Illinois HOA and COA Foreclosures

If you live in a planned development, you’re probably part of a condominium owners’ association (COA) or homeowners' association (HOA). COAs and HOAs are typically nonprofit corporations that are responsible for managing and maintaining the community. The association has a lot of power over the residences and homeowners in a planned neighborhood. It creates and enforces the rules of the community. The association also determines how much members have to pay in dues and assessments (collectively referred to as “assessments”).

Residents who live in this kind of a community setting—whether it’s a condominium, townhouse, or single-family home—in Illinois usually have to pay assessments to their COA or HOA. If you fall behind in those payments, in most cases, the COA or HOA can get a lien on your home that could lead to a foreclosure.

Read on to learn about COA or HOA foreclosures and related laws in Illinois.

Finding Illinois’ COA and HOA Lien Laws

The Illinois Condominium Property Act (765 Ill. Comp. Stat. 605/1 through 605/35) governs COAs. The Illinois Common Interest Community Association Act (765 Ill. Comp. Stat. 160/1-1 through 160/1-90) governs HOAs, although it’s not very comprehensive when compared to the Condominium Property Act.

An HOA’s governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws, usually contain specific information about the rules of the community, including assessments liens. You should have received copies of the CC&Rs and bylaws when you purchased your property.

How COA and HOA Liens Work

Generally, a COA or HOA has the power to place a lien on your property if you become delinquent in paying the assessments. The lien will typically automatically attach to the home from the time that the assessments come due.

COA Liens

In Illinois, a COA is entitled to a lien if the condo owner fails or refuses to pay the common expenses or fines. (765 Ill. Comp. Stat. 605/9(g)(1)).

HOA Liens

If you’re part of an HOA, check the association’s governing documents to learn about the association’s right to place a lien on your home if you don’t pay the assessments.

Charges a COA or HOA May Include in its Lien

State law, as well as the COA or HOA’s declaration and bylaws, generally set out the type of charges that may be included in the lien.

COAs. Under Illinois law, a COA is permitted to include the following in its lien:

• past-due assessments
• late charges
• reasonable attorneys’ fees
• costs of collection
• fines, and
• interest. (765 Ill. Comp. Stat. 605/9(g)(1)).

HOAs. To find out which charges an Illinois HOA may include in its lien, check the association's governing documents.

Lien Priority

Lien priority determines what happens to other liens, like mortgages and judgment liens, if a COA or HOA lien is foreclosed.

Priority of COA Liens

In Illinois, a COA lien is prior to all other liens, except for:

• taxes and liens by certain governmental entities, and
• encumbrances recorded before the date of the condo owner’s failure or refusal to pay the assessments or fines. (765 Ill. Comp. Stat. 605/9(g)(1)).

Priority of HOA Liens

An HOA’s CC&Rs usually include a provision regarding lien priority, and typically say that assessments and liens are subordinate to a first mortgage. To find out the priority of a particular HOA lien in Illinois, check the association’s governing documents.

COA and HOA Foreclosures in Illinois

If you default on the assessments, the COA or HOA may foreclose. A common misconception is that the association can’t foreclose if you’re current with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you’re current on your home loan.

COA Foreclosures

A COA lien may be foreclosed in the same manner as a mortgage once the association records the lien in the county records. (765 Ill. Comp. Stat. 605/9(h)).

HOA Foreclosures

To find out about an HOA’s right to foreclose if you become delinquent in paying the assessments, read your association’s governing documents.

Talk to a Lawyer

If you’re behind in assessments and facing a COA or HOA foreclosure in Illinois consider consulting with a local attorney to discuss all legal options available in your particular circumstances.