Real Estate Auctions, Foreclosures, and Evictions 101

 Posted on November 10, 2022 in Residential Landlord Evictions

What is a Foreclosure?

Foreclosure of residential real estate refers to “any real estate, except a single tract of agricultural real estate consisting of more than 40 acres, which is improved with a single family residence or residential condominium units or a multiple dwelling structure containing single family dwelling units for one or more families living independently of one another, for which an action to foreclose the real estate: (1) has commenced and is pending; (2) was pending when the bona fide lease was entered into or renewed; or (3) was commenced after the bona fide lease was entered into or renewed.”  (see 735 ILCS § 5/15-1225).

What is the Foreclosure Process Like in Illinois?

A foreclosure complaint, summons, and homeowners notice should be given to the homeowners, which includes information regarding the future foreclosure and the homeowners’ rights. The homeowner should be served personally or by publication, allowing the borrower thirty days to respond.

Under Illinois mortgage foreclosure law, when a property is foreclosed on the purchaser is required to make a “good faith effort” to identify the tenants and serve them written notice of the foreclosure, (see 735 ILCS § 5/15-1101). 

What is Required in a Foreclosure Notice?

The notice must provide the occupants with information regarding the foreclosure and change of ownership as well as contact information of whoever bought the property. This notice is not an automatic notice to vacate and should provide information on how to pay future rent. The notice may be served by first class mail, or served to all parties in possession of the property by delivering the notice to someone who lives at the home and is at least 13 years old (see 735 ILCS § 5/1508.5(a)). If a purchaser does not provide this notice to the mortgagee in possession of the premises, he is not allowed to collect rent or terminate the tenancy (see 735 ILCS § 5/1508.5(d)(i)).

What is the Process of Selling Foreclosed Property?

In Illinois, a foreclosed property sold as a judicial sale, transfers to either the highest bidder or the original lender of the property (i.e. the bank). Before a sale can be made at auction, a notice of sale must be first class mailed to the homeowner at least ten days before the initiation of the sale. In addition, the notice is required to be published in the county newspaper in which the property sits for three consecutive weeks. The purpose of this is to ensure all interested parties are made aware and given sufficient notice of the upcoming foreclosure. If the sale of the foreclosure is for less than the balance, the lender may pursue a deficiency judgment and sure the former owner. If the deficiency judgment is entered, the former owner will be liable for the outstanding debt of the property. A motion for sale is filed thirty days acter the auction. Then, the court gives the former owner thirty days before the new purchaser gains legal possession of the property (see 735 ILCS § 5/15-110).

Illinois homeowners in risk of foreclosure should know that they are allowed a “right of redemption.” This allows the borrower to pay off the outstanding balance and redeem their property rights. The typical redemption period is three months from the day of judgment. However, if the property has been abandoned, the redemption period may be as little as thirty days.  

What is the Eviction Process in Illinois?

If the purchaser (person, entity, or business) wishes to terminate the lease of the tenant, the purchaser, must abide by the guidelines of the Illinois Eviction Act. It should be known that simply entering a judgment for foreclosure is not sufficient to be enforced against a tenant with a bona fide lease. A lease may be terminated only if the lease has met its natural end, whether that be a specified written term, or a month-to-month lease. Either way, at least 90 days’ written notice is required. However, there are instances when a lease term may be canceled prematurely: If the purchaser intends to use the property as his primary residence, or if there is just reason for canceling such as nonpayment or violation of lease terms. Again, either way, at least 90 days written notice is required (see 735 ILCS § 5/15-1701(i)).

If the occupants of the property refuse to voluntarily leave the premises, the purchaser may enlist the sheriff’s department to serve an eviction order and face the possibility of forceful removal (see 735 ILCS § 5/15-1701).

Experienced and Reputable Yorkville and Naperville Eviction Attorneys Serving the Chicagoland Suburbs

Regardless of your position, it is important to understand your foreclosure and eviction rights. Landlord Evictions, LLC is knowledgeable, experienced, and concentrates in foreclosure and landlord tenant law. Our real estate lawyers utilize strategies to protect the economic security and peace of mind of our clients. We are eager to assist you and your family with their real estate needs. An Attorney is available at 630-780-1034 or available through an online contact form.