Purchasing a foreclosure or REO property soon? New ways to charge a prospective purchaser of a foreclosed condominium unit may be coming soon.
Dear Realtors and Illinois Residents:
If you, your clients, or client base are thinking of buying a foreclosed condominium from a bank, contact our Governor today and tell him to send back Senate Bill 2664 for rewrite to have the banks pay for past due assessments, not the buyer for a foreclosed condominium or to leave the existing statutory language.
Here is the link with information on how to contact the Governor: http://www2.illinois.gov/gov/Pages/ContacttheGovernor.aspx
Senate Bill 2664 allows the following:
1. Associations can charge a Buyer of a foreclosed condominium for any amount, as long as the amount is not more than 9 months of regular assessments (the regular assessment rate is the regular assessment rate during the 9 months before the foreclosure, not the regular assessment rate at the time the buyer of a foreclosed condominium purchases the unit, which sometimes is more).
2. The Association does not have to attempt to recover assessments via collection action against the foreclosed upon owner to collect from a Buyer of a foreclosed condominium.
3. The Buyer of the foreclosed condominium has to pay item 1 above, even if the foreclosed upon owner was current on assessments or repaid delinquent assessments, fines, or fees later. This means that if the Association does recover assessments via collection action against the foreclosed upon owner, they can still charge item 1 above to Buyer of a foreclosed condominium. Therefore, the Association could theoretically be paid double the amount owed, once from the foreclosed upon owner, and once from the Buyer of the foreclosed condominium.
The current statute allows Associations to charge 6 months of the condominiums share of common expenses (in practice, most associations only charged 6 months of assessments, not common expenses) to the Buyer of the foreclosed condominium only if the Association filed a collection action in order to charge the Buyer of a foreclosed condominium. Further, the Buyer of a foreclosed condominium did not have to pay any amount if the foreclosed upon owner paid their outstanding assessments. With this current statute, there were many ways to avoid a Buyer of a foreclosed condominium from paying anything to the Association at closing (If the new Bill passes, there will be many abuses and double billing by Associations.).
Instead, the current statute should be kept that allows Buyers of foreclosed condominiums to pay Associations if and when needed, or if automatic payment to Association is desired, pass it on to the foreclosing bank, not the buyer of the foreclosed condominium.
Please contact the Governor today, here is the link again: http://www2.illinois.gov/gov/Pages/ContacttheGovernor.aspx
Law Office of Theresa L. Panzica
2510 W. Irving Park Rd, Suite A
Chicago, IL 60618