Spanish Court Condominium Association v. Carlson

Illinois Official Reports
Supreme Court
Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342
Caption in Supreme SPANISH COURT TWO CONDOMINIUM ASSOCIATION,
Court: Appellant, v. LISA CARLSON, Appellee.
Docket No. 115342
Filed March 20, 2014
Rehearing denied June 19, 2014
Held Where a condominium association brought a forcible entry and
(Note: This syllabus detainer action against a unit owner for failure to pay assessments, the
constitutes no part of the affirmative defense of alleged failure to repair and maintain common
opinion of the court but areas was properly stricken as not germane to that summary statutory
has been prepared by the proceeding.
Reporter of Decisions
for the convenience of
the reader.)
Decision Under Appeal from the Appellate Court for the Second District; heard in that
Review court on appeal from the Circuit Court of Lake County, the Hon.
Michael J. Fusz, Judge, presiding.
Judgment Appellate court judgment reversed in part.
Circuit court judgment affirmed.
Counsel on Diane J. Silverberg and Nicholas R. Mitchell, of Kovitz Shifrin
Appeal Nesbit, of Buffalo Grove, for appellant.
Norman J. Lerum, of Chicago, for appellee.
Allan Goldberg, Hal R. Morris and Laura L. Marinelli, of Arnstein &
Lehr LLP, of Chicago, for amicus curiae Community Associations
Institute-Illinois Chapter.
Justices JUSTICE THEIS delivered the judgment of the court, with opinion.
Chief Justice Garman and Justices Thomas and Karmeier concurred in
the judgment and opinion.
Justice Freeman dissented, with opinion, joined by Justices Kilbride
and Burke.
Justices Freeman, Kilbride and Burke dissented upon denial of
rehearing, without opinion.
OPINION
¶1 This appeal arises out of a forcible entry and detainer action filed by a condominium
association against one of its unit owners based on unpaid assessments. At issue is whether an
association’s purported failure to repair or maintain the common elements is germane to the
proceeding, and thus may be raised by the unit owner in defense of the forcible action. We hold
that it is not germane to the forcible proceeding, and thus reverse, in part, the judgment of the
appellate court. 2012 IL App (2d) 110473.
¶2 BACKGROUND
¶3 In February 2010, in the circuit court of Lake County, plaintiff, Spanish Court Two
Condominium Association (Spanish Court), filed a complaint under the Forcible Entry and
Detainer Act (forcible statute) (735 ILCS 5/9-101 et seq. (West 2008)) against defendant, Lisa
Carlson (Carlson), one of the association’s unit owners. Spanish Court alleged that Carlson had
failed to pay monthly assessments for the preceding six months, and sought a money judgment
and an order of possession. In her answer to the complaint, Carlson admitted that she had not
paid her assessments since August 2009. Carlson denied, however, that she owed those
assessments, alleging that she incurred water damage to her unit because Spanish Court failed
to properly maintain the roof directly above her unit. Carlson also alleged, without providing
specifics, that Spanish Court “destroyed property within her unit without justification.”
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¶4 Carlson also asserted two affirmative defenses, entitled “Breach of Covenants” and
“Set-Off.” In her first affirmative defense, Carlson alleged that Spanish Court failed to
maintain the roof and brickwork directly above her unit, resulting in water damage to her unit.
Carlson additionally alleged that Spanish Court failed to repair or replace a toilet in her unit
that was rendered inoperable during the investigation of a water leak in an adjoining unit.
Carlson claimed that such conduct by Spanish Court constituted a breach of its duties set forth
in the condominium declaration, and that Spanish Court was estopped as a matter of law from
seeking payment for the monthly assessments. In her second affirmative defense, Carlson
relied on the same allegations and requested a set-off against any money judgment entered
against her on Spanish Court’s complaint. Carlson also filed a counterclaim in which she
sought money damages based on the same allegations set forth in her affirmative defenses.
¶5 Spanish Court moved to strike Carlson’s affirmative defenses and to sever her
counterclaim, arguing that they were not “germane” to the proceeding, as required by the
forcible statute. See 735 ILCS 5/9-106(a) (West 2008). The trial court granted Spanish Court’s
motion, striking Carlson’s affirmative defenses and ordering that Carlson’s counterclaim be
reassigned to the proper division of the circuit court. Thereafter, the trial court entered an
agreed order awarding possession of Carlson’s unit to Spanish Court, and a money judgment
for unpaid assessments through January 1, 2011. The matter then proceeded to a bench trial as
to Spanish Court’s claim for unpaid special assessments, accrued assessments not covered in
the prior order, late charges, attorney fees, and costs. After disallowing a special assessment
and certain attorney fees and costs, the trial court entered its final order again awarding
Spanish Court possession, and a money judgment covering all sums due through April 2011.
