There have been a number of changes in Illinois laws in 2018 that have impacted the management of condominium and common interest community associations. Below is a summary we have compiled in an attempt to keep our clients and the community aware of the implications of these legal updates.
V&T Investment Corporation v. West Columbia Place Condominium Association
In November 2009, the West Columbia Place Condominium Association (the “Association”) initiated a foreclosure action against a delinquent unit owner. Subsequently, V&T Investment Corp. purchased the delinquent owner’s unit at a judicial foreclosure sale on October 16, 2013, which was later confirmed by court order on December 16, 2013. Thereafter, V&T Investment Corp. tendered its first assessment payment to the Association for the months of January and February of 2014. However, V&T Investment Corp. did not render payment for assessments that accrued during November and December of 2013. After obtaining a paid assessment letter stating that assessments which accrued before the foreclosure sale were still due and owing on the account, V&T Investment Corp. elected to pay the remaining amount allegedly owed under protest and filed suit.
Ultimately, the Court determined that V&T Investment Corp. was not obligated to pay any assessments that had accrued before it acquired title to the Unit. To that end, the Court stated that a party that purchases property at a foreclosure sale who pays its assessments “shortly after the confirmation order dating back to the month following the sale” has delivered prompt payment to extinguish the Association’s lien on the Unit for past due assessments that accrued before the sale. On that basis, the Court determined that V&T Investment Corp. was only obligated to pay assessments that accrued after October, 2013, which was the first month following the foreclosure sale.
Hussar v. Brewster Condominium Corporation Case Summary
The Brewster Condominium Association contracted with Thornton Tomasetti, Inc. to perform an “at-a-distance inspection of the façade” of the Association’s building. The Agreement between the parties contained language that required the Association to indemnify and hold harmless any party relative to the project, which included Thornton Tomasetti, Inc., for certain damages and/or losses arising out of the parties’ agreement. However, the Agreement stated that the Association was not obligated to indemnify and hold Thornton Tomasetti, Inc. harmless for damages and/or losses arising out of Thornton Tomasetti Inc.’s sole negligence.
Thereafter, three individuals filed a lawsuit against, among others, the Association and Thorton Tomasetti, Inc. after they suffered personal injuries when a water tank situated on the Association’s roof collapsed. The Association denied it was obligated to indemnify Thornton Tomasetti, Inc. as it was not required under the terms of the Agreement to indemnify Thornton Tomasetti, Inc. for its own negligence. The Court however, disagreed and held that the phrase “the negligence of any other party” required the Association to indemnify Tomasetti for its non-exclusive negligence. Therefore, the language “negligence of any other party” in an indemnity clause can be construed to include the non-exclusive negligence of the party to be indemnified under the agreement.
Sylva, LLC v. Baldwin Court Condominium Association
Sylva, LLC purchased a condominium unit within the Baldwin Court Condominium Association at a judicial foreclosure sale. After Sylva, LLC purchased the unit, the Association demanded that Sylva pay six months of assessments that were incurred, but not paid, by the previous owner of the unit. As a basis for the Association’s demand, the Association cited Section 9(g)(4) of the Illinois Condominium Property Act which authorizes the Association to collect up to six (6) months of assessments immediately preceding institution of an action to enforce the collection of assessments from a party that purchases a unit at a judicial foreclosure sale.
The Court clarified that Section 9(g)(4) of the Act did not require the Association to actually file a lawsuit against the prior owner of the unit in order to be able to collect up to six months of unpaid assessments from Sylva, LLC. However, the Court stated that the Association must have, at minimum, taken some action to enforce its lien rights, which was suggested could include recording a lien against a delinquent owner’s unit prior to the foreclosure sale and notifying the foreclosure buyer of that lien. Given that the Association did file a lien claim against the delinquent owner prior to foreclosure and sent notice of that lien to Sylva, LLC after it purchased the Unit, the Association was entitled to collect six (6) months of assessments under Section 9(g)(4) of the Illinois Condominium Property Act.
