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Q&A: To Foreclose or Not?

Q I am the president of a 60-unit condo association. One of our original owners,  severely handicapped, lost his unit to bank foreclosure in December 2012. He was supposed to have moved out by January 3, 2013 but he is still here. We have returned the 2013 assessment he paid because we believe the assessment  is now the bank's responsibility. No one on the board is in a hurry to see this  family put out of their home. But what worries us is this: Are we shirking our duty knowing he is living free in the unit? We are assuming the bank doesn't know that he hasn't moved. Is there something the board should be doing? Or is it okay to just bide our time until the bank figures out that the unit is  not empty?  

 —Showing Compassion in Chicago

A “A board may not waive collection of assessments, from any ‘owner’, this includes a lender that becomes an owner,” says Sima Kirsch, an attorney at the Law Office of Sima L. Kirsch in Chicago. “This is a mandate of the ICPA and included in every set of operating documents.  Therefore, when necessity requires, and the board doesn’t keep such information readily available, and it probably should, the board  needs to determine the legal owner of the unit and undertake whatever process  necessary and available depending on the point in time you are collecting, to  collect the assessments no matter what an owner might be experiencing.  

 “It also only matters who the owner is, not who is living in the unit. It is  difficult to determine your past relationship with the individual owner or his  payment history, whether you needed to do any type of collection. He could  still be tied up in a court matter but you can proceed against the owner  separately or it could be as easy as the bank already in title and a letter,  even though the owner has not moved, directing them where assessment payments  are to be made.  

 “Any claim for past due assessments is accounted for up to 6 months and fees and  costs at time of sale when it has been sold to a third party. An owner after a  confirmed sale will receive a 30 day notice to vacate and this is whether to a  third party seller or the lender. You would know this as you would need to  provide documents for the sale. A lender receives documents by court order. It  could be more complicated based on the actual facts or the recourse at this  point may be limited. Without knowing certain other important operative facts  and with the tricky interplay of assessment collections and foreclosure it is  difficult to give a clearer response to your questions.  

 “Again, without exact facts, none of this information should be taken as legal  advice and you should consult an attorney in the field who can help you assess  your particular factual situation.”  

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