60-Second Answer: What the Paid Assessment Letter Is

1. It’s a written statement from the association. Shows all amounts owed by the unit as of a specific date: regular assessments, special assessments, late fees, transfer fees, attorney fees if the association has initiated collection, and any capital contribution owed by the buyer.
2. Illinois law requires it. For condominiums, 765 ILCS 605/22.1 requires disclosure of specified information upon a unit owner’s written request. For homeowner associations, the Common Interest Community Association Act imposes a parallel obligation.
3. The association has 30 days to respond to a properly made request. In practice, well-run associations turn it around in 5 to 10 business days; struggling ones need the full 30.
4. The seller orders it, usually through the attorney, the management company, or directly with the association board. Fees typically range from $100 to $500 depending on the management company.
5. At closing, unpaid amounts get debited to the seller and the letter is the line item the title company uses to settle the association’s piece.

Why the Paid Assessment Letter Is Not a Formality

A buyer takes a condominium or HOA property subject to the association’s lien rights. If the seller leaves behind $6,000 of unpaid assessments and the letter never flags it, the buyer’s next letter from the association is a demand for $6,000 the buyer never knew about. Courts have enforced these assessments against new owners when disclosure wasn’t made, and the buyer’s recourse against a seller who has moved out of state is often theoretical.

The paid assessment letter protects the buyer by converting the association’s claim from a hidden cloud to a settled closing line item. It protects the seller by documenting exactly what was owed as of closing, making post-closing disputes clean.

Condo vs. Homeowner’s Association: Slightly Different Rules

Illinois Condominium Property Act (765 ILCS 605)

Section 22.1 governs what a condo seller must disclose and what the association must deliver. Required items include: the amount of regular assessments, the amount of any unpaid assessments, any known special assessments pending or coming due, the state of the reserve fund, the most recent budget, minutes of the last 6 board meetings, rules and regulations, and a statement of any capital contribution due from the buyer.

Common Interest Community Association Act (765 ILCS 160)

Applies to non-condominium associations like single-family HOAs and townhome developments. Parallel disclosure obligations, slightly different statutory citations, same practical effect.

Small HOAs and informal associations

Some subdivisions have associations that technically fall below the CICAA threshold. Disclosure practices vary. The smart move: request the letter anyway in writing and document what the association does or doesn’t produce.

What the Paid Assessment Letter Should Contain

• Unit address and unit owner name
• Effective date (letter is only good as of that date)
• Regular assessment amount and frequency (monthly, quarterly, etc.)
• Assessments paid through a specific date
• Any unpaid assessments with late fees and interest
• Pending or upcoming special assessments
• Transfer fee or move-in fee owed at closing
• Capital contribution or working-capital deposit required of the buyer
• Attorney fees or collection costs if any are attributed to the unit
• Reserve fund status
• Most recent financial statements or budget
• Rules, regulations, and bylaws
• Insurance information for the association’s master policy
• Litigation disclosure (any pending lawsuits involving the association)

Not every management company produces a complete packet on the first pass. An attorney review catches the gaps before they become closing-day problems.

When to Order the Paid Assessment Letter

For a 30-day close, order the letter within the first 5 business days after the contract is signed. For a 45 or 60-day close, order it within the first 10 days. Reasons to order early:

• Associations can take 14 to 30 days to produce the packet
• Finding a pending special assessment early means time to negotiate who pays it
• Discovering a large unpaid balance early means time for the seller to either pay it down or get it credited from closing proceeds
• Discovering litigation or insurance gaps early means the buyer’s lender has time to react

The worst time to get the letter is the day before closing, when the surprises have no runway to get fixed.

Who Pays for the Letter and Who Pays the Assessments

The letter fee is almost always paid by the seller. Expect $100 to $500 depending on the management company. Some associations charge separately for each section of the disclosure. Some charge a flat fee for a complete 22.1 package.

Past-due assessments and late fees are the seller’s responsibility through the date of closing. These come out of the seller’s proceeds at the closing table.

Special assessments in effect before closing are the seller’s. Special assessments voted on and payable only after closing are typically the buyer’s. The contract allocates the in-between cases where the assessment was voted on before closing but is payable in installments that continue past closing.

Transfer fees and capital contributions are the buyer’s under most Illinois contracts. The buyer typically pays these at closing in addition to the purchase price.

Common Issues That Show Up in the Letter

The Buyer’s Lender Cares About This Letter

Conventional loans, FHA, and VA all have association eligibility rules. The paid assessment letter and the financial disclosures in the 22.1 packet feed directly into the lender’s underwriting:

• FHA condominium approval requires specific reserve, owner-occupancy, and litigation thresholds
• VA approval has a similar but shorter list
• Conventional (Fannie/Freddie) has condo project review and PERS approval for larger projects
• Portfolio lenders vary but typically review the same disclosures

A seller who lists a condo without understanding the association’s approval status can lose the first two buyers before finding one whose lender will fund.

How the Letter Gets Delivered at Closing

The final paid assessment letter arrives at the title company. The title company uses it to prepare the closing statement (the settlement statement or ALTA). Amounts owed by the seller reduce the seller’s proceeds. Amounts owed by the buyer increase the buyer’s cash to close.

After closing, the title company records the deed and transmits the association’s payment. The association updates its records to reflect the new unit owner, and the buyer starts receiving assessment invoices at the next billing cycle.

When the Letter Is Wrong or Incomplete

The letter is only as good as the association’s records. Mistakes happen:

• Assessment balance is wrong. Usually the association’s bookkeeping missed a payment. Seller produces canceled checks or bank statements, association corrects the letter.
• Special assessment missing. Board voted on it, management company hadn’t updated the packet. Harder to address same-day. Often requires a hold-harmless or escrow.
• Transfer fee amount wrong. Buyer shows up short on closing funds. Wires get held up.
• Rules and regs outdated. Buyer signs based on an old version. Later discovers new restrictions.

The attorney on each side reads the letter against the contract and against known disclosures. Gaps get addressed before closing, not after.

Related Content

For the full Illinois closing picture, see my posts on what an Illinois real estate attorney does and attorney review. For condominium-specific issues, an attorney review of the 22.1 packet within the first week of contract is the single most valuable piece of work on a condo sale.

Frequently Asked Questions

What is a paid assessment letter?

A written statement from a condominium or HOA showing all amounts owed by a unit owner as of a specified date, required for most Illinois condo and association closings.

Is the paid assessment letter required by Illinois law?

For condominiums, yes. 765 ILCS 605/22.1 requires the disclosure on a unit owner’s written request. For most HOAs, the Common Interest Community Association Act imposes a similar obligation.

Who orders the paid assessment letter?

The seller, usually through the listing attorney, real estate agent, or directly with the association’s management company.

How much does the paid assessment letter cost?

Typically $100 to $500, paid by the seller. Fees vary by management company and association.

How long does the association have to provide it?

30 days under Illinois law. In practice, well-run associations produce it in 5 to 10 business days.

Who pays past-due assessments at closing?

The seller, through the date of closing. The amounts are deducted from the seller’s proceeds on the closing statement.

Who pays special assessments?

Special assessments in effect before closing are generally the seller’s. Assessments voted after closing are the buyer’s. The contract governs allocation for assessments voted before closing but payable in installments.

What if the letter arrives the day before closing?

This is common and risky. Issues found at that point rarely have time to resolve before closing. A late letter is the usual cause of closing delays on condo transactions.