Boucher v. 111 E. Chestnut Condominium Association
The 111 E. Chestnut Condominium Association sent Unit Owner Michael Boucher a letter documenting certain violations of the Association’s governing documents related to, among other things, rude and disrespectful conduct towards employees of the Association. Thereafter, Mr. Boucher requested a hearing before the Board to discuss his alleged violations, which he attended with an attorney. At the hearing, Mr. Boucher’s attorney requested “to review all underlying evidence, information, and/or documents relating to the allegations.” After the hearing, Mr. Boucher’s attorney also requested “a copy of the video and audio tape which recorded Mr. Boucher’s violation hearing.” The Board denied both of Mr. Boucher’s requests and levied a fine against his account. Mr. Boucher paid the fine under protest and filed a lawsuit naming as defendants the Association and all seven members of the Board.
If the board receives a request from a violating owner prior to or during his or her hearing for evidence, documents and/or information supporting the allegations against the violating owner, the board must provide said owner with an opportunity to review such documents, evidence and/or information in its possession. To that end, at his or her hearing, the violating owner must also be afforded the opportunity to respond to the documents, evidence and/or information supporting the allegations against him/her. Moreover, the Court instructed that a board is required to maintain minutes documenting that a hearing occurred notwithstanding the fact that the hearing can be held separate and apart from the other owners. Further, the Court also held that in the absence of written minutes, a video and/or audio recording of the hearing will serve as the requisite minutes that must be kept by the board.
Finally, the Court also confirmed that condominium owners have a right to free speech pursuant to Section 18.4(h) of the Illinois Condominium Property Act and that the Board cannot act in any manner that “prohibits the free exercise of religion, abridges an owner’s right to free speech, or infringes the right to peaceably assemble.” On that basis, the Court invalidated the fine levied against Mr. Boucher and held that an owner cannot be fined for simply exercising his First Amendment right of speech which includes expressing his/her criticism of management and/or the board’s conduct.
Dedic v. Board of North Shore Towers Condominium Association
The North Shore Towers Condominium Association levied a $1.01 million special assessment to remediate all 90 balconies serving the Units. Unit owner Selma Dedic sought a permanent injunction to prevent the Association from proceeding with the assessment.
In support of her claim, Ms. Dedic cited Section 18(a)(8)(ii) of the Illinois Condominium Property Act which provides owners with a limited right to nullify a special assessment properly adopted by the board if that assessment would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and special assessments payable during the preceding fiscal year. Specifically, Section 18(a)(8)(ii) of the Act states that owners have the right to call for a special election to decide whether to proceed with a special assessment upon providing the Board with a petition signed by 20 percent of ownership. However, the Court noted that the owners’ right to petition a special assessment levied by the Board does not apply to a special assessment for expenditures related to emergencies or those mandated by law.
Although Ms. Dedic did provide the Association with a timely petition to call a referendum vote to consider whether to proceed with the Assessment, the Court denied Ms. Dedic’s request for a preliminary injunction and held that the Association could proceed with the special assessment without affording the complaining owners with the election they requested. To that end, the court held the remediation work for which the special assessment was adopted to fund constituted an “emergency” as the facts at issue evidenced that the condition of the balconies posed an imminent safety risk to unit owners and were not compliant with local building code requirements as required by law.
Geraci v. Union Square Condo. Ass’n
Holly Geraci, a Unit Owner within the Union Square Condominium Association, claimed she was diagnosed with Post-Traumatic Stress Disorder following an incident involving a dog that occurred within the elevator at the property. Ms. Geraci sought an accommodation from the Association based on her diagnosis of post-traumatic stress disorder and was denied. Ms. Geraci then filed a lawsuit against the Association claiming that it violated the Fair Housing Act by retaliating against her for seeking an accommodation.
Ms. Geraci’s lawsuit asserted that the Association retaliated against her when it held an open forum and sent litigation updates to other Owners within the Association revealing that she had been diagnosed with post-traumatic stress disorder. The Court denied Ms. Geraci’s claim for retaliation on the grounds that her decision to file suit effectively made her medical diagnosis public knowledge. In addition, the Court noted that all information shared during the open forum as well as the litigation updates was entirely within the public record and therefore, properly shared with the other owners in the Association. As such, Ms. Geraci failed to demonstrate that the Association’s conduct was retaliatory. The Court also noted that the Association was within its rights to present expert testimony at trial to disprove Ms. Geraci’s diagnosis of Post-Traumatic Stress Disorder.
