A group of people have gathered outside the door of a unit in a condo building. They’re frustrated. They’re angry. They’re the members of the condo association’s board, and one of the unit-owners in their building is behind -- way behind -- in paying his assessment fees. If the board doesn’t get the money from him, everyone else in the building (including the angry members of the board) will have to pay more -- all of this because one unit-owner hasn’t paid
He agreed to pay the fees when he purchased the condo. Those fees are his share of the upkeep for the building’s common areas: its roof and hallways, maybe its elevator if it has one. These are important things -- things that need to be taken care of -- and because one unit owner hasn’t paid, everyone else will have to pay his share.
Maybe the board members sympathize. Times are hard. Economy’s bad. Property values are down. The current value of the condo is less than what he paid for it. But times are hard for everyone. The board members are struggling with the same bad economy. The value of their condos might be less than what they paid, too -- and if they don’t maintain the common areas of the building, the value will drop even more. So they need the assessment fees, one way or the other, and they can’t afford to pay more than they already do.
The board members are frustrated . . . angry. They’ve gathered outside the delinquent unit-owner’s door to get their money, and naturally he isn’t home -- maybe he hasn’t been home for months, maybe he doesn’t even live in the unit anymore. So one of the board members kicks open the door. They charge into the condo unit. They take all his stuff, bring it outside, and hold an impromptu yard sale, keeping their fingers crossed that the unit-owner’s couch, television, computer, and stereo bring a good price -- a price high enough to pay the association fees the unit-owner owes, so they don’t have to.
Those parts about kicking down the door and holding the yard sale aren’t true -- can’t happen, at least not legally -- but that’s what I imagined when I read the following: “Illinois Condominium Property Act allows for the forcible entry and detainer, or eviction, of a condominium owner who does not pay his or her share of common expenses, or assessments, thereby affording condominium associations a unique mechanism by which to collect on a lien . . . .”
I came upon the passage while doing research for the Institute for Housing Studies (IHS) at DePaul’s College of Business. The IHS is dedicated to collecting and analyzing data about housing to help provide affordable housing in Chicago and Cook County. As a part of this mission, it investigates the financial pressures the recent mortgage crisis and current recession are putting on condo associations, and one of these pressures is unpaid association fees.
I was a little bit outraged when I read that a condo association could evict one of its members. He paid for his property. It’s his by right, so how can others in the building take it away? These are private citizens, not the government. Can a utility company evict a person for not paying his bill? And if not, why should a condo association be able to evict a unit-owner for not paying his bill to the condo association? But the reality of forcible entry and detainer is neither as exciting as what I imagined, nor as outrageous as I initially believed, but it is an effective solution to a singular problem condo associations face when confronted with a unit-member who can no longer afford to pay his association fees.
Illinois law allows a condo association, once it has enforced a lien for delinquent association fees, to take possession of a unit. The owner still owns the condo, but he can’t live there. He has the right of ownership, but not the right of possession. Effectively, the condo association has evicted him. In order to regain possession, the delinquent unit-owner must pay his overdue fees. While in possession, the condo association can lease the unit, and through rents, generate income to help defray the cost of the unit-owner’s unpaid association fees. In other words, the other unit-owners in the condominium association don’t have to pay for all the unpaid fees of a delinquent unit-owner out of their own pockets. Instead, they can use the property of the delinquent unit-owner to help pay his association fees.
One situation where forcible entry and detainer is particularly effective is when the delinquent unit owner abandons his condo because he simply can’t afford it anymore. It takes time for ownership of the condo to pass from the delinquent owner to a new one who can pay association fees. Foreclosure is a time-consuming process, and a bank might be slow in starting the foreclosure process. The time it takes is likely measured in years, and those years are in addition to the months of unpaid association fees that drove the association to seek the lien on the delinquent unit-owner’s property in the first place. During those years, the fees aren’t being paid, and being able to lease the condo unit can make up some of the difference. The downside is that it requires the members of the association to become landlords, but in a poor economy, being a landlord might be a better choice than having to pay more money.
While this may seem an extreme solution, the Forcible Entry Act provides a statutory scheme for the condo association assuming possession of the unit. The whole process from obtaining the lien to taking possession requires judicial approval, so there is oversight by the court. Also, the law dictates how the condo association can spend the rent. Broadly, the rent goes to pay the delinquent fees, the costs associated with collecting those delinquent fees, and the current association fees; then the condo association must send any remaining money to the unit owner. As for that couch, television, computer, and stereo I imagined being sold at an impromptu yard sale, the condo association doesn’t get the delinquent unit-owner’s personal possessions. The sheriff is the one who actually does the forcible entering of the condo, and he takes responsibility for the possessions.
The author is a current student in the DePaul Housing and Community Development Legal Clinic. Views expressed on this blog are those of the student author and do not represent the position of the Clinic or the University.