Bill
HB 2563
Illinois condo and HOA reserve studies must identify major components, estimate lifespans and costs, and fund needs, with updates every 5 years.
Status and key dates
- Bill: HB 2563 (104th General Assembly) — sponsored by Rep. Terra Costa Howard; co‑sponsors include Rick Ryan, Harry Benton, and Janet Yang Rohr. Companion: SB 2510.
- Enacted: Signed by the Governor 2025‑06‑20.
- Effective: 2025‑09‑01.
Purpose
- Require common interest community associations and condominium associations to conduct regular “reserve studies” to better identify, plan and fund future major maintenance, repair, and replacement of common/shared infrastructure and components.
Scope and statutory changes
- Amends:
- Common Interest Community Association Act (adds Section 1‑32; modifies Section 1‑35; 765 ILCS 160)
- Condominium Property Act (adds new Section 18.13; 765 ILCS 605)
- Applies to associations that have “major shared components or significant infrastructure” (see definition below). Associations of 15 or fewer units are exempt from the reserve‑study requirement but must still meet other budgeting and reserve obligations under the Acts or community instruments.
Key provisions
- Definition: “Major shared components or significant infrastructure” — common elements the association must maintain/repair/replace (structural, mechanical, electrical, plumbing and other infrastructure) with a restoration or replacement cost exceeding $10,000. Examples listed include roads, street lighting, hardscape, ponds/lakes, water features, pools, landscaping, accessory buildings, etc.
- Reserve study requirements:
- A “reserve study” must analyze reserves needed for future major maintenance/repair/replacement and must:
1. Identify each structural, mechanical, electrical, and plumbing component (and other association responsibility components).
2. State normal useful life and estimated remaining useful life for each component.
3. State estimated maintenance/repair/replacement costs for each component.
4. State the estimated annual reserve amount required to fund those future needs.
- Timing and deadlines:
- If an association had a reserve study conducted on or after January 1, 2024: update the study within 5 years of that study date and every 5 years thereafter.
- If an association has not had a reserve study on or after January 1, 2024: it must conduct a reserve study on or before January 1, 2028, and update it every 5 years thereafter.
- Qualified preparer: studies/updates must be prepared or compiled with information from a “qualified” person, organization, or business entity experienced with the relevant components. Associations may internally prepare a study only if it compiles input from qualified sources.
- Disclosure: the most recent reserve study (if any) must be made available to any prospective purchaser, upon request, in connection with resale of a unit.
Who is affected
- Primary: common interest community associations and condominium associations in Illinois that own/maintain major shared components exceeding $10,000 in replacement cost.
- Secondary: unit owners, boards of directors, prospective purchasers, and professionals/consultants that prepare reserve studies.
Potential impacts
- Financial planning: improved long‑term maintenance forecasting and more consistent reserve funding.
- Transparency: buyers gain access to condition/cost information for common elements at resale.
- Administrative/cost burden: associations may incur costs to commission qualified reserve studies and to periodically update them; smaller communities (≤15 units) are exempt from the study requirement but still must follow budgeting/reserve rules.
- No specific enforcement penalties are added in the text provided; compliance obligations are statutory.
Other notes
- House amendment added the parallel Condominium Property Act provision (new Sec. 18.13).
- The bill amends disclosure provisions (Sec. 1‑35) to explicitly include the reserve study among materials the board must make available on resale.
Compiled from official sources — confirm details with the bill’s official record.
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