By now all boards and managers are well aware of the fact that COVID-19 has put a stop to “business as usual” with collection lawsuits. The pandemic has resulted in the Illinois Governor issuing an Executive Order prohibiting the initiation of eviction actions (which, per Circuit Court of Cook County Judges, includes filing complaints and sending the standard eviction demand letters). The Governor’s most recent Executive Order 2020-72 (“Order”) extends the moratorium on Illinois evictions at least through December 12, 2020. The moratorium has, up until now, prevented associations from sending the standard 30-day eviction demand letters and proceeding with evictions actions to seek unpaid common expenses. While many owners have used the moratorium for much-needed protection during difficult economic times, other owners have used the moratorium as an excuse to simply stop paying assessments, causing financial strain for their associations.
The most recent Order, however, provides a reprieve for associations. The Order allows boards to proceed with collection and eviction actions against those who earn over a certain threshold amount of money annually. In order to enjoy the protections of the eviction moratorium, the most recent Order requires delinquent owners to complete an affidavit certifying certain facts as true, under penalty of perjury and as sworn testimony, such as:
- The owner expects to earn less than $99,000 in annual income during 2020 (or less than $198,000 if filing joint tax returns);
- The individual is unable to pay his/her assessments due to “a COVID-19 related hardship” such as substantial loss of income or increase in out-of-pocket expenses;
The first of the aforesaid certifications (the annual earnings) can be proven or disproven in a court of law using an individual’s 2020 tax returns.
Accordingly, we are revising our recommendations to our clients for collections. We recommend the following:
- If an individual is in arrears, the association’s managing agent or attorney should send the delinquent owner a notice asking him/her to sign the affidavit included with Executive Order 2020-72 and return it to the association within a certain number of days (we recommend no more than five  days);
- If the individual fails or refuses to either sign and return the affidavit or pay the full balance of the arrearage, then direct association counsel to send a formal 30-day demand notice of eviction;
- If the individual fails to pay upon expiration fo the 30-day demand timeframe (or return the signed affidavit), direct association counsel to file a collection/eviction lawsuit.
In short, while boards were limited in their ability to proceed with collections per Illinois law, those who have no business refusing to pay assessments due to their financial situations can no longer hide behind the Governor’s moratorium. Contact Altus Legal to discuss your association’s options for collections in the time of Covid-19.