The process of selling a condominium unit in Illinois requires sellers to provide buyers with detailed disclosure documents under 765 ILCS 605/22.1 of the Illinois Condominium Property Act. These disclosures provide essential information about the condominium association’s finances, governance, and anticipated capital expenditures. However, disputes have increasingly arisen regarding the fees charged to sellers for obtaining these documents.
In Greenswag as Trustee of Franklin P. Friedman Living Trust v. Lieberman Management Services, Inc., 2025 IL App (1st) 240289-U, the Illinois Appellate Court affirmed the dismissal of a consumer fraud claim against a property management company accused of charging allegedly excessive disclosure fees. This decision provides necessary clarification regarding disclosure fees and the impact of recent statutory amendments to 765 ILCS 605/22.1 of the Illinois Condominium Property Act. This article will discuss the court’s decision and its implications for condominium associations.
Background of the Condominium Association Dispute
The case arose when a condominium unit owner sought to sell a unit located at Mission Hills Condominiums in Northbrook, Illinois. As required by Section 22.1(a) of the Illinois Condominium Property Act, the seller was obligated to provide the prospective buyer with disclosure documents, including the declaration, bylaws, rules, and financial information.
To comply with this requirement, the seller requested the documents from the association’s property management company. The documents were provided through a third-party vendor at a total cost of $445.
The seller believed the fee was excessive and filed a class action lawsuit asserting multiple claims, including a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act. The plaintiff alleged that charging excessive fees constituted an unfair business practice.
The trial court ultimately dismissed the claims, and the plaintiff appealed. The appellate court was tasked with determining whether charging allegedly excessive disclosure fees could support a consumer fraud claim.
The Appellate Court’s Analysis Regarding 765 ILCS 605/22.1 of the Illinois Condominium Property Act
- No Private Right of Action Under 765 ILCS 605/22.1 of the Illinois Condominium Property Act
A central issue in the case was whether 765 ILCS 605/22.1 of the Illinois Condominium Property Act provides sellers with a private right of action to challenge disclosure fees charged by property managers.
The appellate court relied heavily on the Illinois Supreme Court’s prior decision in Channon v. Westward Management, Inc., which held that 765 ILCS 605/22.1 of the Illinois Condominium Property Act does not create an express or implied private right of action for sellers to challenge disclosure fees charged by property managers acting on behalf of associations.
Because there was no private right of action under the statute itself, the plaintiff attempted to assert a consumer fraud claim as an alternative means of recovery.
- Consumer Fraud Claims Cannot Circumvent the Lack of a Private Right of Action
The court acknowledged that a consumer fraud claim can sometimes be based on violations of other statutes. However, in this case, the plaintiff’s consumer fraud claim depended entirely on the alleged violation of 765 ILCS 605/22.1(c) of the Illinois Condominium Property Act.
The court explained that when a statute does not provide a private right of action, plaintiffs cannot use consumer fraud claims as a workaround unless the conduct independently satisfies the elements of consumer fraud.
To establish consumer fraud, a plaintiff must allege deceptive or unfair conduct. Here, the court found no deception and focused on whether the conduct was unfair.
Ultimately, the court concluded that the plaintiff could not establish an unfair practice because the statutory framework allowed the fees charged.
- Legislative Amendment Clarified Permissible Fees
During the litigation, the Illinois legislature amended 765 ILCS 605/22.1(c) of the Illinois Condominium Property Act to establish a clear cap on disclosure fees. The statute now provides that associations may charge:
- Up to $375 for disclosure documents; and
- An additional $100 for rush service within 72 hours of a request.
The court determined that this amendment clarified existing law rather than creating new law. Because the total fee charged in this case was $445, which fell below the statutory maximum of $475, the court concluded that the fee was permissible.
Accordingly, the court affirmed the dismissal of the consumer fraud claim.
Key Takeaways and Practical Guidance for Illinois Condominium Associations
The Greenswag decision provides several important lessons for Illinois condominium associations and their property managers:
- Sellers Cannot Sue Property Managers Under 765 ILCS 605/22.1 of the Illinois Condominium Property Act for Disclosure Fees
Illinois courts have affirmed that 765 ILCS 605/22.1 of the Illinois Condominium Property Act does not create a private right of action for sellers against property managers regarding disclosure fees. This significantly limits the legal exposure of Illinois condominium associations and their managing agents in this area.
- Illinois Law Now Clearly Caps Disclosure Fees
The amendment to 765 ILCS 605/22.1(c) of the Illinois Condominium Property Act establishes clear limits on disclosure fees:
- $375 maximum standard fee
- $100 maximum rush fee within 72 hours of a request
- Total maximum: $475
These fees are adjusted annually based on the consumer price index.
- Ensure Fees Comply with Statutory Limits
Illinois condominium associations should confirm that their disclosure fees do not exceed the statutory maximum. Fees above the statutory cap could expose the condominium association to legal liability and potential enforcement actions.
- Review and Update Fee Schedules
Illinois condominium associations should review their governing documents, management agreements, and fee schedules to ensure compliance with the current statutory framework.
Many management agreements still reference outdated statutory language. Updating these agreements can help avoid confusion and potential disputes.
- Maintain Transparency with Unit Owners
Illinois condominium associations should clearly communicate disclosure fees to unit owners. Providing written disclosure fee schedules can reduce disputes and improve transparency.
- Monitor Third-Party Vendor Fees
Some Illinois condominium associations rely on third-party vendors to provide disclosure documents. Illinois condominium associations should confirm that vendor fees comply with Illinois law.
Conclusion
The court’s decision in Greenswag confirmed that 765 ILCS 605/22.1 of the Illinois Condominium Property Act does not provide sellers with a private right of action against property managers. Equally important, the Illinois state legislature’s amendment to 765 ILCS 605/22.1(c) of the Illinois Condominium Property Act now provides clear guidance by establishing a maximum allowable disclosure fee.
By ensuring compliance with 765 ILCS 605/22.1 of the Illinois Condominium Property Act and maintaining clear and reasonable disclosure fee policies, Illinois condominium associations can minimize legal risk and facilitate smooth real estate transactions for their members.
If your association has questions regarding disclosure fees or compliance with the Illinois Condominium Property Act, please contact the attorneys at Hirzel Law, PLC. Our experienced legal counsel can help ensure compliance and reduce potential liability.
