In June of 2012, the Illinois Second District Court of Appeals issued a controversial decision in the case of Spanish Court Two Condominium Ass’n v. Carlson, No. 2-11-0473 (Ill. App. Ct., June 27, 2012), holding that, although condo associations can pursue collection of unpaid assessments by filing a complaint against the homeowner, the homeowner may assert the association’s failure to maintain common areas as a defense.
In Spanish Court Two, the plaintiff condo association sued Lisa Carlson, the defendant, in 2010 under Illinois’s Forcible Entry Act, alleging that Carlson had failed to pay monthly assessments. The condo association sought possession of her condominium unit and an award of unpaid assessments, late fees, court costs, and attorney fees.
Carlson answered and counterclaimed, admitting that she had not paid the assessments, while claiming that the nonpayment was justified because the condo association had failed to repair damage to the roof, which resulted in water damage to her unit. Carlson alleged that the condo association was estopped from collecting the unpaid assessments because it had breached its duty to repair the property, and that the cost of repairing the water damage to her unit should be deducted from the calculation of the unpaid assessments.
The condo association moved to strike Carlson’s defenses and counterclaim, relying on Section 9-106 of the Forcible Entry Act, stating that issues “not germane to the distinctive purpose of the proceedings” cannot be asserted by a defendant. The trial court granted the motion, and Carlson appealed to the Second District Court of Appeals.
On appeal, the Second District reversed the trial court’s decision, holding that the Carlson’s duty to pay assessments was analogous to a tenant’s obligation to pay rent and, under Illinois law, a renter is permitted to defend against a claim for unpaid rent by alleging that the landlord breached his duty to maintain and repair to premises.
The condo association appealed to the Illinois Supreme Court, which heard oral arguments in September of last year. At the oral arguments, the association argued that condominiums survive through collecting assessments and that allowing owners to assert the type of defenses at issue would result in chaos in the condominium industry.
Carlson responded by arguing that, if condo residents were not permitted to raise these defenses of forcible entry and detainer suits, they would be forced to file an independent lawsuit, which would result in a protracted legal battle. Carlson argued that it was in the interest of public policy to allow condo residents to assert the types of defenses at issue.
The Spanish Court Two case demonstrates the need for residents belonging to condominium and housing associations to be aware of the association’s rules and regulations, and to be represented by a knowledgeable real estate attorney should a dispute arise between the resident and association. If you have questions regarding homeowner’s associations, or need additional information about real estate transactions, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.