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» VISIT US ONLINE @ DSNEWS.COM 71 Can loan servicing be personal? Using modern, cloud- based technology and dedicated support teams, we shape our operations to how our clients do business. Learn more at bsifinancial.com/personal The new standard for performance. 972.347.4350 sales@bsifinancial.com FROM THE BENCH PUT A STOP TO YOUR LIABILITY FOR UNPAID PRE-FORECLOSURE CONDOMINIUM ASSESSMENTS By Brian P. Tracy; Codilis & Associates, P.C. In Illinois, determining the extent to which parties to an REO transaction are responsible for the payment of condominium assessments presents a variety of challenges. Although a mortgagee who acquires title to a condominium unit by judicial deed has an obligation to pay the subject unit's pro- portionate share of assessments from and after the first day of the month after the judicial foreclosure sale, any liability for outstanding assessments that remain prior to the date of the judicial foreclosure sale depends on whether the new owner satisfies their statutory obligation as discussed below. Fur- thermore, beyond the mere obligation to pay the assessments remains the more pressing question as to the amount that may be collected and what effect the payment of post-judicial sale assessments in accordance with Section 9(g)(3) of the Illinois Condominium Property Act (the "Act") has on extinguishing the lien for pre-sale assessments as set forth by Section 9(g)(1) of the Act. 1010 Lake Shore 1 confirms the statutory require- ment that a mortgagee who acquires title to a condominium unit by judicial deed has an obligation to begin paying assessments beginning the first day of the month after judicial sale per Section 9(g)(3); the case further adds that the payment of post-sale assessments confirms the extinguishment of the lien for pre-sale assessments as proscribed in Section 9(g) (1). In 1010 Lake Shore the defendant, Deutsche Bank National Trust Company ("Deutsche Bank"), ac- quired title to the subject condominium unit through judicial foreclosure sale. Per Section 9(g)(3) Deutsche Bank had an obligation to begin paying assessments on the first day of the month post-sale. Its subsequent failure to tender the amount due for any post-sale assessments it had incurred meant that the pre-sale assessments attributable to the prior owner were never extinguished and, consequently, became Deutsche Bank's obligation to pay. Deutsche Bank argued that Section 9(g)(3) provides that the purchaser who acquires title at a judicial foreclosure has only an obligation to pay assessments that began to accrue beginning the first day of the month after judicial sale and, although the court agreed with Deutsche Bank's position, it added that the plain language of Section 9(g)(3) is clear that the payment of the post- sale assessments confirms the extinguishment of the preexisting lien created under Section 9(g)(1). In Pembrook 2 , a case decided eight months prior to 1010 Lake Shore, the court found that that a similar claim for pre-sale assessments had in fact been extinguished as the mortgagee who acquired title at judicial foreclosure sale had attempted to tender payment for the assessments that became due beginning the first day of the month following the judicial foreclosure sale. Pembrook, the court found, was distinguishable from 1010 Lake Shore as the defendant and current owner, North Shore Trust & Savings ("North Shore"), had tendered payment for the post-sale assessments. e fact that the associa- tion failed to accept the tender was irrelevant as per Section 9(g)(3) the claim for pre-sale assessments was extinguished by North Shore's act of tendering payment for the post-sale assessments. e court in 1010 Lake Shore was clear that had Deutsche Bank tendered payment, it also would have satisfied its obligation to pay under Section 9(g)(3) and had the effect of confirming the extinguishment of the as- sociation's claim for any unpaid pre-sale assessments created by Section 9(g)(1). In practice, the payment of post-sale assess- ments is a matter not fraught with nearly the confusion and ambiguity presented by the issue of pre-sale assessments. Associations, and the nu- merous agents acting on their behalf, are typically willing to provide the new owner of a condomini- um unit, whether by virtue of mortgage foreclo- sure or otherwise, a statement as to the current assessments and obligations that are appurtenant to the ownership of the condominium unit. So long as an owner is able to obtain this information in a timely fashion subsequent to judicial sale and finds it to be accurate and reliable it is clear from these recent decisions that tendering the payment of the amount claimed due for post-sale assess- ments effectively defeats any future claim from the association for pre-sale assessments and confirms the extinguishment of the lien for pre-sale assess- ments that would have resulted from the prior owners' non-payment of the same. An owner's failure to simply satisfy the obligation created by Section 9(g)(3) opens the door to legal challenges seeking to assert the claim of lien for pre-sale assessments where it would have otherwise been shut and the issue rendered moot. 1 1010 Lake Shore Association v. Deutsche Bank National Trust Company, as Trustee for Loan Trust 2004-1, Asset Backed Certificates, Series 2004, 2014 IL App (1st) 130962 (August 12, 2014) Cook Co., 2d Div. (SIMON) Affirmed. 2 Pembrook Condominium Association-One v. North Shore Trust & Savings, 2013 IL App (2nd) 130288 (December 17, 2013) Lake Co., (BURKE) Affirmed.

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