 ILCS 605/4(e) of the Illinois Condominium Property Act requires the declaration to set forth the percentage of ownership interest in the common elements allocated to each unit. In a condominium, each owner owns their unit plus an undivided percentage interest in the common elements, and 765 ILCS 605/6 prohibits separating the two. In a typical common interest community, an owner owns their lot or home, and the association holds title to common areas such as a clubhouse, retention pond, or private roads.

3. Check the Plat

765 ILCS 605/5 of the Illinois Condominium Property Act requires a plat prepared by a Registered Illinois Land Surveyor that shows the vertical and horizontal boundaries of each unit. A common interest community will generally have a subdivision plat showing individual lots.

4. Apply CICAA’s Definition

CICAA defines a “common interest community” as real estate “other than a condominium or cooperative” in which owners are obligated to pay for the maintenance, improvement, insurance, or taxes of common areas described in a declaration administered by an association. CICAA expressly states that this may include attached or detached townhomes, villas, and single-family homes. In short, if the community is not a condominium or cooperative, CICAA likely applies. However, as discussed below, certain “smaller” communities may be exempt from CICAA.

If a community association’s documents are unclear, which is common with older communities that have been amended several times or with master associations that sit over both condominiums and single-family homes, the board should have legal counsel review the documents. It is important to note that master associations are subject to 765 ILCS 605/18.5 of the Illinois Condominium Property Act.

Key Differences Between the Illinois Condominium Property Act and CICAA

1. Small Community Exemption

The Illinois Condominium Property Act applies to all condominiums in Illinois, regardless of size (765 ILCS 605/2.1). CICAA is different. Under 765 ILCS 160/1-75(a) of CICAA, a common interest community association organized under the Illinois General Not For Profit Corporation Act that has 10 units or less, or annual budgeted assessments of $100,000 or less, is exempt from CICAA unless it elects to be covered by a majority vote of its directors or members. Accordingly, a small HOA may not be subject to CICAA at all, while a six-unit condominium is subject to the Condo Act.

2. Budget Notice and Petition Deadlines

A condominium board must provide each owner with a copy of the proposed annual budget at least 25 days before adopting it (765 ILCS 605/18(a)(6)). A CICAA board must provide the proposed budget at least 30 days but no more than 60 days before adoption (765 ILCS 160/1-45(a)). Both statutes allow owners holding 20% of the votes to petition for a meeting if assessments increase more than 115% over the prior year. However, condominium owners have 21 days to deliver that petition, while CICAA owners have only 14 days.

3. Approval of Additions and Alterations

Assessments for additions and alterations to the common elements that are not included in the annual budget require approval of two-thirds of the total votes of all unit owners in a condominium (765 ILCS 605/18(a)(8)(v)). Under CICAA, the same type of assessment requires approval of a simple majority of the total members at a meeting called for that purpose (765 ILCS 160/1-45(f)).

4. Board Terms and Elections

Condominium board members may not serve terms longer than two years, and the terms of at least one-third of the board must expire annually (765 ILCS 605/18(a)(1), (11)). CICAA permits terms of up to four years and only requires an election at least once every 24 months (765 ILCS 160/1-25(a), (d)).

5. Amending the Governing Documents

765 ILCS 605/27 of the Illinois Condominium Property Act allows amendments to the condominium instruments upon the affirmative vote of two-thirds of those voting or the majority specified in the condominium instruments. Importantly, the condominium instruments can never require more than three-quarters of all unit owners. CICAA contains no similar cap, so the community instruments set the amendment threshold. Some older HOA declarations require very high approval percentages, which can make amendments difficult to adopt.

6. Records Requests

A condominium association must make requested records available within 10 business days of receiving a written request, or the request is deemed denied (765 ILCS 605/19(b)). A CICAA association has 30 days to respond (765 ILCS 160/1-30(i)(2)).

7. Insurance

765 ILCS 605/12 of the Illinois Condominium Property Act mandates specific coverage, including property insurance at full insurable replacement cost, commercial general liability insurance of at least $1,000,000, a fidelity bond, and directors and officers coverage. CICAA only requires fidelity insurance for associations with 30 or more units (765 ILCS 160/1-55). Other coverage for a common interest community is generally governed by its declaration.

8. Collections

The Condo Act provides condominium associations with a statutory lien for unpaid assessments and the right to pursue an eviction action under Article IX of the Code of Civil Procedure (765 ILCS 605/9(g), 9.2). A common interest community’s lien rights generally derive from its declaration, and eviction is available only if the declaration provides for it (735 ILCS 5/9-102(a)(8)).

What Should Illinois Community Association Boards Do Next?

1. Confirm Which Statute Applies

Boards should pull their recorded declaration and plat and confirm whether the association is a condominium or a common interest community. If the association is a common interest community, the board should also determine whether it qualifies for the small community exemption.

2. Audit Notices and Procedures

Budget notices, meeting notices, election schedules, and records request procedures should be reviewed to confirm they track the correct statute.

3. Prepare for 2027

Both condominium associations and CICAA associations that pursue delinquent owners must adopt a written collection policy before January 1, 2027.

Conclusion

Whether an Illinois community association is a condominium or a common interest community affects nearly every aspect of its operation. In summary:

1. The recorded declaration determines which statute applies, not the type of building;
2. The Illinois Condominium Property Act applies to all condominiums, while small common interest communities may be exempt from CICAA; and
3. The two statutes impose different requirements for budgets, voting, board terms, records, insurance, and collections.

A board that applies the wrong statute risks having its decisions invalidated. Accordingly, Illinois community associations should consult legal counsel if there is any question about which law governs their community. The experienced Illinois community association attorneys at Hirzel Law, PLC can review an association’s governing documents and help boards confirm compliance with the applicable Illinois statute.