We have a deadbeat in our association who owes assessments and late fees. Now he's listed his property and

Asked by Samantha, Chicago, IL Thu Jul 24, 2008

may have a buyer. He has been notified numerous times that he's in arrears. If the association does not find an attorney quick and file a lien (or whatever) before he closes, are we automatically out the money he owes? Thanks for any direction you can provide.

Help the community by answering this question:

+ web reference
Web reference:


Carol Kurz’s answer
Carol Kurz, , Evanston, IL
Fri Jul 25, 2008
This is actually a much simpler process than you may think., especially if you are on the Board. There is nothing that you need to do at this moment. Let him run through the course of selling his property, however, once a closing is scheduled and the attorneys are preparing their final paperwork, they will request a "paid assessment letter." This is where you begin to fight back and, by law, refuse to issue this letter, as assessments are, in fact, not paid. Needless to say, this will delay his closing but that is no matter to you, as recouping your funds is your priority.

As someone else answered, it will not hurt to give a heads up to both attorneys that this is the situation. The Board should have been furnished a copy of the contract by now, so all of this information should be in hand for your use.

I am the president of the my condo Board and have handled this type of situation, unfortunately, many times over. But, you and your association are protected.

FYI, filing a lien and going through the motions of taking possession of his unit in leiu of past-due assessments takes many, many months and your greates relief should lie in the sale of his unit. Honestly, this is the best way it could work out for your entire association, as it is most often the best way to get your accounts settled.

Hope this puts you at ease. In agreement with most, I do recommend that you consult a real estate attorney on behalf of your association.
1 vote
Scott Shapiro, Agent, Evanston, IL
Wed Oct 8, 2008
Great answers!! You should know what to do now. Find the attorney or agent representing the buyer and let them know your deadbeats situation. The buyers will be requesting that letter soon, if they haven't already. When your association says "We'd love to issue the paid assessment letter but this guy owes $1500!!" The attorney's will make the deadbeat seller pay up if he wants to close.....simple as that.

Contact me if you need more direct answers and explanations!

Scott Shapiro
0 votes
Alan May, Agent, Evanston, IL
Fri Jul 25, 2008
In Chicago, it's very rare for a closing to occur on an "attached" property (condo or townhome) where there is a Homeowners Association Fee involved, for it to close without a required "paid assessment" letter.

Our closings are done with attorneys, and no real estate attorney worth his/her salt, is going to allow his/her buyer to purchase a condo without requiring a paid assessment letter. Don is right, that the lien is a much stronger method of enforcement, but it does require a little effort on the part of the board.

I would recommend that the board contact the seller's real estate agent, and make them aware of the arrears, and make sure they understand that the board will not supply a paid assessment letter, unless the arrears are made current at least 30 days prior to any closing. Once the agent is aware of this, I'm sure they'll make certain the seller's attorney is informed, and they'll make sure the association gets paid.
0 votes
Lisa Schade, Agent, Libertyville, IL
Fri Jul 25, 2008
The dues and assessments will be brought forward at the time of the sale. The Buyer's attorney will do a title search, if the buyer is not forth coming that there is an association. The buyer's attorney will call the association. And these fees will be cleared at closing if not before. The buyer will have to notify the association that they are the new buyer's and to send the association bills to them. Or they will have to pay the association bill for the upcoming year at the time of closing. EIther way, the new buyer's will start at a zero balance and the previously due portion will be corrected through the transaction process.

Hope this helps!
0 votes
Mwass, , Chicago, IL
Fri Jul 25, 2008
the assessments are due and owing to the association without regard to who owns that condo unit - the deadbeat or anyone he sells to. never mind the buyer's mortgage lender, no reasonable buyer (and no buyer represented by a competent real estate attorney) is going to buy the condo without proof that all assessments are paid in full through the date of closing. if he sold the unit, you could make claims against both the old owner and the new one!

a lien simply places the world (Ok, the people who take the time to look at the recorder's records) that the debt is due and that you are "in line" to get paid from proceeds of the condo sale (in line behind anyone who recorded a lien before you and ahead of anyone else that deadbeat owes money to that has not perfected a lien yet).
0 votes
Stacy Karel, Agent, Chicago, IL
Fri Jul 25, 2008
It wouldn't hurt to call the agent representing the property to let them know that his or her seller will have difficulty getting the paid assessment letter because they are in arrears.
0 votes
Don Tepper, Agent, Burke, VA
Thu Jul 24, 2008
I'm not a lawyer, so this isn't legal advice. But the previous advice about a lien is good. To answer your more recent post:

A lien is public notification that money is owed. It "clouds the title," making it very, very difficult (if not impossible) to sell the property until the lien is removed. And the condo association would only remove the lien once the arrearages are paid.

Will you be "out the money" without a lien? Maybe. Eric says, "the bank will most likely request a paid assessment letter." If it did, and actually paid attention to it, that might hold the sale up. But a lien is a much, much stronger technique.

You ask: "does it make any difference if we are a townhouse and not a condo?" That's a question for a lawyer. However--and I'm not a lawyer--the association is a legal entity. Money is owed to it. It shouldn't make any difference. A workman can file a lien. A person who slips and falls and successfully sues can file a lien.

Any competent lawyer should be able to do it, and it shouldn't cost that much. Eric provided a recommendation; I'd suggest starting there.

Hope that helps.
0 votes
Samantha, , Chicago, IL
Thu Jul 24, 2008
Thanks for responding so quickly. I am not on the board, but as a unit owner, I am very worried that the board is not acting quickly enough to do what needs to be done. What does "it won't hurt to have a lien" mean exactly? Will we be out the money unless a lien is placed prior to closing? Also, does it make any difference if we are a townhouse and not a condo? Thanks again, I plan to print this info to light a fire under some people...
0 votes
Eric Marcus, Agent, Chicago, IL
Thu Jul 24, 2008
If the buyer is getting a mortgage the bank will most likely request a paid assessment letter prior to closing and at that time you could hold back the letter until you receive full payment. However, its best to place a lien on the property (if allowed by your condo declarations) so that it cannot transfer until he pays up.

If you need an attorney to file the lien, contact Nick Jakubco at 773-588-3395. For a reasonable fee he will do it for you.

As with all legal matters, contacting an attorney and not relying solely on the advice of agents is a good idea.
0 votes
Tom Cox, Agent, Louisville, KY
Thu Jul 24, 2008
You don't need to hire the most expensive attorney in town to place a simple lien on the property in question, but I assure you, you best be getting on with this process. It won't hurt to have a lien.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more