Can I Be Responsible for Unpaid Assessments When I Buy a Condo?

 Posted on June 30, 2020 in Foreclosure

When purchasing a condominium, you need to be aware of the various rules and regulations governing the condominium association. For example, if you fail to pay required condominium assessments or common expenses, the association can foreclose on your unit. And if you happened to be the person who buys a condominium at a foreclosure sale, you may also find yourself on the hook for the previous owner's unpaid expenses.

Appellate Court Determines Who is Responsible for Previous Costs

A recent case from Cook County, Shannon Court Condominium Association v. Armada Express, Inc., helps to illustrate how these issues work in practice. This case involves a condo building in Streamwood, Illinois, where the co-owners of a particular unit failed to pay over $5,000 in condo assessments. The condo association, Shannon Court, then filed a foreclosure action and obtained a final judgment evicting the owners in January 2018.

Shannon Court proceeded to rent the unit itself from August 2018 to December 2018. In December, the court approved a foreclosure sale, which was held in January 2019. A corporation, Armada Express, purchased the unit and took possession in March 2019.

A few months later, Shannon Court moved to foreclose on Armada. This time, the dispute was over whether or not Armada Express met all of its obligations to pay condominium dues, including expenses incurred with the foreclosure action against the previous owners. A Cook County judge ruled in favor of Armada Express, holding that the Shannon Court needed to apply the rent that it collected from the unit prior to the foreclosure sale towards the unpaid assessments. Since Armada paid the remaining balance – $56.04 – it was not liable for any other costs.

An appellate court, however, said the trial judge's ruling on this issue was premature. To make a long story short, Shannon Court incurred legal fees in connection with the foreclosure lawsuit against the previous owners. Under Illinois law, Armada was required to pay its “proportionate share” of these legal fees. As a result, Armada owed more than the $56.04 it previously paid. That said, the appellate court also held that Shannon Court could not hold Armada responsible for the costs of repairing the unit after it initiated foreclosure proceedings against the prior owners. State law only holds the purchaser responsible for costs incurred during the six-month period before the initiation of foreclosure.

Contact a Lake County Real Estate Closing Attorney 

A condominium carries special rules and regulations that do not typically apply to detached single-family homes. That is why it is important to educate yourself on these rules prior to closing on a condo purchase. It is always best to work with an experienced Libertyville real estate lawyer who can assist you in understanding the “fine print” of the law so that you do not find yourself in a situation similar to the one described above. If you need advice or representation in connection with any Illinois real estate matter, contact Newland & Newland, L.L.P., today at 847-549-0000 to conduct a free telephone consultation.

Source:

https://scholar.google.com/scholar_case?case=940505316985874349