R.B. from Cook County, Illinois writes:
Dear Mister Condo,
We own a single-family home that is part of a 60 Single-Family Home HOA in Chicago. The property self-manages and the designated and paid “property manager” is a resident. It recently came to some owners’ attention that our property manager is technically no longer an owner as her home was foreclosed on by her lender (BOA). The bank has chosen to continue to allow her to remain in the home for the time being but it begs the following question…. Does the fact she is no longer an owner impact her ability to serve as our self-managed HOA property manager as she is not licensed by the state. In Illinois, self-managed association don’t need to have a licensed manager when the role is served by an owner.
Mister Condo replies:
R.B., I am not an attorney nor do I offer any legal advice in this column. Clearly, you are skirting on the law here and I am advising you to seek the advice of a qualified attorney with experience in Illinois Community Association Law. From a friendly outsider point of view, I would ask if the bank has taken ownership of the home where the property manager resides? In other words, has the foreclosure proceeding finished and has the tile of the home been transferred to the bank? If so, and the bank is allowing the homeowner to remain in place, why are they doing so? Is there a lease between the occupant and the bank? I have never heard of a bank simply allowing a homeowner in a foreclosed home to live there without having some kind of agreement in place. Banks are risk-averse and allowing an undocumented tenant in their property is not typical bank behavior. As I said early on, there are lots of questions to be answered here. Additionally, if there is a contract in place between the HOA and the property manager, your attorney needs to review that before you terminate the manager. I hope you had a clause in place that identified the property manager had to be a homeowner. If not, you may need to fulfill the contract AND hire another property manager to comply with the law. This is exactly what your HOA attorney is for. A misstep here could prove costly for the HOA. Good luck!