Illinois Senate Bill 2664 Passed affects Condo Associations

Illinois Senate Bill 2664 Passed affects Condo Associations

Illinois Senate Bill 2664 & 2730 have recently been passed in Illinois and both bills have to do with laws regarding foreclosures and REOs.

Illinois Senate Bill 2664, Regarding Condo Associations

Illinois Senate Bill 2664 has to do with condominium associations.  In the past, many buyers in Illinois have been responsible for hefty association dues owed when buying a REO property.  Sometimes buyers were completely blindsided and given an enormous bill after they purchased a property. The associations also charged the new buyers attorney fees and late fees which were uncapped. In some cases, the association dues owed by a new buyer were more than the purchase price of the unit itself!

The new bill caps the association dues for a new buyer at nine months. Any past due association assessments will now have to be put on the listing sheet by the real estate broker. This allows buyers to make better informed decisions about a condo purchase and creates full transparency. Illinois Senate Bill 2664 also requires managers of condominium associations to provide potential buyers information about the condominium unit within 14 days. The information provided will have to include association amounts due, rules and regulations, and the condominium instruments. The previous law was that condominium associations would have to provide this information within 30 days which was much too long in many cases.

This bill has been lobbied hard by condominium associations. The condo associations are against the bill and are trying to get the Governor to veto it (hopefully that does not happen).

Illinois Senate Bill 2730, Strict Foreclosure

Illinois Senate Bill 2730 was also recently passed which has to do with junior lien holders. Sometimes foreclosures in the past have been completed and junior lien holders were not named in the foreclosure action. This has happened in the past because title companies have made mistakes in reviewing title for the foreclosure action and law firms have failed to name the junior lien holder. The omitted junior lien holder than can request that their interest be paid because they were not notified. The senior mortgage would then have to file another foreclosure and follow the entire process once again and go through the entire time line.

The new bill will change that because if a junior lien holder is discovered after a foreclosure, the interest can be terminated much quicker. Once the junior lien holder is served under the new bill, the junior lien holder can exercise redemption rights, pay the senior lien holder and take title, or have its lien terminated. This is a much quicker process now and the junior lien holder will no longer have the advantage of time and charging interest while the entire foreclosure process is started once again.

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