The country's financial downturn has caused major financial difficulties for many smaller condominium associations in Chicago.  When just one or two owners stop paying assessments or fall into foreclosure, the effects can be devastating on a small building.  Thankfully, the IL Condo Act provides a remedy that can help condominium associations to recover delinquent assessments, and HausFS provides a service to help associations through the process. 

When an owner stops paying, the Board can take legal collection action to obtain possession of the unit and subsequently rent it out for a period of 13 months.  Rents are applied to the delinquent balance (including all legal fees and other costs to get the unit rentable) until paid off, and the unit is then returned to the owner.  If necessary, the association can file for an extension if the total balance has not been recovered after 13 months. 

This remedy is available even if the delinquent owner is a bank that has foreclosed on the property.  Banks are responsible for assessments beginning on the first of the month following the sheriff's sale.  If they do not pay assessments, possession action can be taken against the bank.

It's important to begin collection action against delinquent owners as soon as possible.  Foreclosures and bankruptcy filings can prevent the possession action and cause the association to lose the right to collect delinquent assessments.  The Board should contact a condo attorney when two months of assessments have gone unpaid to discuss collection action and any potential obstacles. 

If the association successfully obtains possession, the Board will need to get the unit into rentable shape, market the unit, and screen tenants.  They must then manage the tenants for the length of the possession.  This can be a time-consuming and burdensome task for an already overworked Board.  HausFS is filling the gap with a new rental management service for associations who have taken legal possession of delinquent units.  Contact us for more information about how we can help you to navigate the collection process and get delinquent balances caught up.