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.
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 — it does, so underfunding may be a compliance issue.
- Check the remaining life of the roof, elevators, and façade.
- Remember delinquent-owner debt carries a super-lien in Illinois (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), which raises everyone's risk.
- 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.
Related guide
Illinois reserve studies — the full guide →This page answers what to do right now. For how reserve studies works in Illinois — the law, the process, and what to check before you buy or sell — read the full state guide.
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