Illinois Court Rules in Favor of Association in Eviction Action Even Though Board was Not Properly Elected
Recently, the First District Court of Appeals discussed a situation where a unit owner claimed that an eviction action filed by her condominium association was not proper because the members of the association’s board of managers were not properly elected, and as such, the budget setting the amount of assessments was not properly passed. The case is Hickory Heights Condo. Unit No. 1, Inc. v. Okoye, 2023 IL App (1st) 221023-U, and a more detailed analysis, including the court’s holding, is outlined below. The holding of the Court of Appeals was that the failure to properly elect a condominium board was not a defense to (or germane to) an eviction action filed by a condominium association as a result of a unit owner’s failure to pay assessments.
Unit Owners’ Duty to Pay Assessments Under Illinois Law
In Illinois, condominium associations are governed by their declaration, bylaws, articles of incorporation (commonly referred to as the “condominium documents” or “condominium instruments”) and the Illinois Condominium Property Act (765 ILCS 605/1 et seq.). More specifically, under the Illinois Condominium Property Act, it is the “duty” of each unit owner “to pay his proportionate share of the common expenses.” (765 ILCS 605/9(a)).
Under the Illinois Condominium Property Act, and more specifically, Section 9(g) of the Illinois Condominium Property Act, a condominium association has a lien for: (1) the amount of common expenses unpaid; (2) the amount of any unpaid fine; and (3) interest, late charges, reasonable attorney fees and costs of collection incurred enforcing the condominium instruments, rules and regulations of the board, or any applicable statute or ordinance. Because the condominium lien is automatic, it does not need to be recorded, and is senior to all other liens and encumbrances other than taxes and previously-recorded encumbrances (including mortgages). 735 ILCS 605/9(g).
Section 9.2 of the Illinois Condominium Property Act also provides that a condominium association may file an eviction action in the case of a delinquency. More specifically, that section provides the condo association can evict a unit owner, or any tenant of the unit owner, if there is a default in the performance of obligations set forth in the condominium documents or the rules and regulations of the board of managers. The eviction action is then handled in the manner prescribed by Article IX of the Code of Civil Procedure (which is similar to a landlord/tenant lawsuit). Importantly, an eviction order in a condominium assessment situation is meant to be “temporary” with possession eventually returning to the unit owner. See, Knolls Condominium Ass’n v. Harms, 202 Ill. 2d 450, 454 (2002). The unit owner maintains title to the unit and the condominium association has the right to possession of the unit until the judgment for possession is vacated after the amount owed is paid, and in the interim, the condominium association can rent the unit and apply any funds received to the delinquency. 735 ILCS 5/9-111(a).
The jurisdiction of the court in an eviction action is limited to matters that are “germane” to possession and for a money judgment as to outstanding assessments or fines. In other words, if the default is simply non-payment, the owner/tenant should not be entitled to raise defenses regarding the actions or the inactions of the community association or the board. See, e.g., Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342. However, if the delinquency arose due to a default under the condominium documents, the owner/tenant will be entitled to present evidence that there was no bylaw violation or that a hearing was not properly held as required under the declaration or bylaws. See, Bd. of Directors of Winnitt Park Condo. Ass’n v. Bourdage, 2021 IL App (1st) 192536.
The Okoye Decision
In the Okoye case, the unit owner fell behind on the payment of assessments, which ranged from $220/month to $270/month. The assessments were set yearly by the purported board of managers, and by the time a lawsuit was filed, the unit owner was behind in the amount of nearly $5,000. A lawsuit was filed in August 2020 seeking a money judgment and possession of Ms. Okoye’s unit pursuant to Illinois’ Eviction Act. Ms. Okoye filed a motion to dismiss claiming that the board of managers was not properly elected and that there had been no elections since at least 2017, and as a result, any budget passed by the board was invalid. The motion to dismiss was initially denied due to the existence of a question of fact as to the election.
After discovery, the case went to a bench trial in January 2022. During cross-examination of the association’s only witness, it was established that there were no proper elections during the annual meetings held in 2018, 2019 and 2020. In ultimately finding for the association, the trial court held that that there was nothing in the Eviction Act or the Condominium Property Act that required a condominium association, as part of its case, to prove that it strictly adhered to the condominium documents or the Condominium Property Act and found in favor of the association. The judgment included possession of the unit in favor of the association, and a judgment of over $45,000, including about $19,000 in attorneys’ fees and costs.
The unit owner appealed the trial court’s decision. The Court of Appeals reiterated that a condominium association need only prove three items to be successful in an eviction action: “(1) common expenses or other expenses that were lawfully agreed upon were owed, (2) the unit owner failed to pay, and (3) the amount owed.” Okoye, 2023 IL App (1st) at ¶15, citing Sherwood Commons Townhome Owners Ass’n, Inc. v. Dubois, 2020 IL App (3d) 180561, ¶ 21, Board of Managers of Dunbar Lakes Condominium Ass’n II v. Beringer, 94 Ill. App. 3d 442, 447 (1981)); North Spaulding Condominium Ass’n v. Cavanaugh, 2017 IL App (1st) 160870, ¶ 25.
The Court of Appeals further held that the issue of whether the board of managers was properly elected is not “germane” to an eviction action under Illinois law, because, in part, a unit owner’s payment of assessments was an “independent duty” owed by the condominium unit owner. Relying on the Spanish Court decision above, the Court stated:
The Condominium Act specifies that the “association shall have no authority to forbear the payment of assessments by any unit owner.” 765 ILCS 605/18(o) (West 2018). As for the unit owner, that person “may not assign, delegate, transfer, surrender, or avoid the duties, responsibilities, and liabilities of a unit owner under this Act” and that an attempt to do so “shall be deemed void.” (Emphasis added.) 765 ILCS 605/18(q) (West 2018). Together, these statutory provisions “demonstrate that a unit owner’s liability is not contingent on the association’s performance” of its own obligations. “The unit owner cannot ‘avoid’ the duty to pay assessments, i.e., the duty cannot be annulled, vacated, defeated, or invalidated *** and the association cannot refrain from enforcing that obligation.”
Additionally, again relying on the Spanish Court decision, the Court held that “permitting a unit owner’s duty to pay assessments to be nullified by a defense regarding the association’s failure to properly perform its duties would threaten the financial stability of condominium associations throughout this state.” The ultimate holding in the case is that the “undisputed failure of the association to convene a proper election for the 2020 term is not pertinent to Okoye’s duty to pay assessments, and that the circuit court was correct in finding that Okoye’s defense was not germane to the eviction action.” As such, the trial court decision finding in favor of the association was affirmed by the Court of Appeals.
The primary takeaway from the Okoye case is that a unit owner’s duty to pay assessments is not impacted by a condominium association’s failure to strictly adhere to either its governing documents or the Illinois Condominium Property Act. As the Court stated, that duty is “independent” from and separate from the issue of whether the association followed the condominium documents. Although the final decision was handed down over three years after the eviction action was initially filed, the association was ultimately successful in obtaining possession of the unit and for all the money damages sought—including attorneys’ fees and costs. This decision, in conjunction with the Spanish Court decision, provides additional ammunition to unit owners’ claims that they can withhold assessments for myriad reasons, including that the budget was not passed by a properly-elected board.
The attorneys of Hirzel Law, PLC focus their practice on condominium and homeowners association law in addition to real estate law. Our attorneys have extensive litigation and trial experience in state and federal courts involving commercial litigation issues and real estate matters. We stand by our clients, offering quality legal representation and promptly responding to our clients’ needs. Contact Hirzel Law online or call 312-552-7669 to learn how our Illinois attorneys can help.