Quadrangle House Condominium Association v. U.S. Bank, N.A.
U.S Bank, N.A. was the holder of a mortgage of a condominium unit within the Association. In August of 2015, U.S. Bank obtained a judgment of foreclosure and sale and a judicial sale of the unit was held in November of 2015 at which U.S. Bank was the successful bidder. After obtaining possession of the unit, in August of 2016 the Bank requested verification from the Association as to the amount of monthly assessments due for the unit. In response, the Association provided the Bank with a ledger indicating that there were unpaid assessments owed that accrued from November of 2015 through August of 2016. U.S. Bank then rendered payment for the unpaid assessments listed in the amount listed in the ledger.
After receiving U.S. Bank’s payment, the Association initiated legal action seeking an order for possession of the unit contending that U.S. Bank’s failure to pay assessments owed within the first month following the foreclosure sale did not extinguish the Association’s lien under Section 9(g)(4) of the Illinois Condominium Property Act for unpaid pre-foreclosure sale assessments that were still due and owing. Ultimately, the Court denied the Association’s request for possession of the Unit and held that the payment of post-foreclosure assessments, whenever made, are sufficient to extinguish the Association’s lien under Section 9(g)(1) of the Illinois Condominium Property Act for assessments that accrued before the foreclosure sale.
Radiant Star Enterprises, LLC v. Metropolis Condominium Association
Radiant Star Enterprises, LLC and the Metropolis Condominium Association were owners of portions of the building located at 8 West Monroe St. in Chicago, Illinois. Given that Radiant Star Enterprises, LLC was not a member of the Condominium Association, the relationship between the respective owners was governed by a Reciprocal Easement and Operating Agreement. As part of that Reciprocal Easement and Operating Agreement, both the Association and Radiant Star Enterprises, LLC were required to submit any dispute amongst themselves to mandatory arbitration as a means to resolve the dispute.
Shortly after a dispute related to Radiant Star Enterprises’ efforts to build out certain portions of its property, Radiant submitted a formal demand for arbitration to the Association. In response, the Association rejected Radiant’s demand for arbitration on the grounds that Radiant had breached the arbitration clause contained in the Reciprocal Easement and Operating Agreement between the parties on a prior occasion during an unrelated dispute. Upon receiving the Association’s response, Radiant initiated legal action against the Association seeking a court order requiring the Association to arbitrate the dispute.
The Court concluded that the Association and Radiant were required to submit their dispute to arbitration as the simple fact that Radiant may have failed to comply with the arbitration clause on a prior occasion does not preclude it from seeking arbitration over the dispute at issue. As such, the Court confirmed that, aside from certain exceptions, “once a party enters into a contract with a valid arbitration clause, it will be irrevocably committed to arbitrate all disputes under that Agreement.”
Hussey v. Chase Manor Condominium Association
Rita Hussey, a unit owner within the Chase Manor Condominium Association, slipped and fell on ice located in the back of the Association’s building. Thereafter, Ms. Hussey filed a lawsuit against the property management company as well as the Association claiming that they failed to timely remove the snow from the area which created an unnaturally icy surface.
In its opinion, the Court noted that the Snow and Ice Removal Act was adopted by the Illinois legislature to provide an owner, lessor, occupant, or other person in charge of residential property with immunity if a third-party is injured as a result of his or her efforts to remove (or attempt to remove) snow or ice from “sidewalks abutting the property.” However, the Court clarified that the use of the term “sidewalks” as used in the Snow and Ice Removal Act relates solely to walkways bordering the property which are located within the public right-of-way and are reserved for pedestrians as a municipal sidewalk. As such, the Court’s holding confirmed that the immunity provided to a homeowner under the Snow and Ice Removal Act does not extend to the removal of snow or ice that accumulates on private walkways.
