When filing a forcible entry and detainer action, our offices will inquire with the Association whether or not there is a tenant residing in the unit. The purpose of this is to establish if the tenant is a paying renter so that the Association can ultimately collect the rental income to be applied to the money judgment it recovers once the lawsuit is adjudicated. This proposition is supported by the Forcible Entry and Detainer Act, and benefits the Association by providing it with the remedy of recovering monies to be applied to the outstanding debt of the unit owner. Under 735 ILCS 5/9-104.2 (c) of the Forcible Entry and Detainer Act, the relevant provision states, in part, as follows:
“(c) If a judgment for possession is entered, the Board of Managers may obtain from the clerk of the court an informational certificate notifying any tenants not parties to the proceeding of the assignment of the unit owner’s interest in the lease arrangement to the Board of Managers as a result of the entry of the judgment for possession and stating that any rent hereinafter due the unit owner or his agent under the lease arrangement should be paid to the Board of Managers until further order of court. If the tenant pays his rent to the association pursuant to the entry of such a judgment for possession, the unit owner may not sue said tenant for any such amounts the tenant pays the association. Upon service of the certificate on the tenant in the manner provided by Section 9-211 of this Code, the tenant shall be obligated to pay the rent under the lease arrangement to the Board of Managers as it becomes due. If the tenant thereafter fails and refuses to pay the rent, the Board of Managers may bring an action for possession after making a demand for rent in accordance with Section 9-209 of this Code.”
The statute was intended to protect the Association and the unsuspecting tenant who may or may not know that their landlord/owner of the unit is delinquent in paying their common area expenses for the Association. The process by which the tenant is ordered to tender his or her monthly rent is as follows.
- At the onset, the Association directs our offices to prepare and send a Notice for Demand and Possession to the unit owner for their outstanding balance for common area expenses.
- If the unit owner fails to pay the requisite amount sought in the Notice for Demand and Possession, the Association can direct our offices to prepare and file a Forcible Entry and Detainer action. This lawsuit allows the Association to obtain a money judgment for the past due balance and possession of the Unit if the balance remains unpaid by the stay date. The stay date is the date by which the unit owner has to pay the money judgment and the subsequent accruing assessments, and or/other charges.
- If the unit owner fails to pay the balance due by the stay date, the Association can direct our offices to place the order with the Sheriff to enforce. In addition to an order for possession, our offices will inquire with the Association whether or not there is a tenant residing in the unit.
- If there is a tenant in the unit, the Association’s has the option to request that our offices pursue obtaining an Order directing the tenants to tender their monthly rent to the Association directly until the unit owner’s balance is paid off. This serves two purposes: 1) the current tenant can remain in the unit without threat or fear of an impending eviction; and 2) the Association can start to collect money without having to go through an eviction and the steps necessary to make the unit rentable.
- Once our offices obtain the Order directing the tenants to tender their monthly rent to the Association, our offices will mail a copy of that Order to the tenant directly, if they failed to appear in court. In addition to mailing the Order to the tenant, our office prepares a letter advising the tenant of the implications of the Order.
- The tenant is protected from the owner/landlord bringing a cause of action for nonpayment against the tenant pursuant to the statute as it specifically states that the landlord/unit owner may not sue the tenant once this situation occurs. Furthermore, it is imperative that the Association maintain a current copy of the lease on file is so that the Association can ascertain what the monthly rent is.
Upon the tenant paying their rental income to the Association, the Association has established a landlord-tenant relationship with the tenant. This is important because it precludes the Association from enforcing the Order for Possession that was granted by the court.
In the event that the tenant fails to make rental payment thereafter, the Association should notify our offices immediately so that our offices can prepare the proper notice to maintain an action against the tenant. This is often referred to as a Landlord’s 5 day notice for nonpayment of rent. This notice directs the tenant to pay the outstanding rental amount within 5 days of receiving the notice. If the renter fails to do so, the Association can file a forcible entry and detainer action. The Association must accept the rent if it is tendered within the five days.
In the event the tenant’s rent satisfies the unit owner’s delinquency and brings the unit owner’s account to a zero balance, the rental income reverts back to the unit owner’s account and cannot be used as a “profit” for the Association.
If your Association need legal assistance, please do not hesitate to contact our office by calling 855-537-0500 or visiting Kovitz Shifrin Nesbit online at www.ksnlaw.com.