Free Act 221 Disclosure Form in PDF

Instructions on Writing Act 221 Disclosure

Completing the Act 221 Disclosure form is a critical step in the resale process of a condominium or townhome in Illinois. It is designed to provide prospective buyers with essential information about the financial and operational health of the condominium association. By following these instructions, the officer or managing agent of the association can ensure that all relevant information is accurately and succinctly provided, thereby complying with Illinois Law (Chapter 765, Section 605/22.1 of the Illinois Compiled Statutes).

1. Identify whether the Board of Managers of the condominium association or the designated managing agent is completing the form by striking out the incorrect option.
2. For statement 1(a), enter the monthly assessment amount, the unit number, and specify if the monthly assessment is paid in full and through what date. If there are past due sums, enter the amount due and specify the periods they cover.
3. Tick the appropriate box for statement 1(b) to indicate whether there are other monthly, special, or other assessments or charges due and provide details if applicable.
4. For statement 1(c), indicate if there are any special assessments currently under consideration. If yes, provide an explanation.
5. In statement 2, specify if capital expenditures are anticipated within the current or succeeding two fiscal years, and if yes, elaborate on the plans.
6. Enter the amount of the reserve or replacement fund for statement 3 and indicate if any portion is earmarked for specified projects, with an explanation if applicable.
7. Attach the association's most recent approved budget as required by statement 4.
8. For statement 5, reveal if there are any pending lawsuits or judgments involving the unit owner's association and provide details if necessary.
9. Fill out the insurance carrier information for the unit owner's association in statement 6, including the company name, address, contact name, telephone, and facsimile numbers.
10. In statement 7, certify whether any improvements or alterations made to the unit or the limited common elements assigned thereto by the current unit owner violate the condominium declarations, bylaws, rules, or regulations.
11. Enter the Association Name and Managing Agent’s Name (if applicable) at the bottom of the form.
12. The form must be signed by the agent of the association where indicated.

After completing and signing the form, it should be submitted to the appropriate party as directed in the resale process. This ensures that potential buyers have access to crucial information about the condominium association, fostering transparency and compliance with Illinois law.

What is the purpose of the Act 221 Disclosure form?

The Act 221 Disclosure form is a document that provides important information about the financial and operational status of a condominium or townhome association in Illinois. It’s designed to keep potential buyers informed about the health and management of the association, including any financial obligations, pending legal matters, or planned capital expenditures that could affect their decision to purchase a unit. Compliance with Illinois Law (Chapter 765, Section 605/22.1 of the Illinois Compiled Statutes) is required, ensuring transparency and protection for buyers.

Who is responsible for completing the Act 221 Disclosure form?

The form must be completed by an officer of the condominium association or a designated managing agent. This responsibility lies with those who have direct knowledge of the association’s financial status, legal matters, and operational details, ensuring that the information provided is accurate and up-to-date.

What information does the form include about monthly assessments?

The form includes details on whether the monthly assessments for a specific unit have been paid in full and if there are any past due amounts owed to the association. It also mentions if there are any other monthly, special, or additional assessments or charges due by the unit owner.

Are special assessments mentioned in the form?

Yes, the form specifies whether there are any special assessments currently under consideration by the Board of Managers. If there are, the nature and reason for these assessments are detailed, providing potential buyers with a clear understanding of any additional financial obligations that may arise.

Does the Act 221 Disclosure form include information on capital expenditures?

It does. The form indicates whether the unit owner’s association anticipates any capital expenditures within the current or succeeding two fiscal years. Potential buyers are informed of the amount reserved or earmarked for these expenditures, offering insight into the association’s future financial planning.

How does the form handle pending lawsuits or judgments?

The document requires disclosure of any pending lawsuits or judgments in which the unit owner’s association is a party. This information is crucial for buyers, as it can impact the association’s financial health and, consequently, the value of their investment.

What details about the association’s insurance are provided?

