Illinois required condo and HOA boards to adopt a written collection policy. New York hasn't.

Illinois Senate Bill 3527, signed into law on July 31, 2026, addresses a specific gap in how condo and homeowners associations deal with delinquent owners: boards often had written collection policies, but nothing required them to adopt one, follow it consistently, or tell buyers what the policy says before purchase. SB3527 closes all three gaps. Starting January 1, 2027, every Illinois condominium association and common-interest community must adopt a written collection policy, follow it before pursuing any legal remedy, and include a copy in the resale disclosure packet that goes to prospective buyers. New York requires none of these things.

What Illinois SB3527 requires.

Illinois Senate Bill 3527 (104th General Assembly) amends the Illinois Condominium Property Act (765 ILCS 605/18.4) and the Common Interest Community Association Act (765 ILCS 160/1-45) to require that every association adopt a written collection policy before pursuing collection remedies against any delinquent owner. The policy must address seven specific items: when assessments are due, the late fee schedule, any returned check charges the association may impose, the terms under which the board will offer an installment payment plan, the dollar amount or delinquency period at which an account is referred to an attorney, the order in which partial payments are applied to an outstanding balance, and a statement of the legal remedies available to the association. That last item — payment application order — is the provision with the most direct financial consequence for owners.

The bill passed the Illinois Senate 54 to 0 and the Illinois House 108 to 0. Governor Pritzker signed it on July 31, 2026. The effective date is January 1, 2027, giving boards approximately five months to draft and adopt a compliant policy.

The enforcement mechanism is structural: an association cannot pursue any legal collection remedy against a delinquent owner if it has not adopted a compliant written policy. A lien filing, a referral to an attorney, or an application to the court all require the policy to be in place first. That provision removes the strategic advantage of keeping collection practices informal. A board that has never committed to a payment application order, a referral threshold, or a payment plan standard cannot enforce against a delinquent owner in Illinois court starting next year.

Why payment application order matters to unit owners in practice.

When a unit owner owes assessments, late fees, and legal fees, and makes a partial payment, someone decides which item to apply it to first. That decision determines whether the lien remains active or is released.

If the board applies the payment to attorney fees and late charges first, the assessment balance remains unpaid and the lien stays live, continuing to accrue. If the board applies the payment to the assessment balance first, the lien may be released even though legal fees remain owed as a separate debt. The financial outcome for the unit owner is different in each scenario, and so is the credit and title consequence.

Before SB3527, an Illinois board could apply payments in whatever order produced the result it wanted in a given dispute, switch that approach for a different owner, or change the practice mid-collection without any notice. Starting January 1, 2027, the approach must be specified in writing before collection begins. A board cannot apply one rule to an owner who has challenged a special assessment and a different rule to an owner who has not, because the written policy is the same document for all owners.

New York imposes no equivalent requirement. The New York Condominium Act gives condo boards lien and foreclosure rights under Real Property Law §339-aa, which was amended in October 2025 to add a 90-day mandatory notice period before a board may commence a lien foreclosure. The statute says nothing about payment application order, referral thresholds, or payment plan terms. No New York statute requires a condo or co-op board to have a written collection policy or specify in advance how partial payments are allocated. The managing agent who implements collection on the board's behalf is also under no obligation to follow any disclosed standard. New York requires no license to serve as a condo or co-op managing agent, as documented in the site's earlier post on what happens when a managing agent's conduct causes harm with no license to revoke.

The resale disclosure requirement Illinois added.

SB3527's second structural piece is the resale disclosure mandate. Beginning January 1, 2027, the collection policy must be included in the disclosure documents provided to prospective purchasers under the Illinois Condominium Property Act's resale disclosure section. An Illinois buyer will receive the policy before signing and can evaluate it as part of due diligence. If the policy specifies a short referral threshold or applies fees-first in its payment allocation, that is visible to the buyer. If the policy is owner-friendly, that is disclosed too. The information travels with the transaction.

New York's Real Property Law §461, the Property Condition Disclosure Act, explicitly excludes condominium units and cooperative apartments from its scope. No New York statute requires a seller to provide any collection-related document to a buyer before contract signing. The companion post on Washington WUCIOA's 26-item resale certificate maps the comparable disclosure gap; the Fannie Mae unavailable-list post documents the same RPL §461 exclusion in the financing context.

