The Paid Assessment Letter Guide for Chicago Sellers

A Paid Assessment Letter is a financial receipt from your Homeowners Association that tells every party in the transaction whether your unit’s account is current. It confirms whether there are any outstanding dues, fines, special assessments, or other charges sitting on the property. Whenever a home is governed by an HOA, you are required to disclose that fact on the purchase agreement, and the Paid Assessment Letter is one of the most important pieces of paperwork that follows from that disclosure. If you own a townhome or condominium in the Chicago area, the PAL will almost certainly be a required step in your closing, and getting it right matters more than most sellers realize.

(This article was last updated April 2026)

The management company or Homeowners Association issues the PAL, and it reflects the HOA’s current financial picture for that specific unit. Illinois law requires a clear PAL before any condo or HOA-governed property can close, and the title company will not issue an insurance commitment without one. Our office orders and reviews paid assessment letters on every condo and townhome closing we handle across Cook and DuPage Counties, because this is one of the places where problems hide until it is too late to fix them cheaply. As part of our real estate closing services, we treat the PAL review as a mandatory checkpoint rather than a formality.

Why Do You Need a Paid Assessment Letter?

Illinois law (765 ILCS 605/22.1) requires that certain disclosures be made whenever a condominium unit changes hands. Among the most important is a statement of the unit’s account showing any unpaid assessments and charges owed to the association.

(2) A statement of any liens, including a statement of the account of the unit setting forth the amounts of unpaid assessments and other charges due and owing as authorized and limited by the provisions of Section 9 of this Act or the condominium instruments.

765 ILCS 605/22.1(b)

We refer to the full package of required documents as “22.1 disclosures” because they take their name directly from that section of the Illinois Condominium Property Act. Every condominium sale in the state includes these documents, and for good reason. The Homeowners Association holds a lien interest in your property that the law treats similarly to a mortgage lender’s interest. Just as a buyer would never close without knowing whether the mortgage is paid off, no buyer should close without knowing whether the HOA’s books are clear. When your property carries liens and covenants from the association, those obligations must be fully disclosed so that the buyer, the title company, and both attorneys can see the complete financial picture before anyone signs at the table.

22.1 Disclosure Requirements in Illinois

The 22.1 disclosure package under Illinois law includes a substantial set of documents that the seller must provide. Among the items the law requires:

• The association’s original declaration, the most current version of the bylaws, and any rules or regulations the board has adopted.
• Contact information for the condominium board, the HOA president, and the management company, including mailing addresses and phone numbers.
• A statement of all outstanding liens, unpaid assessments, and any fines or charges on the unit.
• The association’s projected annual budget and planned capital expenditures such as roofing, parking lot resurfacing, and common area repairs.
• The prior year’s audited or unaudited financial statements.
• Disclosure of any pending or threatened lawsuits involving the association, the building, or the land.
• The current balance of reserve funds, any reserve study the association has completed, and a summary of how those funds may be spent.
• Insurance information, including the building’s master policy (HO-6 or equivalent) and any gaps in coverage.
• Any unit-specific concerns, violations, or charges that the buyer should know about before closing.

What Exactly Is in a Paid Assessment Letter?

The PAL is narrower than the full 22.1 package. It is a focused financial snapshot of your unit’s standing with the HOA. When the title company receives a clean PAL, they can confirm that the association will not contest the sale or place a lien at the last minute. A complete Paid Assessment Letter should tell you:

• The monthly assessment amount for the unit.
• Whether the unit has any outstanding monthly fees, meaning past-due balances that need to be cleared before closing.
• Whether there are any pending or recently approved special assessments.
• Whether the association charges move-in or move-out fees and how much those fees are.
• Where assessment payments should be sent and the management company’s contact information.
• Whether the unit has any open inspection violations or compliance issues that could generate new charges.

Homeowner Association Specifics for Chicago

If your property is governed by an HOA, assessment fees are a fixed part of your monthly expenses. The fees on a paid assessment letter typically cover things like landscaping, hallway and common area cleaning, parking lot maintenance, and sometimes shared utilities like heating, gas, water, or air conditioning. The exact breakdown varies from one association to the next, and two buildings on the same street in the same suburb can have wildly different fee structures depending on the age of the building, the amenities it offers, and how well the board has managed the reserve fund over the years.

Special Assessments

Sometimes the HOA board will vote to impose a special assessment for an expense that the regular monthly dues cannot cover. This happens when a major repair comes up that the reserve fund cannot absorb, or when service costs increase faster than the board anticipated. Well-run associations try to avoid these surprises by maintaining healthy reserve funds and asking homeowners to contribute steadily over time, but even the best-managed buildings can face unexpected expenses.

