A former condominium owner has sued the document management company contracted by his condo association, claiming the company charged more than $300 for access to electronic documents, some of which he says could have been provided for less than $3.
Robert Ahrendt is seeking class-action status for the suit he filed in federal court on Nov. 20. The suit charges CondoCerts.com Inc., a subsidiary of Mutual of Omaha, with violating Illinois’ Condominium Property Act, fraud, unjust enrichment and deceptive business practices. The suit seeks refunds of the money paid to the company as well as punitive damages and court costs for anyone who paid a fee to the company for documents related to the sale of a condo in Illinois for the past five years.
Under the Illinois Condominium Property Act, sellers of condo properties are required to provide prospective buyers with specific documents prior to the sale. According to court documents, most real estate contracts also require these documents, and a seller’s failure to provide them will almost certainly doom the sale, in addition to being unlawful.
According to Ahrendt’s attorneys, the law caps the reasonable fee that can be charged for these documents to the direct out-of-pocket cost of providing and copying them. The law also requires sellers to obtain the required documents directly from their condo associations, though some of them, like condominium declarations and covenants, are also recorded with the county recorder of deeds.
CondoCerts is marketed by Mutual of Omaha as an online document management service. It electronically stores the real estate documents related to condominium transactions and provides copies upon request, tasks typically handled by a property manager.
Ahrendt said when he was negotiating the sale of his condo last May, he went to his condo association’s property manager to request the required documents. He was told the condo association had outsourced its document storage and management to CondoCerts, which would make the documents available for a fee.
Ahrendt said when all was said and done, he was charged a total of $370 for access to the documents, including two unexplained $20 service fees. Within minutes of receiving confirmation that the transaction went through, he said, he received an email saying the documents were ready for download.
The suit claims that obtaining copies of the documents filed with the recorder of deeds from that office typically costs about $2.50 and calls CondoCert’s fees “unreasonable” in light of the fact that they are digital and were immediately accessible.
“There was no cost to Defendant for providing these documents, already downloaded and available in Defendant’s system, yet fees in the amount of $370 were charged for access to them,” the suit states. “The $370 charge does not constitute a ‘reasonable fee for covering the direct out-of-pocket cost of copying and providing such information.’”
Ahrendt is represented by attorneys James X. Bormes and Catherine P. Sons of the Law Office of James X. Bormes, P.C., by Elizabeth M. Al-Dajani and Karnig S. Kerkonian of Kerkonian Dajani LLC and by Kasif Khowaja of The Khowaja Law Firm LLC.