Condominiums Win in the Supreme Court – 1010 Lake Shore Association v. Deutsche Bank

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On December 3, 2015 the Illinois Supreme Court issued a ruling in  1010 Lake Shore Association v. Deutsche Bank National Trust Company, 2015 IL 118372.  The Supreme Court’s affirmation of this case substantiates a condominium association’s right to collect all unpaid common expenses on a unit in mortgage foreclosure if the foreclosing bank fails to begin paying its share of common expenses after the judicial sale.  In ruling, the Court held that Section 9(g)(3) of the Illinois Condominium Property Act requires the payment of assessments in order to foreclose or extinguish prior existing liens – and to that logical conclusion, in the absence of such a payment, a prior existing assessment lien would not be foreclosed.

 

While community association advocates consider this case a substantial and important victory for not-for-profit associations uncertainties remain.  Neither the ruling in the case nor the plain language of the statute are clear on what is or is not a timely payment by the bank. Needless to say, the impact of the case is that foreclosing banks are best served to make some form of payment in response to a Notice and Demand for Possession served by an association because it now risks being held responsible for pre-foreclosure unpaid common expenses.

 

Please do not hesitate to contact me to determine a course of action on any pending or future collection actions involving foreclosures.