97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5760

 

Introduced 2/16/2012, by Rep. Kelly M. Cassidy

 

SYNOPSIS AS INTRODUCED:
 
765 ILCS 605/9  from Ch. 30, par. 309

    Amends the Condominium Property Act. In provisions concerning liens for amounts due, for unpaid common expenses, provides, with respect to a condominium unit in foreclosure, that a mortgagee who receives title to a unit by purchase at a judicial foreclosure sale, by a deed in lieu of foreclosure, or by a court order pursuant to a foreclosure shall pay the unpaid proportionate share of the common expenses for the unit, related late charges, and attorney's fees that accrued before the mortgagee acquired title and those that later become due, up to the date of the conveyance of the unit pursuant to a sale by the mortgagee. Provides that a purchaser at a judicial foreclosure sale or a person who purchases a foreclosed unit from the mortgagee has no obligation to pay for the unpaid proportionate share of the common expenses for the unit, related late charges, or attorney's fees which accrued before the purchaser acquired title. Deletes language providing that: (i) the purchaser at a judicial foreclosure sale or a mortgagee who receives title by deed in lieu of foreclosure or by a court order shall pay the unit's common expenses from and after the first day of the month after the delivery of the deed in lieu of foreclosure, the sale, or the court order; and (ii) a person who buys a unit, other than a mortgagee, at a judicial foreclosure sale or from a mortgagee shall have the duty to pay the proportionate share of unpaid unit common expenses which would have become due (without any assessment acceleration) during the 6 months before the filing of an action to collect assessments. Makes other changes.


LRB097 14988 AJO 65892 b

 

 

A BILL FOR

 

HB5760LRB097 14988 AJO 65892 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Condominium Property Act is amended by
5changing Section 9 as follows:
 
6    (765 ILCS 605/9)  (from Ch. 30, par. 309)
7    Sec. 9. Sharing of expenses - Lien for nonpayment.
8    (a) All common expenses incurred or accrued prior to the
9first conveyance of a unit shall be paid by the developer, and
10during this period no common expense assessment shall be
11payable to the association. It shall be the duty of each unit
12owner including the developer to pay his proportionate share of
13the common expenses commencing with the first conveyance. The
14proportionate share shall be in the same ratio as his
15percentage of ownership in the common elements set forth in the
16declaration.
17    (b) The condominium instruments may provide that common
18expenses for insurance premiums be assessed on a basis
19reflecting increased charges for coverage on certain units.
20    (c) Budget and reserves.
21        (1) The board of managers shall prepare and distribute
22    to all unit owners a detailed proposed annual budget,
23    setting forth with particularity all anticipated common

 

 

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1    expenses by category as well as all anticipated assessments
2    and other income. The initial budget and common expense
3    assessment based thereon shall be adopted prior to the
4    conveyance of any unit. The budget shall also set forth
5    each unit owner's proposed common expense assessment.
6        (2) All budgets adopted by a board of managers on or
7    after July 1, 1990 shall provide for reasonable reserves
8    for capital expenditures and deferred maintenance for
9    repair or replacement of the common elements. To determine
10    the amount of reserves appropriate for an association, the
11    board of managers shall take into consideration the
12    following: (i) the repair and replacement cost, and the
13    estimated useful life, of the property which the
14    association is obligated to maintain, including but not
15    limited to structural and mechanical components, surfaces
16    of the buildings and common elements, and energy systems
17    and equipment; (ii) the current and anticipated return on
18    investment of association funds; (iii) any independent
19    professional reserve study which the association may
20    obtain; (iv) the financial impact on unit owners, and the
21    market value of the condominium units, of any assessment
22    increase needed to fund reserves; and (v) the ability of
23    the association to obtain financing or refinancing.
24        (3) Notwithstanding the provisions of this subsection
25    (c), an association without a reserve requirement in its
26    condominium instruments may elect to waive in whole or in

 

 

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1    part the reserve requirements of this Section by a vote of
2    2/3 of the total votes of the association. Any association
3    having elected under this paragraph (3) to waive the
4    provisions of subsection (c) may by a vote of 2/3 of the
5    total votes of the association elect to again be governed
6    by the requirements of subsection (c).
7        (4) In the event that an association elects to waive
8    all or part of the reserve requirements of this Section,
9    that fact must be disclosed after the meeting at which the
10    waiver occurs by the association in the financial
11    statements of the association and, highlighted in bold
12    print, in the response to any request of a prospective
13    purchaser for the information prescribed under Section
14    22.1; and no member of the board of managers or the
15    managing agent of the association shall be liable, and no
16    cause of action may be brought for damages against these
17    parties, for the lack or inadequacy of reserve funds in the
18    association budget.
19    (d) (Blank).
20    (e) The condominium instruments may provide for the
21assessment, in connection with expenditures for the limited
22common elements, of only those units to which the limited
23common elements are assigned.
24    (f) Payment of any assessment shall be in amounts and at
25times determined by the board of managers.
26    (g) Lien.

