Make sure association fees are current before the closing

Q. I am purchasing a condominium from a bank. The condo was a foreclosure property. I have purchased many properties and was not planning on using an attorney. I am concerned though about any potential assessments due the association as a result of the foreclosure. I would appreciate any advice you would have to offer.

A. Pre-foreclosure and post-foreclosure condominium assessments (and other related charges) are kind of the "Wild West" of condominium law. Much litigation has arisen over the issues of who owes what in regards to association dues incurred both prior to and subsequent to the foreclosure. These issues, however, mostly involve two parties: the foreclosure purchaser (usually the bank holding the original loan being foreclosed) and the homeowners association.

Presuming you are purchasing from the foreclosure purchaser (the bank), you will simply insist on a paid assessment letter from the homeowners association. This letter will indicate either all association obligations are paid through closing, or it will indicate a certain amount is due to bring all association obligations current. If an amount is due, you should insist the bank satisfy that obligation before closing.

For those of you contemplating purchasing any homeowners association property at a foreclosure sale, tread carefully. Cases have come down assessing tens of thousands of dollars in damages against foreclosure purchasers for outstanding association dues, late fees, attorneys fees and more. You would be wise to consult an attorney familiar with this area of the law prior to making your purchase.

Q. My husband and I purchased an investment property a number of years back with another couple. About three years into this, the other couple decided they wanted out. We came to an agreement and we paid the other couple for their interest in the property. We wrote something up that says the other couple gives all their interest in the property to us. We continue to own and rent out the property but are concerned we did not handle this properly. Is there anything else we should have done and is there anything we should be doing today?

A. What should have been done is a quitclaim deed should have been prepared, conveying their interest in the property to you and your husband. In exchange for your payment, they would tender to you the signed and notarized quitclaim deed. You would then record the deed with the county, thereby removing their interest in the property and making you and your husband sole owners. A quitclaim deed conveys any interest the grantor has in a property to the grantee.

As it stands today, if you were to attempt to sell the property, the title would reflect you and you husband co-owning the property with this other couple. You would be unable to convey the property without their signatures on certain documents. Now, maybe they are still around, maybe everyone is still friends and maybe they would have no problem executing the appropriate documents to remove themselves from the title. However, that's a lot of maybes.

What you need to do today is contact an attorney, prepare a quitclaim deed and contact your ex partners. Hopefully they will execute the quitclaim deed and once you record the deed, all will be as it should. If for some reason you cannot obtain the executed quitclaim deed from your ex-partners, contact an attorney to determine your next step.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.