What 'percent funded' is too low?

There's no universal line, but below roughly 30% is generally considered weak and below 10% a strong warning sign — the lower it is, the more likely a special assessment when a major component fails. The trend over time matters as much as the single number.

How would underfunding affect me at resale?

The § 22.1 certificate discloses liens, a capital-expenditure schedule (current + 2 years), reserves, financials, litigation, and insurance. Reading the reserve study against the budget and your state's rule is the way to see it before closing.

Illinois • Reserve study / underfunding

Is your Illinois condo's reserve underfunded — and does the state require funding?

A reserve study can read as reassuring while quietly showing your Illinois building is years behind on saving for its roof, elevators, or façade. What matters is how funded the reserves actually are — and what Illinois requires.

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The short answer

Illinois does not require a reserve study and requires the association to fund it. Post-1990 condos must budget 'reasonable reserves,' but owners can waive them by a 2/3 vote (which must be prominently disclosed). No fixed funding percentage. A thin reserve is the most common reason a special assessment lands later, so the study-versus-actual-balance gap is the number that matters. CondoSignal reads your reserve study and budget against Illinois's rules. Free.

Illinois at a glance

Reserve study

Not required

No state mandate

Reserve funding

Required

Funded to the study

Super-lien

Yes

Limited 90-day priority for condos; a foreclosure purchaser is liable for 6 months of pre-foreclosure dues if the association sued before the sale

Resale disclosure

Cancellation right

No statutory rescission period

What Illinois requires

Post-1990 condos must budget 'reasonable reserves,' but owners can waive them by a 2/3 vote (which must be prominently disclosed). No fixed funding percentage. Whether a thin reserve is merely risky or actually out of compliance depends on that rule — which is the first thing to establish.

Why underfunding becomes an assessment

HOAs face a 115% rule — a budget raising total assessments more than 15% can trigger an owner referendum on a 20% petition (765 ILCS 160/1-45). No cap on amount. The 'percent funded' figure in the study, compared to the actual reserve balance, tells you how exposed you are.

What it means for collection and resale

Condo liens have limited super-priority (765 ILCS 605/9); HOAs have no statutory lien — it depends on the declaration. Judicial foreclosure only. The § 22.1 certificate discloses liens, a capital-expenditure schedule (current + 2 years), reserves, financials, litigation, and insurance.

Your rights in Illinois

As a Illinois owner, your reserve information and any approved special assessments should appear in the association's budget and resale disclosures (no statutory rescission period). None of this is legal advice — confirm against the current statute and a licensed professional in your state.

What to check

Find the reserve study's 'percent funded' figure.
Compare the recommended contribution to what's budgeted.
Confirm whether Illinois mandates reserve funding.
Check the remaining life of the roof, elevators, and façade.
Look for a reserve catch-up or a recent special assessment.
Check the study's date — an old study understates today's costs.

Sources

Illinois Condominium Property Act — 765 ILCS 605(High)
Common Interest Community Association Act — 765 ILCS 160(High)
765 ILCS 605/22.1 — resale disclosure(Medium-High)

Educational only — not legal, financial, or engineering advice. Confirm against the current statute and, where it matters, a Illinois-licensed professional.

FAQ

Frequently asked questions

Not sure what your documents are really telling you?

Get a free CondoSignal review of your situation — we read the paperwork against your state's rules and tell you what to do next. No cost, no obligation.