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71 » VISIT US ONLINE @ DSNEWS.COM ILLINOIS ILLINOIS SUPREME COURT AFFIRMS RULING AFFECTING CONDOMINIUM ASSOCIATION LIENS AND THE PAYMENT OF POST-JUDICIAL SALE ASSESSMENTS By Michael Anselmo, Anselmo Lindberg Oliver LLC In December of 2015, in a unanimous decision, the Illinois Supreme Court affirmed the Appellate Court's ruling in the case of 1010 Lake Shore Association v. Deutsche Bank National Trust Co., holding that a condominium as- sessment lien against foreclosed property survives the foreclo- sure where post-sale assessments go unpaid. In August, 2014, the Illinois Appel- late Court held that the purchaser of a condominium unit at a foreclosure sale must pay the monthly assessments that come due beginning with the first month after the sale occurs. Otherwise, the lien for pre- foreclosure assessments (regular or special) survives the foreclosure. Specifically, the appellate court held that payment of regular post-foreclosure-sale assessments after the sale serves to "confirm the extinguishment" of any pre-foreclosure assessment lien held by the association. In affirming the appellate court, the Il- linois Supreme Court held that "e plain language of Section 9(g)(3) . . . provides an additional step to confirm or formally approve the extinguishment [of pre-existing as- sociation assessment liens] by paying the post-foreclosure sale assessments." e opinion further rea- soned that, "mortgag- ees may be exempted from liability for the prior owner's unpaid assessments, but only if the mortgagee pays the assessments com- ing due following its purchase of the unit at the foreclosure sale." Significantly, the Illinois Supreme Court also strongly implied that it is the duty of the successful bidder at the foreclosure sale to re- quest the amount to be paid. e Court noted that Section 9(j) of the Illinois Condominium Property Act gives lien holders the ability to demand a statement of unpaid assessments. us, if a lender is the winning bidder at the foreclosure sale, it could, as a lien holder, de- mand such a statement. e relevant statutory provision reads as follows: Any encumbrancer may from time to time request in writing a written statement from the manager or board of managers setting forth the unpaid common expenses with respect to the unit covered by his encumbrance. Unless the request is complied with within 20 days, all unpaid common expenses which become due prior to the date of the making of such request shall be subordinate to the lien of the encumbrance. Any encumbrancer holding a lien on a unit may pay any unpaid common expenses payable with respect to the unit, and upon payment the encumbrancer shall have a lien on the unit for the amounts paid at the same rank as the lien of his encumbrance. Lenders should take notice of two issues with this statute. First, the opinion requires payment of regular monthly assessments that come due in the month following the foreclo- sure sale. e above statute does not, however, require the association board of managers to supply any specific information. Condo as- sociations can be expected to take advantage of this and refuse to advise of the amount due for regular monthly assessments and instead pres- ent a demand for all unpaid assessments. Sec- ond, note that if a lienholder's request for a statement goes without a response for 20 days, the association lien is automatically subordi- nate. e ruling gives lenders a strong incen- tive to take advantage of this provision. e last thing to note about the opinion is that is says nothing about when dues must be paid in order to confirm extinguishment of pre-foreclosure association liens. us, this will continue to be a contentious issue in which lenders tender payments, associations refuse them, and the two then argue about what total amount is due. "Significantly, the Illinois Supreme Court also strongly implied that it is the duty of the successful bidder at the foreclosure sale to request the amount to be paid."

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