Condo Board Fiduciary Duties: What is the Statute of Limitations for Claims Against Illinois Condominium Board Members?

Serving on an Illinois condominium association board comes with significant legal responsibilities. Condominium board members have a fiduciary duty to act in the best interests of the condominium association.  In Bd. of Managers of Weathersfield Condo. Ass’n v. Schaumburg Ltd. P’ship, 307 Ill. App. 3d 614, 622, 717 N.E.2d 429, 436, 240 Ill. Dec. 336, 343 (1st Dist. 1999), as modified on denial of reh’g (Sept. 30, 1999), the Illinois Court of Appeals defined the common law fiduciary duty of directors and officers as follows:

A fiduciary relationship exists where there is special confidence in one who, in equity and good conscience, is bound to act in good faith with due regard to the interests of the other. Since the association officers and board members owe a fiduciary duty to the members of the association, they must act in a manner reasonably related to the exercise of that duty, and the failure to do so will result in liability not only for the association but also for the individuals themselves.

765 ILCS 605/18.4 of the Illinois Condominium Property Act further defines a director /board member’s fiduciary duties, which include, but are not limited to, providing for the operation, care, upkeep, maintenance, replacement, and improvement of the common elements.  As such, it is not unusual for an owner to assert claims for breach of fiduciary duty and claims for breach of contract for failing to follow the declaration when they are unhappy with the speed at which common element repairs are made.  However, for an owner’s claim to be successful, it must be filed within five (5) years, or the statute of limitations bars the claim.  As demonstrated by a recent Illinois case, Narkiewicz-Laine v. Thorndale Beach N. Condo. Ass’n, 2025 IL App (1st) 232259-U, ¶ 51, 2025 WL 1249565, the statute of limitations can be an effective defense to a claim for breach of fiduciary duty related to a failure to make repairs. As such, this article will discuss how condominium board members can effectively establish a statute of limitations defense in response to a breach of board fiduciary duties claim to limit their potential liability.

Facts Establishing the Statute of Limitations Defense for the Condominium Board

Plaintiff was the owner of a condominium unit in Chicago that was part of the Thorndale Beach North Condominium. The Thorndale Beach North Condominium Association was responsible for administering the Condominium.  The Plaintiff had occupied the condominium unit since January 2007, and owned it since January 2009, after inheriting the unit from his parents.  In 2019, the plaintiff filed a lawsuit against the Illinois condominium association and the board of directors, which included claims for breach of board fiduciary duties and breach of contract.  The plaintiff claimed that the association and board failed to maintain the common element plumbing and sewage systems, creating a sewer backup in the condominium unit in September 2008.  The Plaintiff claimed damages for the decrease in market value of the units and for lost personal property caused by the sewage backup.

The condominium association and board filed a motion for summary judgment to dismiss the plaintiff’s claims based on the statute of limitations.  The defendants argued that the plaintiff’s claims were untimely, as the Plaintiff admitted to observing water backups between 1996 and 2008, the water backups had continuously occurred and never been resolved.   The Plaintiff further stated that he was aware that the unit had plumbing issues as far back as 1996, when his parents owned it, and was aware of the plumbing issues when he moved in and became the owner of the unit. As such, the defendants argued that a five (5) year statute of limitations barred the owner’s claims, and the trial court dismissed the plaintiff’s claims as they were untimely.

The Court Dismissed the Breach of Fiduciary Duty Claim against the Condominium Association and Directors

On appeal, the plaintiff argued that his claims should not have been dismissed as factual issues existed regarding whether his claims were timely, which should have been decided at a trial.  The appellate court started by analyzing 735 ILCS 5/13-205, which states that “all civil actions not otherwise provided for,” a cause of action shall be commenced within five years “after the cause of action accrued.” In determining when the five (5) year time period started to run, the Illinois Court of Appeals stated as follows:

A cause of action accrues under the statute when the plaintiff “knew or reasonably should have known that it was injured and that the injury was wrongfully caused.” Superior Bank FSB v. Golding, 152 Ill. 2d 480, 488 (1992). A plaintiff reasonably should know that an injury is wrongfully caused when he has enough information about the injury to alert a reasonable person about the need for additional inquiry to determine if the cause of the injury is legally actionable. Lubin v. Jewish Children’s Bureau of Chicago, 328 Ill. App. 3d 169, 172 (2002). The limitation period begins when the plaintiff is injured, not when the plaintiff realizes the consequences of the injury or the full extent of the injury. Khan v. Deutsche Bank AG, 2012 IL 112219, ¶ 45. “That damages are not immediately ascertainable does not postpone the accrual of a claim.” Indiana Insurance Co. v. Machon & Machon, Inc., 324 Ill. App. 3d 200, 304 (2001).

In applying the above standard, the court stated that the plaintiff’s claims were barred before filing the complaint in April 2016.  The Court determined that Plaintiff had been aware of sewer backups since the time his parents moved into the unit in 1996.  Plaintiff also admitted that the condominium association advised him in 2008 that the sewer backups were his responsibility, the 2008 sewer backup had not been resolved, and that the statute of limitations began to run in 2008 at the very latest, so Plaintiff had to file any claims by 2013 at the very latest.

The plaintiff also attempted to argue that he had additional sewer backups in 2019 and 2021, and that the condominium association had a continuing duty to maintain the common element plumbing system in the condominium. However, the court rejected the plaintiff’s argument, as the statute of limitations started to run when the plaintiff was injured, not when the plaintiff realized the consequences or the full extent of the injury. Specifically, the appellate court stated that, “…there may have been a period of time in which there were no backups, plaintiff nonetheless admitted that the 2008 backup had never been resolved, fatally undermining any claim that the 2018 and 2019 backups were new breaches (thus rescuing them from the statute of limitations).”

Key Takeaways for Illinois Condominium Associations: Defending Breach of Board Fiduciary Duties Claims Against Directors

 While proactively addressing owner repair complaints is a key responsibility for Illinois condominium association boards, consulting with an experienced condominium attorney is equally important to understand potential legal defenses. Doing so helps reduce liability, avoid insurance claims, and fulfill fiduciary responsibilities. The best way for directors and officers to avoid claims for breach of board fiduciary duties is to develop and follow a clear plan for maintaining the common elements. However, even if mistakes occur, defenses such as the statute of limitations may still apply. As shown in Narkiewicz-Laine v. Thorndale Beach N. Condo. Ass’n, 2025 IL App (1st) 232259-U, ¶ 51, 2025 WL 1249565, claims for breach of fiduciary duty may be barred if the alleged injury occurred more than five years before the lawsuit was filed.

Maintaining detailed records of maintenance activities is important, not only for establishing a statute of limitations defense but also for invoking the business judgment rule. Under the business judgment rule, absent evidence of bad faith, fraud, illegality, or gross overreaching, courts will interfere with corporate directors’ exercise of business judgment. For example, in  Fountain Square on the River Condo. Ass’n, Ltd. v. First Am. Bank, 2024 IL App (2d) 230076-U, ¶ 27, 2024 WL 4783946, an Illinois appellate court held that a condominium board could rely on the advice of a professional reserve study company in determining the amount to fund into reserves and how to address water leaks when making maintenance decisions.

When common element maintenance disputes arise with condominium owners, having knowledgeable legal counsel can mean the difference between swift resolution and prolonged litigation. Hirzel Law regularly advises Illinois condominium associations on minimizing legal exposure through preventive planning, effective documentation, and establishing strong legal defenses. If your community association is facing potential claims or dealing with a difficult owner, contact Hirzel Law!