(This article, with its road map to the collection of past due condominium association assessments was published in the February, 2009 issue of ACTHA News, the newsletter of the Association of Condominium, Townhouse and Homeowners Associations (ACTHA))
Today’s severe recession is forcing many of us to make unpleasant choices as to which bills to pay. The mortgage crisis makes these decisions harder for condominium and town home owners, some of whom have fallen behind in payment of assessments, unfortunately transferring their problems to their associations. An Illinois Condominium Association Board has both a fiduciary and statutory duty to collect all assessments due. The Condominium Act does not give the Board discretion to reduce assessments due from a delinquent unit owner, although compromise is permitted as to the amount of fines, attorney fees or other collection costs collected.
Several collection options are available to an Illinois Condominium or Town Home Association. The Association can file a lien, foreclose the lien and eventually force a court ordered sale of a unit. The Association can also seek a personal judgment against an owner, allowing
collection from all nonexempt assets or earnings. The most powerful collection option is the right of an Illinois Condominium or electing Town Home Association to seek eviction of the owner from the right to possess the unit, allowing the Association to rent the unit and use the rent collected to pay the past due assessments as well as current assessments and the costs incurred by the Association in collection. This option is especially effective in the case of an absentee owner who has rented the unit, as the eviction action need not be served on and can leave the tenant in place and simply terminate in the Association’s favor the owner’s right to collect rent from the existing tenant.
THE EVICTION PROCESS
Once the Association has decided to pursue eviction of a delinquent unit owner, the Board should adopt a resolution to employ an attorney and begin collection procedures. The first step is to serve the owner with a 30 day Notice and Demand for Possession, meeting the requirements of the Eviction Statute and the federal Fair Debt Collection Practices Act. The Notice is served by personal service or by registered or certified mail, return receipt requested. If properly mailed, the Notice is effective upon mailing and need not even be actually received by the owner. Unless all amounts demanded under a properly prepared Notice are paid in full within the 30 days or the Association or its representative agrees in consideration of partial payment to withdraw the
Notice, the Notice continues effective even if partial payments are accepted. Once 30 days have passed without payment in full, the eviction action is commenced by filing suit in the Circuit Court and service of summons on the owner by the Sheriff. The action can be filed as a “joint action”, to seek both judgment for possession and a personal judgment enforceable against all nonexempt assets or earnings of the owner. The summons must be served at least seven days before the trial date specified in the summons but the trial date can be as few as three or four weeks after suit is filed. There are provisions for using a private special process server, if the sheriff is unable to obtain service and if all else fails, there can be constructive service by posting or publication and mailing. In the case of constructive service, the Association obtains what is called an in rem judgment, against the unit itself and not a personal judgment against the owner; however, constructive service still permits the eviction to proceed.
TRIAL AND JUDGMENT
If the delinquent unit owner does not contest the proceeding, judgment may be obtained by affidavit, without the Association or management company having to appear in Court. If there is a dispute, a trial will be held so that the court can hear testimony to resolve any disputed issues. By statute, enforcement of the eviction judgment must be stayed for at least 60 but no more than 180 days, at the discretion of the court. Once the stay expires, the Association may serve a copy of the judgment on the tenant in the case of a leased unit or in the case of an owner occupant, may employ the sheriff to execute the order to evict the owner. The Association may thereafter collect rent from an existing tenant or lease the unit to a bona fide new tenant, using the rent collected to reduce the amounts determined by the court to be due from the defaulting unit owner and to pay leasing costs and current assessments.
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- To view the entire text of the Illinois Condominium Property Act, Click Here.
- To view the text of the Chicago Condominium Ordinance, Click Here.
- To view the text of Provisions of the Illinois Forcible Entry and Detainer Act Applicable to Condominiums, Click Here.
- To view selected provisions of the Illinois Not for Profit Corporation Act, Click Here