Page 6 - Chicago Cooperator Winter 2019

6 THE CHICAGOLAND COOPERATOR
—WINTER 2019
CHICAGOCOOPERATOR.COM
BOARD OPERATIONS
Removing a Condominium Owner
A Complex Legal Process
BY A J SIDRANSKY
Removing a disruptive, abusive, non-pay-
ing, or otherwise problematic tenant from a stay issued during which the owner can cure you can get sanctions and fees, and maybe are protected under the sale, should it occur.
rental building is relatively easy. Doing the the offense by bringing his accounts current. some monetary relief, but it’s virtually impos-
same thing in a co-op is also possible, though If that occurs, the eviction order is vacated. If sible to remove someone if they own the unit.”
substantially harder. But removing a
condo
not, the owner is evicted from the premises.
owner from the premises (and effectively wip-
ing out his or her equity position as a member fines as well. Once the condominium associa-
of the condominium association) is very dif-
ficult indeed, and subject to very narrow legal and collect rent on it. If the unit is already minium boards lack legal standing to remove agreement that if there’s no monetary default,
interpretation—yet is doable under certain leased out to an acceptable tenant, the associa-
circumstances.
While theoretically a co-op shareholder take an assignment of rents from them.
could be evicted for non-monetary issues
(prolonged patterns of harassment; ceaseless strong Teasdale, a law firm based in Manhat-
petty litigation against neighbors or the coop-
erative corporation; and criminal activity are corporation, a condominium association has ium is not in privity with the tenant. (
a few examples), the same is virtually impos-
sible in a condominium setting. Condomini-
ums are pure real estate, not shares in a cor-
porate entity. As a matter of fact, from a legal be removed for bad behavior. She outlines the however, in privity with its tenant and can described by Schechter: “While a unit owner
standpoint, even the word ‘eviction’ cannot process as follows:
be used relative to removing a condo owner,
though it can be applied to removing a rental charges, the board can file a lien against the leverage under most governing documents is tactics that can be utilized by condo boards
tenant in a condominium unit—a point we owner’s unit. Once the lien has been filed, the when an association stands in the shoes of the to accomplish the same result. For example,
will return to later. The closest we can come board has two options: it can bring an action owner. The owner has a renter; the renter is during a foreclosure action, a condominium
to a legally recognizable term for this type of to recover the money due, or it can foreclose a problem, but the owner doesn’t take action. can request the court appoint a receiver to col-
action is a
removal.
Generally speaking, points of law on this due is less expensive and faster than a lawsuit ments say the association may step into the living in the unit and refuses to pay the rent
subject are consistent from state to state with to foreclose the lien, but neither is very fast. If owner’s shoes and take the necessary action. ordered by the receiver, the condominium
only slight variations. The important distinc-
tions relate to whether the person being re-
moved is the owner of a unit, or that owner’s ment that can be enforced against bank ac-
tenant. In both cases, laws are consistent on counts or other assets of the unit owner. The putes through alternative dispute resolution er can be removed.”
the most basic matters. Some states’ statutes assistance of an enforcement official—specifi-
have slightly differing approaches and nuanc-
es, another point we will return to later.
Removing a Condo Owner
Attorney Michael Kim, principal at law foreclose the lien that is similar to a mortgage sociation can seek injunctive relief,” Piekar-
firm Michael C. Kim & Associates in Chicago, foreclosure action,” Schechter continues. “If sky says. “I’ve never seen anyone forced out edies are so slow going—associations should
explains that unlike any other state in the na-
tion, Illinois law actually does provide for the ment to sell the unit and apply the proceeds danger to themselves, others or the property, situations to their attorney for resolution as
eviction of condominium owners. “In Illinois to payment of the debt. It is important to you can get a civil commitment, which would soon as they’re aware there’s an issue. Daw-
we have a unique remedy for eviction for col-
lection of unpaid monetary obligation,” he on the unit, the bank’s lien is superior to the
says. “It is primarily for uncollected monthly condominium’s lien. There may be one other
assessments, but could also include fines and step that can be taken to encourage the unit
charges of other kinds that the owner has owner to pay the money due. Depending on
failed to pay. In most jurisdictions you cannot the particular community’s bylaws, rules, and
get someone out with an eviction case—you regulations, it may be possible to suspend cer-
have to go through a lien foreclosure. In Illi-
nois, we do have that remedy as well, but we receives.”
use it sparingly.”
