Get Act 221 Disclosure Form

How to Use Act 221 Disclosure

Completing the Act 221 Disclosure form is a straightforward process. This form provides essential information about the condominium or townhome association and its financial condition. Follow these steps carefully to ensure accurate completion.

1. Begin by identifying whether you are the Board of Managers of the condominium association or the designated managing agent. Strike out the option that does not apply.
2. Fill in the Unit Number for which you are providing the disclosure.
3. State the monthly assessment amount and indicate if it is paid in full through the specified date.
4. List any past due sums owed to the association, along with the relevant periods.
5. Indicate whether there are other assessments or charges due by the unit owner. Choose between "are" or "are not."
6. Specify if there are any special assessments currently under consideration by the Board of Managers. If applicable, provide an explanation.
7. State whether capital expenditures are anticipated within the current or next two fiscal years. If so, include an explanation.
8. Provide the amount of the reserve or replacement fund for current or future capital expenditures. Indicate if any part of this reserve is earmarked for a specific project and explain if necessary.
9. Attach a complete copy of the association's most recent approved budget or statement of financial condition.
10. Indicate if there are pending lawsuits or judgments involving the unit owner's association. If yes, provide an explanation.
11. Fill in the details of the insurance carrier for the unit owner's association, including the name of the company, address, contact name, telephone, and facsimile number.
12. Confirm that there are no improvements or alterations made to the unit or common elements that violate any declarations, bylaws, rules, or regulations.
13. Finally, include the name of the association and the managing agent’s name if applicable. Sign the form as the Agent of Association.

Filling out the Act 221 Disclosure form can be a straightforward task, but many people stumble along the way. One common mistake is failing to provide accurate information about the monthly assessments. It's crucial to clearly state whether the assessments are paid in full and to specify any past due amounts. Incomplete or incorrect details can lead to confusion and potential legal issues.

Another frequent error involves overlooking special assessments. When answering whether there are any special assessments under consideration, it's important to be thorough. Simply marking "no" without checking can mislead potential buyers and create problems later on.

People often neglect to mention capital expenditures. If the association anticipates any major expenses in the coming years, this should be clearly noted. Buyers deserve to know if there are plans that could affect their financial obligations.

Additionally, failing to attach the most recent approved budget is a mistake that can have serious consequences. This document provides essential insight into the financial health of the association. Without it, potential buyers may feel uncertain about their investment.

Another oversight is not addressing pending lawsuits. If there are any legal matters involving the association, these should be disclosed. Ignoring this can lead to distrust and may even affect the sale.

When it comes to insurance, providing incomplete information is another pitfall. The form requires the name of the insurance carrier and relevant contact details. Omitting this information can leave potential buyers in the dark about the coverage protecting their investment.

People sometimes forget to confirm whether any improvements or alterations have been made to the unit that violate the rules. This can be a significant issue. Buyers need to know if there are any potential conflicts with the condominium’s declarations or bylaws.

Another mistake is not having the form signed by the appropriate parties. The signature of the managing agent or an officer of the association is essential. Without it, the form may not hold up legally.

Lastly, many individuals rush through the form, resulting in careless errors. Taking the time to review each section carefully can prevent mistakes that might jeopardize the transaction. Being thorough and accurate is key to a smooth process.

The Act 221 Disclosure form is an important document for those involved in the buying or selling of condominium or townhome units in Illinois. It provides essential information about the financial health and legal standing of the homeowners' association. However, several other forms and documents are often used in conjunction with this disclosure to ensure a comprehensive understanding of the property and its governing body. Below is a list of these additional documents, along with a brief description of each.

• Condominium Bylaws: These are the rules and regulations that govern the operation of the condominium association. They outline the rights and responsibilities of unit owners, as well as the procedures for meetings and decision-making.
• Declaration of Condominium: This document establishes the condominium as a legal entity. It includes details about the property, such as the number of units, common areas, and the percentage of ownership each unit holds in the common elements.
• Budget Statement: This statement provides a detailed overview of the association's financial plan for the upcoming year. It includes expected income from assessments and outlines planned expenditures for maintenance and improvements.
• Meeting Minutes: These records summarize discussions and decisions made during association meetings. Reviewing these minutes can provide insight into ongoing issues and the overall management of the condominium.
• Reserve Study: A reserve study assesses the condition of common elements and estimates future repair and replacement costs. It helps ensure that the association has sufficient funds set aside for major repairs.
• Insurance Certificate: This document verifies that the association has the necessary insurance coverage for the property. It typically includes details about the types of coverage and policy limits.
• Special Assessment Notice: If the association is planning a special assessment, this notice informs unit owners of the additional fees required to cover unexpected expenses or major projects.
• Disclosure of Pending Litigation: This document outlines any ongoing legal disputes involving the association. It is crucial for potential buyers to understand any risks associated with these legal matters.

