Act 221 Disclosure Template

Guidelines on Filling in Act 221 Disclosure

Filling out the Act 221 Disclosure Form is an important step in the condominium or townhome resale process. This form ensures compliance with Illinois law, specifically Chapter 765, Section 605/22.1 of the Illinois Compiled Statutes. It requires detailed information about the financial and operational state of the condominium association, which will be useful for both sellers and buyers. Given its significance, it's crucial to approach this task with care and attention to detail to ensure all provided information is accurate and complete.

1. Choose the Appropriate Designation: STRIKE through either "Board of Managers of the condominium association" or "the designated managing agent" to indicate who is completing the form.
2. Monthly Assessment Details: Enter the Unit Number in the space provided, and specify if the monthly assessment for this unit is paid in full. Indicate the period covered and list any past due sums along with the periods they relate to.
3. Assessments and Charges: Specify if there are other monthly, special, or other assessments or charges due by checking the appropriate box and provide details if applicable.
4. Special Assessments: Indicate whether any special assessments are currently under consideration and provide an explanation if necessary.
5. Capital Expenditures: Disclose if any capital expenditures are anticipated within the current or succeeding two fiscal years and explain if applicable.
6. Reserve Funds: Report the amount in the reserve or replacement fund for future capital expenditures, and specify if any part of this reserve is earmarked for a specific project.
7. Attach Budget: Include a complete copy of the Association's most recent approved budget or financial statement.
8. Legal Matters: Indicate if there are any pending lawsuits or judgments involving the unit owner's association. If there are, provide explanations.
9. Insurance Information: Fill in the insurance carrier's details for the unit owner's association, including the name of the company, address, contact name, telephone number, and facsimile.
10. Compliance with Declarations: Confirm whether there are any violations of the condominium declarations, bylaws, rules, or regulations by any improvements or alterations made to the unit or its assigned limited common elements.
11. Sign and Date: The form must be signed by the agent of the Association. Include the Association Name and Managing Agent’s Name (if applicable).

Once the Act 221 Disclosure Form is completed and signed, it should be reviewed for accuracy before submission. Providing a complete and accurate submission is critical for a transparent and smooth transaction process for both parties involved. Following the submission, the next steps typically involve the processing of the form by the relevant parties, potentially including lawyers, real estate agents, and the parties to the transaction itself. This form plays a crucial role in providing essential information needed for the prudent buying and selling of condominium units.

What is the purpose of the Act 221 Disclosure Form?

The Act 221 Disclosure Form is used to provide potential buyers with essential information regarding the financial and physical status of a condominium or townhome association, in compliance with Illinois Law (Chapter 765, Section 605/22.1 of the Illinois Compiled Statutes). It provides transparency on assessments, special charges, capital expenditures, reserve funds, pending lawsuits, insurance details, and any unauthorized improvements or alterations made to the unit or its limited common elements.

Who is responsible for filling out the Act 221 Disclosure Form?

The Board of Managers of the condominium association or the designated managing agent of the association is responsible for completing the Act 221 Disclosure Form. This individual or group provides detailed statements on various conditions of the property on behalf of the association.

What kind of financial information is disclosed in the form?

1. Current status of the monthly assessment for a specific unit, including any past due amounts.
2. Existence of other monthly, special, or additional assessments or charges due by the unit owner.
3. Whether any special assessments are currently under consideration by the Board of Managers.
4. Anticipated capital expenditures by the unit owner's association for the current or succeeding two fiscal years.
5. The amount in the reserve or replacement fund for future capital expenditures.

What additional important information does the form provide?

• A copy of the association's most recent approved budget or statement of financial condition.
• Information on any pending lawsuits or judgments involving the unit owner's association.
• Details regarding the association's insurance carrier, including the name of the company, address, contact name, telephone, and facsimile numbers.
• Confirmation of any violations of the condominium's declarations, bylaws, rules, or regulations concerning improvements or alterations made by the current unit owner.

Is the form applicable only for sales transactions?

While primarily used for resale and disclosure purposes in a sales transaction, the information within the Act 221 Disclosure Form can also be valuable for current unit owners and potential renters to understand the financial and physical status of the condominium or townhome association.

What happens if there are pending lawsuits against the association?