Details such as the name of the insurance company, contact information, and the type of coverage are provided. This information is essential for understanding how the association is protected against potential losses or liabilities.

Does the form include details about unauthorized improvements or alterations?

Yes, the form states whether there have been any improvements or alterations made to the unit or the limited common elements assigned to it that violate the condominium declarations, bylaws, rules, or regulations. This ensures that buyers are aware of any potential issues that might need rectification.

Is the association’s budget or financial statement provided with the form?

A complete copy of the association's most recent approved budget or statement of financial condition is attached to the disclosure. This gives buyers a comprehensive view of the association’s financial operations, reserve funds, and planned expenditures.

Who signs the Act 221 Disclosure form?

An authorized agent of the association is responsible for signing the form, ensuring that the information provided is verified and endorsed by the association. This affirms the form’s accuracy and reliability for potential buyers.

One common mistake people make when filling out the Act 221 Disclosure form is not being thorough in their responses. For instance, question 1 requires detailed information about the monthly assessments, including whether they are paid in full and if there are any past due sums. Often, individuals might overlook providing the specifics of the due periods, leading to an incomplete disclosure of financial status to potential buyers.

Another error involves the assessment of future expenses, as referenced in question 2 regarding capital expenditures. It’s crucial to accurately report if such expenses are anticipated within the current or succeeding two fiscal years. However, some might mistakenly answer "no" without properly consulting the association's financial projections or plans, potentially misleading buyers about future costs associated with the property.

Question 3 on the form asks for the amount in the reserve or replacement fund, a critical factor for buyers to understand the financial health of the association. A frequent mistake is failing to specify whether parts of this reserve are earmarked for certain projects. Providing clear information here helps buyers gauge how well the association prepares for future expenses, but this is often overlooked or inaccurately filled out.

The attachment of the association's most recent approved budget, as required by question 4, is another area where errors occur. Some individuals might attach outdated financial statements or forget to include this attachment altogether. This omission can lead to a lack of transparency and potentially mislead buyers about the association's financial condition.

Finally, question 7's inquiry about any improvements or alterations that might violate the condominium's declarations, bylaws, rules, or regulations is another critical section prone to mistakes. Sellers or managing agents sometimes mistakenly assert that there are no such violations, either because they are not well-informed about the specific alterations made by the unit owner or they fail to properly investigate. This can result in future disputes or legal issues for the buyer if undisclosed violations come to light after the purchase.

When engaging in the sale or purchase of a condominium or townhome, the Act 221 Disclosure Form is crucial for providing buyers with comprehensive information on the property's financial and management status. Alongside this form, several other documents are often required to ensure a transparent and informed transaction. Understanding these documents can aid buyers and sellers in making educated decisions.

• Resale Certificate: This document supplements the Act 221 Disclosure by offering detailed information about the condominium association, such as the governing documents, budget, and insurance coverage. It helps potential buyers understand the rules, fees, and financial health of the association.
• Minutes of the Most Recent Association Meetings: The minutes from recent condominium association meetings can provide insights into ongoing issues, future projects, or any disputes within the community. It’s a window into the association's operations and priorities.
• Condominium Declaration and Bylaws: These foundational documents of the condominium association outline the rights and responsibilities of the unit owners and the association. They detail the governance structure, unit boundaries, common elements, and the rules and regulations governing the property.
• Rules and Regulations: In addition to the bylaws, a document detailing the specific rules and regulations for residents covers everyday living aspects, such as pet policies, noise restrictions, and amenity usage. It ensures potential buyers are aware of the lifestyle and conduct expected within the community.

Incorporating these documents with the Act 221 Disclosure Form offers a holistic view of the property and its management. Buyers are equipped with essential details for an informed purchase, while sellers meet their legal disclosure requirements. This combination of documents fosters transparency in the transaction, contributing to a smoother process for all parties involved.

