Does selling a condominium unit end the seller’s obligation to pay assessments in Illinois? Not always. When the deed is never recorded and the association is never notified of the sale, a former owner can remain on the hook. In Cambridge Apartments Condominium Ass’n v. Williams, 2014 IL App (1st) 133226-U, the Illinois Appellate Court affirmed a judgment for unpaid assessments against a former unit owner who had sold her unit more than a year and a half before trial. The case offers valuable lessons for condominium associations on collections, recordkeeping, and the legal significance of an unrecorded deed.
How the Cambridge Apartments Assessment Dispute Arose
In October 2012, Cambridge Apartments Condominium Association (“Cambridge”) filed a complaint under the Illinois Forcible Entry and Detainer Act, 735 ILCS 5/9-101 et seq., against Zojacqueline Williams, the record owner of Unit 110 in the association’s building. Cambridge sought possession of the unit along with unpaid assessments and other common charges.
Williams responded that she was not the proper defendant. She asserted that she had sold Unit 110 to Patricia Bennett in January 2012, months before the lawsuit was filed, and that Bennett had notified Cambridge of the sale and thereafter paid the unit’s assessments. However, the deed conveying the unit to Bennett was not recorded until August 27, 2013, just two days before trial. According to trial testimony, the deed could not be recorded earlier because Cambridge had an unpaid water bill of approximately $4,000, which prevented the parties from obtaining the water certificate required to record a deed in Cook County.
At trial, Cambridge’s board president testified that the association had no knowledge that the title had been transferred and that it credited checks received for Unit 110 to Williams’ account, believing she remained the owner. Bennett testified that she had notified the association of her ownership by telephone and in writing, but she could not produce the notice letter at trial. The board president also testified about a retroactive increase in monthly assessments for January through July 2009, which resulted from the board’s untimely adoption of its 2009 annual budget.
The trial court entered judgment in favor of Cambridge in the amount of $2,086.24, and later awarded the association $5,529 in attorney fees and $573 in court costs. Williams appealed.
The Illinois Appellate Court’s Analysis
-
An Unrecorded Deed Did Not Shield the Seller from Liability
Williams first argued that Cambridge could not obtain a judgment against her because she no longer owned the unit. The appellate court acknowledged the general rule that the failure to record a deed does not affect its operation as a conveyance between the parties. However, under section 30 of the Illinois Conveyances Act, 765 ILCS 5/30, an unrecorded deed is void as to creditors and subsequent purchasers without notice until the deed is filed for record. Under 765 ILCS 605/9(g)(1) and 9(h) of the Illinois Condominium Property Act, unpaid common expenses constitute a lien on the unit owner’s interest in the property, and a lienholder is a creditor. Accordingly, the court held that Cambridge qualified as a creditor.
The court then treated the notice issue as a question of fact. The trial court was entitled to credit the board president’s testimony that the board did not know about the transfer, rather than Bennett’s uncorroborated claims of telephone calls and a notice letter she could not produce. Notably, the declaration required a selling unit owner to give the board 30 days’ prior notice of a sale, and there was no evidence that Williams herself ever notified the association. Nor did the association’s cashing of Bennett’s checks establish notice, since Cambridge could reasonably have believed that Bennett was making payments on Williams’ behalf. Because Williams failed to establish that Cambridge had notice of the unrecorded deed, the conveyance was ineffective against the association, and the judgment against Williams stood.
-
The Retroactive Assessment Following an Untimely Budget Was Enforceable
Williams argued that Cambridge could not “back door” a special assessment by labeling the post-budget catch-up a retroactive general assessment. The appellate court disagreed, citing 765 ILCS 605/18(a)(8)(i) of the Illinois Condominium Property Act, which requires that unit owners receive notice of board meetings concerning the adoption of the annual budget and assessments. However, it does not address the specific situation of an untimely budget, and Williams identified no evidence that the required meeting notice was not given. Moreover, the declaration itself made clear that a delay in preparing the budget did not waive or release the unit owners’ obligation to pay their share of common expenses once the budget was ultimately determined.
Key Takeaways for Illinois Community Associations
The appellate court’s decision in Cambridge Apartments highlights several important principles for Illinois community associations:
- Associations may pursue the record owner. Until a deed is recorded or the association has actual notice of a sale, the association may generally treat the record owner as the party responsible for assessments. An off-record, private sale does not automatically relieve the seller of liability.
- Notice-of-sale provisions matter. The declaration in this case required 30 days’ advance notice of any sale, and the seller’s failure to provide it weighed heavily in the outcome.
- Accurate ledgers win cases. The association prevailed in significant part because its board president testified from detailed account ledgers, while the appellant failed to include any competing documentation in the record on appeal.
- Budget delays do not erase assessment obligations. A late-adopted budget does not relieve unit owners of their obligation to pay their proportionate share of common expenses, particularly where the declaration expressly says so.
Practical Guidance for Community Associations
These principles translate into a few concrete practices every board should adopt:
- Track unit ownership reliably. Require written notice of sales as provided in the declaration, issuing paid assessment letters at closing, and periodically verifying record title for delinquent accounts.
- Keep meticulous, contemporaneous assessment ledgers. Maintain a detailed assessment ledger for each unit and retain copies of all checks and correspondence. The party with the better paper trail usually prevails.
- Stay current on their own obligations. Unpaid utility bills and similar items can interfere with unit transfers. Here, the association’s unpaid water bill delayed the recording of a deed for more than a year and helped create the very confusion that led to litigation.
- Adopt annual budgets on time. While the court enforced the retroactive assessment in this case, an untimely budget invites owner challenges. The safer course is strict compliance with the Illinois Condominium Property Act and the association’s governing documents.
Conclusion
The decision in Cambridge Apartments Condominium Ass’n v. Williams is a reminder that, in Illinois, an unrecorded deed offers little protection against a condominium association that lacks notice of a sale, and that careful recordkeeping often determines collection disputes. Associations that require written notice of sales, maintain accurate ledgers, and stay current on their own obligations will be in the strongest position to collect what they are owed. The attorneys at Hirzel Law, PLC are experienced community association attorneys who can advise Illinois condominium and homeowners associations on collections, governing document compliance, and general counsel needs.
