Every association eventually deals with an owner who stops paying. Until now, many Illinois boards handled delinquencies case by case — a reminder letter here, a call to the attorney there. Starting January 1, 2027, that approach stops working.
Public Act 104-734 adds a new subsection (t) to Section 18.4 of the Illinois Condominium Property Act. It requires every board to adopt collection policies and procedures, and it makes the requirement enforceable in a very direct way: no written policy, no lawsuit.
This guide explains what the law requires, what a practical collection process looks like, how to handle payment plans and hardship, and what owners who fall behind should know.
Why collections matter to every owner
A condo budget is a shared bill. When one owner stops paying, the association still owes the insurance premium, the utility bills and the vendors. The shortfall is covered by everyone else — through reduced reserves, deferred maintenance, or higher assessments next year.
Delinquencies can also affect the whole building's finances in less obvious ways. Lenders reviewing a condo project for mortgage eligibility look at the share of owners who are behind on assessments, and a high delinquency rate can make units harder to finance and sell.
That's why a clear, consistent collection process isn't about being harsh. It's about protecting every owner who pays on time.
What the new law says
Under the amended Section 18.4(t), an association — or anyone who buys or is assigned the association's debt — may not take legal action to collect common expenses unless it has adopted, and follows, a written policy governing the collection of unpaid assessments. The rule applies regardless of what the declaration, bylaws or rules say.
Two words deserve attention: adopted and follows. Having a policy in a drawer isn't enough. If the board skips its own steps — say, referring an account to an attorney earlier than the policy allows — expect the owner's lawyer to argue the association can't proceed.
What the policy must include
The law lists seven minimum elements. Your written policy must specify:
1. Due date and delinquency. The date assessments are due and when an unpaid assessment is considered delinquent.
2. Late fees and interest. Any late fees and interest the association may charge on a delinquent account.
3. Returned-check charges. Any fee for bounced checks or failed payments.
4. Payment plans. The circumstances, if any, under which an owner can enter a payment plan, and the plan's minimum terms.
5. Attorney referral trigger. The amount owed, or the length of time delinquent, before the account goes to an attorney for legal action.
6. Application of payments. How incoming payments are applied to a delinquent account — for example, to the oldest assessment first, or to fees before principal.
7. Legal remedies. The remedies available to the association under its governing documents and Illinois law.
Why this matters: the remedies at stake
Illinois gives condo associations unusually strong collection tools, which is part of why lawmakers want them used consistently:
Lien priority. Under Section 9(g), unpaid assessments, fines, interest, late charges, reasonable attorney fees and collection costs become a lien on the unit that ranks ahead of most other liens, except taxes and certain encumbrances recorded before the delinquency.
Eviction. Section 9.2 lets the board bring an eviction action against a defaulting owner or tenant under Article IX of the Code of Civil Procedure — a remedy many owners don't realize exists.
Attorney fees. Fees incurred because of an owner's default are added to that owner's share of common expenses.
All of these involve legal action. From 2027, all of them depend on having that written policy. (For a deeper look at these tools, see Condo Liens, Foreclosure and Eviction in Illinois: How Associations Collect Unpaid Assessments.)
Rules that already apply
The new policy requirement sits alongside existing limits:
No forbearance. Section 18(o) says the association has no authority to forgive or forbear the payment of assessments by any owner. A payment plan is fine; waiving what's owed is not.
Management collection fees. Under Section 9.2(c), fees charged by a manager for collections can only be added to an owner's account if they relate to collecting common expenses, are set out in the management contract, and the declaration or bylaws specifically authorize adding them.
Collection agency status. Collection of assessments by the association, the board or their authorized agents isn't treated as operating a collection agency under Illinois law.
What a practical collection timeline looks like
The law lets each association set its own timeline, as long as it's written down and followed. The example below shows how many associations structure the steps. It's an illustration only — your policy's dates, amounts and triggers should be set with your attorney and must match your declaration and bylaws.
Day 1: Assessment due.
Day 15 (example): Account considered delinquent; late fee posted as allowed by the governing documents; friendly reminder notice sent.
Day 30: Second notice sent, stating the balance, any late fees, and inviting the owner to contact the manager about a payment plan.
Day 60: Final notice before attorney referral, clearly stating the date the account will be referred and the added costs the owner may face.
Day 90 (or a set balance): Account referred to the association's attorney under the policy's referral trigger.
After referral: The attorney sends the required legal notices and, if the balance isn't resolved, pursues the remedies the board authorizes.
Notice how each step is triggered by the calendar, not by someone's memory or the board's mood. That's the consistency the new law is designed to produce.
Tips for effective notices
Keep the tone factual and respectful. Many delinquencies start with a job loss, a medical issue or a simple mistake. Early notices should invite a conversation.
Always state the balance clearly, broken down into assessments, late fees and other charges.
Explain how to pay and who to contact about a payment plan.
Say what happens next and when, so the owner isn't surprised by the next step.