If there are pending lawsuits or judgments in which the unit owner's association is a party, the form requires a detailed explanation of these legal matters. This disclosure helps buyers make informed decisions before purchasing a unit within the association.

How often should the form be updated?

Although the form does not have a specified update frequency, it should be completed with the most current information available at the time of a sale or when requested by a potential buyer. Significant changes within the association, such as new assessments or lawsuits, warrant an update to the disclosure.

Are there legal consequences for not providing the Act 221 Disclosure Form?

Failing to provide the Act 221 Disclosure Form or providing inaccurate or incomplete information can lead to legal consequences, including potential lawsuits. Transparency and accuracy are essential to avoid disputes and ensure compliance with Illinois Law.

Where can I obtain an Act 221 Disclosure Form?

The form is typically available through the Board of Managers of the condominium association, the designated managing agent, or legal representatives specializing in real estate. It may also be accessible through online resources that offer legal forms specific to Illinois condominium and townhome associations.

Filling out the Act 221 Disclosure Form is a crucial step in the process of selling a condominium or townhome. However, people often make errors that can complicate this process. Here are ten common mistakes:

1. Not clarifying who is completing the form – whether it’s the Board of Managers of the condominium association or the designated managing agent.
2. Failing to accurately state if the monthly assessments for the unit are paid in full up to the current date.
3. Omitting details about past due sums, including the amount and the period they are due for.
4. Inaccurately stating whether there are other monthly, special or other assessments or charges due by the unit owner.
5. Forgetting to mention whether any special assessments are under consideration by the Board of Managers and not providing an explanation if there are.
6. Incorrectly stating whether capital expenditures are anticipated by the unit owner's association within the current or succeeding two fiscal years without explanation.
7. Misreporting the amount in the reserve or replacement fund for current or future expenditures and whether any part of this reserve is earmarked for a specific project by the board of Managers.
8. Overlooking the attachment of the association's most recent approved budget or statement of financial condition.
9. Incorrectly stating whether there are pending lawsuits or judgments involving the unit owner's association and failing to provide explanations if there are.
10. Neglecting to verify and disclose information about any improvements or alterations made to the unit or the limited common elements assigned thereto that violate the condominium declarations, bylaws, rules, or regulations.

To ensure a smooth disclosure process, it's important to:

• Read the form thoroughly before filling it out.
• Verify all information for accuracy.
• Attach all required documentation.
• Seek clarification on any items you are unsure about.

Taking the time to properly complete the Act 221 Disclosure Form avoids delays and complications in the sale process, ensuring a transparent and smooth transition for all parties involved.

When dealing with real estate transactions, particularly in the realm of condominiums and townhomes, the Act 221 Disclosure Form plays a crucial role. However, it's just one piece of the puzzle. To ensure a smooth and well-informed transaction, several other documents and forms typically accompany the Act 221 Disclosure Form. Let's delve into some of these essential documents, shedding light on their significance in the process.

• Resale Certificate: This document provides a snapshot of the current financial health and legal standing of the condo association. It includes information on budgets, insurance, and any pending litigation, offering potential buyers insight into what they're investing in.
• Budget Summary: A detailed breakdown of the association's annual budget. It contains information about income, expenses, and reserves, giving potential buyers a clear view of the association's financial planning and stability.
• Rules and Regulations: These documents outline the dos and don'ts for residents within the condominium association. Understanding these rules is essential for prospective buyers to ensure their lifestyle aligns with the community standards.
• Board Meeting Minutes: Reviewing the minutes from recent board meetings can offer prospective buyers insights into the issues and challenges the association is dealing with. It's an excellent way for buyers to gauge the community's dynamics and how decisions are made.
• Warranty Deed: This is a document that provides proof of a property's ownership. It shows the transfer of the title from the seller to the buyer, ensuring that the buyer is becoming the legitimate owner of the property.
• Title Insurance Policy: Protects buyers (and their lenders) from potential loss in the event of a title dispute. It ensures that the seller has the legal right to sell the property and protects against any liens or encumbrances on the title.

The journey of purchasing a condominium or townhome involves navigating through a multitude of documents, each serving its purpose towards ensuring a fully informed and legally sound transaction. From understanding the financial health and regulations of the association to ensuring the legitimacy of ownership and protection against possible disputes, the companions to the Act 221 Disclosure Form are indispensable guides. They come together to paint a comprehensive picture of what buyers are stepping into, making their decision-making process more informed and safeguarded against unforeseen legal and financial issues.

