Delinquency - Condo Dues In Illinois And How Bankruptcy Can Help
March 18, 2014
Condominiums (Condo) include multi-unit apartments and townhouse and some single family house. While co-ops are a bit different the following generally apply to the following.
Owners of Condo units are responsible for monthly dues or assessments. In addition the Condo Association can levy special assessments. The special assessments can be required to be paid in a lump sum or over a period of time.
What happens if I fall behind? What can the Condo Association due? What can I do to protect myself?
FALLING BEHIND ON CONDO DUES
Generally monthly condo payments are due on the first of the month. If received after the 15th of the month a late charge is levied.
When the condo is behind 31 days or more the Association will send a collection letter for the full amount due and the day it expect the payment to be made. Many Associations hire Management Companies. When a Management Company sends the letter they will likely add another fee.
The collection letter must comply with the Fair Debt Collection Practices Act allowing the condo owner time to dispute the delinquency and/or the amount demanded
At some point the Association will refer the matter to a law firm who concentrates in collecting defaulted condo dues.
THE CONDO LAW FIRM
Generally, they too will send a demand letter which will include so-called reasonable attorney’s fees.
As the matter progresses there will be a title search and thereafter a recorded Lien placed on the unit. Again more costs and fees.
FORCIBLE ENTRY AND DETAINER (EVICTION)
The Condo Association can proceed with a law suit to gain possession of the unit. If a judgment is entered the possession can be enforced by the sheriff.
While rare the Association can actually file a foreclosure. It is rare because most condo have mortgages and other liens making it impractical. But if there is a lot of equity there is nothing to stop them.
When the condo unit is subject a foreclosure or if the condo owner abandons the unit a Money Judgment can be entered against the owner. After that they can pursue collection the same as other creditors including wage garnishment and bank garnishments.
A condo owner can file a Chapter 13 assuming the ability to pay the current condo dues and repay the back amounts over a period up to 5 years
At any time the condo unit owner can file a Chapter 7 to obtain a discharge of back condo dues (although a lien will remain.) However, the unit owner is legally responsible for future condo dues.
Frequently there is a pending foreclosure which will end with a sheriff’s sale. The unit owner can file a Chapter 7 and receive a discharge of the mortgage debt and condo arrearages but will have to pay future dues. Pending an eventually move this might be cheap rent.
On the other hand if the unit owner has moved out of the unit it might well be best to wait to file a Chapter 7 until after the mortgage company completes its sheriff’s sale.
If you are have a condo dues arrears problem please feel free to contact us. We can discuss your problem and let you know what options you have. Our consultation is Complimentary and confidential.