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Illinois Supreme Court Backs Condo Associations In Assessment Dispute

An Illinois Supreme Court ruling has barred condo owners from using their condo association’s failure to repair common property elements as a defense for not paying monthly assessments.

The 4-3 decision Thursday found that state condominium laws require condo owners to pay their assessments as a matter of law, not as a matter of a contract like that of a tenant and landlord.

The case sprang from a long-running dispute between Lisa Carlson and the board of her Highland Park condominium association over its alleged failure to repair a leaking roof that severely damaged her unit.

After months of wrangling, Carlson stopped paying her assessment in August 2009, saying the leak made it impossible to sell her unit. Six months later, the board filed a forcible entry and detainer lawsuit, a legal move that allows homeowner associations to evict unit owners over unpaid dues.

A Lake County judge barred Carlson from using the association’s failure to fix the roof as a defense, but the Illinois 2nd District Appellate Court overturned the lower court’s decision. It found that if Carlson’s allegations were true, the board actions constituted a material breach of contract.

In a majority opinion written by Justice Mary Jane Theis, the state’s high court overturned the appellate decision.

Since associations rely on assessments to pay a host of common expenses shared by all the unit owners, prolonged court battles over unpaid fees “would thus threaten the financial stability of condominium associations throughout this state,” the ruling said.

In dissent, Justice Charles Freeman said the threat of eviction would prevent most delinquent owners from using such a defense for frivolous reasons. The majority opinion, he said, stripped owners of an important legal protection.

“Not permitting a unit owner to raise a nullification defense in a forcible action denies a voice to an ever growing segment of the population who purchase condominium property,” Freeman wrote.

The attorney for the condo association, Diane Silverberg, applauded the decision, saying it “recognizes that a unit owner’s duty to pay assessments cannot be conditioned upon the association’s performance.”

Carlson said she and her attorney plan to pursue legislation to expand the power of unit owners to hold association board members responsible for their actions.

“It’s not over, and my attorney and I plan to march resolutely to Springfield to tell my complete story … with the hope that no other member of an association will suffer the way I have,” she said.

Carlson’s separate lawsuit against the condo board over water damage is pending in Lake County.

Article reposted from Chicago Tribune, Written by Matthew Walberg, March 21, 2014