Illinois SB 3527 makes a written collection policy a condition of suing for assessments
Illinois SB 3527 makes a written collection policy a condition of suing for assessments
2026-09-10 · Illinois · Legislation
What happened. Governor Pritzker signed SB 3527 on July 31, 2026 as Public Act 104-0734. From January 1, 2027, an Illinois condominium or common interest community association may not take legal action to collect unpaid common expenses unless it has adopted — and follows — a written collection policy meeting seven statutory minimums.1
The bill was not close. It passed the Senate 54-0 and the House 108-0.2
What the Act actually requires
P.A. 104-0734 amends four places at once: 765 ILCS 160/1-35 and a new subsection (j) of 765 ILCS 160/1-45 on the common interest community side, and a new subsection (t) of 765 ILCS 605/18.4 plus 765 ILCS 605/22.1 on the condominium side. The parallel drafting is deliberate — the duty is identical for both statutes.
The policy must specify, at a minimum, seven things:
- the date common expenses are due, and when an assessment becomes delinquent;
- any late fees and interest that may be imposed;
- any returned-check charges;
- the circumstances, if any, under which an owner may enter a payment plan, and that plan's minimum terms;
- the amount owed or the time elapsed before a delinquent account is referred to an attorney;
- how payments are applied to a delinquent account; and
- the legal remedies available under the governing documents and Illinois law.
Two features of the drafting matter more than the list. First, the restriction reaches a holder or assignee of the association's debt, not just the association — the Act defines both as “the entity.” An association that sells or assigns receivables does not launder the requirement away. Second, the adopted policy joins the mandatory resale disclosure package: it is new item (10) in 765 ILCS 605/22.1(a) and new item (8) in 765 ILCS 160/1-35(d), still furnishable within 30 days of written request.
Why this is a condition precedent, not a best practice
The operative words are “may not take legal action.” That is not a fine, a penalty, or a factor a court weighs. It is a gate on the courthouse door, and gates of that kind get raised as defenses.
What boards have to do before January 1, 2027
The compliance window is about sixteen weeks from publication, and it has three parts that have to be finished in order.
Adopt the policy at a properly noticed board meeting. The duty sits in the powers-and-duties sections of both Acts (605/18.4 and 160/1-45), which is where fiduciary obligations live. A policy circulated by email and never voted on is not adopted.
Reconcile it with the governing documents. Item (G) requires the policy to state the remedies available “under the governing documents and Illinois law.” If the declaration's late-fee provision and the policy's disagree, the association has manufactured its own defense. Read them side by side before adopting, not after.
Wire it into the 22.1 packet. This is the step most likely to be missed, because the resale disclosure is usually produced by the manager or a third-party vendor rather than the board. From January 1, 2027 a 22.1 response that omits the collection policy is incomplete.
The exposure for an association that misses it
Consider a collection action filed under 735 ILCS 5/9-102(a)(7) in January 2027 by an association whose policy was never adopted. The defect is not curable by adopting the policy mid-case, because the statute conditions taking the action, not maintaining it. At best the association dismisses and refiles, losing the filing fee and several months. At worst it does so after the owner has already run up a defense the association now pays for twice.
“And follows” is the sleeper clause. An association with a compliant policy that refers an account to counsel at 30 days when its own policy says 90 has not followed it. Boards that adopt an aspirational policy — payment plans they do not actually offer, referral thresholds they routinely jump — are writing the cross-examination themselves. Draft the policy to describe what the association will really do.
What it does not change
Nothing here touches the six-month priority lien under 765 ILCS 605/9(g), the association's remedies once a conforming policy exists, or the substance of what may be charged. This is a procedural precondition, and a board that treats it as a paperwork exercise will comply on time. The associations at risk are the self-managed ones with no manager to remind them.
What to watch next
Two things. Whether IDFPR's Ombudsperson publishes a model policy — the Office already publishes a sample complaint procedure under 765 ILCS 615/35, and the same logic applies here. And whether the first wave of 2027 defenses produces an appellate decision on what “follows” means, which is the ambiguity the drafting leaves open.
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