• Home Resale Disclosure Form: Similar to the Act 221 Disclosure Form, the Home Resale Disclosure Form provides potential buyers with important information about a home before purchase, including any fees, assessments, or legal issues associated with the property. Both forms aim to ensure transparency and protect the buyer's interests.

• HOA (Homeowners Association) Disclosure: This document shares its purpose with the Act 221 Disclosure Form by informing potential buyers about the financial health and regulatory environment of a homeowners association, including dues, capital reserves, and any pending litigation, which mirrors the information required for condominium associations in the Act 221.

• Lead-Based Paint Disclosure: While focusing on a specific health risk related to older homes, the Lead-Based Paint Disclosure, like the Act 221 Disclosure Form, is mandated to protect buyers by providing critical information before a transaction, in this case about the presence of lead-based paint.

• Property Insurance Claims Disclosure: Similar to disclosing the insurance carrier information and any pending lawsuits in the Act 221 Disclosure, this form informs the buyer of any past insurance claims on the property, providing insight into potential issues or damages previously sustained.

• Real Estate Condition Report: Just as the Act 221 requires disclosure of any violations of the condominium's declarations, bylaws, rules, or regulations, this report discloses the overall condition of a property, including any defects or problems, ensuring that the buyer is aware of what they are purchasing.

• Special Assessment Notice: Similar to part of the Act 221 Disclosure that deals with assessments, this notice informs property owners of additional fees assessed for specific projects or improvements, highlighting financial obligations that may affect the buyer's decision.

• Seller’s Disclosure Form: This general real estate form, like the Act 221 Disclosure, requires sellers to disclose comprehensive information about the property's condition and history, aiming to provide buyers with a clear understanding of what they are buying.

• Environmental Hazards Disclosure: While focusing on environmental concerns, this form, like the Act 221 Disclosure, is designed to inform buyers about potential hazards (e.g., flood zones, earthquakes) that could affect the property, thereby ensuring informed purchasing decisions.

• Building Code Compliance Form: This document declares a property's compliance with local building codes, akin to the section in the Act 221 Disclosure that addresses any improvements or alterations made in violation of condominium regulations, both ensuring the property meets legal standards.

• Mold Disclosure Form: Focused on a specific property condition, the Mold Disclosure Form, like the Act 221 Disclosure, requires sellers to inform buyers of any known mold issues, which could impact health or property value, ensuring buyer awareness and protection.

When dealing with the Act 221 Disclosure form, specifically relating to condominium or townhome resales, accuracy and thoroughness are key. Here's a list of do's and don'ts to ensure the process is smooth and compliant with Illinois law.

Do:

• Read through the entire form before starting to fill it out, ensuring a clear understanding of each section.
• Verify all the information regarding dues, assessments, and charges due to the association to prevent any misinformation.
• Attach the most recent approved budget statement. This document is crucial for transparency and provides clarity on the financial health of the association.
• Consult with other board members or managing agents, if necessary, to confirm the details about pending lawsuits, special assessments, or capital expenditures.
• Clearly indicate any known improvements or alterations made to the unit or its associated limited common elements that may contravene the condo's declarations, bylaws, rules, or regulations.
• Check for accuracy in the details provided regarding the association's insurance carrier, including the name of the company, address, and contact information.
• Ensure that the form is completed by an authorized officer or managing agent of the association, as required.

Don't:

• Leave any sections blank. If a section does not apply, clearly mark it as "Not Applicable" or "N/A" to indicate that it has been considered and determined irrelevant for your specific situation.
• Provide estimated or inaccurate financial information. All amounts and statements related to assessments, reserves, or capital expenditures should be based on the most current data.
• Ignore questions about pending lawsuits or judgments. Failing to disclose such legal matters can lead to further complications and liabilities.
• Omit attachments that are requested, like the association’s most recent approved budget. These documents are part of the full disclosure and are necessary for compliance.
• Guess on details about insurance or special assessments. It's better to verify the information than to provide incorrect details that could mislead potential buyers.
• Attempt to hide or underplay any known issues with the unit or common elements that could affect the integrity of the disclosure form.
• Sign the form without verifying that all provided information is true and accurate to the best of your knowledge. The signature certifies that you have complied with the requirements and are aware of the consequences of providing false information.

