Preparing buyer questions about existing association contracts
Learn to evaluate condo association contracts by identifying key financial, maintenance, and governance documents essential for informed Illinois buyers.
The short answer
To protect your investment, you must investigate the association’s governing documents and existing contracts before closing. As an Illinois buyer, verify the declaration and current budget to confirm how association dues are managed and whether reserves are adequate for future maintenance. Never assume that current common element conditions match previous verbal descriptions without reviewing the board’s official records.
Analyzing the Declaration and Bylaws
The declaration acts as the foundational contract for the building. It defines your percentage of ownership in common elements, which dictates your share of common expenses.
Worksheet: Document the percentage of common elements assigned to your unit. Determine if the declaration includes specific restrictions, such as age requirements or leasing caps, which may impact your future use of the property.
Reviewing Annual Budget and Reserve Planning
The Board of Managers must provide an annual budget. This document reveals if the association is funding reserves for capital expenditures or relying on special assessments.
Worksheet: Check the reserve fund line item. If reserves appear low relative to the building's age, plan to ask a professional how the association intends to handle future major repairs.
Identifying Existing Maintenance Contracts
Associations often hold long-term contracts for property maintenance, insurance, and professional management. These costs are reflected in your monthly dues.
Worksheet: Request a list of active vendor contracts. Note whether any contracts are up for renewal, as this could trigger an increase in monthly common expenses.
Verifying Insurance Coverage Limits
Condo associations must maintain property insurance, general liability coverage of at least $1 million, and fidelity bonds. These protect the association's assets.
Worksheet: Confirm the current insurance policy covers the replacement cost of common elements. If the documentation seems incomplete, ask for proof of current coverage levels.
Checklist
- Obtain the official declaration and bylaws.
- Review the most recent annual association budget.
- Verify the reserve fund status for future repairs.
- Confirm association insurance meets statutory requirements.
- Check for existing board-approved special assessments.
Common questions
Can I hold the seller liable for incorrect association information?
The Residential Real Property Disclosure Act does not typically cover common elements of a condominium. You must verify association details through the board's records rather than relying solely on seller disclosures.
What is the consequence of unpaid association dues?
Unpaid expenses or fines create a lien on the unit in favor of the board of managers. This lien generally takes priority over other claims, except for specific tax liens or prior recorded encumbrances.
Sources
- CFPB — Closing Disclosure explainerChecked October 12, 2026
- Illinois Residential Real Property Disclosure ActChecked October 12, 2026
- Illinois Condominium Property Act — 2025 editionChecked October 12, 2026
- SQFT IO — Listing plans and termsChecked October 12, 2026
This guide is general educational content from SQFT IO, prepared with AI assistance. It is not legal, tax or loan advice. Talk with a licensed attorney, tax professional or lender about your situation. SQFT IO Illinois license 478.027617.