Illinois
LEGISLATIVE ACTION COMMITTEE LEGISLATIVE UPDATE By Patrick T. Costello, Co-Chair CAI Illinois Legislative Action Committee
THE 2024-2025 LEGISLATIVE SESSIONS AND THE RESERVE STUDY BILL
A Lesson of How The Road to Failure is Paved by a Desire for Ignorance
In the 2024 legislative session CAI Illinois’ Legislative Action Committee (ILAC) introduced House Bill 220 – the “Reserve Study Bill.” The Reserve Study Bill was designed to impart knowledge to boards, homeowners, prospective purchasers, lenders and insurers, regarding the condition of the major capital components within a community. At its core, the purpose of the bill was to protect residents by making sure all community associations are safe and secure. The bill simply requires associations to take a look at their major components and plan ahead for the inevitable replacement costs of these components. Effectively the bill required “knowledge.” Knowledge of the condition of the major components of the property, knowledge of life expectancy of various elements, and knowledge of the cost to repair, replace and maintain those major components. The hope was that associations would use this knowledge to plan ahead and provide safety and protect against unanticipated expenses.
In 2024 HB 220 passed the House 92-17. In the Senate, the bill passed the Judiciary Committee 8-0, but when it reached 3rd reading for final passage, a single state senator opposed the bill, and it never received a vote on the Senate Floor. The sponsors of the bill requested that the members of ILAC meet with a senator and representative who opposed the bill and attempt a compromise.
The opposing voices biggest concerns regarding HB 220 was that it would create unnecessary expenses by compelling a professional reserve study. Further, there
22 | COMMON INTEREST®
was a concern that the legislation did not exempt smaller associations. In an effort to address those concerns the language of the proposed bill was revisited and revised. In an effort of compromise and to address the concerns raised, ILAC introduced SB 1703 and its House companion HB 2563 in the 2025 legislative session. The new language in SB 1703 and HB 2563 ensured that communities were not required to hire a reserve study company and instead could “internally prepare a reserve study.” Additionally, in order to respect the concerns of small associations the new legislation specifically exempts all associations which have less than 15 units from compliance.
In summary, SB 1703 and HB 2563 would require an association to conduct and update a reserve study every 5 years; require a reserve study to be made available to any prospective purchaser of a unit upon request for a resale of any unit in the community; exempts a condominium association with 15 or fewer units; and that an association may do the reserve study internally which would limit an external expense.
Once again, following the introduction of SB 1703 and HB 2563, more meetings and negotiations ensued. ILAC was told by many legislators that this was a commonsense piece of legislation which they would support on a vote. Unfortunately, ILAC was also told by a small number of the same opposing legislators, that the bill was legislation in search of a problem where one did not exist. That the bill was unnecessary because if repairs were needed funds could easily be obtained. That more
• Summer 2025 • A Publication of CAI-Illinois Chapter
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