When a legal right is still wrong!
More and more of my clients are running into problems with the 
Illinois Condominium Property Act and the Associations when they purchase foreclosures. Even though these foreclosures are 'deals' it is imperative that you contact the association BEFORE you make an offer on the property to see how much you will be paying.
The buyer paying? What? Lyn, are you sure?
Yes, the buyer pays some back association fees and some legal fees for the association. The Illinois Condominium Property Act states that if you buy foreclosed property from the bank, you are responsible for assessments for the six months immediately prior to when the association instituted legal action to collect the assessments, assuming that such assessment is still unpaid. If the homeowner did not pay assessments for more than six months before the association took legal action, you are still only liable for six months' assessments. If the association never took legal action, you are not responsible for the assessment at all. In fact, the new buyer would benefit here because they were purchasing a foreclosed condo in an association that never filed suit for past due assessments.
The bank (that foreclosed the condo and is now the new owner) is liable for assessments from the first day of the month after the month in which the foreclosure took place, through the date you close on your purchase from that bank. So right after the foreclosure, this bank (new owner) starts making assessment payments.
They don't make all the back assessment payments? NO.
Is it fair? NO. But it is something you should know about as a buyer and take that into your budget and negotiation strategy. Some attorney's don't even know about this law and there are plenty of arguments going back and forth as to whether the association legal fees are included under the law.
It's not fair that the new buyer should have to pay back assessments! YES, that's true. The law was designed to give the association some relief and payment after lengthy foreclosures in the association. Some assessments after all have not been paid for years! Gas still needs to be paid, or the water if that is included every month. Until a new owner is found, the association is on the 'hook' for the assessments.
It's not fair that the association treats the new buyers this way! YES, that's true. That is another reason why you should take this into consideration with your offering price.
It's not fair to the new buyers but it's still the law in Illinois. That is why I educate my buyers and get the information from the association to see how much will be due at closing. Make sure you understand how much you will owe at closing if you're purchasing foreclosed property from a bank!
Lyn Sims (847)230-7324
at RE/MAX Suburban
I proudly serve and sell real estate in the Northwest Suburbs of Chicago. If you are thinking about purchasing or selling your home in the communities of Schaumburg, Hoffman Estates, Elk Grove Village, Roselle, Palatine, Medinah, Itasca, Bloomingdale, Carol Stream, Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and more importantly, want to work with a local area expert, contact me immediately.
Resources: Naheed Amdahi, Attorney Skokie IL
Arnstein & Lehr, LLP
When a legal right is still wrong! ©2009 Lyn Sims - RealEstateConsumerInfo.com and RealEstateBuyMe.com
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