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posted: 4/5/2014 12:01 AM

U.S. Supreme Court: Condo assessments must be paid

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An opinion was issued last month by the Illinois Supreme Court that is receiving national attention.

In Spanish Court Two Condominium Association v. Carlson, argued before the justices by my partner, Diane Silverberg, the Supreme Court ruled that a unit owner's claim that her association failed to repair and maintain the common elements is not a viable -- or "germane" -- defense to payment of assessments. In so holding, the court observed that the provisions of the Illinois Condominium Property Act "demonstrate that a unit owner's liability for unpaid assessments is not contingent on the association's performance."

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The state Supreme Court's ruling recognizes the necessity of a "quick method" for collection of past-due assessments, as the State's Forcible Entry and Detainer Act created, is critical to an association's ability to function. The opinion will ensure that Illinois courts can continue to expedite association collection proceedings. After all, assessments are the lifeblood of an association, and prompt and appropriately aggressive action needs to be taken by an association to collect assessments from delinquent owners.

With that backdrop, let's continue with the assessment collections theme.

Q. An increasing number of units in our association are delinquent in the payment of their assessments. What can our association do if an owner does not pay their assessments?

A. There are a variety of remedies available to the association. Initially, the association can levy a reasonable late charge in the month the assessment is not paid. Though, that's not always effective in actually collecting the assessments.

If the delinquency continues for 60 days, the association should pursue a forcible entry and detainer (eviction) action against the owner. Illinois allows associations to evict an owner who does not pay assessments, similar to how a landlord can evict a tenant for nonpayment of rent. The legal proceeding permits the association to take possession (not ownership) of a delinquent owner's unit.

The process is initiated by sending a statutorily required notice and demand to the owner. If the owner does not pay, an eviction suit is filed. When the association obtains a judgment, the unit is then leased to a third party, and the rent received is applied to the payment of outstanding assessments and other charges and the association's attorney's fees. When the owner's account is brought current, the owner can request the court to return possession of the unit to the owner.

Most owners bring their account current before the time of eviction. The eviction action is an effective remedy, but implementation should not be delayed. Collection should be implemented whenever an owner is delinquent for 60 days in order to reduce or avoid the potential impact of a mortgage foreclosure.

Q. An owner in our association is delinquent in the payment of his assessments. Can the association recover its attorney's fees from the owner, for costs incurred in collecting the assessments?

A. An association is generally entitled to recover its reasonable attorney's fees incurred in the collection of assessments from a delinquent owner. Attorney's fees claimed by an association are subject to review by the courts. That is, the court has the discretion, based on various factors, to determine what the award to the association will be.

Q. A demand for payment of assessments for a specific period of time was issued to an owner in our condominium association. The owner tendered his assessments for a period of time after the time period described in the demand letter. However, the owner has not paid the assessments described in the demand letter. Can the association accept the later payment, or will it invalidate our original demand?

A. An action to collect assessments is neither barred nor waived by the action of the association in accepting assessment payments for any time period other than that covered by the demand. The association can accept the payment.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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