IL Supreme Court holds HOAs “are a creature of statute,” and not contractual

Last month the IL Supreme Court opinion in Spanish Court[1] reversed the right of an owner to withhold assessments in view of the HOA’s failure to fix and maintain.[2] In its argument, frequently making use of pro-HOA activist and CAI CCAL attorney in Florida, Gary Poliakoff, the Court stated,

 

Although contract principles have sometimes been applied to the relationship between a condominium association and its unit owners based on the condominium’s declaration, bylaws, and rules and regulations . . . the relationship is largely a creature of statute, defined by the provisions of the Condominium Act. . . . Although these duties may also be reflected in the condominium declaration and bylaws, as they are in this case, they are imposed by statute and exist independent of the association’s governing documents. Accordingly, a unit owner’s obligation to pay assessments is not akin to a tenant’s purely contractual obligation to pay rent, which may be excused or nullified because the other party failed to perform. ¶ 21.

So much for the sanctity of the CC&Rs contract! The Court, guided not only by Poliakoff, but by a CAI amicus curiae brief,[3] rolls with the punches and chooses when and when not to uphold the contractual nature of the governing documents.

The Court avoided dealing with the equitable aspects of withholding assessments just like withholding rent, rejecting the favorable appellate decision that held,

[T]he obligation to pay assessments, and the obligation to repair and maintain the common elements, as mutually exchanged promises, and concluded that under principles of contract law, a material breach of the repair obligation could warrant nonpayment of assessments. ¶ 7.

Adding fuel to the fire, the Illinois Supreme Court followed the CAI propaganda that the HOA’s survival depends on assessments being paid immediately and without question.

This section [of the IL condo act] was adopted to provide a constitutionally permissible, quick method for collection of assessment arrearages. . . . The necessity of a “quick method” for collection of past due assessments, unencumbered by extraneous matters, is manifest when we consider the manner in which condominium associations operate . . . . the condominium form of property ownership only works if each unit owner faithfully pays his or her share of the common expenses. When a unit owner defaults in the payment of his or her assessments, the resulting forcible entry and detainer action is thus brought “for the benefit of all the other unit owners.” ¶¶ 29 -30.

Permitting a unit owner’s duty to pay assessments to be nullified would thus threaten the financial stability of condominium associations throughout this state. . . . For the same reason that taxpayers may not lawfully decline to pay lawfully assessed taxes because of some grievance or claim against the taxing governmental unit, a condominium unit owner may not decline to pay lawful assessments. Trustees of the Prince Condominium Trust v. Prosser, 592 N.E.2d 1301.” ¶ 32.

 

Here we have the alleged dicta [non-supported court opinions], and becoming part of the Illinois public policy, that the survival of the HOA/condo is first and foremost. The HOA rises to the same level as a public entity, with the questionable governing documents now having contractual validity and court support to deny homeowner rights, freedoms, privileges and immunities.

 

Welcome to the New America of HOA-Land.

References

 

[1] http://www.state.il.us/court/Opinions/SupremeCourt/2014/115342.pdf.

[2] See appellate decision Court decisions: HOA Enlightenment Movement vs. the Dark Ages.

[3]Spanish Court Condominium Association II vs. Carlson (Illinois),” CAI Amicus Curiae Activity 2013.

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5 CommentsLeave a comment

  1. […] [i] See IL Supreme Court holds HOAs “are a creature of statute,” and not contractual. […]

  2. I agree with all of you. The only way I know to fight back is through black and white documentation by dissecting the financials from the conception of the HOA management company. In my two year journey I have learned where the hidden “slush” funds are, the prefabricated services of monies for pocketed vendors through no meeting, under-the-table means. Yearly budgeted items not adhered to, with a no-raise budget (which actually gave $20,000 to the landscape company and an additional $5,000 to a vetoed raise for the management company). Hidden costs in the usual places of administrative, maintenance, postage, water, and social expenses amongst the many others.

    The only way to fight the clueless BODs is to place “wrongful doing” questions in their minds by adhering to the so-called budget and raising questions at their every turn of “wish lists” with their own documentation.

    By digging further through public records, finding vendor owners who are in other business ventures with owners of the management company, to ALEC contributors (who keep in place the HOA interest holders) steadfast in legislation.

    This isn’t about the color of your house or the number of weeds. This is about special parasitic interest groups getting rich off of the poor owners who have absolutely no rights when they signed on the dotted line to purchase their home without true disclosure, and now finding no way to fight back in wrongful doing. In Mr. Staropoli’s own words, “it’s the 800 pound gorilla” in the room of our government and HOA meeting rooms. However, anything worth wild is worth a strategically armed, documented fight!

    Thank you Mr. Staropoli for your endurance and in this cause. I am for HOA reform.

  3. I am the secretary of our neighborhood HOA board, and I consider our HOA to be more enemy than friend. The Board wanted to have a neighborhood party: but the last three were not successful. I said, “How can the Mafia give a party for those who are forced to pay Protection Money? Our only job can be to try to keep the peace, be a go-between.” We pay $300 a year to keep the long entrance mowed and pretty. Many don’t pay. It’s a very middle class neighborhood, no pool, no club. If we got rid of the HOA (impossible) volunteers would do the entrance. Neighbors would get together. The HOA is divisive; no one likes it. Our payment goes to someplace in Arizona, though the Association is local. It’s true: lawyers are the winners.

  4. Can you explain the difference between creature of statue and contractual? So if the HOA breaches their contractual obligations that were forced upon us without disclosure. An adhesion contract if you will. CAI strikes again speaking for homeowners so there is still no oversight or accountability on the part of an HOA. Single family homes and Condo HOA’s are categorized the same even under the Community Association Act in Illinois? When will our rights be restored? The economy is so bad right now I couldn’t get out even if I wanted to. My property values are lower than the surrounding towns. This is a nightmare.

    • The deck is stacked against the homeowner! As evident from this decision with reference to the need to not let the HOA fail, homeowners were conned and not told that they have pledged their homes for the survival of the HOA. Pay until you die — indentured servitude.


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