Illinois has the distinction of being the only state in the country that hits up the buyers of foreclosed condominiums with costs incurred by former owners.
That’s why the Illinois Association of REALTORS® is asking for members to call in support of Senate Bill 2664, which is sponsored by Sen. Michael E. Hastings. Click here to take part in the Call to Action.
Here’s why this is important: Under Illinois law, the buyer of a foreclosed condo may get to the closing table thinking they need one amount of money to complete the purchase.
In fact, they may be hit with thousands of dollars in additional costs. That’s because under Illinois law, buyers of the foreclosed condo are responsible for paying unpaid assessments, fees, fines, and attorney’s fees.
Not only is it an unpleasant surprise for buyers expecting to pay one amount and getting stuck with another amount, it also can jeopardize deals when the buyer doesn’t have immediate arrangements to come up with the additional money.
SB2664 seeks to make the process fairer for those trying to buy foreclosed condos:
It makes the amount that is owed by the buyer much more transparent, so that the maximum exposure is clearly known before the buyer makes an offer on the property.
SB 2664 sets the maximum amount that a buyer must pay at nine months times the “regular monthly assessments” for the unit. Under current law, the amount owed is six month’s worth of unpaid costs, but that amount can include regular assessments, special assessments (which can be very significant), unlimited attorney’s fees, and other unspecified fees, fines, and expenses.
According to IAR lobbyists:
“In short, SB 2664 is a fair and reasonable proposal that will make foreclosed condominiums more attractive and fair transactions for home buyers, while still maintaining the unique advantage Illinois condominium associations have, exclusive of all other states, to collect unpaid assessments from buyers.”