Send notices to the address on file and, where the owner has authorized it, electronically as well.
Payment plans: set the terms in advance
The law requires the policy to state when payment plans are available and their minimum terms. Deciding this ahead of time is one of the most useful things a board can do, because it removes guesswork and favoritism.
Points to address in the policy:
Eligibility. Is a plan available to any delinquent owner, or only before attorney referral? Only once in a set period?
Down payment. Is a minimum initial payment required?
Length. What's the maximum length of a plan?
Current assessments. Most plans require the owner to stay current on new assessments while paying down the old balance.
Late fees during the plan. Will late fees continue to accrue while the owner is making plan payments?
Default. What happens if the owner misses a plan payment — does the account go straight to the next collection step?
Written agreement. Plans should always be in writing, signed by the owner.
Remember that a payment plan is a schedule for paying what's owed, not a reduction. The association can't forgive assessments under Section 18(o).
Handling hardship with fairness
Boards often want to help owners who are going through a hard time, and a payment plan is the right tool for that. What boards shouldn't do is make one-off exceptions that aren't in the policy. Treating one owner more leniently than another invites claims of unfair treatment — and under the new law, departing from the written policy could undermine the association's ability to collect in court.
If the board wants more flexibility for hardship cases, build it into the policy itself, such as allowing a longer payment plan when an owner documents a qualifying hardship. Then apply it the same way to everyone.
How to adopt your policy in 2026
1. Review your declaration and bylaws for existing late fee, interest and remedy provisions. The policy should match them.
2. Draft the policy with your attorney, covering all seven required elements.
3. Decide on payment plans. Setting minimum terms in advance — down payment, maximum length, what happens on a missed payment — makes delinquencies easier to resolve and treats owners consistently.
4. Adopt it by board vote at an open meeting. Record the vote in the minutes.
5. Distribute it to all owners and post it where owners can find it.
6. Build it into your workflow. Reminder letters, late-fee postings and attorney referrals should be triggered by the policy's timeline, not by someone remembering.
7. Audit old accounts. Before January 1, 2027, identify delinquent accounts likely to need legal action so they're handled under a policy that's already in force.
8. Train everyone who touches collections. Board members, the manager and accounting staff should all know the policy and follow it the same way.
Common mistakes to avoid
Adopting a policy that conflicts with the declaration's late fee or interest provisions.
Charging manager collection fees to an owner's account without the authorization Section 9.2(c) requires.
Referring an account to the attorney before the policy's trigger is reached.
Agreeing to waive assessments or fees informally.
Negotiating payment plans verbally, with no written agreement.
Failing to keep a clear record of each notice sent and each step taken.
Letting accounts sit for months with no action, then escalating suddenly.
Keep good records
For each delinquent account, the association should be able to show: when each assessment was due, when each notice was sent and to what address, what fees were posted and why, any payment plan and its terms, and when and why the account was referred. If a case ends up in court, that record is how the association shows it followed its policy.
For owners: if you fall behind
If you're having trouble paying your assessments:
Contact the manager early. Payment plans are usually easiest to arrange before an account goes to the attorney.
Ask for a copy of the collection policy so you know the timeline and your options.
Keep paying current assessments if you can, even while you work out the old balance.
Get any agreement in writing.
Don't ignore notices. Legal fees and costs added after referral can grow quickly and become part of what you owe.
Frequently asked questions
Does every Illinois condo association need a collection policy?
Under the amended Section 18.4(t), an association can't take legal action to collect unpaid common expenses without an adopted written policy that it follows, starting January 1, 2027.
Can the board forgive late fees or assessments?
The Act says the association has no authority to forgive or forbear the payment of assessments. Talk with your attorney about how this applies to fees and to any settlement of a disputed account.
Do we need owner approval to adopt the policy?
The policy is adopted by board vote at an open meeting. Check your declaration and bylaws for any additional requirements.
Does the policy apply to accounts that were already delinquent?
The law bars legal action without an adopted policy that the association follows. Adopt the policy before 2027 and work with your attorney on how to handle existing delinquent accounts under it.
The bottom line
If your association doesn't have a written collection policy, 2026 is the year to adopt one. After January 1, 2027, it's the price of admission to the courthouse. A clear, consistent policy also makes collections fairer, faster and less personal — for the board and for owners.
Related reading:
Condo Liens, Foreclosure and Eviction in Illinois: How Associations Collect Unpaid Assessments
How to Read Your Condo Association's Financial Statements (Without a Finance Background)
Fining Owners in an Illinois Condo: Notice, Hearings and Fair Enforcement
Adopting Your Condo Budget in Illinois: A Step-by-Step Guide for Boards
Pimmit Run Management drafts collection workflows around each association's adopted policy and runs every step — reminders, late fees, payment plans and attorney referrals — on schedule. Contact us if you'd like help getting ready for 2027.
This article is general information, not legal advice. Have your association's attorney review your collection policy before adoption.
This article is general information, not legal advice. Consult your association's attorney about your specific situation.