BMO Harris Bank, N.A. v. Jackson Towers Condominium Association
BMO Harris Bank, N.A. was the holder of a mortgage on a unit within the Jackson Towers Condominium Association. After BMO Harris Bank foreclosed on the unit and took possession subsequent to a judicial foreclosure sale, the Association demanded that the Bank render payment for all delinquent assessments that accrued prior to the foreclosure sale which had not been paid by the previous owner. The Bank rendered payment to the Association for both pre and post foreclosure sale assessments under protest and filed a lawsuit.
Ultimately, the Court found that BMO Harris Bank had failed to timely pay its post-foreclosure sale assessments to the Association to extinguish the Association’s lien for pre-foreclosure assessments under Section 9(g)(3) of the Illinois Condominium Property Act. Specifically, the Court noted that the Bank’s efforts to challenge the Association’s collection of presale assessments was untimely given that the Bank had already rendered payment to the Association for the presale assessments and thereby releasing Association’s lien. To that end, the Court noted that the Bank was not entitled to seek a declaratory judgment from the Court to contest the validity of a lien that had already been extinguished as a result of its payment thereof.
U.S. Bank N.A. v. Quadrangle House Condominium Association
U.S. Bank, N.A. took possession of a unit within the Quadrangle House Condominium Association subsequent to a foreclosure sale. In July of 2015, U.S. Bank obtained a court order confirming the sale and granting it possession of the unit. In September of 2015, U.S. Bank requested that the Association provide an invoice reflecting all assessments due for the unit that had accrued since the date of the foreclosure sale. In October of 2015, U.S. Bank paid the Association an amount equal to the assessments that had accrued since the date of the foreclosure sale.
Thereafter, U.S. Bank requested a paid assessment letter from the Association which revealed that assessments which had accrued prior to the foreclosure sale were still due and owing on the account. Specifically, the paid assessment letter cited to Section 9(g)(4) of the Illinois Condominium Property Act and stated that the Association was demanding payment of the pre-foreclosure sale assessments due to the Banks failure to “confirm the extinguishment of the lien.”
Ultimately, the Court held that U.S. Bank had extinguished the Association’s lien pursuant to Section 9(g)(4) of the Illinois Condominium Property Act notwithstanding the fact that its payment of post-foreclosure sale assessments occurred several months after the judicial foreclosure sale of the unit at issue.
Hometown Condominium Association v. Mohammed
Saleem Mohammed purchased a unit within the Hometown Condominium Association at a sheriff’s sale following a foreclosure on the unit. After the sheriff’s sale, the Association advised Mr. Mohammed of its lien pursuant to Section 9(g)(3) of the Illinois Condominium Property Act for certain association dues and late fees that had accrued prior the sheriff’s sale. After Mr. Mohammed refused to render payment to extinguish the Association’s lien, the Association suit against Mr. Mohammed. However, on the night before trial was scheduled to proceed, Mr. Mohammed rendered payment to the Association for assessments that accrued six months prior to the foreclosure sale as well as the first month after the sale.
In its opinion, the Court held that Mr. Mohammed’s payment of post foreclosure assessments 17 months after the judicial confirmation of sale did not extinguish the Association’s lien under Section 9(g)(3) of the Illinois Condominium Property Act. To that end, the Court noted that Mr. Mohammed’s decision to render payment on the eve of trial represented a “blatant attempt to circumvent the lien-extinguishment requirement of Section 9(g)(3)” and therefore, could not be considered sufficient to extinguish the Association’s lien. Moreover, the Court noted that the fact that Mr. Mohammed rendered only partial payment also precluded his payment from extinguishing the Association’s lien.
Interstate Funding Corp. v. Meurer (In re Skidmore)
On November 18, 2013, Interstate Funding Corp. purchased the delinquent property taxes for the condominium unit owned by Kenneth Meurer. On May 25, 2016, Interstate filed a petition for tax deed in the Circuit Court of Lake County and also filed a notice prescribed by Section 22-5 of the Illinois Property Tax Code informing Meurur of the property’s sale for delinquent taxes and the date of the expiration of the redemption period. This notice was prepared by the county clerk and approved by Interstate. Meurur filed an objection to the issuance of a tax deed, contending that Interstate failed to strictly comply with the Property Tax Code.
