Friday, August 17, 2012

Ruling could change course of collection proceedings -

Ruling could change course of collection proceedings -

Delinquent condominium owners historically have been told to pay up, no matter how well the board took care of the property. But an Illinois appellate court this summer said just the opposite. The groundbreaking decision could change the course of collection proceedings nationwide.
The case, Spanish Court Two Condominium Association v. Lisa Carlson, began two years ago when the association sued the owner for nonpayment of assessments under the Forcible Entry and Detainer Act. This law allows associations to take temporary possession of a unit and rent it out until the delinquency has been paid. The owner countersued the association for failing to maintain, repair and replace the common elements as required by its governing documents. The trial court ruled in favor of the association.
But the Second District Appellate Court in late June disagreed. The three-judge panel ruled that associations are duty-bound to repair and maintain the common elements and that neglect can be a viable defense, at least in eviction cases like this one. Comparing the relationships between landlords and tenants to associations and owners, they wrote: "Just as the contract principle of mutually exchanged promises can justify a tenant's refusal to pay rent, so that principle can justify a condominium unit owner's refusal to pay assessments."
Pamela McKuen of the Chicago Tribune reports on this major decision.   Link to opinion here.

1 comment:

Anonymous said...

This is good!

This evolution of law is similar to what happened in landlord tenant law for residential - although what is not yet universally accepted in commercial contexts.

Inexplicably, courts have held in the past that the obligation to pay rent is separate from the obligation for the landord to provide habitable premises even though that is exactly what the tenant is paying for. The law has evolved to allow the tenant to withhold rent and to raise the landlord's breach as a defense to the tenant's actions.

It's quite appalling that it is taking so long for similar case law to develop in the context of condominiums. First of all, the owners ARE NOT RENTERS. The owners own the property. There is NOT a "landlord-tenant" relationship between the condo and the owners. Second, the purpose of the condo/HOA is allegedly to provide services to the owners and to maintain the common areas (condo). If the condo corporation is not doing that - on what basis should any owner be paying the condo corporation?