Illinois HOA & Condo Assessment Collections: A Guide for Association Boards

Illinois has one of the most condominium-association-friendly collection frameworks in the country.  The Condominium Property Act gives condo boards automatic liens, a valuable super-lien that survives foreclosure sales, and multiple enforcement paths. HOAs operate under different rules with fewer statutory regulations. Whether you're managing a Chicago high-rise, a suburban townhouse community, or a downstate planned development, knowing which rules apply to your association helps determine how you approach delinquent accounts.

What Gets Funded

Illinois association assessments cover shared community expenses:

• Common areas—lobbies, hallways, landscaping, pools, parking structures
• Building infrastructure—elevators, boilers, chillers, fire systems, security equipment
• Utilities—common area electric, gas, water; sometimes individual units
• Taxes—property taxes on common elements
• Insurance—the association's master policy
• Reserves—funds designated for major repairs and replacements down the road

Special assessments handle major one-time expenses beyond reserve capacity. Illinois weather—brutal winters, summer storms and the freeze-thaw damage that comes with both—makes adequate reserves and timely collections essential. Aging buildings in Chicago and its older suburbs adds to the urgency.

Two Very Different Frameworks

Illinois treats condos and HOAs differently, and the distinction matters:

The Automatic Condo Lien

Under 765 ILCS 605/9(g), a condo association has an automatic lien the moment assessments become due. Recording is recommended to put buyers on notice, and is ultimately required before foreclosure can take place, but the underlying lien is automatic.

What Goes in the Lien

Illinois condo associations can include:

• Unpaid common expenses—regular and special assessments (dues)
• Fines—for rule violations
• Interest and late charges—per your governing documents
• Attorney's fees—reasonable amounts incurred in collection
• Collection costs—court costs, administrative expenses

Recovering these costs from the delinquent owner protects association reserves.

Lien Priority and the Super-Lien

Illinois follows "first in time, first in right" as the general rule—but the Condominium Property Act creates important exceptions.

The Six-Month Super-Lien

Here's where Illinois really helps associations. Under 765 ILCS 605/9(g)(4), when a unit sells at judicial foreclosure:

• A purchaser (someone other than the foreclosing bank) who buys the unit must pay up to six months of unpaid assessments that accrued before the foreclosure was filed. This covers assessments that would have come due under normal circumstances, not accelerated amounts
• The association must have "instituted an action" before foreclosure concludes to preserve this right

Critical point: Illinois courts interpret "instituting an action" to mean filing an actual lawsuit. Demand letters don't count. Recording a lien doesn't count. To preserve super-lien rights, file suit—a Forcible Entry and Detainer action works—before the bank's foreclosure wraps up.

When Banks Take Title

Different rules apply when the lender forecloses and ends up as the buyer:

• The bank becomes responsible for assessments starting the first day of the month after the foreclosure sale
• The association's lien for pre-existing amounts gets wiped out by the foreclosure
• For pre-foreclosure amounts, your only remedy against the former owner is a breach of contract action

Enforcement Options

Illinois gives associations multiple paths when owners won't pay.

Judicial Foreclosure

After recording the lien, associations can foreclose "in the same manner as a mortgage."  Illinois requires judicial foreclosure, which means:

• File a complaint in circuit court
• Court oversees the process
• Public sale under court supervision
• Potential deficiency judgment if sale proceeds fall short

Eviction Proceedings

Associations can also bring Forcible Entry and Detainer actions which:

• Pressures owners to pay
• Preserve super-lien rights by meeting the "instituted an action" requirement
• Allows association to gain possession to rent the unit and apply income toward the debt

Money Judgment

Associations also have the option to pursue a personal judgment against the owner, and if successful, collect through wage garnishment, bank levies, or other execution methods. However, it should be noted that personal judgments do not have the same level of success  as a foreclosure does.

The HOA Problem

Homeowners associations in Illinois face a different reality:

Typical Collection Steps

Demand Letter

Collection usually starts with a formal demand from association counsel. Many owners pay at this stage, especially when the letter outlines legal consequences of continued non-payment.

Lien Recording

If an owner ignores payment demands, a lien can be filed. While not required for enforcement (for condos),  it does provide notice to buyers, and is necessary before foreclosure. So it's worth doing.

Legal Action

When payment still doesn't come, associations can pursue foreclosure, eviction, or money judgment—or a combined approach depending on the situation. The amount owed, equity in the property, and the owner's overall financial picture all factor into the optimal collection strategy.

Time Limits

Illinois provides ten years to pursue consumer debts including association assessments - generous compared to many states.

But the longer waiting period can create problems:

• As balances grow larger they become harder to collect
• Super-lien rights can be lost if you don't file suit before a bank forecloses
• Association finances suffer shortfalls in the meantime

Owner Protections

Notice Requirements

Proper notice must precede collection actions. Courts require proof that associations have followed required procedures before granting foreclosure or other relief.

Payment Negotiations

Owners can negotiate payment plans or settlements. Some boards prefer payment plan arrangements that bring owners back to paid-in-full status, rather than deal with foreclosures. However, it should be noted that when owners default on their payment plan, it only puts off the inevitable, and the association must revisit the foreclosure process.

Bankruptcy

Filing bankruptcy can halt foreclosure temporarily, although the automatic stay period of a bankruptcy has limits. Furthermore, post-petition assessments generally remain the owner's responsibility.

How We Handle Illinois Collections

The Rickel Law Firm has been in operation since 1899. We know Illinois law—both the powerful tools available to condos and the more limited options HOAs face.

Illinois associations working with us enjoy:

• No costs in many cases. Our fees and collection expenses are first applied to the delinquent owner's balance, not the association's books.
• Online visibility. ONYX gives board members and managers 24/7 access to case status, payments, and progress.
• We keep it professional. Delinquent owners are still your neighbors. We pursue collections in step with state laws while treating delinquent owners with respect— this produces better results and keeps community relationships intact.
• Illinois experience. From the Condominium Property Act's super-lien requirements to the limitations HOAs face under the Common Interest Community Association Act, we know what works here.

Getting Started

Toleration of delinquent assessments can have a domino effect. When there is no repercussion for delinquency, other owners may be inclined to begin skipping payments too. Maintenance gets deferred, reserve funding falls short, and the burden falls on everyone except the owners who aren't paying. 

If your Illinois association has delinquent accounts, contact us for a free consultation.  Don't use funding from people who pay on time to collect from people who don't!  Contact Rickel Law. We'll explain the process and answer your questions. 

Call The Rickel Law Firm at 855-752-7156  or  www.rickellaw.com