¶6 Carlson appealed, challenging the trial court’s order striking her affirmative defenses and
severing her counterclaim, as well as the subsequent orders granting Spanish Court possession
and a money judgment. Spanish Court cross-appealed, challenging the trial court’s
disallowance of one of its special assessments.
¶7 The appellate court vacated the judgment of the trial court, and remanded the case for
partial reinstatement of Carlson’s affirmative defenses. 2012 IL App (2d) 110473, ¶ 48. The
appellate court held that a unit owner may claim, as a defense to a forcible action based on
unpaid assessments, that her responsibility to pay assessments was diminished or nullified by
the failure of the association to repair or maintain the common elements. Id. ¶¶ 16, 28, 46. The
appellate court reasoned that if a tenant could raise, as an affirmative defense in a forcible
proceeding, the landlord’s failure to maintain the leased premises, a condominium unit owner
should also be able to raise as an affirmative defense the association’s failure to repair and
maintain the common elements. Id. ¶¶ 26, 46. The appellate court viewed the 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. Id. ¶¶ 27-28. The appellate
court acknowledged that its holding placed Illinois in the small minority of jurisdictions that
permit a unit owner to claim an offset to assessments based on a failure to repair and maintain
the common elements. Id. ¶ 63.
¶8 The appellate court also determined that the particular failure to repair and maintain the
common elements alleged by Carlson was germane to Spanish Court’s action for possession
because “it affects the basic comfort of the dwelling.” Id. ¶¶ 29-30. The appellate court
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remanded the matter for reinstatement of those parts of Carlson’s affirmative defenses that
were based on Spanish Court’s alleged failure to repair and maintain the roof and brickwork
above her unit, which are common elements, but not those parts of her affirmative defenses
based on Spanish Court’s alleged failure to repair or replace her toilet, which is not a common
element. Id. ¶ 48. In light of this disposition, the appellate court declined to consider the
parties’ various claims of trial error, including Spanish Court’s claim raised in its cross-appeal
that the trial court erred in disallowing a special assessment. Id. ¶ 49.
¶9 As to Carlson’s counterclaim, the appellate court held that it was not germane to the
forcible proceeding because it sought nothing but monetary relief. The appellate court
therefore affirmed the trial court’s order severing the counterclaim. Id. ¶ 48.
¶ 10 We allowed Spanish Court’s petition for leave to appeal (Ill. S. Ct. R. 315(a) (eff. Feb. 26,
2010)), and allowed the Community Associations Institute-Illinois Chapter to file an amicus
curiae brief in support of Spanish Court (Ill. S. Ct. R. 345 (eff. Sept. 20, 2010)).
¶ 11 ANALYSIS
¶ 12 The only issue before this court is whether an association’s purported failure to repair or
maintain the common elements is germane to a forcible entry and detainer proceeding against a
unit owner based on unpaid assessments, and thus may be raised by the unit owner in defense
of the forcible action. 1 Spanish Court argues that a unit owner’s obligation to pay assessments
is independent of the association’s obligation to maintain and repair the common elements and,
thus, a unit owner’s claim that the association failed to fulfill its obligation is not germane to a
forcible action based on unpaid assessments. In line with the appellate court judgment, Carlson
counters that a unit owner’s obligation to pay assessments and the association’s obligation to
repair and maintain the common elements are personal contractual obligations, and that if the
association does not perform, it cannot demand performance from her.
¶ 13 Our review of the parties’ arguments and resolution of the legal issue before us require
consideration of various provisions of the forcible statute, codified in article IX of our Code of
Civil Procedure (735 ILCS 5/9-101 et seq. (West 2008)), as well as various provisions of the
Condominium Property Act (Condominium Act) (765 ILCS 605/1 et seq. (West 2008)).
Accordingly, our review proceeds de novo. Knolls Condominium Ass’n v. Harms, 202 Ill. 2d
450, 454 (2002).
¶ 14 Section 9-102 of the forcible statute expressly provides that a forcible entry and detainer
action may be maintained against a unit owner who “fails or refuses to pay when due his or her
proportionate share of the common expenses ***, or of any other expenses lawfully agreed
upon,” subject to proper notice by the association’s board of managers. 735 ILCS
5/9-102(a)(7) (West 2008). The Condominium Act contains a comparable provision
authorizing an association’s board of managers to maintain a forcible entry and detainer action
1
Spanish Court has not pursued its challenge, raised below, to the trial court’s order disallowing a
special assessment, nor has Spanish Court requested a remand to the appellate court to resolve that
issue. Carlson has not challenged, by way of cross-appeal, that part of the appellate court judgment
affirming the trial court’s order severing her counterclaim and, like Spanish Court, has not requested a
remand to the appellate court to consider trial court errors raised in the appellate court but not
considered.
