Daily Development for Thursday, September 6, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

CONDOMINIUMS; ASSESSMENTS; LIENS: Extraordinary Illinois procedure permits association to seize possession of owner's unit for nonpayment of assessments. Knolls Condominium Association v. Harms, 759 N.E.2d 985 (Ill. App. 2001).

Illinois condominium law, probably unique in all the land, provides that an action in forcible entry and detainer may be maintained "[w]when an property is subject to the provisions of the Condominium Property Act [and] the owner of a unit fails or refuses to pay when due his or her proportionate share of the common expenses of such property."A judge, upon hearing, will issue the eviction order but will stay it from 60 to 180 days in order to permit the unit owner to see the light (or the dark) and satisfy the claim before eviction.

The statute gives the association the right to take possession of the property upon such eviction and rent it out to generate revenues to pay the arrearages and currently accruing assessments. There is even a right to attorney's fees in the association.

In this case, an association filed a complaint in forcible entry and detainer against Mary E. Harms ("Defendant"), alleging that Association was entitled to possession of Defendant's condominium unit because Defendant was indebted to Association for unpaid maintenance assessments related to the unit in the amount of $2,326.40 plus costs and attorney's fees, and that Defendant was wrongfully withholding possession of the unit from Association.

Defendant asserted, as an alternative affirmative defense, that she was the owner and resident of the unit and was entitled to an estate of homestead in the unit, which estate of homestead was a proper defense to Association's action in forcible entry and detainer.

Although, in this case of first impression involving construction of the conflict between the homestead and condominium statutes the courfound that the estate of homestead could not be divested by a forcible entry and detainer action, the Illinois legislature has quickly acted to clarify the statute. So the outcome of the case is now moot, and the editor has reported this case simply to highlight this very unusual statute.

Comment 1: The editor was unaware of this feature of Illinois law and finds it utterly remarkable, particularly in a state that requires judicial foreclosure of mortgage liens. Basically the forcible entry and detainer action does away with a foreclosure requirement, or any justification for receivership in a debt collection proceeding.

Presumably the association in possession has some responsibilities as would a mortgagee in possession, but nevertheless the notion that one must turn over one's residence to an entity for purposes of collecting a debt, even when the amount owed is relatively small in relation to the value of the property, is certainly unusual.

After all arrearages are paid and the unit is current, the owner has the right to go to court and seek a vacation of the possession order.

Comment 2: Dave Bendoff, a condominium specialist at Arnstein & Lehr in Chicago, reports that he files "100's" of these forcible entry and detainer actions each year, but few of them result in dispossession, since the recalcitrant unit owners usually get in line. Dave indicates that associations usually wait until arrearages have built up for 90 days or more because otherwise the amount to be collected is so small that it is difficult for the court to accept an award of attorney's fees that is commensurate with the labor needed to brings these actions off.

Comment 3: Although one might argue that assessments are the equivalent of rent, and the remedy the equivalent of a landlord's eviction, we ought to keep in mind that, unlike the landlord, the association is not the owner of the unit - the defendant in the eviction action is. The justification for the device, of course, is that all of the owners in the project benefit from this policy, since revenues are needed to maintain the premises. Without a policy like this, nonpaying unit owners become "freeloaders," - enjoying maintenance, insurance, and various other amenities while remaining in possession.

On the other hand, many associations use assessments to fund a variety of projects that individual unit owners might not agree are in their individual interest. Not only must they pay anyway, but now they must pay at peril of losing their residence.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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