What does it cost an Illinois condominium association to collect unpaid assessments? The answer depends on several factors, including the declaration, the bylaws, the unit owner’s willingness to cooperate, whether the case goes to court, and how far it proceeds in court.
Fortunately, many Illinois condominium declarations and bylaws allow associations to recoup collection costs, including attorney’s fees, and costs from the delinquent owner. While the majority of collections are resolved early in the collections process, the recovery of attorney’s fees is not automatic. Illinois courts maintain discretion to determine the reasonableness of attorney’s fees in assessment collection cases, and condominium associations can still incur out-of-pocket expenses if issues escalate.
This article breaks down the typical steps in the Illinois condominium collection process, outlines potential costs at each stage, and offers strategies to help your condominium association recover assessments as efficiently as possible.
The Illinois Condominium Assessment Collection Process and Costs
Eviction is the most common method of collecting delinquent assessments in Illinois. While many accounts are resolved early on, condominium associations should be aware of the steps and costs when assessment recovery requires legal action.
Best practice: Your condominium association should adopt a written collection policy to ensure consistent treatment of all unit owners and reduce the risk of discrimination claims.
Step 1: Initial Demand Letter
The collection process typically begins when the association’s attorney issues an initial demand letter to the delinquent unit owner. The initial demand letter gives the unit owner 30 days (plus 5 business days) to pay the past-due amount or dispute the debt. Before issuing the initial demand letter, attorneys usually:
- Review the title to confirm the current owner of record
- Confirm the owner’s off-site mailing address (if any)
- Conduct a bankruptcy search to check for any automatic stay
- Review the association’s ledgers to confirm the amount owed
Once the above steps have been completed, attorneys will prepare and send the initial demand letter to the unit owner via certified mail (with return receipt requested) and regular mail.
Typical legal costs at this stage:
- $400.00 to perform the above steps and send an initial demand letter
- If the owner disputes the debt and the association must provide verification, additional work would be performed by the association’s attorney at the attorney’s hourly billing rate.
Step 2: Statutory 30-Day Notice and Demand for Possession
If the delinquency is still not resolved after issuing the initial demand letter, the next step in the collection process would be for the association’s attorney to serve the delinquent unit owner with a Statutory 30-Day Notice and Demand for Possession pursuant to the Illinois Condominium Property Act. This notice gives the delinquent unit owner 30 days (plus 5 business days) to pay the past-due amount or dispute the debt.
Before issuing the notice, attorneys will:
- Confirm that legal title to the unit has not changed and confirm the current owner of record
- Confirm the owner’s off-site mailing address (if any)
- Confirm the owner has not filed for bankruptcy
- Review the association’s ledgers to confirm the amount owed and update the balance
Once the above steps have been completed, attorneys will prepare and mail the notice to the unit owner via certified mail (with return receipt requested) and regular mail.
Typical legal costs at this stage:
- $250.00 to perform the above steps and send the notice
- If the owner disputes the debt and the association must provide verification, additional work would be performed by the association’s attorney at the attorney’s hourly billing rate
The majority of delinquencies are resolved or enter into payment plans during Steps 1 or 2. A condominium association also has the option of recording a lien in the county where the unit is located to provide record notice of the delinquency as well, but since most condominium associations do not pursue foreclosure, this step is less common.
Step 3: Eviction Process for Unresolved Accounts
If a delinquent unit owner still does not pay or enter a payment plan after the completion of Steps 1 and 2, the next step is often to initiate the eviction process under the Illinois Forcible Entry and Detainer Act. Although condominium associations may pursue foreclosure, eviction is generally faster and more cost-effective in Illinois.