In support of his objection, Meurur argued that the notices for his property did not strictly comply with the Property Tax Code since the Property Index Number was “incorrectly” placed where the certificate number should have been listed. The Court, however, ruled that no incorrect information was included on the notices and as such, the notices were complete, correct and strictly complied with the Property Tax Code.
Bd. of Managers of Northbrook Country Condo. Ass’n v. Spiezer
The Board of Managers for Northbrook Country Condominium Association (“Board”) filed suit against June Spiezer, trustee of the June Spiezer Revocable Trust, for common expenses owed to the Association. In January of 2013, the court entered a default judgment and order of possession in the Board’s favor for the past due expenses owed by Ms. Spiezer, who had since become deceased, to the Association. After the default judgment was entered, Ms. Spiezer’s son filed a timely notice of appeal, which was denied.
Thereafter, three years later, Ms. Spiezer’s son filed a petition with the trial court attempting to vacate the January 16, 2013 order granting default judgment to the Association. The petition was denied by the Court. Ms. Spiezer’s son then attempted to appeal the trial court’s decision to deny the motion to vacate. However, the appellate court held that it could not hear the case as the court’s decision to deny the motion to vacate could not be appealed under Illinois Rule of Civil Procedure 303.
Henderson v. Lofts at Lake Arlington Towne Condominium Association
Steven Henderson, an owner of a unit within the Lake Arlington Towne Condominium Association, was injured in a slip-and-fall incident that occurred on a “stoop and stairs” just outside the entrance to the building. As a result of the significant injuries Mr. Henderson suffered due to the slip-and-fall, he filed suit against the Association and the contractor the Association retained to apply a special concrete epoxy sealant and co-efficient of friction to the stoop and stairs.
While the Court acknowledged that the Association did not have a duty to protect Mr. Henderson from those conditions that were “open and obvious,” the Court held that the Association did have a duty to protect Mr. Henderson from the stoop at issue notwithstanding evidence that Mr. Henderson had previously slipped in the same area on at least two prior occasions. Notably, the Court stated that evidence that Mr. Henderson subconsciously knew of the condition of the stoop prior to his fall did not negate the Association’s duty to protect him because it was reasonably foreseeable that Mr. Henderson might momentarily forget that the stoop could be slippery when it was wet. To that end, the Court cited that Mr. Henderson traversed the stoop on a daily basis to enter and exit the building and that on a majority of those occasions, the stoop was dry and therefore, not slippery. As such, the Court confirmed that regardless of whether Mr. Henderson may have been subconsciously aware that the stoop could be slippery due to his prior falls in the area, the fact that it was entirely foreseeable that he might momentarily forget that the area was slippery when it became wet did not negate the Association’s duty to protect him from the dangerous condition of the stoop.
2018 LEGISLATIVE UPDATES
Changes to the Community Association Licensure and Disciplinary Act in 2018
SB3394 – Public Act 100-0892- Changes to 225 ILCS 427/40 – Effective August 14, 2018
Amends the Community Association Manager Licensing and Disciplinary Act to lower age from 21 to 18 to be Community Association Manager. Note that this section will be repealed 1/1/2020.
SB 3036 – Public Act 100-0886 – Changes to 225 ILCS 407/30-30 – Effective August 14, 2018
Amends the Community Association Manager Licensing and Disciplinary Act to remove Section 29(b) which provided that a CAM license could be denied to a person that has defaulted on an educational loan or scholarship provided or guaranteed by the Illinois Student Assistance Commission or any governmental agency of the State
Changes to the Illinois Condominium Property Act
HB 5447- Changes to 625 ILCS 605/18-19, 27 – Effective August 14, 2018
This bill amends Section 18, 19 and 27 of the Illinois Condominium Property Act to implement certain non-substantive changes. Note that these changes edit the text of the Act but do not alter any substance of the Act.
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