Each of these documents plays a vital role in providing a clear picture of the condominium association's status and the responsibilities of unit owners. Reviewing them in conjunction with the Act 221 Disclosure form can help ensure informed decisions are made during the buying or selling process.

The Act 221 Disclosure form is designed to provide important information about a condominium or townhome association to potential buyers. It shares similarities with several other documents that serve similar purposes in real estate transactions. Below is a list of these documents and how they relate to the Act 221 Disclosure form.

• Seller's Disclosure Statement: This document informs potential buyers about the condition of a property, including any known issues or repairs. Like the Act 221 form, it aims to disclose material facts that may affect the buyer's decision.
• Property Condition Disclosure Statement: This statement provides detailed information about the physical condition of a property. Both documents require sellers or managing agents to disclose any known defects or issues, ensuring transparency in the transaction.
• Homeowners Association (HOA) Disclosure: Similar to the Act 221 form, this document outlines the rules, regulations, and financial obligations of an HOA. It informs potential buyers about the association's governance and any fees associated with membership.
• Lead-Based Paint Disclosure: This form is required for homes built before 1978 and informs buyers about potential lead hazards. Like the Act 221 Disclosure, it aims to protect buyers by providing critical safety information.
• Natural Hazard Disclosure Statement: This document informs buyers about natural hazards that may affect a property, such as earthquakes or floods. Both forms serve to disclose risks that could impact the buyer's investment.
• Radon Disclosure: This disclosure informs buyers about the potential presence of radon gas in a property. Similar to the Act 221 form, it emphasizes the importance of transparency regarding health and safety issues.
• Condominium Bylaws: These governing documents outline the rules and regulations of a condominium association. Like the Act 221 form, they provide essential information about the rights and responsibilities of unit owners.

When filling out the Act 221 Disclosure form, it’s important to be thorough and accurate. Here’s a list of things you should and shouldn't do:

• Do ensure all information is current and accurate.
• Do clearly indicate whether assessments are paid in full.
• Do provide detailed explanations for any pending assessments or lawsuits.
• Do attach the most recent approved budget of the association.
• Do verify the insurance carrier's information is complete and correct.
• Don't leave any sections blank; every question must be addressed.
• Don't provide vague responses; clarity is key.
• Don't forget to check for any capital expenditures planned for the future.
• Don't misrepresent any information; honesty is crucial.
• Don't rush through the form; take your time to ensure accuracy.

By following these guidelines, you can help ensure that the disclosure process goes smoothly and that all parties involved have the necessary information. Being diligent now can prevent issues later on.

Here are seven common misconceptions about the Act 221 Disclosure form:

• Only the seller needs to complete the form. This is incorrect. The form must be completed by an officer or managing agent of the condominium association, ensuring accurate and official information.
• The form guarantees that there are no financial issues with the association. The disclosure only provides the current status of assessments and potential financial obligations; it does not guarantee future financial stability.
• The form is optional for all condominium sales. In Illinois, this disclosure is required by law for condominium and townhome sales, making it a mandatory part of the transaction process.
• All assessments are fully disclosed in the form. While the form outlines known assessments, it may not cover every possible financial obligation or special assessment that could arise in the future.
• The form includes information about the unit's interior condition. The Act 221 Disclosure focuses on the financial and legal status of the association, not the physical condition of individual units.
• Pending lawsuits are always disclosed. The form states whether there are pending lawsuits, but it may not provide detailed information about the nature or potential impact of those lawsuits.
• The reserve fund is always sufficient for future needs. The form indicates the amount in the reserve fund, but it does not assess whether that amount is adequate for future capital expenditures.

Here are key takeaways regarding the Act 221 Disclosure form:

• The form must be completed by an officer or managing agent of the condominium association.
• It is essential to provide accurate information about the unit's financial status, including any past due sums and assessments.
• Disclosure of pending lawsuits or judgments involving the association is mandatory.
• The form requires details about the association's insurance coverage, including the name of the insurance company and contact information.
• Attach a copy of the association's most recent approved budget to the form for transparency.