Lenders, Beware: Hidden Mortgagor-Tenants in "Commercial" PropertiesDownload
No particular notice is required before commencing a mortgage foreclosure suit relating to commercial property, and many of the rules intended to help keep homeowners in their homes do not apply. But what about the odd situation where a commercial property is used by the mortgagee as a primary residence? In a cautionary tale for foreclosing lenders, the Appellate Court of Illinois, First District recently held that where a borrower utilizes his or her commercial property as a principal residence, he or she is entitled to receive all notices required under Illinois law governing residential foreclosures. Thus, characterizing a property as “commercial,” even when it was never intended to serve as a home, will not necessarily save a lender from the notice requirement when the property is utilized as a residence.
An expanded version of this Client Alert was published by Law360 on November 16, 2015. Click here to read the Law360 article.