Implied Warranty of Habitability in Illinois Condominiums: What Every Unit Owner and Developer Should Know
In Illinois, the implied warranty of habitability serves as a fundamental protection for condominium purchasers, ensuring that newly constructed units and their common elements meet basic standards of safety and livability. This doctrine holds developers accountable for latent defects that compromise the habitability of a property. Over the years, Illinois courts have addressed the scope and applicability of this warranty in various contexts. This article examines three pivotal cases—Tassan v. United Development Co., Kelley v. Astor Investors, Inc., and Library Tower Condominium Association v. Library Tower, LLC—to provide a comprehensive understanding of how the implied warranty of habitability is applied in new construction condominiums.
1. Tassan v. United Development Co. (1980): Developers Can Be Held Liable for Common Element Defects
The Tassan case marked a significant expansion of the implied warranty of habitability in Illinois. In this case, seven condominium unit owners sued the developer-seller, United Development Company, alleging that the company failed to repair defects in the common elements of the condominium complex. The defects included issues such as water leakage, inadequate heating systems, and faulty plumbing.
The court held that the implied warranty of habitability extends not only to builder-vendors but also to developer-sellers of newly constructed condominiums. This decision was grounded in the principle that purchasers of condominium units rely on the developer’s expertise and assurances regarding the quality and safety of the property. The court emphasized that the developer-seller is in the best position to ensure that the property meets the necessary standards for habitability.
Furthermore, the court addressed the issue of contractual disclaimers. United Development Company attempted to disclaim the implied warranty through a standard form contract. However, the court found that the disclaimer clause was inconspicuous and insufficient to effectively negate the warranty. This ruling underscores the importance of clear and prominent disclaimers in contracts involving the sale of new residential properties.
2. Kelley v. Astor Investors, Inc. (1985): Warranty Also Applies to Condo Conversions
In Kelley v. Astor Investors, Inc., the Illinois Supreme Court reaffirmed and clarified the application of the implied warranty of habitability in condominium conversions. The plaintiffs, unit owners in a condominium conversion project, alleged that the developer failed to repair structural defects in the common elements, such as leaking roofs and inadequate drainage systems.
The court distinguished between new construction and condominium conversions, noting that the implied warranty of habitability applies to both scenarios. However, the court also recognized that the extent of the developer’s obligations may vary depending on the nature and scope of the work performed. In this case, the court found that the developer’s failure to address the alleged defects constituted a breach of the implied warranty.
This decision highlights the court’s commitment to protecting condominium purchasers from latent defects, regardless of whether the property is newly constructed or converted from an existing building. It reinforces the principle that developers have a duty to ensure that the property is suitable for habitation and free from significant defects.
3. Library Tower Condominium Association v. Library Tower, LLC (2021): Condo Associations Can Enforce the Warranty
The Library Tower case further developed the jurisprudence surrounding the implied warranty of habitability in Illinois. In this case, the condominium association sued the developer, Library Tower, LLC, alleging that the building suffered from various construction defects, including water infiltration, inadequate flashing, and improper sealing of window frames.
The court addressed the applicability of the implied warranty of habitability in the context of condominium associations. It held that the association, as a representative of the unit owners, had standing to assert claims for breach of the implied warranty on behalf of its members. This decision underscores the importance of condominium associations in enforcing the rights of unit owners and holding developers accountable for defects that affect the habitability of the property.
Additionally, the court considered the enforceability of waivers of the implied warranty of habitability contained in the condominium declaration and purchase agreements. It concluded that such waivers are enforceable if they are clear, conspicuous, and voluntarily agreed upon by the parties. This ruling emphasizes the need for transparency and mutual consent in contractual agreements involving waivers of statutory warranties.
Key Takeaways for Condominium Developers and Unit Owners
These cases collectively highlight several important aspects of the implied warranty of habitability in Illinois condominium law:
- Applicability to Condominium Units: The warranty applies not only to traditional homes but also to newly constructed and converted condominium units.
- Coverage of Common Elements: Defects in common areas are covered under the warranty, ensuring that all aspects of the condominium meet habitability standards.
- Developer Responsibility: Developers are obligated to deliver units and common areas that are free from latent defects, and this responsibility extends beyond the completion of construction.
- Legal Recourse for Purchasers: Purchasers have the right to seek legal remedies if defects are discovered, reinforcing the protective nature of the warranty.
Understanding these principles is crucial for both condominium developers and owners. For developers, it emphasizes the importance of quality construction and thorough inspections. For owners, it provides assurance that their investment is protected against latent defects that could affect the habitability of their property.
Conclusion
The implied warranty of habitability serves as a fundamental protection for condominium purchasers in Illinois, ensuring that their homes meet basic standards of livability. The cases discussed above illustrate the courts’ commitment to upholding this warranty and holding developers accountable for delivering quality construction.
Whether you’re a developer looking to minimize legal risk or a condominium association unsure of your rights after discovering construction defects, understanding how this warranty applies is critical. But you don’t have to navigate these issues alone.
At Hirzel Law, we help condominium boards and developers take proactive steps to protect their investments. Our attorneys can review your governing documents, advise on warranty claims, and help you avoid common pitfalls before they become costly legal battles.
Want to dig deeper? Request a copy of our Illinois Condominium Handbook, which includes a step-by-step developer turnover checklist and practical guidance to ensure compliance with state law. Contact us today to schedule a consultation or request the handbook. Let’s make sure your condominium community is built—and protected—on a solid legal foundation.
David Poirier is a Senior Attorney at Hirzel Law, PLC, specializing in complex commercial litigation. Mr. Poirier has extensive experience in handling a broad range of legal matters, including ownership and shareholder disputes, intellectual property, trade secret misappropriation and non-compete disputes, real estate litigation, environmental law, insurance coverage, professional malpractice defense, and various business torts. Mr. Poirier also serves as an outside “general counsel” to business clients by providing his clients day-to-day advice regarding operations and business formation and transactions. He may be reached at 248-478-1800 or dpoirier@hirzellaw.com
