Illinois has a new rule that affects every board that ever has to chase an unpaid assessment. Public Act 104-0734 (Senate Bill 3527) was approved by the Governor on July 31, 2026 and takes effect on January 1, 2027. It requires condominium boards and common interest community association boards to adopt a written policy for collecting unpaid assessments — and it stops an association from going to court to collect until that policy exists and is being followed.
Most associations already have a collection habit. Far fewer have it written down in one place, adopted by the board, and matched to what actually happens. That gap is what this law closes.
What exactly does the new Illinois law require?
Public Act 104-0734 adds a new subsection (t) to Section 18.4 of the Condominium Property Act and a new subsection (j) to Section 1-45 of the Common Interest Community Association Act (CICAA). Both say the same thing: to promote responsible governance, the board must adopt policies and procedures concerning the collection of unpaid assessments. The Act also adds the policy to the resale disclosure lists in Section 22.1 and Section 1-35.
The law passed both chambers without a single no vote — 54-0 in the Senate and 108-0 in the House — and was approved on July 31, 2026. It is not a pending bill. It is enacted law with a fixed effective date.
What happens if our association has no written policy on January 1?
The association cannot take legal action to collect common expenses. The text is direct: notwithstanding anything to the contrary in the condominium instruments or community instruments, the association, or a holder or assignee of its debt, shall not take legal action to collect common expenses unless it has adopted, and follows, a written policy governing the collection of unpaid assessments. A missing policy means a stalled collection file.
Two details matter here. First, the restriction reaches anyone who buys or is assigned the association's debt, so selling a delinquent account does not get around it. Second, the test is "adopted, and follows." A policy that sits in a binder while the manager does something different invites exactly the challenge the law was written to allow. Ask counsel how the new rule applies to collection matters that are already open on January 1.
What must the collection policy say, at minimum?
The enacted text lists seven required items. The policy must specify, at a minimum:
- The due date and the delinquency date — the date on which common expenses must be paid, and when an assessment is considered delinquent.
- Late fees and interest — any late fees and interest the association is entitled to impose on a delinquent account.
- Returned-check charges — any returned-check charge the association is entitled to impose.
- Payment plans — the circumstances, if any, under which an owner may enter a payment plan, and the minimum terms of that plan.
- Referral to an attorney — the amount owed or the length of time before the association refers a delinquent account to an attorney for legal action.
- How payments are applied — the method by which payments are applied to a delinquent account.
- Legal remedies — the remedies available to collect a delinquent account under the association's governing documents and Illinois law.
Note the phrase "entitled to impose." The policy describes charges the association already has authority to impose under its declaration, bylaws, rules and the statute; it does not create new authority. If your late fee has never been properly adopted, writing it into the collection policy does not fix that. Our guide to building a defensible late fee and interest policy covers that groundwork.
Does the law say how the policy must be adopted or sent to owners?
No. The Act requires the board to adopt a written policy and to follow it, but it does not prescribe a particular adoption procedure or a mailing requirement. Sensible practice is to adopt it by a recorded vote at a properly noticed open board meeting, keep it with the association's records, and send every owner a copy so the first time an owner reads it is not in a collection letter.
Ask association counsel one specific question: should the policy go through the association's rules-adoption process? Under Section 18.4(h) of the Condominium Property Act, rules and regulations require an owner meeting with the full text in the notice. Some boards may choose that route for extra defensibility, or their governing documents may point that way. Counsel should decide, not the manager.
Does the policy have to be in the resale disclosure packet?
Yes. For condominiums, Section 22.1(a) now includes a new item (10): a copy of the collection policy adopted under Section 18.4(t). For CICAA communities, Section 1-35(d) adds item (8): a copy of the collection policy adopted under Section 1-45(j). Condominium boards must still furnish the 22.1 information within 10 business days of a written request.
Practically, that means the policy needs to be in final form and in the resale file before the first closing of 2027. If your 22.1 workflow uses a standard document set, add the policy now. Our 22.1 disclosure packet checklist shows where it fits, and Stellar's resale disclosure service keeps those packets current.
Does this apply to HOAs and townhome associations as well as condominiums?
It applies to associations governed by either Act. Condominiums are covered through Section 18.4(t) of the Condominium Property Act; homeowner and townhome associations governed by CICAA are covered through Section 1-45(j). CICAA contains its own applicability provisions, including exemptions for some smaller associations, so a smaller HOA should have counsel confirm exactly which of its obligations apply. Adopting a written policy is sound practice either way.
What should the board do in November and December 2026?
Ten weeks is enough time if the work starts now. A workable timeline:
By mid-November 2026
- Pull the declaration, bylaws, rules and any prior collection resolutions. List what late fees, interest and returned-check charges have actually been adopted.
- Ask the manager to document what actually happens today: when reminders go out, when accounts go to the attorney, how payments are applied.
- Engage association counsel to draft or review the policy against the seven required items.
By early December 2026
- Review counsel's draft at a board meeting. Decide the payment-plan terms and the referral threshold — these are judgment calls the board must own.
- Confirm with counsel whether the policy should be adopted as a board resolution or through the rules process.
- Confirm the accounting system can apply payments the way the policy says it will.
By mid-December 2026
- Adopt the policy by recorded vote at an open meeting and record the vote in the minutes.
- Distribute the policy to every owner and post it wherever owners find association documents.
- Add the policy to the 22.1 or 1-35 resale document set.
January 2027 and after
- Follow the policy exactly. Run every delinquent account through the same steps on the same timetable.
- Review it at least once a year, at budget time, and re-adopt any changes the same way.
How does the policy fit with our existing delinquency process?
The policy should describe the process you already run, not replace it. A good escalation process — reminder, formal notice, attorney referral, lien, and where appropriate an eviction (forcible entry and detainer) action — becomes the backbone of the policy's attorney-referral and legal-remedies sections. The value is consistency: every owner treated the same, on the same timetable, with a document that proves it.
For the underlying steps, see our guides to a consistent delinquency escalation process, association liens and delinquencies, and the assessment collection possession action in Illinois.
Board checklist: is our policy complete?
- States the date assessments are due and the date they become delinquent.
- Lists late fees and interest the association is already entitled to impose.
- Lists any returned-check charge.
- States whether payment plans are available, when, and on what minimum terms.
- States the dollar amount or time period that triggers attorney referral.
- States how payments are applied to a delinquent account.
- Describes the legal remedies available under the governing documents and Illinois law.
- Reviewed by association counsel and adopted by recorded board vote.
- Distributed to all owners and added to the resale disclosure set.
- Manager and accounting procedures match the written policy.
How Stellar helps boards meet the deadline
Stellar works with association counsel to turn each board's existing collection practice into a written policy that covers all seven statutory items, then builds it into the monthly financial management routine so the association follows what it adopted. If your board needs the policy in place before January 1, contact our office or see how we support boards through board support. We serve associations across the city through Chicago property management and on the North Shore.
This article is general information for Illinois community association boards and is not legal advice. It summarizes Public Act 104-0734 as enacted; your declaration, bylaws and circumstances matter. Have association counsel draft or review your collection policy before you adopt it.