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Asked by David Pulley, Chicago, IL Thu Mar 7, 2013

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Answers

11
Don Pasek, , Chicago, IL
Thu Mar 7, 2013
Hi, David:

It is highly unlikely that the seller (or the Association) will collect $17,000 in past due assessments. This is due to a 2007 amendment to the Illinois Condominium Act.

Under this amendment, a condominium association may collect up to six months' past due assessments from the purchaser of a "Real Estate Owned (REO)" property, that is, one that has been obtained through a foreclosure sale by the lender. The Association must file an action in court prior to any foreclosure to protect its rights to collect.

Take a look at these links for several explanations:

http://www.arnstein.com/Condo-ICPA/ICPA-Handbook.pdf
http://www.amdanilaw.com/2008/07/condominium-assessments-whe…

According to the Clerk of the Circuit Court, the Drexel Parc Lofts Condo Association did file such an action, for $2038.21, back in April of 2009. Subsequently, Bank of America filed a foreclosure action in June of 2009 on the property, and obtained possession in June of last year, according to the Cook County Recorder of Deeds.

The property you asked about has a monthly assessment of $354, according to its listing broker.
So, under the law, the amount due would more likely be in the range of $3,000, not $17,000, including legal fees to the Association's lawyer. Of course, if there was a special assessment in those last six months, it's also collectable from the purchaser. Since this is a relatively new development, this is also unlikely.

The listing broker should have done some investigation into this by now; the property has been on the market for 93 days. If you are interested in it, call the broker and request a full accounting of the claim against the property -- you are entitled to this information as a purchaser, and the broker certainly knows that no one will make an offer without it.

Regards,

Don Pasek, CIPS, TRC, ADPR
Omniterra Real Properties
Chicago
1 vote
Mike Opyd, Agent, Chicago, IL
Fri Mar 8, 2013
I would expect this is for a foreclosure transaction. Because of the Illinois Public Act 94-1049 that was passed a few years ago banks are expecting the buyer to pay 6 months of unpaid assessments because they dont want to pay them as they are already taking a hit as it is. Especially in the Chicago market right now with inventory level so low we are seeing multiple offers across the board especially in foreclosures so banks know they can ask for the unpaid assessments since buyers are willing to pay the assessments in order to get the unit. I would ask the bank to cover the assessments and negotiate from there. They may be willing to cover a portion of them.
0 votes
Manuel Brown, Agent, Chicago, IL
Fri Mar 8, 2013
Dear David,

Don Pasek hit the nail on the head. The amendment to condominium association act only allows the associations to collect six months of past assessments. One of the purposes of amendment of the act was to prevent condo association to simply sit pack and not take legal action against the condo owner. After so many months a condo association has the RIGHT to evict an owner for unpaid assessments and rent the condo at market value until the delinquent association dues and late fees are paid. within this the association has the right to recuperate all legal fees associated with correcting the problem.

Any association that doesn't act on behalf of community is causing harm to the overall health of the building.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Mar 8, 2013
David,
If one were to turn the question around, "How can a buyer expect a seller to 'give their house away' for $20,000 less than list price?"

Or, why does a buyer think they can beat down the seller further with a goofy appraisal...or repairs listed by a rogue inspector.

The right answer is...."It all part of the negotiation strategy!" You keep asking until the other side says "No", then you reevaluate how much you want to buy or sell the house.

This scenario has come up with past assessments, liens, and even the potential IRS bill that would arrive at the end of the year.

Anything can and does happen. This is a question you need to redirect to your real estate consultant. Your consultant can explain in detail what Don refers to. Be aware, banks, especially 'big banks' have a tendency to ignore the intent of legislating like this (which the big banks wrote and exempted themselves) so it comes back to, 'Just because they ask, does not mean you have to accept or can not counter. "How much do you want the house?"

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us

Scotsdale Bluffs, Dunedin Home Tour
http://youtu.be/KTuVUxNDpOQ
0 votes
Scott Godzyk, Agent, Manchester, NH
Fri Mar 8, 2013
This is more typical with short sales. With REO properties teh bank will bring things current. If you want to bnuy a short sale, that is what it takes some times. the price of the home should be 17k less then. This is why so many short sales do not sell.
0 votes
Jack Lewitz, Agent, Lincolnwood, IL
Fri Mar 8, 2013
Dans answer is very good. I would check about special assessments just in case?
0 votes
Philip Sencer, Agent, Chicago, IL
Fri Mar 8, 2013
The seller can ask for anything. It does not mean they will get it depending on how motivated the buyer might be. You can add the 17K to the price you offer or offer less or walk away from the property.
0 votes
Ivan Sagel, Agent, Chicago, IL
Thu Mar 7, 2013
David,

Everything is negotiable. Typically the buyer can be responsible for up to six months of unpaid assessments.

Best regards,

Ivan Sagel
312.515.7823
Ivan@atproperties.com
0 votes
Jose Hernand…, Agent, Chicago, IL
Thu Mar 7, 2013
This is common with short sales, your agent should of had advised you of this prior to making an offer. Also, this is negotiable with the lenders and association but I would budget for the full amount when making the offer.

Goof luck!
0 votes
Matt Laricy, Agent, Chicago, IL
Thu Mar 7, 2013
If no one has been paying the assessments, someone has to be responsible for paying them up to date.
0 votes
Jorge Vega, Agent, Chicago, IL
Thu Mar 7, 2013
Hello David,

You will typically see this request in foreclosed condominiums. In many cases the bank is selling you the property as is and with any liens or fees associated to the unit. If you hired a professional agent they will be able to give you comparable properties that sold within the past six months. Based on that information you can make a judgement on whether you are getting a great deal or overpaying for the unit. Interview three buyers agents and go with the one that you feel will jump hoops for you. Good luck!
0 votes
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