Homeowners usually learn about pending special assessments through a letter from the board inviting them to a meeting where the expense will be discussed and voted on. In our practice, the most common special assessments we see involve parking lot resurfacing, roof replacement, tuckpointing, and tree removal, though the list can be longer depending on the property. The fees are generally split proportionally among all unit owners based on the percentage of ownership laid out in the declaration.

When an owner refuses to pay an assessment, the HOA has the right to pursue legal action, which in extreme cases can result in the owner losing the property through an assessment foreclosure. That outcome is rare, but having a Paid Assessment Letter in hand well before closing lets both the buyer and seller know exactly where they stand, with no room for unwelcome surprises.

How Much Does a Paid Assessment Letter Cost?

The cost depends on the HOA and its management company. Across suburban Chicago, a Paid Assessment Letter typically runs about $100, though some management companies charge more if they bundle it with the full 22.1 disclosure package or add administrative processing fees on top. A reasonable rule of thumb is to set aside roughly one month of HOA dues to cover the PAL and any associated disclosure fees when you decide to sell. That figure will not cover every situation, but it keeps most sellers from being caught off guard at the closing table.

What Does a Paid Assessment Letter Tell the Buyer?

If you are looking to purchase a property governed by an HOA, the paid assessment letter gives your attorney a direct look at the financial health of the unit you are about to buy. You should research the monthly assessment amount and work it into your budget alongside the mortgage, taxes, and insurance. It is also worth talking to current owners in the building about how well the board manages the association’s money, and if possible, asking to see the HOA’s most recent reserve study. Buyers can request additional documents beyond what the 22.1 disclosure requires, and meeting minutes are one of the most commonly requested items because they reveal how the board actually operates.

Between the 22.1 disclosures and the PAL, expect to spend a few hundred dollars in document fees. That cost is a fraction of what it would take to deal with an unpaid special assessment or a lien that surfaces after you have already closed, and it gives your attorney the information needed to advise you properly about the investment you are making.

Will a Paid Assessment Letter or 22.1 Disclosures Tell You Whether You Can Rent the Unit?

In Illinois, a condominium association can prohibit or restrict the leasing of units either through a board vote or a vote of the full membership, provided the restriction is written into the condominium declaration. If the board imposes the restriction on its own authority, courts will uphold it only if it is reasonable in both purpose and application. If the restriction is part of the declaration itself, it carries a stronger presumption of validity and will stand unless a court finds it arbitrary, contrary to public policy, or in violation of a fundamental constitutional right. That legal framework comes from Apple II Condominium Ass’n v. Worth Bank & Trust Co., 277 Ill. App. 3d 345 (Ill. App. Ct. 1995).

For prospective buyers, especially investors who plan to rent the unit out, this means you need to review the condominium declaration and related governing documents carefully before you close. A blanket leasing prohibition in the declaration can make the property a poor investment if your plan depends on rental income. We review these documents for buyers regularly, and the cost of having an attorney flag a rental restriction before closing is minimal compared to the cost of finding out after the fact.

Do You Need a Paid Assessment Letter for Every Type of Sale?

Not every real estate transaction requires one, but you should always run a title search regardless of the property type. The PAL is specifically required for condo and HOA-governed properties. If you are purchasing a single-family home that is not part of an association, you will not need one.

Where the PAL becomes especially important is in distressed sales. If you are purchasing a property at a sheriff’s sale following a foreclosure, you should know that Illinois law, specifically 765 ILCS 605/9(g)(1) and (g)(3), provides that purchasers at foreclosure sales take the property subject to existing HOA liens. That means past-due assessments survive the foreclosure and become the buyer’s responsibility. If you are bidding on sheriff’s sale properties, have your attorney examine the assessment history before you bid. We have saved clients thousands of dollars by catching unpaid assessments that would have transferred to them at the sale.

The Bottom Line on Paid Assessment Letters

The Paid Assessment Letter looks like a simple piece of paper, but it carries real weight in a condo or townhome transaction. Whether you are the seller who needs to show a clean account or the buyer who needs to know what financial obligations come with the unit, the PAL is the document that keeps both sides honest at the closing table. Getting it ordered early, reviewed by your attorney, and resolved if there are problems is one of the simplest ways to keep a transaction on track and avoid the kind of last-minute chaos that costs people money and sometimes kills deals entirely.

This article was originally written by Justin Abdilla and Kaylee Leffel. It has been updated to reflect current Illinois law and closing practices.