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.