Illinois community association boards should begin preparing an Illinois association collection policy now, but they should not describe the requirement as enacted law yet.
As of August 5, 2026, Senate Bill 3527 has passed both chambers of the Illinois General Assembly and has been sent to the governor. The bill has not yet been listed as a public act.
If Senate Bill 3527 becomes law in its current form, condominium associations and common interest community associations would need to adopt and follow a written Illinois association collection policy before taking legal action to collect unpaid common expenses.
Because the bill passed before June 1 and contains no separate effective-date provision, it would generally take effect January 1, 2027, if enacted. Illinois law provides that a bill passed before June 1 without its own effective date becomes effective January 1 of the following year or when it becomes law, whichever is later.
That leaves boards with a limited preparation window. The strongest approach is not to wait for the first delinquent account in 2027. Boards should use the remaining months of 2026 to review their governing documents, coordinate with association counsel, align management procedures, and prepare an Illinois association collection policy that can be adopted promptly if the bill becomes law.
What Senate Bill 3527 Would Change
Many Illinois associations already have informal collection practices. Assessments are due on a certain date, late charges are added, reminder notices are sent, and seriously delinquent accounts are eventually referred to legal counsel.
The problem is that those steps may be scattered across the declaration, bylaws, rules, management agreement, board resolutions, attorney instructions, accounting procedures, and prior board practices.
Senate Bill 3527 would require those practices to be consolidated into an adopted Illinois association collection policy. The enrolled bill would amend both the Common Interest Community Association Act and the Condominium Property Act.
The proposed language states that an association, holder, or assignee of association debt could not take legal action to collect common expenses unless the association has adopted and follows a written policy governing unpaid assessments.
The phrase “and follows” is important. An Illinois association collection policy would not merely be another document placed in the association’s files. The board, management company, collection vendor, and legal counsel would need to use the policy consistently.
What an Illinois Association Collection Policy Would Need to Include
Under the enrolled version of Senate Bill 3527, an Illinois association collection policy would need to address seven subjects.
Assessment Due Dates and Delinquency
The policy must identify when common expenses are due and when an account becomes delinquent.
Boards should confirm that these dates match the declaration, bylaws, adopted budget, assessment notices, payment coupons, owner portal, and current accounting system. A policy that conflicts with the governing documents will create more problems than it solves.
Late Fees and Interest
The Illinois association collection policy must state the late fees and interest the association is authorized to charge.
The policy should not create charges that are unsupported by the governing documents or Illinois law. Association counsel should review both the board’s authority and the specific language used in the policy.
Returned-Payment Charges
The policy must explain any charge imposed when a check or electronic payment is returned.
Management and the association’s accounting system should apply this charge only when authorized and under the circumstances stated in the Illinois association collection policy.
Payment-Plan Eligibility
The policy must describe whether owners may enter a payment plan, the circumstances under which a plan is available, and the minimum terms.
The current bill language does not appear to require every association to offer every delinquent owner a payment plan. It does require the Illinois association collection policy to state the association’s position clearly.
Boards should decide who may approve a plan, whether an owner must remain current on new assessments, how long a plan may last, and what happens after a default.
Attorney Referral Threshold
The policy must identify the amount owed or the length of delinquency that triggers referral to an attorney.
This is where boards must make a practical decision. Referring accounts too early can increase costs and owner conflict. Waiting too long can impair cash flow and shift the burden of unpaid assessments onto owners who are paying on time.
The referral standard in the Illinois association collection policy should also match the management agreement and the instructions given to association counsel.
Application of Payments
The Illinois association collection policy must explain how partial payments are applied to an owner’s account.
This provision should align with the declaration, applicable law, accounting procedures, and advice from association counsel. An inconsistent application method can create disputes over whether payments were applied to current assessments, older balances, late charges, collection costs, or legal fees.
Available Legal Remedies
The policy must identify the legal remedies available under the governing documents and Illinois law.
This section should be drafted or approved by association counsel. It should describe the collection framework accurately without suggesting that every available remedy will be used in every case.
The Collection Policy May Become Part of Resale Disclosure
Senate Bill 3527 would also add the adopted Illinois association collection policy to information provided during certain unit resale transactions.
For common interest communities, the policy would be added to the information the board makes available to a prospective purchaser. For condominium associations, it would be included with the statutory resale disclosure documents that a seller obtains from the board.
That means the Illinois association collection policy may be reviewed not only by current owners, but also by prospective buyers, real estate attorneys, lenders, closing professionals, and title companies.
Ambiguous language, outdated fees, and procedures that do not match actual practice will become easier to identify.
Why Boards Should Not Copy a Generic Template
A template can provide a starting structure, but an Illinois association collection policy must match the association’s own declaration, bylaws, rules, assessment schedule, collection authority, and operational procedures.
A policy copied from another community may contain different grace periods, fees, interest provisions, payment-plan terms, notice requirements, or attorney referral standards.
The policy must also match what management actually does.
For example, if the Illinois association collection policy says an account is referred after 60 days but management routinely waits 120 days, the association may not be following its own adopted procedure. If the policy promises a notice that is never sent, the written procedure creates an avoidable inconsistency.
Boards should treat the policy as an operational document, not a legal formality.
A Practical Preparation Process for 2026
The board should first collect every document that currently affects assessment collection. That includes the declaration, bylaws, rules, prior board resolutions, management agreement, attorney collection procedure, payment-plan forms, late notices, owner statements, and resale disclosure package.
Management should then map the current collection timeline from the original due date through attorney referral. Every fee, notice, decision point, and responsible party should be identified.
This review frequently exposes gaps such as inconsistent late-fee timing, unclear payment application, undocumented exceptions, missed notices, and delayed legal referrals.
Association counsel should compare the proposed Illinois association collection policy with the governing documents and the final enacted version of the law. The board can then adopt the policy at a properly noticed meeting using the procedure required by the association’s governing documents and applicable statute.
After adoption, management should update:
- Accounting rules and charge codes
- Delinquency reports and internal timelines
- Owner notices and payment-plan forms
- Attorney referral procedures
- Resale disclosure packages
- Board and management checklists
The board should also understand where discretion remains and where the Illinois association collection policy requires consistent action.
Why the Illinois Association Collection Policy Matters
Assessment collection is not simply an accounting function. Unpaid assessments affect operating cash, reserve contributions, vendor payments, maintenance decisions, insurance obligations, and the financial burden placed on owners who remain current.
A well-designed Illinois association collection policy gives the board a defensible and repeatable process. Owners can understand what happens when a payment is missed. Management can apply the same timeline across accounts. Counsel receives referrals with the required documentation. Exceptions can be evaluated deliberately instead of being granted inconsistently.
An Illinois association collection policy can also reduce disputes by removing uncertainty before an account becomes seriously delinquent.
Williamson Management, Inc. supports Illinois condominium, townhome, and homeowner associations with assessment collection, financial reporting, governance coordination, resale administration, and day-to-day operational systems. Williamson Management cannot replace association counsel, but disciplined management can ensure that a board-approved Illinois association collection policy is translated into consistent accounting and collection procedures.
Because Senate Bill 3527 remains pending as of August 5, 2026, boards should verify its final status and enacted language before adopting or publishing a policy based on the bill.