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Illinois SB3527: What Condo Boards Need To Know About Assessment Collection Policies
Illinois condominium and community association boards should begin preparing now for a major change to assessment collection practice.
SB3527, identified by the Illinois General Assembly as the “CONDO COLLECTION POLICIES” bill, would amend the Illinois Condominium Property Act and the Common Interest Community Association Act to require covered associations to adopt written policies and procedures for collecting unpaid assessments.
As of this writing, SB3527 has passed both houses of the Illinois General Assembly and has been sent to the Governor. If enacted, the expected effective date is January 1, 2027.
That may sound far away. It is not.
For condominium associations — especially smaller and mid-sized associations — unpaid assessments are not a minor administrative issue. Assessments pay for insurance, utilities, repairs, maintenance, reserves, management, legal expenses, and the basic operation of the building. When one owner refuses to pay, everyone else is forced to carry the burden.
Below are answers to some of the most common questions Illinois condominium board members should be asking about SB3527 and unpaid-assessment collection policies.
What Would SB3527 Require?
In simple terms, SB3527 would require condominium and common-interest community associations to adopt and follow a written policy governing the collection of unpaid assessments.
Most importantly, the bill would prohibit an association — or a holder or assignee of association debt — from taking legal action to collect common expenses unless the association has adopted and follows a written collection policy.
That is a very big deal.
For years, many associations have handled assessment collections through informal practices. For example, a board may wait a certain number of months, then send the account to management or legal counsel. Other associations may rely on late-fee rules, emails, management-company habits, or “how we have always done it.”
Under SB3527, that may not be enough.
Associations will need a clear written policy that matches their governing documents, actual practices, and Illinois law.
Why Should Condo Boards Care About This?
Because any new procedural barrier to assessment collection can become a serious problem for an association.
Delinquent owners already have many reasons to delay payment. If an association does not have a compliant written collection policy, or if the association fails to follow its own policy, that may give a delinquent owner a new argument against collection efforts.
For small associations, this can be financially disastrous.
A three-unit, six-unit, or twelve-unit building may not have the cash reserves to carry a chronically delinquent owner for months. One bad-faith owner can quickly create pressure on everyone else in the building. Bills still need to be paid. Insurance still needs to be maintained. Repairs still need to happen.
Assessment collection is not optional. It is how the association survives.
What Must Be In The Collection Policy?
SB3527 requires the written collection policy to address several core issues.
At minimum, an association’s policy should address:
- when common expenses are due;
- when an assessment becomes delinquent;
- what late fees or interest may be imposed;
- returned-payment charges;
- whether payment plans are available and on what terms;
- when an account may be referred to an attorney for legal action;
- how payments are applied to delinquent accounts; and
- what legal remedies may be available under the governing documents and Illinois law.
This does not mean every association should use the same form.
A collection policy should be reviewed against the association’s declaration, bylaws, rules, existing collection practices, management procedures, and attorney referral process.
A generic template may not be enough.
Are Existing Association Rules Enough?
Maybe. But many associations should not assume so.
Some associations already have rules about late fees, interest, or collection costs. Others have management-company procedures or long-standing board practices. Those may be useful starting points, but they may not satisfy SB3527 unless they are part of a written policy that contains the required information and is actually followed.
The danger is not just failing to adopt a policy.
The danger is adopting a policy and then ignoring it.
If the association’s written policy says one thing, but the board, manager, or collection attorney does something else, that inconsistency may create avoidable problems in a future collection case.
That is why associations should review their actual workflow now.
How Could This Affect Resale Disclosures?
SB3527 also affects resale-disclosure obligations.
The bill would add the association’s unpaid-assessment collection policy to certain disclosure materials provided in condominium and common-interest community transactions.
That means the policy may eventually be seen by sellers, purchasers, buyer attorneys, lenders, title companies, and property managers.
In other words, this is not just an internal board document.
It may become part of the association’s public-facing transaction paperwork.
That is another reason the policy should be clear, accurate, and consistent with how the association actually operates.
What Should Condo Boards Do Now?
Illinois associations should not panic. But they also should not wait until December 2026.
A practical next step is to gather the association’s existing governing and collection documents, including:
- declaration;
- bylaws;
- rules and regulations;
- existing collection policy, if any;
- late-fee or interest rules;
- management-company collection procedures;
- attorney turnover guidelines;
- payment-plan practices;
- and current resale disclosure procedures.
Then the board should determine whether the association already has a written policy that can be updated, or whether a new policy should be prepared.
The goal should be simple:
When 2027 arrives, the association should be able to collect unpaid assessments without giving delinquent owners unnecessary procedural arguments.
Questions About SB3527 Or Assessment Collection Policies?
We understand how unpaid assessments affect real buildings, real budgets, and volunteer board members who are trying to keep their associations functioning. We also understand how collection policies, notices, attorney referrals, liens, payment plans, and court filings work in practice — not just on paper.
If your condominium association is concerned about SB3527, unpaid assessments, or whether your current collection procedures are sufficient, contact Cameron & Kane LLC today.
We can help review your existing documents, prepare a written collection policy, and position your association to continue collecting assessments efficiently when the new requirements take effect.
Call or Text 872-588-0727 today.