Failure to pay current assessments following a condominium foreclosure in Illinois means that a preexisting lien for past due assessments will not be extinguished

The statute addressed in 1010 Lake Shore Ass’n v. Deutsche Bank Nat. Trust Co., 2014 IL App (1st) 130962 (August 12, 2014) was Section 9(g)(3) of the Illinois Condominium Property Act 765 ILCS 605/9(g)(3) which governs the obligations of a purchaser at a foreclosure sale to pay unpaid assessments. The Act provides that [t]he purchaser of a condominium unit at a judicial foreclosure sale shall have the duty to pay the unit’s proportionate share of the common expenses for the unit assessed from and after the first day of the month after the date of the judicial foreclosure sale. It further provides Such payment confirms the extinguishment of any lien created by virtue of the failure or refusal of a prior unit owner to make payment of common expenses, where the judicial foreclosure sale has been confirmed by order of the court. The bank in that case purchased the condominium at a judicial sale in 2010. In May 2012, the association sued for unlawful withholding of possession because the bank owed assessments of $62,530.81, which included $000 in assessments that accrued prior to the foreclosure sale. The circuit court granted judgment for the association in the amount of all the unpaid assessments and possession of the property. On appeal, the bank argued that it was not liable for the pre-existing unpaid assessments because section 9(g)(3) provides that the purchaser of a condominium unit at a foreclosure sale only has a duty to pay its share of common expenses assessed from and after the first day of the month following the sale. The court found that [w]hile we agree with defendant that the first sentence of section 9(g)(3) provides that the purchaser of a unit at a foreclosure sale only has a duty to pay its share of the common expenses assessed from the first day of the month after the date of the sale, the second sentence of section 9(g)(3), which defendant does not address, provides that the making of that payment ‘confirms the extinguishment’ of a lien created under section 9(g)(1). Construing the two sentences together, the court said that the lien for unpaid assessments is extinguished only if the purchaser pays the assessments which are incurred after the sale. Thus, when the bank failed to pay its share of the common expenses assessed from the first day of the month after the date of the sale- and the reason why it did not is not explicated in the opinion- meant that the lien for preexisting assessments was not extinguished. The lesson for a new owner is don”t wait to pay the post-sale assessments. Pay them under protest if need be.

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