Wing Street of Arlington Heights Condominium Asssociation v. Kiss the Chef Holdings, LLC
48 N.E.3d 237
Ill. App. Ct.2016Background
- Unit at 171 West Wing St., Unit 203: former owner RealWorks, LLC defaulted on condo assessments and mortgage; association obtained judgment for unpaid assessments.
- Village Bank obtained a foreclosure judgment and its wholly owned subsidiary, VBT Wing Street Condo, LLC (VBT), purchased the unit at judicial sale.
- VBT paid post-sale (current) assessments beginning January 2012 but did not pay the prior owner’s arrears from before the foreclosure.
- VBT conveyed the unit by quitclaim deed to Kiss The Chef Holdings, LLC on March 29, 2013; neither buyer requested an association payoff letter.
- Association sued Kiss The Chef under 765 ILCS 605/9(g)(4) seeking six months of presale delinquent assessments; trial court initially entered judgment for the association but later reconsidered and ruled for Kiss The Chef.
- Appellate court reversed, holding VBT was a "mortgagee" under the Act and Kiss The Chef, as purchaser from a mortgagee, was liable for the statutory 6‑month assessment remedy under section 9(g)(4).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a foreclosure-sale purchaser that is a wholly owned subsidiary of the bank qualifies as a "mortgagee" under the Condominium Property Act | VBT acted on behalf of Village Bank and thus is a mortgagee for Act purposes | VBT was a purchaser, not a mortgagee; if a mortgagee, its postsale payments extinguished the lien | VBT is a mortgagee under the Act because it acted for Village Bank at the sale |
| Whether payment of postsale assessments by the mortgagee extinguishes association's lien for presale delinquencies | Association conceded extinguishment under §9(g)(3) once postsale assessments paid | Kiss The Chef: extinguishment absolved subsequent purchaser from liability for presale arrears | Postsale payments by VBT extinguished the association's lien under §9(g)(3) |
| Whether a third‑party purchaser from a mortgagee is separately liable for six months of prior owner’s unpaid assessments under §9(g)(4) | Association: §9(g)(4) imposes an independent duty on a purchaser from a mortgagee to pay six months' presale assessments | Kiss The Chef: argued it was not liable because lien was extinguished or any §9(g)(4) lien did not survive sale | Held buyer from mortgagee (Kiss The Chef) is directly liable under §9(g)(4) for six months of presale assessments |
| Whether postsale payment by a mortgagee discharges a later purchaser’s §9(g)(4) obligation | Association: §9(g)(3) extinguishes prior lien but does not eliminate the separate §9(g)(4) obligation of a later purchaser | Kiss The Chef: paying postsale assessments should discharge obligation or lien did not survive transfer | Court held postsale payments extinguish the prior owner's lien but do not relieve a later purchaser from the independent §9(g)(4) payment duty |
Key Cases Cited
- 1010 Lake Shore Ass'n v. Deutsche Bank Nat'l Trust Co., 2015 IL 118372 (Ill. 2015) (held postsale payment requirement in §9(g)(3) is necessary to "confirm" extinguishment of association's presale lien and explained interplay between subsections (3) and (4))
- JPMorgan Chase Bank, N.A. v. Earth Foods, Inc., 238 Ill. 2d 455 (Ill. 2010) (principles of statutory construction: apply plain language when statute is clear)
- In re Marriage of Turk, 2014 IL 116730 (Ill. 2014) (statutory interpretation principles reaffirmed)