 

 

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1        (1) If any unit owner shall fail or refuse to make any
2    payment of the common expenses or the amount of any unpaid
3    fine when due, the amount thereof together with any
4    interest, late charges, reasonable attorney fees incurred
5    enforcing the covenants of the condominium instruments,
6    rules and regulations of the board of managers, or any
7    applicable statute or ordinance, and costs of collections
8    shall constitute a lien on the interest of the unit owner
9    in the property prior to all other liens and encumbrances,
10    recorded or unrecorded, except only (a) taxes, special
11    assessments and special taxes theretofore or thereafter
12    levied by any political subdivision or municipal
13    corporation of this State and other State or federal taxes
14    which by law are a lien on the interest of the unit owner
15    prior to preexisting recorded encumbrances thereon and (b)
16    encumbrances on the interest of the unit owner recorded
17    prior to the date of such failure or refusal which by law
18    would be a lien thereon prior to subsequently recorded
19    encumbrances. Any action brought to extinguish the lien of
20    the association shall include the association as a party.
21        (2) With respect to encumbrances executed prior to
22    August 30, 1984 or encumbrances executed subsequent to
23    August 30, 1984 which are neither bonafide first mortgages
24    nor trust deeds and which encumbrances contain a statement
25    of a mailing address in the State of Illinois where notice
26    may be mailed to the encumbrancer thereunder, if and

 

 

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1    whenever and as often as the manager or board of managers
2    shall send, by United States certified or registered mail,
3    return receipt requested, to any such encumbrancer at the
4    mailing address set forth in the recorded encumbrance a
5    statement of the amounts and due dates of the unpaid common
6    expenses with respect to the encumbered unit, then, unless
7    otherwise provided in the declaration or bylaws, the prior
8    recorded encumbrance shall be subject to the lien of all
9    unpaid common expenses with respect to the unit which
10    become due and payable within a period of 90 days after the
11    date of mailing of each such notice.
12        (3) A The purchaser of a condominium unit at a judicial
13    foreclosure sale, or a mortgagee who receives title to a
14    unit by purchase at a judicial foreclosure sale, deed in
15    lieu of foreclosure, or judgment by common law strict
16    foreclosure or otherwise takes possession pursuant to
17    court order under the Illinois Mortgage Foreclosure Law
18    must: (i) , shall have the duty to pay the unpaid unit's
19    proportionate share, if any, of the common expenses for the
20    unit, related late charges, or attorney's fees which
21    accrued before the mortgagee acquired title; and (ii)
22    continue to pay the proportionate share of the common
23    expenses for the unit and any related charges or fees until
24    the mortgagee conveys title pursuant to a sale by the
25    mortgagee assessed from and after the first day of the
26    month after the date of the judicial foreclosure sale,

 

 

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1    delivery of the deed in lieu of foreclosure, entry of a
2    judgment in common law strict foreclosure, or taking of
3    possession pursuant to such court order. Such payment
4    confirms the extinguishment of any lien created pursuant to
5    paragraph (1) or (2) of this subsection (g) by virtue of
6    the failure or refusal of a prior unit owner to make
7    payment of common expenses, where the judicial foreclosure
8    sale has been confirmed by order of the court, a deed in
9    lieu thereof has been accepted by the lender, or a consent
10    judgment has been entered by the court.
11        (4) The purchaser of a condominium unit at a judicial
12    foreclosure sale, other than a mortgagee, who takes
13    possession of a condominium unit pursuant to a court order
14    or a purchaser who acquires title from a mortgagee shall
15    have no the duty to pay the unpaid proportionate share, if
16    any, of the common expenses for the unit, related late
17    charges, or attorney's fees which would have become due in
18    the absence of any assessment acceleration during the 6
19    months immediately preceding institution of an action to
20    enforce the collection of assessments, and which remain
21    unpaid by the owner during whose possession the assessments
22    accrued. If the outstanding assessments are paid at any
23    time during any action to enforce the collection of
24    assessments, the purchaser shall have no obligation to pay
25    any assessments which accrued before he or she acquired
26    title.

 

 

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1        (5) The notice of sale of a condominium unit under
2    subsection (c) of Section 15-1507 of the Code of Civil
3    Procedure shall state that the purchaser of the unit other
4    than a mortgagee shall pay the assessments, late charges,
5    and the legal fees required by subdivisions (g)(1) and
6    (g)(4) of Section 9 of this Act. The statement of
7    assessment account issued by the association to a unit
8    owner under subsection (i) of Section 18 of this Act, and
9    the disclosure statement issued to a prospective purchaser
10    under Section 22.1 of this Act, shall state the amount of
11    the assessments, late charges, and the legal fees, if any,
12    to be paid by the mortgagee as required by subdivisions
13    (g)(1) and (g)(4) of Section 9 of this Act.
14    (h) A lien for common expenses shall be in favor of the
15members of the board of managers and their successors in office
16and shall be for the benefit of all other unit owners. Notice
17of the lien may be recorded by the board of managers, or if the
18developer is the manager or has a majority of seats on the
19board of managers and the manager or board of managers fails to
20do so, any unit owner may record notice of the lien. Upon the
21recording of such notice the lien may be foreclosed by an
22action brought in the name of the board of managers in the same
23manner as a mortgage of real property.
24    (i) Unless otherwise provided in the declaration, the
25members of the board of managers and their successors in
26office, acting on behalf of the other unit owners, shall have

 

 

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1the power to bid on the interest so foreclosed at the
2foreclosure sale, and to acquire and hold, lease, mortgage and
3convey it.
4    (j) Any encumbrancer may from time to time request in
5writing a written statement from the manager or board of
6managers setting forth the unpaid common expenses with respect
7to the unit covered by his encumbrance. Unless the request is
8complied with within 20 days, all unpaid common expenses which
9become due prior to the date of the making of such request
10shall be subordinate to the lien of the encumbrance. Any
11encumbrancer holding a lien on a unit may pay any unpaid common
12expenses payable with respect to the unit, and upon payment the
13encumbrancer shall have a lien on the unit for the amounts paid
14at the same rank as the lien of his encumbrance.
15    (k) Nothing in Public Act 83-1271 is intended to change the
16lien priorities of any encumbrance created prior to August 30,
171984.
18(Source: P.A. 94-1049, eff. 1-1-07.)