In Lake Point Tower Condominium Ass’n v. Waller, 2017 IL App (1st) 162072, decided on June 28, 2017, the Association filed a Forcible Entry and Detainer action against Defendant to obtain possession of Defendant’s condominium. At trial, Defendant filed a motion to dismiss the complaint. In the motion, Defendant acknowledged that she owed past-due assessments but alleged that that the Association lacked authority to initiate litigation because the Board failed to vote at an open meeting to approve filing the action, in violation of Section 18(a)(9)(A) of the Illinois Condominium Property Act.
In further support of her motion, Defendant contended that the First District Court of Appeals’ decision in Palm required that the Association prove the requisite vote to authorize litigation occurred as an essential element of its case under the Forcible Entry and Detainer Act. The Defendant also claimed that the Association’s meeting minutes showed that the Board had improperly delegated its authority to file litigation for collection matters to the Association’s managing agent.
Although the Trial Court ultimately dismissed the Association’s claim with prejudice, the First District Court of Appeals noted that, prior to the Trial Court’s dismissal, the Board voted at an open meeting to pursue litigation against Defendant, effectively eliminating Defendant’s basis for asserting that the Association did not have authority to file a collections action against her. The Appellate Court also cited the recent case, North Spaulding Condominium Ass’n v. Cavanaugh, as well as the Forcible Entry and Detainer Act, to assert that when filing a forcible entry and detainer action, the Association is not required to prove that the Association’s Board voted at an open meeting to initiate litigation.
Furthermore, the Appellate Court distinguished the case at hand from the Palm decision, stating that Palm involved the defense of litigation, whereas Lake Point Tower involved collection matters. Citing to Palm, the court further concluded that the Illinois Condominium Property Act did not preclude an association’s board from delegating authority to initiate collection lawsuits to the property manager. Accordingly, the Appellate Court found that the Trial Court erred by dismissing the case with prejudice as the Association should have been permitted to cure its deficiency and amend its pleadings to reflect that the Board subsequently voted to approve filing the lawsuit at an open Board meeting.
In sum, Lake Point Tower and North Spaulding Condominium Ass’n evidence that at an open meeting, the board may adopt a collections policy authorizing the property manager to initiate collections proceedings against a delinquent owner. Moreover, these cases also indicate that where the board has failed to authorize collections proceedings against a delinquent owner prior to suit, the board may retroactively authorize legal action.
It is important to ensure that your association’s existing collections policies are consistent with the Court’s holdings in Lake Point Tower and North Spaulding Condominium Ass’n so that your association may quickly and efficiently pursue legal action against delinquent owners. Kovitz Shifrin Nesbit has extensive experience reviewing collections policies in this regard and is available to provide legal guidance.
If you have questions or concerns regarding this case law update and its effect on your community, please do not hesitate to contact our law firm at 855-537-0550 or visit our website at www.ksnlaw.com
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