Appellate Court Rules Condo Resident not Required to Pay Assessments After Condo is Not Repaired

The Illinois Appellate Court has ruled that a condo resident was justified in not paying more than $2,000 in condo fees because the roof above and the brick facade outside her unit had not been properly prepared.

The plaintiff, Lisa Carlson, had been threatened with eviction for non-payment of her condo dues totaling $2,143. Her attorney filed an appeal under the Forcible Entry and Detainer Act (FED). The court found that the condo association had breached its duty to maintain and repair common elements of the building.

The decision was reported in the Chicago Daily Law Bulletin.

Carlson also sought compensation for the cost of repairing water damage to her unit caused by the leaks in the roof. She further sought compensation for a toilet that was allegedly broken during repair work unrelated to the roof and brick problems.

The trial judge dismissed the affirmative defense and severed the counterclaim based on Section 9-106 of the FED statute, which provides that “no matters not germane to the distinctive purpose of the proceeding shall be introduced by joinder, counterclaim or otherwise.”

Then the 2nd District relied on past cases in which landlords attempted to evict tenants for failing to pay rent. In these cases, judges permitted the defendants to allege breach of warranty as affirmative defenses. Also, although some counterclaims are considered “germane” under the Forcible Entry Act, the reviewing court concluded that the trial judge acted correctly in severing Carlson’s counterclaim. Spanish Court Two Condominium Ass’n v. Carlson. 2012 IL App (2d) 110473 (June 27, 2012).

Here are the highlights of Justice Joseph E. Birkett‘s scholarly opinion:
The issue in this case, which appears to be one of first impression in Illinois, is whether, in an action brought under the FED by the board of managers of a condominium property against a unit owner for possession of the unit due to unpaid assessments, the unit owner may claim as a defense that her responsibility for the assessments was diminished or nullified by the failure of the board to maintain the common elements of the property as required in the condominium instrument.

Although there are no prior decisions on point, we hold, by analogy to the case law on actions brought under the FED 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.

We further hold, also by analogy to existing case law on suits under the FED involving leased dwellings, that, with certain narrow exceptions, the unit owner may not counterclaim under the FED for damages caused to her unit or to her personal property by the board’s neglect of the common elements.

This issue involves consideration of what matters are “germane” under Section 9-106 of the FED.

The Supreme Court has defined “germane” as “closely allied; closely related, closely connected; appropriate.” Rosewood Corp. v. Fisher. 46 Ill.2d 249 (1970). “Forcible entry and detainer is a summary statutory proceeding to adjudicate rights to possession and is unhampered and unimpeded by questions of title and other collateral matters not directly connected with the question of possession.'” Id.

Possession and directly related matters might be the only substantive issues for decision in a FED action, but possession is not the sole remedy available to the plaintiff in the action: A landlord may seek overdue rent (735 ILCS 5/9-106, 9-209) and a condominium board of managers may seek overdue assessments (735 ILCS 5/9-111(a)).

Cases involving rented dwellings have held that, where the landlord seeks possession under the FED for nonpayment of rent, the tenant has the right to defend the action by disputing some or all of the claim for rent.

In Jack Spring, Inc. v. Little, 50 Ill.2d 351 (1972), the Supreme Court held that an implied warranty of habitability exists in a lease for a dwelling in a multiunit building and that Section 9-106 of the FED permits a tenant to claim an alleged breach of the warranty as a defense to an action for possession due to unpaid rent.

Jack Spring’s rationale for finding an implied warranty of habitability in multiunit dwellings is that, with society’s transformation from an agrarian to an industrial society, it can no longer be assumed that tenants have the expertise to make their own repairs to the leased premises as did the “jack-of-all-trades” farmers of old and, hence, rent is now paid with the assumption that the dwelling will be maintained by the landlord in a habitable state.

