The Illinois Supreme Court says state law grants no right to condominium owners to sue property associations over allegedly excessive fees to access documents needed to sell condo units.
The ruling ends a lawsuit from 2016, when Harry and Dawn Channon sold their Chicago condo. They eventually sued Westward Management, the retained agent of the Kenmore Club Condominium Association, alleging the firm charged excessive, unreasonable fees to produce materials to give to prospective buyers. They said the charges violated the Condominium Property Act and the Consumer Fraud and Deceptive Business Practices Act.
Cook County Circuit Judge Anna Loftus denied Westward’s motion to dismiss the complaint. But she agreed to certify a legal question to the Illinois First District Appellate Court:
Former Illinois Supreme Court Justice Robert Carter
| Illinoiscourts.gov
Whether the law the Channons invoked provides an implied cause of action for condo sellers, which would give them the ability to sue.
In December 2021, the appeals court answered the question in the affirmative, but Westward asked the Supreme Court to consider the same issue. Justice Robert Carter wrote the unanimous opinion, filed Nov. 28, and Justice Michael Burke wrote a special concurrence.
The heart of the dispute is Westward’s itemized list of documents and forms, for which it charged the Channons $245. According to Carter’s opinion, the law in question establishes a duty for people selling condo units to make the necessary disclosures and does not otherwise enshrine protection for sellers.
“The mandate that sellers make those disclosures was clearly intended to protect potential buyers by providing them with information vital to making their purchasing decisions,” Carter wrote. “It is virtually unimaginable that the legislature’s decision to include that litany of nine distinct types of mandated disclosures was intended to protect anyone other than a potential unit buyer.”
Furthermore, a condo association’s “principal officer” is required by law to make the mandated disclosures within 30 days of the seller’s written request, more evidence the law “protects only potential buyers,” Justice Carter wrote. “Nonetheless, the Channons argue that (the law) shows a legislative intent to provide unit sellers with a benefit by limiting the sum they may be charged to obtain disclosures to ‘a reasonable fee covering the direct out-of-pocket cost of providing such information and copying.’ ”
The Supreme Court rejected the argument a clause within the law is intended to benefit sellers, saying it can just as easily be construed as an aid to buyers. And while the justices said the plain reading of the law is sufficient to answer the question in favor of Westward, they also noted the challenged law was an amendment to the original Condominium Property Act. When the General Assembly added this section in 1980, it allowed associations to charge 10 cents per page, but ensured buyers would not pay to obtain the information.
“By imposing the expense of providing the requisite disclosures on sellers rather the buyers,” Carter wrote, “the amendment’s plain language strongly suggests that the legislature intended to primarily benefit buyers.”
In his special concurrence, Burke expressed his belief the court should make it clear courts can only find an implied private right of action when four specific criteria are met: the plaintiff belongs to a class for whose benefit a law was enacted, the alleged injury is one that law was designed to prevent, a civil suit is consistent with the law’s underlying purpose and the lawsuit is needed to provide the adequate remedy for statutory violations.
Burke said the majority’s opinion doesn’t sufficiently clarify that all four factors must be met, instead perpetuating “confusing language” under which some parties argue there must be a “clear need” for a court to consider every factor.
Justice Michael Burke was defeated in a recent election for a 10-year Supreme Court term. His replacement on the court is Appellate Justice Mary K. O'Brien, who bested him in the November election for the seat from Illinois’ Third Judicial District. Carter also is leaving the court, having opted not to seek a full term.
The Channons have been represented in the action by attorneys Terrie C. Sullivan, Jeffrey C. Blumenthal and Michael D. for Richman, of the firm of Jeffrey C. Blumenthal Chtrd., of Northbrook; attorneys Karnig S. Kerkonian and Elizabeth Al-Dajani, of Kerkonian Dajani, of Evanston; and Richard A. Greenswag, of Greenswag & Associates, of Northfield.
Westward has been represented by attorneys Melinda S. Kollross, Brian J. Riordan, James M. Weck and Paul V. Esposito, of Clausen Miller, of Chicago.