Navigating through the complexities of real estate transactions can sometimes be tricky, especially when it comes to condominiums or townhomes. A pivotal document in this process is the Act 221 Disclosure Form, specifically designed for the state of Illinois. Despite its importance, there are several misconceptions surrounding it. Let's clarify the most common misunderstandings.

• The Act 221 Disclosure Form is Optional: Contrary to what some may believe, this form is a mandatory document for the resale of a condominium or townhome in Illinois. As stipulated by the Illinois Compiled Statutes, it must be completed by an officer or managing agent of the Association to comply with the law. This form plays a crucial role in informing the buyer about the financial and physical condition of the property.
• Only Financial Information is Required: While financial disclosures, such as monthly assessments, pending lawsuits, or the reserve fund status, are certainly a major component, the form also requires disclosures about the physical condition of the unit and the overall property. It even includes information about any modifications that may contradict the association's bylaws or regulations.
• Personal Information of the Seller is Needed: The form is designed to disclose information about the property and the association, rather than personal details of the seller. Its primary purpose is to ensure the buyer is aware of any financial obligations or legal matters involving the property that could affect their decision to purchase.
• The Form Can Be Completed Without Consulting the Association: This is a misconception. The form explicitly requires information that only the association's board of managers or designated managing agent would have, such as details about possible capital expenditures, the reserve fund, and pending legal actions. Completing this form independently isn't advisable or even feasible.
• There's No Need to Update the Form After Initial Completion: Updates might be necessary if significant changes occur between the time the form is first completed and when the actual sale happens. For example, new assessments might be levied or legal issues might arise, requiring the disclosure form to be updated to accurately reflect the property's condition at the time of sale.
• The Form Only Covers Financial and Physical Assessments: While these areas are a major focus, the form also requires the disclosure of other critical information, such as insurance details, any violations of the condominium declarations, and if there are known improvements that breach the association's regulations. This comprehensive approach ensures that buyers are well-informed on a variety of fronts.
• Completion of the Form Guarantees a Smooth Transaction: While the Act 221 Disclosure Form provides vital information and helps in making the transaction transparent, it doesn't guarantee that the process will be without issues. Other factors, such as financing approval, inspections, and personal contingencies, play significant roles in the transaction's success.
• Only the Buyer Benefits from this Form: While it's true that the primary aim is to protect the buyer, sellers and the association also benefit. For sellers, providing this disclosure helps to mitigate future legal risks by ensuring that the buyer is fully informed. For the association, it ensures that new owners are aware of their financial and legal obligations, contributing to a smoother transition and community integration.

Understanding the Act 221 Disclosure Form is crucial for anyone involved in buying or selling a condo or townhome in Illinois. It not only facilitates transparency but also ensures compliance with legal requirements, paving the way for a more informed and secure real estate transaction.

Understanding the Act 221 Disclosure form is essential for anyone involved in the resale of condominiums or townhomes. This form, required by Illinois law, is a crucial document that lays out the financial and legal status of a condominium unit and the association it belongs to. Here are four key takeaways about filling out and using this form:

• Accurate Assessment Info is Crucial: The form requires detailed information about the monthly assessments for the unit, including whether these assessments are paid in full and if there are any past due sums or additional charges due. This element is critical for potential buyers to understand their financial obligations upon purchase.
• Disclosure of Capital Expenditures: The form asks for information about anticipated capital expenditures within the current or succeeding two fiscal years, and the status of the reserve or replacement fund. This disclosure helps buyers evaluate the financial health of the association and potential future costs they might incur.
• Legal Matters and Insurance Details: Sellers must disclose any pending lawsuits or judgments involving the association, as well as details regarding the association’s insurance coverage. This information can significantly affect a buyer’s decision, as legal issues or insufficient insurance could pose a financial risk.
• Compliance with Rules and Regulations: The disclosure requires confirmation that any improvements or alterations made to the unit comply with the condominium’s declarations, bylaws, rules, and regulations. This ensures that buyers are not inheriting any unresolved compliance issues that could affect their usage or ownership of the unit.

Overall, the Act 221 Disclosure form is an important tool for transparency in the resale process of condominiums and townhomes, providing potential buyers with essential information about their prospective home and its governing association.