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Recent case clarifies foreclosures and assessments

Q. Can you discuss the 1010 Lake Shore Association v. Deutsche Bank National Trust case, and its impact on assessment collections?

A. The Illinois Supreme Court recently issued its opinion in 1010 Lake Shore Association v. Deutsche Bank National Trust. Each condominium association has a lien against an owner's unit for unpaid assessments and other charges due to the association. The Illinois Condominium Property Act provides that the condominium association's lien for unpaid assessments is extinguished by the judicial sale at the conclusion of the mortgage foreclosure. However, Section 9(g)(3) of the act further provides that the purchaser at the foreclosure sale must actually pay the unit's proportionate share of the common expenses for the unit assessed from and after the first day of the month after the date of the judicial foreclosure sale in order to confirm the extinguishment of the association's lien.

In the 1010 Case, an association filed suit against the lender who took title after a foreclosure, but who did not pay assessments going forward, from and after the first day of the month after the date of the judicial foreclosure sale, as required. The suit included sums owed by the former unit owner, and the lender challenged its responsibility for the amounts that were due prior to the judicial sale.

The Illinois Supreme Court affirmed that under Section 9(g)(3) of the act, if a mortgagee or a third party purchaser of a unit at a judicial foreclosure sale fails to pay their post judicial sale assessments, the association's lien for the prejudicial sale assessments is NOT extinguished. This permits the association to pursue collection of all of the unpaid amounts due and owed by the former (foreclosed) unit owner, from the judicial sale purchaser.

However, unless a lender or purchaser of a unit at a foreclosure sale is living under a rock, they should be aware of this case and avoid its outcome by paying the assessment for the month after the judicial sale. That said, a condominium association should contact its attorney if the purchaser at the judicial sale in a foreclosure is not paying assessments going forward as required.

Q. Your recent column referred to the amendments to the Illinois Condominium Property Act that were enacted in 2015 for 2016. When are these amendments actually effective?

A. The amendments to the Illinois Condominium Property Act, set forth in Public Act 99-0472 and described in the Jan. 16 column, are effective June 1. The new Condominium and Common Interest Community Ombudsperson Act, set forth in Public Act 98-1135 and described in the Jan. 23 column, is effective July 1.

Q. Our association's board meetings last for several hours, regardless of the extent of the agenda. Is there something the board can do to reduce the length of these meetings?

A. There are many things that can be done to manage the length of a board meeting. However, I would recommend that the board use, and stick to, a "timed" agenda. Each item on the meeting agenda should include a description of the amount of time to be allocated to that agenda item. This would typically be done by the president. The amount of time to be allocated to each agenda item needs to be appropriate for the subject matter, and there is certainly some room for flexibility at the actual meeting. However, for the timed agenda to be effective, the president needs to manage the meeting so as to keep closely to the agenda, and to the time allocated to each item. The targeted total length of the meeting should be about 60 to 90 minutes.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. 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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