Board has a right to collect certain fees beyond assessments
By David M. Bendoff
Q: Thanks for doing your column. It is very interesting and useful. A recent column talked about collection of assessments. What about collection of other charges to association members, such as for landscaping, repairs, etc. Our manager says we can collect for assessments by liens, but does not have any advice for collection of charge backs. Is there any way for management or the board to collect these sums from an owner?
A: An owner can be responsible to an association for a variety of expenses, including assessments, limited common element chargebacks, late fees, fines and attorney's fees, for example.
The most common legal procedure to collect sums due and owing from an owner to the association is through an eviction action. In such a case, the association obtains possession, not ownership, of a unit.
The unit is then leased, and rents received are applied to the sums due the association until the account is brought current. Possession of the unit is then returned to the owner.
However, if the bulk of what is owed by an owner to an association is made up of items other than assessments, many courts are not willing to issue an eviction order. In those situations, an association would pursue a breach of contract action against the owner. The association's declaration is the contract.
The association would obtain a judgment against the owner for the sums due. A judgment is often no more than a "license to hunt money." That is, unless the owner voluntarily pays the judgment, the association would have to pursue post-judgment collection through, for example, wage garnishment or bank garnishment.
The association typically has a lien for all these unpaid sums, which may be collectible at a closing of the sale of the unit. Filing of a lien is a rather passive approach, and does not, itself, generate funds.
Not used very often by associations in Illinois, foreclosure of an association's lien for unpaid sums is also available. However, this is often reserved for when the sums due the association are quite substantial. Such an action results in a sale of the unit, and the association needs to be prepared to be the "successful bidder" at the judicial sale.
Q: A fire destroyed many units in our condominium; thankfully no one was injured. Owners of some of these units have said they will stop paying assessments until they are able to again live in their units. Can owners stop paying assessments in this situation?
A: No, the owners must continue to pay their assessments. Owners need to understand their assessments pay for a broad array of items that support their ownership and maintain the value of the property, regardless of their actual occupancy of a unit. This includes maintenance, repair, and replacement of all of the common elements, and the payment for things like insurance to cover losses from a fire!
Note, too, that Section 18.4(o) of the Illinois Condominium Property Act expressly provides that "(t)he association shall have no authority to forbear the payment of assessments by any unit owner." The typical declaration of condominium includes language to the effect that "no owner may waive or otherwise escape liability for the assessments or other charge or payment provided herein by nonuse, abandonment or transfer of his unit." This all means owners cannot be excused from paying assessments and other charges, and the board must proceed to collect unpaid assessments, even if the unit is currently uninhabitable due to a fire.
Hopefully, the various insurance carriers whose policies are triggered by this unfortunate situation will work diligently, so that damaged property can be restored and owners can return home and get back to their lives.
• 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.