The appellate case that settled this issue is called Knolls Condominium Association v. Harms, 202 Ill. 2d 450 (2002). In Knolls Condominium, an owner failed to pay her assessments and defended against the association’s forcible entry and detainer action that sought to recover possession of the unit and unpaid assessments until the balance was resolved. The owner claimed that she had a homestead exemption in the property that would entitle her to stay in the property so long as the debt was less than $7,500. The association claimed that her interpretation of the statute was incorrect and that the homestead exemption statute included a specific exclusion for the Illinois Condominium Property Act’s use of evictions for assessment collection.
The court agreed with the association and held that the Illinois Condominium Property Act is exempt from the homestead exemption provisions and that the legislature clearly intended for associations to be able to seek both unpaid assessments and possession of a unit to recover unpaid assessment balances. It also held that owners cannot claim a homestead exemption as a defense to an association’s forcible entry and detainer suit to obtain unpaid assessments.
Though this case reiterates what many boards and managers know, it is important for new board members and new managers to know that this remedy is unique in Illinois and exists only in part in other states. Illinois condominium and common interest properties are allowed to seek to evict delinquent owners who do not pay assessments, after a formal legal demand process, and obtain possession of a unit plus money damages for the unpaid balance, costs, and reasonable attorney’s fees to collect that balance. This becomes a possessory lien on the owner’s right to possess the unit and can be enforced by getting an order of possession in court. This process is much faster than traditional lien foreclosure. Associations then have the right to rent out that unit, if they so choose, to recover the balance, assign rent from existing tenants, or keep the owner out of the unit until the owner pays the balance due. This is a very effective tool and is very useful for enforcing the uniform collection of assessments.