Court Upholds Rights of Illinois Condo Associations to Charge Use and Occupancy Fees During Litigation

Court Upholds Rights of Illinois Condo Associations to Charge Use and Occupancy Fees During Litigation

When unit owners fall behind on their assessments, condominium associations are often left holding the financial bag, forced to maintain common elements without the contributions they’re contractually entitled to receive. The Illinois Appellate Court’s decision in Bd. of Directors of Warren Blvd. Condo. Ass’n v. Milton, 399 Ill. App. 3d 922, 927 N.E.2d 176 (1st Dist. 2010), affirms a necessary remedy available to associations: the right to collect use and occupancy payments while litigation is pending. This article will address the court’s decision in Warren Blvd. Condo Ass’n, and provide practical takeaways for community associations.

Background

In Warren Blvd. Condo. Ass’n v. Milton, the condominium association filed an Illinois Eviction Action under the Illinois Eviction Act (735 ILCS 5/9-101 et seq.) against Hilda Milton, a unit owner who had fallen behind on her assessments. The association sought $4,484 in unpaid assessments, possession of the unit, and an order requiring Milton to pay $178 per month, representing the regular monthly assessments while the case was pending.

Milton disputed the debt, demanded a jury trial, and sought discovery. The circuit court granted the association’s request for interim use and occupancy payments. Milton appealed, arguing that the association was not entitled to such relief under the Illinois Eviction Act because there was no traditional landlord-tenant relationship between her and the board.

The Appellate Court’s Ruling

The Illinois Appellate Court affirmed the trial court’s order, holding that a condominium association is entitled to use and occupancy payments during the pendency of litigation when seeking possession for unpaid assessments. The court’s reasoning relied heavily on the intersection of the Illinois Condominium Property Act (765 ILCS 605/1 et seq.) and the Illinois Eviction Act (735 ILCS 5/9-101 et seq.).

The court pointed to several statutory provisions that support the association’s right to pursue possession and compensation:

• 765 ILCS 605/9(g)(1) and 765 ILCS 605/9(h) of the Illinois Condominium Property Act provide that unpaid assessments constitute a lien on the unit, enforceable through foreclosure.
• 765 ILCS 605/9.2 of the Illinois Condominium Property Act allows a condominium board to bring a possession action for defaults under the Illinois Condominium Property Act or the governing documents using forcible entry procedures provided under the Illinois Eviction Act (735 ILCS 5/9-101 et seq.).
• 735 ILCS 5/9-102(a)(7) of the Illinois Eviction Act expressly authorizes boards to bring possession actions when an owner fails to pay assessments after receiving proper notice.
• 735 ILCS 5/9-201 of the Illinois Eviction Act allows recovery of a fair value for use and occupancy in civil actions.

The defendant argued that 735 ILCS 5/9-201 of the Illinois Eviction Act applies only in landlord-tenant relationships and, therefore, was inapplicable. The defendant relied on Jackson v. Reeter, 201 Ill.App. 29 (1915) required a landlord-tenant relationship for a use and occupancy claim to succeed. However, the appellate court rejected this argument, distinguishing Jackson as involving unrelated parties with no contractual relationship.

By contrast, the condominium relationship between a unit owner and the association is governed by contract (the declaration and bylaws) and statute (the Illinois Condominium Property Act). The court emphasized that assessments are akin to rent in this context: the association provides maintenance and services, and owners are contractually obligated to contribute. The court cited Graue Mill Country Condo. Ass’n No. 1 v. Gary-Wheaton Bank, 213 Ill. App. 3d 698 (1991), where a similar analogy between assessments and rent was drawn. Ultimately, the court found no reason why the rationale supporting rent for use and occupancy should not apply equally to assessment payments during litigation.

Practical Considerations for Illinois Condominium Associations

The court’s ruling in Warren Blvd. Condo. Ass’n v. Milton reinforces the association’s ability to secure interim financial relief when a unit owner disputes assessments and delays proceedings. For associations operating on tight budgets, this is a vital lifeline.

Here are key takeaways for Illinois condominium boards and their counsel:

1. Use and Occupancy Orders Are Available Even Without Landlord-Tenant Relationships

The Milton court clarified that a traditional landlord-tenant relationship is not required to obtain a use and occupancy order. This is especially important because it allows associations to bypass one of the most common defenses raised by delinquent owners.

2. Legal Support for Interim Assessment Payments During Litigation

Associations can rely on this precedent to seek monthly assessment-equivalent payments while a possession lawsuit is pending. This discourages unit owners from stalling litigation.

3. Statutory Remedies Remain Powerful Tools

The court interpreted the Illinois Condominium Property Act and the Illinois Eviction Act as working to give associations meaningful tools to enforce assessment obligations. 765 ILCS 605/9.2 of the Illinois Condominium Property Act provides remedies to associations facing rising delinquencies.

4. Strategic Leverage for Boards and Counsel

Associations should seek a use and occupancy order early in the eviction proceedings. Doing so can pressure non-paying unit owners to settle or pay, rather than drag out proceedings. It may also help preserve the association’s finances and reduce the burden on other unit owners.

Conclusion

The court’s decision in Warren Blvd. Condominium Ass’n provides associations with a vital remedy during the pendency of an eviction action. Assessment collection is essential for association financial stability, and the court’s decision equips associations with an underutilized but effective remedy. If your community association has filed an eviction action, the association may want to consider seeking compensation for use and occupancy of the condominium during the pendency of the litigation.

As always, community association boards should consult with experienced association counsel to evaluate their legal options when faced with delinquent unit owners. The attorneys at Hirzel Law, PLC, are experienced community association attorneys who can assist associations facing collection issues in their community.

 

Jeremy Fernando is an Associate Attorney at Hirzel Law, PLC., Mr. Fernando is licensed to practice law in the State of Illinois. He concentrates his practice on community association law, condominium law, homeowners association law, and real estate law. Mr. Fernando’s legal career includes serving in corporate practice where he represented insurance companies and institutional investors in U.S. and cross-border private placements of securities, including transactions in the Netherlands, England, Ireland, Australia, and Germany. Mr. Fernando earned his Juris Doctor from Marquette University Law School, where he graduated with honors and ranked in the top 15% of his class. He also served as an Associate Editor of the Marquette Law Review. Mr. Fernando is committed to providing effective legal representation to his clients and is passionate about helping communities navigate complex legal challenges. He may be reached at 312-552-7669 or jfernando@hirzellaw.com.