Illinois guide
Illinois condo reserve study requirements
Illinois requires condo budgets after July 1, 1990, to provide for 'reasonable reserves' for capital expenditures and deferred maintenance under 765 ILCS 605. The statute does not define reasonable, does not require a formal reserve study, and explicitly permits owners to waive reserves by 2/3 vote (with conspicuous disclosure on resale financials).
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What 765 ILCS 605 requires for condos
Budgets after July 1, 1990, must provide for reasonable reserves. The board must consider future restoration, replacement, repair costs, and useful life of common elements. Independent professional reserve studies are permitted but not required. The Act does not impose a funding percentage. Older condos (pre-July 1990) may operate without reserves if their governing documents allow.
2/3 owner waiver right
Owners can waive the reserve requirement entirely by a 2/3 vote. A waiver must be conspicuously disclosed on resale financials. This is legal but a meaningful diligence flag — the building either has confidence in voluntary special-assessment funding or is deferring capital obligations.
CICAA HOA reserves
CICAA requires the proposed annual HOA budget to indicate amounts for reserves, repairs, taxes. There is no specific funding requirement and no waiver framework. Reserves are largely discretionary for Illinois HOAs.
Chicago-specific reserve considerations
For Chicago condos subject to FISP, the inspection's identified work materially affects realistic capital trajectory. Reserve adequacy must be measured against FISP-driven obligations, not just generic capital-program estimates.
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Illinois legal references
Informational only. Not legal advice. Always confirm against current statute and counsel.
Need help applying these Illinois statutes to your specific situation? We can connect you with state-licensed counsel and specialists familiar with this exact regulatory environment.
Find a Illinois specialist →Reviewer's checklist
- Request any voluntary reserve study and current reserve balance
- Confirm post-1990 condos have a reasonable-reserves budget line
- Check for any conspicuous 2/3 reserve-waiver disclosure
- For Chicago: compare reserves to FISP-identified capital needs
- Read 24 months of minutes for capital-planning discussions
- Identify recent special-assessment activity
- For HOAs: confirm budget shows reserve allocation per CICAA
- Verify D&O coverage triggers if reserves exceed $250,000
Want this same review on your actual documents? We do it free, with page citations you can verify.
Get my free risk report →Want every document to request before you buy in Illinois — with the local red flags and the statute behind each? See the complete Illinois condo due-diligence checklist →
Critical
Under 10%
Weak
10–30%
Fair
30–70%
Healthy
70%+
- Under 10%:
- Assessment likely imminent
- 10–30%:
- Elevated assessment risk
- 30–70%:
- Common, manageable middle
- 70%+:
- On track to fund replacements
Source documents
- Declaration & bylawsthe rules
- Budget & financialsthe money
- Reserve studythe big repairs
- Meeting minuteswhat the board fears
Cross-reference
The risk lives in the contradiction between documents.
An assessment in the minutes but not the estoppel; a reserve the budget never funds.
Risk report
Severity-graded across 8 categories.
Every finding cites the document, page number, and quoted text.
How CondoSignal reviews this
We read the reserve study, operating budget, and 24 months of meeting minutes together — illinois condo reserve study requirements risk usually lives in the contradiction between documents, not in any single one of them. Every finding cites the source document, the page number, and the quoted text behind it.
See our 8-category framework →Risk Intelligence
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Most buyers get 7–14 days to review condo documents. Upload the packet — we read the reserve study, budget, minutes, and insurance summary and flag the risks, every finding linked to the exact page. Free.
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We can connect you with vetted real estate lawyers, mortgage brokers, and insurance brokers familiar with the specifics of condo and HOA transactions.
- Reserve fund engineer
- Property manager
- Building envelope consultant
- Restoration contractor
Related risk areas
Read these next to round out your due diligence
Special assessments
Special assessments are the single largest source of financial surprise in condo and HOA ownership.
Condo document review
A condo document review is the structured analysis of every disclosure document your seller or association has provided — declaration, bylaws, rules, reserve study, budgets, financials, meeting minutes, insurance summary, estoppel or resale certificate, and any pending special assessment notices.
Insurance risk
The association's master insurance policy determines what your personal HO-6 policy needs to cover — and what it does not.
Related reading
Guides for Illinois buyers and owners
How to Read a Reserve Study Before Buying: Is the Funding a Red Flag?
Reserve studies are dense engineering-financial documents. Learn what percent funded and baseline funding mean, how to spot unfunded repairs, and when the numbers are a special-assessment red flag — before you buy.
Chicago FISP and Balcony Inspections: What Condo Buyers Should Verify
Chicago's FISP facade inspection program plus 2023 balcony-inspection expansion creates a unique diligence overlay. Here is how to read the reports and compliance status.
Chicago Condo Deconversion Risk: What Buyers Should Know About Section 15 Exit Exposure
Chicago is the country's most active condo deconversion market. Under 765 ILCS 605/15, a 75% owner vote can force you to sell at a price you didn't agree to. Here is how to read the documents for it.
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Owner guides for the notice you just got
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Reviewed by Kirk Hasley, Founder. Every claim here is checked against current Illinois statute and primary sources, using the same documented review framework we run on every file. Last reviewed June 13, 2026.
FAQ
Frequently asked questions
What a finding looks like
Every finding cites the exact page in your documents
“The board approved a $15,000-per-unit special assessment for façade repairs, payable over 12 months.”
Source: Board meeting minutes, p. 12 — quoted and linked in your report so you can verify it in seconds.
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We surface what your documents actually say so you can ask better questions of your attorney, lender, and inspector.
Risk Intelligence
Review the documents before your contingency ends
Most buyers get 7–14 days to review condo documents. Upload the packet — we read the reserve study, budget, minutes, and insurance summary and flag the risks, every finding linked to the exact page. Free.
Expert Matching
Need a real estate lawyer or mortgage specialist?
We can connect you with vetted real estate lawyers, mortgage brokers, and insurance brokers familiar with the specifics of condo and HOA transactions.
- Reserve fund engineer
- Property manager
- Building envelope consultant
- Restoration contractor