Illinois condo and HOA assessment liens

For an Illinois condominium, there is no waiting for paperwork. The lien exists the moment an owner defaults, no recording and no pre-lien notice required, and it sweeps in not just unpaid dues but fines, interest, late charges, attorney fees, and collection costs. It sits ahead of most other claims, behind only property taxes and previously recorded encumbrances.

The 6-month rule is the one a buyer at a foreclosure sale needs to know. When a unit changes hands through a mortgage foreclosure, the association can collect up to six months of the former owner's unpaid assessments from the new buyer, provided it pursued collection before the foreclosure wrapped up. Plan for that figure if you are buying out of foreclosure.

The automatic lien is a Condominium Property Act feature. If you are buying into a non-condominium common interest community, a townhome or single-family HOA under the Common Interest Community Association Act, there is no statutory lien. That association can only lien and foreclose if its declaration grants those rights. So the first question is which kind of community you are buying into, because it changes how collections work.

Before you make an offer, confirm:

• Whether the community is a condominium (automatic lien) or a non-condo HOA (declaration lien only).
• The statement of unpaid assessments and any lien in the resale disclosure package.
• For a foreclosure purchase, how much of the prior owner's back dues you could owe under the 6-month rule.
• Whether fines, attorney fees, and collection costs have been added to any balance.

An Illinois condo lien attaches automatically and can follow the unit, especially at a foreclosure sale where the 6-month rule can hand you a real bill. Knowing the community type and reading the assessment statement is how you avoid a surprise.

An HOA Notes brief identifies the community type, pulls the assessment statement and any lien from the disclosure package, estimates your foreclosure-sale exposure, and cites the page behind every number.

765 ILCS 605/9(g) (Automatic CPA assessment lien (condos only)). Under the CPA, the condominium association's assessment lien is automatic -- it attaches upon default without any filing or pre-lien notice required; the lien covers unpaid common expenses, fines, interest, late charges, reasonable attorney fees, and collection costs; the lien is senior to all encumbrances except recorded prior mortgages and tax liens; CICAA (non-condo HOA) associations have NO statutory lien -- their lien and foreclosure rights must be expressly granted in their declaration. The CPA association may foreclose the lien by court action in the same manner as a mortgage; a post-foreclosure sale purchaser (other than the mortgagee) must pay the lesser of: the assessments that would have accrued during the 6 months before collection action began, or actual unpaid assessments; the mortgagee who forecloses takes subject to assessments from the first day of the month after the foreclosure sale is confirmed.

When you read the disclosure packet, watch for governing documents claiming a pre-lien notice requirement overrides the automatic statutory lien, and governing documents stating no lien arises until a court judgment is obtained. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.