Illinois does not require reserve studies, but condominium association budgets must include 'reasonable reserves for capital expenditures and deferred maintenance' under the Condominium Property Act, 765 ILCS 605/9(c)(2) — and any independent professional reserve study is one of five statutory factors boards must consider in setting the amount. The reserve requirement can be waived, in whole or in part, only by a vote of two-thirds of the total votes of the association. Non-condo HOAs governed by the Common Interest Community Association Act have no statutory reserve-funding mandate.
Verified against the statute 2026-07-06
The reserve-funding mandate applies to condominium associations under the Condominium Property Act (all budgets adopted on or after July 1, 1990). Townhome, master, and other non-condo associations under the Common Interest Community Association Act face only budget-labeling and resale-disclosure duties for reserves, not a funding mandate; small CICAA-exempt communities have none.
No statutory reserve-study requirement or cycle; 'any independent professional reserve study' is one of the five factors condo boards must take into consideration when determining reasonable reserves (765 ILCS 605/9(c)(2)).
Condo budgets must provide reasonable reserves, set with regard to five statutory factors (replacement cost and useful life, anticipated investment return, any professional reserve study, financial impact of increases on owners and unit values, and ability to obtain financing). An association whose condominium instruments contain no reserve requirement may waive the statutory requirement in whole or in part by a vote of 2/3 of the total votes of the association, and may reinstate it by the same threshold; after a valid waiver, board members and managing agents are shielded from liability for reserve inadequacy.
On a prospective purchaser's demand, condo associations must disclose the status and amount of any reserve-for-replacement fund and earmarked portions (765 ILCS 605/22.1(a)(4)). If reserves are waived, that fact must be disclosed in the association's financial statements and highlighted in bold print in Section 22.1 responses (765 ILCS 605/9(c)(4)). CICAA resale disclosures must likewise state reserve fund status and amount (765 ILCS 160/1-35).
All budgets adopted on or after July 1, 1990 must provide reasonable reserves; boards must consider five factors, including repair/replacement cost and useful life, investment return, any independent professional reserve study, financial impact on owners, and financing ability. Waiver requires 2/3 of the total votes of the association and triggers mandatory disclosure.
On demand of a prospective purchaser, the association must provide a statement of the status and amount of any reserve for replacement fund and any portion earmarked for specified projects.
Non-condo common interest communities must only indicate which portions of the proposed budget are intended for reserves, capital expenditures, or repairs — there is no mandate to establish or fund reserves.
CICAA resale disclosures must include a statement of the status and amount of any reserve or replacement fund and any other fund specifically designated for association projects.
Independently re-verified July 2026 on the official Illinois General Assembly site (ilga.gov): 765 ILCS 605/9 confirmed — 'reasonable reserves for capital expenditures and deferred maintenance,' all five statutory factors including 'any independent professional reserve study which the association may obtain,' waiver by two-thirds of the total votes of the association (available to associations without a reserve requirement in their condominium instruments, reversible by the same vote), bold-print waiver disclosure in Section 22.1 responses and financial statements, and the post-waiver liability shield. 765 ILCS 605/22.1(a)(4) confirmed (status and amount of any reserve for replacement fund and earmarked portions). 765 ILCS 160/1-45 confirmed — CICAA requires only an indication of which budget portions are intended for reserves, with no funding mandate. Informational only — not legal advice. Confirm with the primary source and a community-association attorney licensed in Illinois. Report an issue.
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