In this “groundbreaking decision”, as described by Evan McKenzie in his Privatopia Blog, the Illinois appellate court made a ruling consistent with the HOA Enlightenment Movement. Neglect by a condo asociation to make repairs affecting a unit is a defense against continued payment of assessment. This is a major step toward homeowner justice that removes the “pay no matter what, or lose your home” doctrine of the authoritarian HOA governments.
The case, Spanish Court Two Condominium Association v. Lisa Carlson (2012 IL App (2d) 110473), involved a demand for assessments owed plus a possession — forcible entry — of the unit that was alleged to have suffered damages due to the condo association’s neglect. (Understand that the condo sued under the Forcible Entry Act to repossess the unit). The court held the condo in the same position as a landlord under the landlord-tenant laws, which allow a tenant to withhold rent as a defense against forcible entry.
We hold, by analogy to the case law on actions brought under the Forcible Entry Act by landlords for possession of leased property due to unpaid rent, that the unit owner may claim neglect as a defense to the board’s suit under the Act.
And of very important significance for case law precedent is the holding on the mutual obligations of the CC&Rs contract, my emphasis, (p. 13,14),
“Plaintiff suggests that a board’s right to collect assessments is absolute and that a claim for nonpayment of assessments is not subject to any affirmative defense.”
[The court replied,] “nowhere does the . . . Condominium Act suggest that the right is absolute.” The Condominium Act appears to set the rights of unit owners on par with the rights of the board of managers. Moreover, the rights arise from mutually exchanged promises—on the one hand to pay assessments, on the other hand to maintain the common elements—and so the Declaration and the Bylaws are best seen as contracts.
[T]he condominium instrument indicates (as presumably most do) that the unit owner’s promise to pay assessments is in exchange for the board of managers’ promise to use those assessments for the repair and maintenance of the condominium property, the unit owner may claim, as a justification for nonpayment of assessments, that the board of managers breached its duty of repair and maintenance.
Contrast this decision with the recent California Supreme Court opinion, reflecting a culture still in the Dark Ages sorely in the need of enlightenment, Pinnacle Museum Tower v. Pinnacle Market Development( No. S186149, Aug. 16, 2012 ). Here the court validated the binding arbitration clause with (my emphasis),
[T]the Davis-Stirling Act ensures that the covenants, conditions, and restrictions of a recorded declaration — which manifest the intent and expectations of the developer and those who take title to property in a community interest development — will be honored and enforced unless proven unreasonable.
Under its Discussion, B. Contractual Nature of Terms in a Recorded Declaration, the court gives an instructive presentation on the preferential treatment of the declarant/developer, consent to obey, waiver of rights, “for the common good,” and the open-ended amendment process. Section C explains what constitute an unconscionable contract clause, rejected in this instance. Very informative of the Dark Ages culture.
The HOA Enlightenment Movement is rolling on, and will gather momentum as the truth, justice, and the American way shall once again prevail.