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Home | Daily Dose | Condominium Law in Flux
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Condominium Law in Flux

A recent opinion from the Illinois’ First Appellate District, Country Club Estates Condominium Assoc. v. Bayview Loan Servicing, LLC, 2017 IL App (1st) 162459, provides that “prompt” payment of assessments is required to extinguish presale assessments under the Condominium Property Act.  This ruling not only puts a new wrinkle on condominium association lien extinguishment, but also clashes with an opinion out of a different division of the same Appellate District issued just months ago.

The contrasting rulings, along with an Illinois Supreme Court case issued in late 2015, all focus on a particular statute of the Illinois Condominium Property Act which provides that a foreclosure sale purchaser must pay condominium assessments “from and after the first day of the month” following the foreclosure sale in order to “confirm the extinguishment” of a condominium association’s lien.

The Illinois Supreme Court, in 1010 Lake Shore Assoc. v. Deutsche Bank National Trust Co., 2015 IL 118372, had ruled that a condominium association’s lien for pre-foreclosure sale assessments was owed in full by a foreclosure sale purchaser who failed to pay any assessments, as the lien’s extinguishment was never confirmed under the statute.

This kicked off a veritable flurry of litigation regarding the payment timing needed to fully extinguish a condo association’s lien, which was seemingly ended, if not at least clarified, earlier this year by Illinois’ First Appellate District in 5510 Sheridan Road Condominium Association v. U.S. Bank, 2017 IL  App (1st) 160279).  In that case, payment of post-foreclosure sale assessments was made approximately seven months after confirmation, three months after a demand was issued, and weeks after suit was filed.  In ruling against the condominium association, the Sixth Division of the First Appellate District held that foreclosure sale purchasers are not subject to any payment deadline in order to confirm the extinguishment of a condominium association’s lien, stating that if the General Assembly had wished to include a strict deadline, they certainly would have done so. The Court further relied on the Illinois Supreme Court’s statement in 1010 Lake Shore Assoc. v. Deutsche Bank National Trust Co., 2015 IL 118372, ¶24, that the statute in question “provides an incentive for prompt payment,” rather than a deadline. A Petition for Leave to Appeal to the Illinois Supreme Court is currently pending.

In a strikingly similar fact situation, the Second Division of the First Appellate District in Country Club Estates Condominium Assoc. v. Bayview Loan Servicing, LLC, 2017 IL App (1st) 162459, instead ruled that “prompt” payment is required. In this case, payment of post-foreclosure sale assessments was made approximately seven months after confirmation, three months after a demand was issued, and two months after suit was filed. In its analysis, the Second Division agreed that an explicit deadline didn’t exist, but also cited to the Illinois Supreme Court’s statement in 1010 Lake Shore Assoc. v. Deutsche Bank National Trust Co., 2015 IL 118372, ¶24, that the statute in question “provides an incentive for prompt payment.” The Court stated that to the extent 5510 Sheridan Road “may be read as imposing no timing deadline whatsoever on foreclosure buyers, we find that conclusion to be inconsistent with 1010 Lake Shore.” The Court further implied that seven months is too long, absent extenuating circumstances, but remanded to the lower Court for a ruling of whether prompt payment had in fact occurred.

Further guidance regarding the payment timing required to confirm the extinguishment of a condominium association’s lien will hopefully be provided in the pending 5510 Sheridan Road Illinois Supreme Court appeal.

About Author: Lauren Riddick

LaurenRiddick
Lauren Riddick handles contested foreclosure matters as a member of the Codilis & Associates, P.C.’s Contested Litigation Unit and also assists with title matters. She joined the firm in August 2013. Prior to joining the firm, she was an Adjunct Professor of Law with several colleges and a Securities Attorney for a large broker-dealer in Florida. Riddick is a member of the Illinois and Florida Bar Associations. She received her Juris Doctor in 2001 from the University of Florida Levin College of Law, and her Bachelor of Science in 1998 from the University of Florida.

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