The Act 221 Disclosure form shares similarities with a Seller's Property Disclosure Statement often used in residential real estate transactions. This document, like the Act 221 form, requires the seller to disclose specific information about the property's condition and history, including repairs, warranties, and any known defects. This ensures transparency and informs potential buyers about the property's state before the sale is completed.

Similar to the Act 221 Disclosure, the Homeowners' Association (HOA) Resale Certificate provides crucial details to potential buyers, but this certificate focuses on the financial and operational status of an HOA community. It outlines monthly dues, any pending litigation, reserve funds status, and any special assessments on the horizon. Through this certificate, buyers gain insight into the community's health and any financial responsibilities they might inherit.

The Reserve Study is another document akin to sections of the Act 221 Disclosure, emphasizing the financial planning of an association. It assesses the longevity and replacement costs of major components in a community, like roofs or roads, and how these are planned for in the budget. This study indicates whether there are sufficient funds for future capital expenditures, a concern also addressed by the Act 221 form's inquiry into capital expenditures and reserve funds.

The Real Estate Transfer Disclosure Statement, mandatory in certain jurisdictions during real estate transactions, bears resemblance to the Act 221 Disclosure by necessitating the revelation of material facts about the property. This document covers a broader range of topics, including the condition of various home systems and any environmental hazards, aiming to protect buyers from unforeseen issues.

The Annual Budget Report shared by a condominium or homeowners association with its members is related to the Act 221 Disclosure form through its financial disclosures. This report details the coming year's budget, including expected income, expenses, and funds allocated for reserves, much like the budget and reserve fund disclosures found in the Act 221 form.

The Special Assessment Notice is issued by condominium or homeowners associations to inform members about additional fees charged beyond the regular dues to cover unexpected or underfunded expenses. The Act 221 form's queries regarding special assessments and capital expenditures reflect this document's purpose, highlighting potential extra costs to individuals considering purchasing a unit.

Finally, the Insurance Summary Document provided by condominium or homeowners associations outlines the community's insurance coverage details, similar to the section in the Act 221 Disclosure that lists the association's insurance information. This document is crucial for potential buyers to understand what damages or liabilities are covered by the association's policy, thereby indicating what additional insurance they might need to secure independently.

When completing the Act 221 Disclosure Form, it's essential to follow accurate and thorough procedures to ensure compliance with Illinois Law. Here are things you should and shouldn't do:

• Verify all information for accuracy before submission. Ensuring that details about dues, assessments, and capital expenditures are correct is crucial.
• Include detailed explanations for any "yes" answers that require it, especially regarding special assessments, capital expenditures, or pending lawsuits.
• Attach supporting documents, such as the association's most recent approved budget or statement of financial condition, as required.
• Ensure that the form is filled out by an authorized officer or managing agent of the association, as stipulated by the statute.
• Be clear about any special assessments under consideration or anticipated capital expenditures, providing specific details as needed.
• Disclose information about the reserve or replacement fund accurately, specifying whether any part of it is earmarked for a specific project.

• Avoid providing vague or incomplete answers, especially when discussing potential financial obligations or legal issues facing the association.
• Do not omit details about the insurance carrier for the unit owner's association, including complete contact information.
• Refrain from skipping sections or questions, even if they seem not to apply; explain why a section might not be relevant instead.
• Do not forget to sign and date the form, as an unsigned form may not be considered valid.
• Avoid delaying submission of the form. Timely disclosure is often required and can impact transactions.
• Do not make assumptions about what is known to the association; if uncertain about improvements or alterations that may violate regulations, investigate further before completing the form.

When navigating the details of the Act 221 Disclosure form, it's important to understand its purpose and contents accurately. This form is essential for disclosing specific information in condominium or townhome resale transactions in Illinois. Misinterpretations of its contents can lead to confusion or misinformed decisions. Here are ten common misconceptions about the Act 221 Disclosure form:

• Misconception 1: The disclosure form is optional. In truth, Illinois law mandates the completion and provision of this form to comply with Chapter 765, Section 605/22.1 of the Illinois Compiled Statutes, making it a required document in the resale process.

