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Flooded Condo Owners Still Have to Pay – Illinois Case Law Update

Illinois Supreme Court reverses Spanish Court Two

Condominium owners must pay assessments even if Board fails to maintain units.

On March 20, 2014 the Illinois Supreme Court filed its opinion in the case of Spanish Court Two Condominium Association v. Carlson, [cite], holding that a condominium owner may not forego payment of monthly assessments based on a claim that the association failed to maintain the property. This decision reverses the holding of the Illinois Appellate Court handed down in 2012.

Spanish Court Two Condominium Association filed an eviction action against a non-paying unit owner on February, 2010.  The defendant unit owner admitted she did not pay assessments but claimed that she should not be held responsible for those assessments because the association failed to properly maintain the roof directly above her unit which caused water damage to her unit.   The  unit owner also filed a counterclaim against the association for damages she claimed were sustained as a result of the water infiltration.

The trial court dismissed the unit owner’s defenses and severed her counterclaim, finding it was not “germane” to the determination of the association’s claim for possession.  On appeal the Illinois Appellate Court held that the relationship between a unit owner and a condominium association is merely contractual – based upon the terms of the declaration of ownership and other governing documents.  As a result the Appellate Court found that nonperformance of one party to the contract – in this case, the claimed failure of the association to maintain the property – would excuse nonperformance of the other party to the contract, thereby excusing the unit owner from payment of assessments.

In its decision, the Illinois Supreme Court ruled that the requirement of condominium owners to pay assessments is statutory, created by Section 9(a) of the Illinois Condominium Property Act.  Likewise, the duty of the board to maintain a condominium property is also statutory, addressed in Section 18.4(a) of the Illinois Condominium Property Act.  The Court found that these two duties – to pay assessments and to maintain the property – arise and endure separately from one other and one duty cannot be forgiven by the nonperformance of the other.

The Supreme Court further held that while unit owners may not simply stop paying assessments if the association fails to maintain the property, an independent cause of action will arise under which the unit owner may recover.  However, that claim is not germane to an action to enforce payment of assessments under the Illinois Forcible Entry and Detainer (eviction) Act and cannot be used as a defense to nonpayment of assessments.

Kerry-Walsh

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Kerry Walsh