The eviction process typically includes:
- Preparing and filing a Complaint for Possession and Unpaid Assessments (“Complaint”) in the appropriate county court
- Preparing an Eviction Summons
- Serving the owner (and any known or unknown occupants) via the sheriff or a special process server
- After service is completed:
- Appearing in court to obtain a default judgment if the owner fails to respond; or
- Proceeding to trial if the owner contests the action
If successful, the court will issue:
- A money judgment for the unpaid assessments, court costs, and attorneys’ fees (at the judge’s discretion)
- A judgment for possession of the unit, which is automatically stayed for 60 days
- After the 60-day stay, the condominium association has the sheriff enforce the eviction
Typical Eviction costs:
- $750.00 in attorneys’ fees to draft and file a Complaint and issue Summons (this amount does not include the costs charged by the circuit court for filing the Complaint and issuing the Summons or the costs charged by the county sheriff or special process server to serve the delinquent unit owner)
- $2,500 to $3,000 in attorneys’ fees for obtaining a default judgment after service has been made
- $3,000 to $4,000+ in attorneys’ fees for a contested judgment after trial
When Illinois Condo Associations May Not Recover Collection Costs
Even with a solid collection policy, an Illinois condominium association is not always guaranteed to recover all past-due assessments or attorneys’ fees. At the same time, one of the benefits of the eviction process is that it is limited to issues directly related to possession of the unit and unpaid assessments or fines. If the default is solely for non-payment, unit owners generally cannot raise unrelated complaints about the board’s conduct as a defense. However, other legal issues can limit or prevent full recovery for the condominium associations.
Examples of such issues are as follows:
- Mortgage Foreclosure by a Lender. If a mortgage lender forecloses on a unit or accepts a deed-in-lieu of foreclosure, the lender is typically not responsible for unpaid assessments incurred before it acquires title. Under the Illinois Condominium Property Act, the lender is only obligated to pay assessments starting the month after the foreclosure sale is confirmed or the deed is recorded.
- Third-Party Purchaser at Foreclosure Sale. If a third party (not the bank) buys the unit at a foreclosure sale, they must pay the unit’s share of common expenses for the six months immediately preceding the association’s collection action under 765 ILCS 605/9(g)(4), commonly referred to as the “six-month super lien.”
- Bankruptcy. If the unit owner files for bankruptcy, the association may be barred from collecting some or all pre-bankruptcy debt, depending on the type of bankruptcy (Chapter 7 vs. Chapter 13), whether a discharge is granted, and how the unit is treated in the bankruptcy estate. However, the condominium association should file a proof of claim in the bankruptcy proceedings. Some collection actions may be halted under the automatic stay imposed by federal bankruptcy law.
Best Practices for Managing Delinquent Condo Assessments in Illinois
Illinois condominium association boards have a fiduciary duty to collect assessments, but that duty must be balanced with smart financial decision-making and legal compliance. Unrecovered legal costs and inconsistent enforcement can increase risk and create financial problems for community associations. To improve recovery outcomes for delinquent assessments, Illinois condominium associations should:
- Review governing documents to ensure they authorize recovery of attorneys’ fees and collection costs
- Amend declarations or bylaws if recovery rights are unclear or outdated
- Adopt a written collection policy that is consistently enforced across all unit owners
- Clearly notify delinquent owners that they are responsible for actual costs, including legal fees
- Do not waive assessments and avoid waiving valid charges, such as attorney’s fees and costs
Approximate Legal Costs of Condo Assessment Collection in Illinois
- Preparing and issuing an initial demand letter: $400.00
- Preparing and serving 30-Day Statutory Notice and Demand: $250.00
- Responding to a unit owner/negotiations: Charged at attorneys’ hourly rate
- Preparing and filing an eviction action: $750.00
- Obtaining judgment in eviction action: $2,000.00 – $3,000.00
- Obtaining judgment in eviction action after contested trial: $3,000.00 – $4,000.00+
Please keep in mind that the actual costs may vary depending on various factors, and the above schedule is only an estimate of costs. However, some of the initial steps such as the initial demand letter, 30-Day Statutory Notice and Demand, and Eviction Complaint are done on a flat fee basis. The above estimates also do not include any out-pocket costs, such as filing fees or service fees.
Delinquent assessments in condominium associations are unavoidable, but costly legal battles don’t have to be. By implementing a sound collection policy, updating your governing documents, and acting quickly when accounts fall behind, your board can reduce legal exposure and improve recovery rates.
If your Illinois condominium association needs help updating its documents or navigating complex collection issues, the attorneys at Hirzel Law, PLC are here to help.
