A condominium purchase is really two purchases. The first is the unit — the light, the layout, the block. The second, invisible at the showing, is a share of a small business: a not-for-profit corporation with a budget, a board, reserves, debts, and neighbors as co-shareholders. First-time buyers who inspect the second purchase as carefully as the first almost never regret the closing.
What is a 22.1 disclosure in Illinois?
Section 22.1 of the Illinois Condominium Property Act (765 ILCS 605/22.1) entitles a resale buyer to a disclosure package from the association, on the seller's request, covering the essentials of the building's health: the governing documents, the current budget and financial statements, reserve balances, anticipated capital expenditures, pending litigation, and insurance coverage. It is the closest thing a condo buyer gets to reading the business's books — and buyers who skim it are buying blind.
What are the red flags in condo association documents?
Five patterns deserve a hard look before closing: reserves that are thin relative to the building's age and components; owner delinquency above a few percent of annual assessments; pending litigation, especially construction or water-related; a history of special assessments without a reserve plan behind them; and assessments that have not moved in years — which usually signals deferred reality, not efficiency. None is automatically a deal-breaker, but each is a question your attorney should ask in writing before you sign.
How to Read the Budget Like a Lender
- Reserve contribution: a meaningful monthly transfer to reserves is the single best indicator of a board that plans. Our reserve fund guide explains the benchmarks.
- Insurance line: current, adequate master coverage — underinsured buildings fail lender project reviews, which constrains your future buyer pool.
- Special assessment history: ask for five years. A pattern of surprises is a management style, and you are buying it. Our special assessments guide covers what owners can expect.
- Delinquency report: when neighbors don't pay, the building runs on the owners who do — including you.
The Questions the Documents Won't Answer
Three questions belong in email, where the answers are durable: Are any special assessments or major capital projects under discussion? What are the leasing rules and is the rental cap full? And who manages the building — self-managed, or a professional firm? The speed and clarity of the answers is itself diagnostic. A well-managed association produces its 22.1 package, paid-assessment letter, and rules within days; a shoebox operation takes weeks, and that difference will shape every year you own there. (Our guide to self-managed association problems shows what to watch for.)
After the Closing
Set up the resident portal and autopay in week one, match your HO-6 policy to the master policy's boundary and deductible, download the governing documents while they're fresh, and attend one board meeting in your first quarter. Then read The Owner's Companion — our eight-chapter guide to the ownership life you just began: what your assessment funds, who fixes what, your rights under Illinois law, and the neighborly arts that make a shared building feel like home.
And if the building you fell in love with turns out to have a board that deserves better management — that conversation is what we do. Request a proposal for your new association.