Illinois Condo Association Liens: Foreclosure vs. the Eviction Route (765 ILCS 605/9)

The lien itself is broad. Under 765 ILCS 605/9(g)(1), if a unit owner fails or refuses to pay common expenses or the amount of any unpaid fine when due, that amount plus interest, late charges, reasonable attorney fees incurred enforcing the condominium instruments or rules, and costs of collection all become a lien on the owner's interest in the property. It sits ahead of every other recorded and unrecorded encumbrance except two: taxes and special assessments levied by a political subdivision of Illinois, and encumbrances recorded before the date of the owner's failure or refusal to pay. Any suit brought to extinguish the association's lien must name the association as a party.

Foreclosure is available but rarely used. Subsection (h) puts the lien in favor of the members of the board of managers and lets the board record notice of it, and if the developer is still the manager or holds a majority of board seats and does not record, any unit owner may. Upon recording, the lien may be foreclosed by an action brought in the name of the board of managers in the same manner as a mortgage of real property, meaning a full case under the Illinois Mortgage Foreclosure Law. Subsection (i) then lets the board bid at that sale and acquire, hold, lease, mortgage and convey the unit unless the declaration provides otherwise.

The cheaper Illinois route is possession. Section 9.2(a) of the Condominium Property Act lets the board maintain an eviction action against a defaulting unit owner or that owner's tenant in the manner prescribed by Article IX of the Code of Civil Procedure, and 735 ILCS 5/9-102(a)(7) makes nonpayment of common expenses, of other lawfully agreed expenses, or of any unpaid fine a ground for it. The board must first serve the demand described in 735 ILCS 5/9-104.1, which for a condominium unit must give at least 30 days to satisfy its terms before an action is filed and must set forth the amount claimed and the time periods when the amounts were originally due. Attorney's fees claimed in that demand are expressly subject to court review in the eviction proceeding. Service is personal, or by registered or certified mail with return receipt requested to the last known address, or by posting if no one is in actual possession, and a mailed demand is effective even if the owner never receives it.

At trial, 735 ILCS 5/9-111(a) leaves the court little discretion. If it finds the expenses or fines due, the association is entitled to possession of the whole of the premises claimed, and the court enters an eviction order plus a money judgment for the amount found due including interest and late charges, with reasonable attorney's fees and costs. The court must stay enforcement of the eviction order for not less than 60 days from the date of judgment and may stay it up to 180 days, but the money judgment and any rent assignment under 735 ILCS 5/9-104.2(b) are not stayed, and the order is not subject to the homestead exemption in Part 9 of Article XII. The owner's escape hatch carries no deadline: at any time during or after the stay the owner may pay the expenses found due, the costs and the court-fixed fees, and if not in arrears for the period after the judgment may move to vacate the order.

One consequence is unusual to Illinois. Under 735 ILCS 5/9-111.1, once the sheriff delivers possession the board may lease the unit to a bona fide tenant on a written lease commencing any time within 8 months after the month the stay expires, for a term not exceeding 13 months, with further 13-month terms available on motion and notice to the evicted owner. Rents go first to the assessments sued upon plus statutory interest, attorney's fees and court costs, then to other lawfully agreed expenses, fines and the reasonable cost of making the unit rentable, then to assessments accruing afterward, with any surplus remitted to the owner. If the board has leased the unit, an owner who cures gets the order vacated only effective concurrent with the expiration of that lease term.

Other limits protect buyers, lenders and delinquent owners. Under 765 ILCS 605/9(g)(3) a judicial foreclosure purchaser or a mortgagee taking a deed in lieu owes the unit's share from the first day of the month after the sale, and that payment confirms extinguishment of the association's earlier lien. Subsection (j) gives a lender a payoff letter right: if the board does not comply with a written request within 20 days, all unpaid common expenses that became due before the request are subordinated to that encumbrance. And 765 ILCS 605/9.2(c) bars the association from adding collection fees other than attorney's fees, managing agent fees included, unless they relate to the cost of collecting common expenses, are set out in the management contract, and the declaration or bylaws specifically authorize adding them. A non-condominium association reaches this machinery only through paragraph (8) of 735 ILCS 5/9-102(a), and subsection (b) opens that door only for a not-for-profit corporation or LLC whose owners may attend board meetings as condominium owners may and whose board voted to adopt Article IX after the 1984 amendatory Act and notified owners, or whose declaration was recorded after the 1985 amendatory Act.

Enforcement is entirely private and runs through the circuit court for the county where the unit sits. No Illinois state agency polices association assessments. 1 demand, waits out the 30 days, and then files either a foreclosure action on the recorded lien under 765 ILCS 605/9(h) or an eviction action under 735 ILCS 5/9-102(a)(7). If the court finds the expenses due it must enter the eviction order together with a money judgment covering interest, late charges, reasonable attorney's fees and costs, and enforcement is stayed for at least 60 and at most 180 days.

1 until the arrears are recovered. An owner who pays the amount found due, the costs and the fees fixed by the court, and who is current on assessments accruing since the order, may move to vacate it at any point. An owner contesting the bill should attack the fee component directly, because 735 ILCS 5/9-111(b) requires the court to weigh the time the attorney expended, the reasonableness of the hourly rate, the reasonableness of the time spent, and the amount in controversy and nature of the action.