• Misconception 2: Only the Board of Managers can complete the form. The form clarifies that either the Board of Managers of the condominium association or the designated managing agent can fulfill this responsibility, allowing flexibility in the management of the disclosure process.

• Misconception 3: Monthly assessments are the only financial obligations disclosed. The form also inquiries about other monthly, special, or additional assessments or charges due, providing a comprehensive overview of the financial responsibilities associated with the unit.

• Misconception 4: Future special assessments are not covered. The form specifically asks if any special assessments are currently under consideration, helping prospective buyers understand potential future costs.

• Misconception 5: Information on capital expenditures is not detailed. Contrary to this belief, the form requires disclosure of anticipated capital expenditures within the current or succeeding two fiscal years, including details about the reserve fund allocated for such expenses.

• Misconception 6: The disclosure form doesn't include legal information. The form indeed requests details about any pending lawsuits or judgments involving the unit owner's association, which is critical information for a prospective buyer.

• Misconception 7: Insurance details are not required. The insurance carrier for the unit owner's association, including contact details, must be provided, giving insight into the association's risk management practices.

• Misconception 8: Improvements or alterations need not be disclosed. The form explicitly asks about any improvements or alterations to the unit or limited common elements that might violate the condominium's declarations, bylaws, rules, or regulations, ensuring the buyer is aware of any non-compliance issues.

• Misconception 9: The budget or financial statement is not attached. The most recent approved budget statement of the association's financial condition is a required attachment, offering transparency regarding its fiscal health.

• Misconception 10: Completion details are irrelevant. The form must be signed by an agent of the association, confirming its authenticity and compliance with the statutory requirements, thereby ensuring the form's validity in the disclosure process.

Understanding these aspects of the Act 221 Disclosure form is crucial for anyone involved in the resale of a condominium or townhome in Illinois. It ensures that buyers are fully informed about the property and its association, minimizing the potential for disputes or dissatisfaction post-transaction.

Filling out and using the Act 221 Disclosure Form is an essential process for those involved in the resale of condominiums or townhomes within Illinois. This form aims to create transparency and ensure that both buyers and sellers are fully informed about the property in question. Here are seven key takeaways about this process:

• The Act 221 Disclosure Form must be completed by either the Board of Managers of the condominium association or the designated managing agent. This ensures that the information provided is from a reliable and authoritative source.
• The form requires disclosure of the monthly assessment status, including any past due sums for the unit in question. This ensures buyers are aware of any outstanding fees before making a purchase.
• It includes information on other monthly, special, or other assessments or charges due to the association by the unit owner. This helps potential buyers understand their financial obligations beyond the purchase price.
• The form addresses whether any special assessments are currently under consideration. Knowledge of potential future assessments can significantly affect a buyer’s decision.
• Capital expenditures anticipated by the unit owner's association for the current or succeeding two fiscal years are disclosed. This information provides insight into the association's financial health and any upcoming improvements or maintenance that may affect the unit's value.
• The document necessitates the disclosure of the amount in the reserve or replacement fund for current or future capital expenditures, including whether these funds are earmarked for specified projects. This gives buyers a sense of how well-prepared the association is for future expenses.
• The form also covers pending lawsuits or judgments involving the unit owner's association, the association's insurance carrier details, and any known violations of the condominium declarations, bylaws, rules, or regulations by improvements or alterations made to the unit or limited common elements. This comprehensive approach ensures all parties are fully aware of any legal or regulatory issues that might impact the property's status or value.

In summary, the Act 221 Disclosure Form is designed to protect all parties involved in the resale of condominiums or townhomes by ensuring that buyers are fully informed about their potential investment. It provides a clear, comprehensive overview of the financial and legal status of the unit and the condominium association, facilitating a transparent and smooth transaction process.