Kim explains further that the eviction does the law firm of Piekarsky & Associates in
not transfer title for the property; it merely Wyckoff, New Jersey, says: “In terms of getting
transfers possession. The statute was chal-
lenged in court many years ago, was upheld, landlord/tenant situation. The only way to re-
and found to be constitutional. It’s similar to a move an owner is if he or she defaults and you
landlord-tenant eviction remedy, but has dis-
tinct procedures of its own. When an owner sale, and dispose of the unit.” And it has to be
is evicted under the statute, there is a 60-day for monetary default. “If it’s non-monetary, sale.” Of course, all outstanding lien holders
This procedure can be used to collect unpaid
tion has taken the unit, they can lease it out larly easy either. Schechter explains: “Condo-
tion can choose to let that tenant remain and sive their behavior may be. Even if the tenant pretty much blocked. The optimal situation
Julie Schechter is an associate with Arm-
tan. She explains that, unlike the cooperative to remove the tenant because the condomin-
recourse against a unit owner
only
for mon-
etary defaults issues—almost exclusively non-
payment of common charges. Owners cannot service. -
“When a condominium is owed common
on the lien. A lawsuit to recover the money Many times, an association’s governing docu-
the board is successful in a lawsuit to recover That’s the best leverage over a renter.”
the money due, it will obtain a money judg-
cally a city marshal or sheriff—is required to mediation or arbitration. New Jersey state law sociation is limited when it comes to remov-
enforce the judgment.”
Alternatively, “an action can be brought to offered ADR before going to court. “The as-
the action is successful, the result is a judg-
note that in the event there is a first mortgage get the resident out.”
tain non-essential services that the unit owner
Scott Piekarsky, Managing Member with
a condo owner out of their unit, it’s not like a
can get a lien, foreclose the lien, get a sheriff’s
Removing an Owner’s Tenant
While it’s certainly possible, removing a ing resident, whether a unit is leased out or
tenant from an investor unit is not particu-
unit owners’ tenants, regardless of how offen-
were to be in constant violation of a provision for an association is when the unit owner is
of the condominium’s bylaws or rules and in default on monthly common charges. The
regulations, the condominium is still unable association then has the right to request a re-
Privity
ant, which can then be turned directly over to
is a relationship between two parties that is the association for both current charges and
recognized by law—typically blood, lease, or to make up arrears.
Ed
) The condominium unit owner,
is
take action to evict the tenant.”
In New Jersey, explains Piekarsky, “the best nonpayment of common charges, there are
New Jersey law also adds another layer to owner for failure to comply with the receiver’s
the resolution process in condominium dis-
(ADR)—usually in the form of professional
requires that all owners in condominiums be ing troublesome or non-paying owners and/
through injunctive relief, though. If they are a act quickly, turning over potential problem
A Real-Life Example
Kim describes another method of removal with rights and responsibilities—as does the
unique to Illinois. It is called
involuntary sale
, stewardship of board members. Both should
and it can be used when a unit owner becomes be taken seriously and acted on with alacrity.
the association member from hell. “In...an in-
voluntary sale, if an owner commits serious
material default—not necessarily monetary,
rather breach of covenants—an association
can notify the owner and give notice of 10 to
30 days to terminate their right to possession
and ownership. If the owner doesn’t sell their
unit in that period, the association can insti-
tute an involuntary sale proceeding. They can
ask for a judicial sale with a restraining order
to prevent the offending owner from redeem-
ing the unit or buying it back himself at the
Not all situations end neatly. The rights
of the owner are squarely in the path of an
association trying to remove an offend-
owner-occupied. Attorneys interviewed by
The Chicagoland Cooperator
are in general
the path to removal of a problem owner is
ceiver to step in and collect rent from the ten-
A similar tactic for a non-paying owner is
in a condominium cannot be removed for
lect rent from the unit. If the unit owner is still
board can bring an action to remove the unit
order. If the action is successful, the unit own-
Overall, the power of a condominium as-
or their tenants. Because of those limita-
tions—and because the available legal rem-
dling will only cause unpaid charges or of-
fensive incidents to pile up. Ownership comes
n
A J Sidransky is a staff writer/reporter for
The Chicagoland Cooperator, and a published
novelist.