“Boards often argue that it is unjust and unfair for delinquent owners to continue to be able to enjoy all of the amenities and privileges of paying owners; however this is the requirement of Illinois law. Delinquent owners are permitted to run for and serve on the board of directors, serve of committees, utilize parking, use the pool and exercise facilities, and all other common amenities. If adverse action is taken against a delinquent owner, claims of discrimination often arise, which may be costly to defend. Boards should focus on aggressive and uniform collection policies to minimize delinquencies.
“The next issue is whether or not the association can compel a renter to stop paying a delinquent unit owner and instead pay rent to the association until the arrearage is satisfied. Illinois law allows an association to execute an assignment of rents and collect rents to offset the outstanding debt, however only after the association has initiated a collection action pursuant to the Forcible Entry and Detainer Act and obtained a judgment for possession. Upon entry of a judgment and order for possession, rent is automatically deemed assigned to the association unless and until such time the judgment is vacated. Therefore, the association may collect rent from the tenant(s) until the entire debt has been paid and an order vacating the judgment has been entered by the court. This option provides both a benefit to associations, by granting them immediate relief to collect rent payments and repay unpaid assessments; and a benefit to paying tenants who do not wish to have their living situation terminated. Additionally, the association does not have to wait the 60-day statutory stay period before enforcing its rights to recoup unpaid assessments.
“To facilitate the rent assignment, the association can and should obtain an “Information Certificate of Assignment” from the clerk of court. The certificate must be sent to current tenant(s) and serves as notice to the tenants that a judgment has been entered against the unit owner and that the unit owner’s right to collect rent has been extinguished. The tenant(s) must immediately begin making their monthly rent payments directly to the association under the same terms as set forth in the lease agreement with the owner.
“Tenants often question the legality of sending their payments directly to the association, no doubt fearing a backlash from the landlord. While this might seem at first glance as a breach of the lease and the tenant’s duty to pay the landlord, the statute expressly provides that a landlord-unit owner may not sue the tenant for failure to pay rent that is sent to the association. Because the certificate of assignment does not provide all of this information, it is helpful for the association or the association’s attorney to send a letter to the tenant(s) along with certificate explaining that the unit owner has lost his/her right to collect rent and may no longer demand rent from the tenant.
“What makes the rent assignment most advantageous for condominium associations is that it allows the association to immediately begin collecting monthly rent from a tenant, which often times exceeds the monthly assessment. Notably, the rent assignment is terminated upon satisfaction of the entire judgment, costs, fees, unpaid assessments and after accruing assessments and upon entry of an order vacating the judgment.”