In Peoria Housing Authority v. Sanders, 54 Ill.2d 478, 483 (1973), the court, making no mention of Jack Spring’s express restriction of its holding to rentals in multiunit buildings, held without qualification that “when an action for possession is based upon nonpayment of rent, the question whether the defendant owes rent to the plaintiff is germane, whether or not the plaintiff seeks judgment for the rent that he says is due.”

There have been several appellate decisions applying the holdings of Jack Spring and Sanders.

The foregoing cases show that, where possession is sought under the FED for nonpayment of rent, the tenant may challenge the amount of rent or late fees claimed and may do so by asserting, e.g., 1) that the lease did not actually call for rent or late fees in the amount claimed , 2) that the rent charged was unconstitutional or otherwise illegal or 3) that a setoff was due because of a provision in the lease for rent credits or because the landlord breached an expressed or implied duty to repair. Any of these bases may also be alleged as part of a claim for recoupment of rent.

The principles of these cases apply equally to actions under the FED in which the board of managers of a condominium property seeks possession of a condominium unit because of the owner’s nonpayment of assessments.

It is unquestioned, and unquestionable, in this appeal that the assessments collected by the plaintiff are for the maintenance of the common elements and that the roof and the brick facade of the building — the two exterior areas that defendant claims were neglected — are among the common elements.

We conclude that the defendant’s assertion that the plaintiff has not performed its duties with respect to the common elements is as viable a defense to the plaintiff’s suit under the FED as a landlord’s failure to maintain a rented dwelling would be to a suit under the FED for possession of that dwelling for nonpayment of rent.

Based on the foregoing, we hold that, where a condominium board of managers sues for possession of a unit because of delinquent assessments and the 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.

The defendant here claims a breach of that duty, but what complicates the issue is that she seeks recompense for damage to her own property, both as a setoff from any assessments due and as a basis for an affirmative plea for damages.

To see the complication, we review the case law that has attempted to articulate the relief a defendant in a FED action may seek. In Sawyier v. Young, 198 Ill.App.3d 1047 (1990), the court gave the following categorization of available defenses:
“The types of claims which Illinois courts have found to be germane to the issue of possession generally fall into one of four categories: 1) Claims asserting a paramount right of possession; 2) claims denying the breach of any agreement vesting possession in the plaintiff; 3) claims questioning the validity or enforceability of the document upon which the plaintiff’s right to possession is based; and 4) claims questioning a plaintiff’s motivation for the bringing of the forcible action.”

The defendant’s affirmative defenses and counterclaim would qualify as germane, if at all, under category 2); defendant neither asserts a paramount right of possession, questions the validity or enforceability of the condominium documents nor questions the plaintiff’s impetus for bringing this action.

Statements in some of the cases on rented dwellings suggest that a defendant in a FED action may never bring a counterclaim for damages. A more accurate statement is: “Where a defendant’s claim seeks damages and not possession, it is not germane to the distinct purposes of the forcible entry and detainer proceeding.” Sawyier, 198 Ill.App.3d at 1053.

Based on the foregoing authorities, we can separate what is legally proper in the defendant’s affirmative defenses and counterclaim from what is not.

Since the defendant’s promise to pay assessments was not exchanged for any promise regarding her unit itself, the fact of damage to her unit does not in itself provide a legal justification for withholding assessments.

Accordingly, we vacate the judgment of the trial court and remand for partial reinstatement of the affirmative defenses. The defenses are to be reinstated such that the only alleged legal ground for withholding assessments is a breach of the duty to repair and maintain the common elements.

The allegation that there is damage to the defendant’s unit due to disrepair of the building’s exterior is reinstated, but only as a factual predicate, not as a ground in itself for withholding assessments.

Kreisman Law Offices has been handling business litigation cases for Illinois families and individuals for more than 36 years in and around Chicago, Cook County, and surrounding areas, including Round Lake Beach, Beach Park, Highwood, Fox River Grove, Mount Prospect, Carol Stream, Wheaton, Batavia, Chicago’s Logan Square, and South Elgin, Ill.