This is one of a series of articles regarding changes in the IL Condo Act that will become effective in 2018.

Condominium de-conversions have become a popular way for condo owners living in buildings with high rental ratios to unburden themselves of condo ownership by selling collectively to an investor. The investor purchases the entire building and turns it into a rental property.

A de-conversion sale requires a vote of 75% of the unit owners by ownership percentage. Unfortunately for some owners, this could mean that if they owe more on their unit than it is worth in the sale, it could cost them. A change effective in 2018 will help to protect those owners.

An amendment to Section 15 of the Illinois Condominium Property Act states that, if a unit owner objects to the sale of the property, they could be entitled to receive the greater of:

  1. The value of their interest as determined by an appraisal, minus any unpaid assessments; or
  2. The outstanding balance of bona fide debt (mortgage) of the objecting unit owner’s interest, minus any unpaid assessments or charges due. The objecting owner is also entitled to receive reimbursements for reasonable relocation costs.

As a result of this change, owners with mortgage balances exceeding their appraised value will be entitled to at least be paid the amount of their outstanding debt.

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