The 2014 Appellate Court decision in Palm v 2800 Lake Shore Drive Condominium Association held that discussions of condominium business and taking action on matters at meetings closed to unit owners by a quorum of association Board members was improper except under very limited circumstances. Closed sessions could only be held to discuss (i) pending, imminent or threatened litigation involving the association, (ii) employment issues, (iii) rule violations and (iv) delinquent unit owner assessments.

Effective June 1, 2016, the Illinois Condominium Property Act has been amended to clarify how the closed sessions should be conducted. The amendment provides that closed sessions can only be held as part of a properly called open board meeting.

After the open board meeting is called to order, the directors may then move into a closed session to discuss the topics properly part of a closed session. The amendment also clarifies that any vote on matters considered in a closed session must take place in an open board meeting.

Logan Law, LLC condominium attorneys have represented Illinois condominium associations for forty five years and have a depth of experience and knowledge of Illinois condominium law. Feel free to contact a Logan Law, LLC attorney whenever you need an attorney experienced in condominium or community association law.

The Illinois Supreme Court has affirmed the Appellate Court’s 2014 decision in 1010 Lake Shore Drive Condominium Association v Deutsche Bank, which had held that an Illinois Condominium Association’s right to collect pre-foreclosure assessments is not necessarily wiped out by the confirmation of the foreclosure sale. The Supreme Court held that the assessment lien for pre-foreclosure assessments is only extinguished if two things occur, (i) the foreclosing lender names the condominium association as a party to the foreclosure suit and (ii) the purchaser at the foreclosure sale pays the assessments as they accrue beginning the month following the foreclosure sale.

The Supreme Court held that the payment of assessments after the foreclosure sale is essential “to confirm the extinguishment of the lien created by the prior owner’s failure to pay assessments.” The Supreme Court emphasized that the Illinois Condominium Act protects mortgage lenders by allowing the lender “from time to time (to) request in writing a written statement *** setting forth the unpaid common expenses with respect to the unit covered …” by the loan. Associations are cautioned to respond promptly to any such request to avoid giving a lender a possible defense to an action for pre-foreclosure assessments.

Associations with units delinquent in assessments which are being foreclosed are advised to consult legal counsel in order to make sure they recover the maximum amount of delinquent assessments available in this change area of the law. Feel free to contact a Logan Law, LLC condominium attorney, if you have any questions regarding collection of delinquent condominium assessments or if you need assistance or advice regarding other areas of condominium law.

The 2014 Appellate Court decision in Palm v 2800 Lake Shore Drive Condominium Association held that discussions of condominium business and taking action on matters at meetings closed to unit owners by a quorum of Association Board members was improper except under very limited circumstances. Effective June 1, 2016, the Illinois Condominium Property Act (ICPA) has been amended to clarify the power of an Illinois Association Board to take action in emergency situations.
A new section 18(a) 21 has been added to the ICPA to cover this situation. The new section specifically provides that “The intent of adding this paragraph (21) is to empower and support boards to act in emergencies”.

The new section permits the Board to ratify and confirm actions of board members taken in response to an emergency. The section requires that within seven business days of the occurrence of an emergency event, board members give notice to unit owners of the occurrence of the emergency as well as a general description of the actions to address the event.

Logan Law, LLC condominium attorneys have represented Illinois condominium associations for forty five years and have a depth of experience and knowledge of Illinois condominium law. Feel free to contact a Logan Law, LLC attorney whenever you need an attorney experienced in condominium or community association law.

The 2014 decision of the Illinois Appellate Court in 1010 Lake Shore Drive v Deutsche Bank National Trust Company pointed a way to a significant exception to the ordinary rule that an Illinois Condominium Association’s lien for pre-foreclosure assessments is wiped out by a condominium mortgage foreclosure.  Until that decision, the only way for a an Illinois Condominium Association to collect any pre-foreclosure assessment arrearage was for it to have initiated an action against the foreclosed unit owner, in which it could collect up to six months’ back assessments plus attorney fees and costs incurred in collection not from the foreclosing lender, but from the first purchaser of the unit other than the foreclosing lender.

The new decision appears to have created a potentially significant opportunity for Illinois condominium associations with units being foreclosed.  The lender in that case completed its foreclosure but did not begin to pay assessments which accrued after the completion of the foreclosure.  The association eventually sued the lender and sued not just for the two + years assessments which had accrued after the foreclosure was complete but also for all pre-foreclosure assessments due with regard to the unit.  The pre-foreclosure assessments totaled approximately 2/3 of what the association claimed.

The Illinois Appellate Court held that since the lender had failed to make any payments after the foreclosure was completed, the pre-foreclosure assessments were not extinguished by the foreclosure and thus the suing association was entitled to a judgment for both the pre- and post-foreclosure assessments regarding the foreclosed unit.

It should be noted that the decision did not make it clear how much a foreclosing lender must be delinquent in post foreclosure assessments for the rule to apply.  In the Deutsche Bank case, the post foreclosure arrearage was for more than two years.  The question arises as to whether a one month arrearage is sufficient, or six months or a year.

One thing to be learned from the decision is that it is important for an Illinois condominium association, large or small, to make sure that the lender does not have the opportunity to later argue that it didn’t know where to pay assessments or how much was owed, in a belated attempt to create a defense.  Thus, it is important the association send regular billings to the lender beginning immediately upon the completion of the foreclosure.  It may also be desirable to begin collection proceedings against the foreclosing lender sooner rather than later.

Associations with units delinquent in assessments which are being foreclosed are advised to consult legal counsel in order to make sure they recover the maximum amount of delinquent assessments available in this change area of the law.  Feel free to contact a Logan Law, LLC condominium attorney, if you have any questions regarding collection of delinquent condominium assessments or if you need assistance or advice regarding other areas of condominium law.