Business Corporation Law §624 gives co-op shareholders the right to inspect financial records, and Real Property Law §339-w gives condo unit owners a parallel inspection right. Both rights arise after closing, available to existing members. Neither creates a pre-closing right to see how the board handles collection against delinquent owners. A buyer purchasing a NYC condo or co-op has no statutory path to that information before signing.

How the absence of a written policy functions as a governance gap.

Without a written collection policy and without any disclosure obligation at resale, enforcement variability is unchecked. A board that applies a strict referral threshold to owners who challenge board decisions and a more lenient threshold to owners who do not is using the collection process as a form of pressure with no record of the inconsistency. A board that applies partial payments fees-first against one owner and assessment-first against another is producing different financial outcomes for different owners, with no disclosed rule that connects the decision to the owner's situation rather than to other factors.

The site's post on what happens when a developer stops paying common charges illustrates how collection mechanics work against a sophisticated opponent. In that scenario, the board had lien rights under RPL §339-aa, a 90-day notice period to navigate, and a first mortgage ahead of its lien in priority. The payment application order becomes relevant any time the developer makes a partial payment: the board's choice of what to satisfy first affects whether the lien survives. No New York statute requires that choice to be documented before the dispute begins.

The no mandatory financial disclosure to buyers issue page maps the broader gap of which financial facts New York allows to move through a condo or co-op transaction without disclosure. Collection policy is one item in that gap. Others include the building's reserve fund level, any pending special assessments, and whether the building is on Fannie Mae's unavailable list.

Where this sits in the national pattern.

Illinois is not the first state to address written collection policies for community associations. Florida's Condominium Act (Chapter 718) and HOA Act (Chapter 720) have long required associations to maintain written collection policies and follow them before pursuing foreclosure. Florida's Department of Business and Professional Regulation has enforcement authority over associations that violate those requirements. Minnesota's Chapter 82, signed May 12, 2026, addressed board fine caps and anti-retaliation protections. Washington's WUCIOA (RCW 64.90), as expanded to all associations on January 1, 2026, includes a 26-item resale certificate covering outstanding balances and pending enforcement actions.

In each case, the mechanism converts a board discretionary practice into a disclosed, documented standard that buyers and owners can evaluate. New York's framework relies on common law and the business judgment rule, under which courts apply a deferential standard to board collection decisions. That deference is not a problem in itself. The problem is that the discretion is exercised without a disclosed standard, and the discretion-holder needs no license and answers to no state regulator.

Bottom line.

Illinois SB3527 passed 54 to 0 and 108 to 0. That unanimous margin, across both chambers and both parties, reflects a legislative conclusion that a written, disclosed collection policy is a floor, not an advanced reform. New York's condo and co-op framework has no equivalent floor. A buyer can purchase a unit in a NYC condo or co-op without knowing how the board collects from delinquent owners. An owner can be subjected to collection practices that have never been written down or disclosed. No New York bill to require a written collection policy for condo or co-op boards has been introduced in the current session. The managing agent who will implement whatever unwritten approach the board uses needs no state license and faces no state regulator if the approach is applied unevenly.

Primary sources

Illinois SB3527 (104th General Assembly, signed July 31, 2026) — mandatory collection policy; resale disclosure requirement
Illinois Condominium Property Act, 765 ILCS 605/22.1 — resale disclosure section as amended by SB3527
Illinois Common Interest Community Association Act, 765 ILCS 160/1-35 — HOA disclosure section as amended by SB3527
NY Real Property Law §461 — Property Condition Disclosure Act; explicit exclusion of condo and co-op units
NY Real Property Law §339-aa — condo board lien and foreclosure rights; 90-day notice requirement added October 2025
NY Real Property Law §339-w — condo unit owner record inspection right
NY Business Corporation Law §624 — co-op shareholder inspection right
NY Senate Bill S.71 — managing agent licensure bill; no committee hearing in ten consecutive sessions

Companion resources: No mandatory financial disclosure to buyers · Managing agent licensure gap · Washington's 26-item resale certificate · Fannie Mae unavailable list: no seller disclosure · Managing agent harm with no license to revoke · Developer stopped paying common charges · What NYC condo and co-op owners can demand from the board · Illinois licensed community managers in 2010 · Write to your state representative