RECENT DEVELOPMENTS IN ILLINOIS LAW: WHAT TO KNOW IF YOU ARE SELLING A CONDOMINIUM

RECENT DEVELOPMENTS IN ILLINOIS LAW: WHAT TO KNOW IF YOU ARE SELLING A CONDOMINIUM

Condominium properties in Illinois are generally governed by the Illinois Condominium Property Act, 765 ILCS 605/1 et seq (the “Condo Act”).  The Condo Act sets standards for what is allowed by both condominium owners, and the associations of which the owners are members.  A relative recent case in Illinois provides an important interpretation of the Condo Act.  It is known as Harry Channon v. Westward Management, Inc. and is cited as 2022 IL 128040.  The Court’s opinion was filed on November 28, 2022 by the Supreme Court of the state of Illinois.

Channon revolves around rules as to the owner of a condominium when he or she sells the unit.  Condominium sellers are almost always required to provide certain condominium documents related to the association to the buyer.  The documents often include the condominium declaration and bylaws.  Naturally, the condominium association charges fees to provide the seller with these documents.  It is usually the condominium seller that bears these fees at the real estate closing.

In Channon, the Supreme Court decided whether the Condo Act provides an implied cause of action in favor of a condominium unit seller against the association, the association’s property management company, or even the association’s board of directors, based on allegations that the latter parties charged excessive fees for the production of the required documents.  The Court stated that it would construe the Condo Act in order to ascertain and effectuate the legislative intent by applying the plain language contained within the Act.

The Illinois Supreme Court found that the Condo Act does not create an implied private right of action by a condominium unit seller against an agent of the condominium association, or the association’s board of managers, for charging allegedly excessive fees.

In making its decision, the Supreme Court applied its test from Metzger v. DaRosa, 209 Ill.2d 30, 36 (2004).  This is a four factor test that determines whether 1) plaintiffs are members of the class that the statute was intended to benefit, 2) the statute was designed to prevent the plaintiffs from suffering the incurred injury, 3) the statute’s purpose is consistent with the creation of a private right of action, and, 4) it is necessary to imply a private right of action to provide an adequate remedy for the statutory violation.

The Illinois Supreme Court’s decision hinged on who the Condo Act was attempting to protect when it defined the documents that condominium sellers had a duty to disclose.  The Court decided that the requirements are not a protection for the condominium seller, but for the condominium buyer.  As a result, the first element of Metzger test was not met.

The Court also noted that a certain standard must be met to imply a private right of action in a statute, including the Condo Act.  The Court would take this step only when it is clearly needed to advance the statute’s purpose and when the statute would be practically ineffective unless a private right of action was implied.  In Channon, this “high” bar was not overcome.

As a result, if you are the seller of a condominium, you may be unhappy with the fees that the association charges for you to provide required documents to the buyer.  Unfortunately, under current Illinois law, you probably do not have a legal remedy.

Nevertheless, if you need information or assistance in selling a condominium unit, local attorney Andrew Szocka provides thorough and speedy real estate assistance in the Chicagoland area.  To schedule a free initial consultation, visit Andrew Szocka, P.C. online or call the office at (815) 455-8430.

 

The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.