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against a unit owner who defaults in the performance of his or her obligations under the
Condominium Act, or under the condominium declaration or bylaws, or under the
association’s rules and regulations. 765 ILCS 605/9.2(a) (West 2008).
¶ 15 Notably, the forcible statute limits the matters which may be raised in a forcible action to
“germane” matters. Section 9-106 states: “no matters not germane to the distinctive purpose of
the proceeding shall be introduced by joinder, counterclaim or otherwise.” 735 ILCS 5/9-106
(West 2008). Historically, the “distinctive purpose” of a forcible proceeding was to gain
possession of property unlawfully withheld. Jack Spring, Inc. v. Little, 50 Ill. 2d 351, 357-58
(1972). With respect to leaseholds, the legislature expanded the purpose of the proceeding by
providing that “a claim for rent may be joined in the complaint, and judgment may be entered
for the amount of rent found due.” 735 ILCS 5/9-106 (West 2008); Jack Spring, 50 Ill. 2d at
358. When the legislature added condominium property to the reach of the forcible statute, the
legislature likewise provided that when the action is based upon the failure of a unit owner to
pay his or her share of the common expenses, or of any other expenses lawfully agreed upon,
the association may obtain a judgment for both possession and the unpaid expenses found due
by the court. 735 ILCS 5/9-111(a) (West 2008).
¶ 16 Although the distinctive purpose of a forcible proceeding has changed to the extent that, in
some circumstances, an order of possession may be coupled with a money judgment, whether a
matter is “germane” is yet closely tied to the plaintiff’s claim for possession. For example, in
Rosewood Corp. v. Fisher, 46 Ill. 2d 249, 257 (1970), where the plaintiffs’ forcible action was
based upon the defendants’ failure to make payments pursuant to a residential installment
contract, we held that “it must necessarily follow that matters which go to the validity and
enforc[ea]bility of that contract are germane, or relevant, to a determination of the right to
possession.” Similarly, in Jack Spring, we held that where a forcible action is based on unpaid
rent, whether the tenant, in fact, owes rent is germane to that proceeding. Jack Spring, 50 Ill. 2d
at 358-59. Indeed, we observed that:
“[E]ven though the plaintiffs do not seek to recover rent in these actions, the question
of whether rent is due and owing is not only germane, but in these cases where the right
to possession is asserted solely by reason of nonpayment, is the crucial and decisive
issue for determination.” Id. at 358.
Accord Peoria Housing Authority v. Sanders, 54 Ill. 2d 478, 483 (1973).
¶ 17 In Clore v. Fredman, 59 Ill. 2d 20, 26-27 (1974), we examined our holdings in Rosewood
Corp., Jack Spring, and Peoria Housing Authority, and held that the landlord’s motive for the
attempted eviction was germane to the forcible proceeding where a state statute and local
ordinance prohibited retaliatory evictions. We explained that, “[i]f in fact, the landlord’s action
is retaliatory, the landlord is not entitled to possession of the property and the action cannot be
maintained.” Clore, 59 Ill. 2d at 27.
¶ 18 In the present case, Spanish Court’s claim to possession of Carlson’s unit was based on
nonpayment of assessments. It necessarily follows that whether Carlson, in fact, owes any
assessments is germane to the proceeding. The issue in this case, however, is not simply
whether a unit owner, like Carlson, may challenge whether assessments are due. Rather, the
issue is whether the basis Carlson asserts for claiming that assessments are not due is legally
sound. The appellate court, agreeing with Carlson, held that a unit owner’s obligation to pay
assessments may be nullified by the association’s failure to repair or maintain the common
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elements. 2012 IL App (2d) 110473, ¶¶ 28, 46. If correct as a matter of law, then Spanish
Court’s alleged failure in this case would be germane to the forcible action because Spanish
Court’s conduct, if proven, could defeat its claim for unpaid assessments, and, in turn, its claim
for possession. But if Carlson’s nullification defense is not a legally viable defense, then
Spanish Court’s alleged conduct is not germane to the forcible proceeding, and Carlson’s
affirmative defenses were properly stricken by the trial court.
¶ 19 Spanish Court maintains that the appellate court’s recognition of a nullification defense
rests on an ill-fitting analogy, namely, that the association-unit owner relationship is, for
purposes of the forcible statute, analogous to the landlord-tenant relationship. See 2012 IL App
(2d) 110473, ¶¶ 16, 26, 46. We agree with Spanish Court.
¶ 20 The relationship between a landlord and tenant is contractual. See generally 24 Ill. L. and
Prac. Landlord and Tenant § 1, at 157 (2009). Although aspects of that relationship may be
governed by state and local landlord-tenant laws, the relationship is created through the
agreement of the parties. When a landlord breaches the terms of the agreement (the lease) by
failing, for example, to comply with the implied warranty of habitability, cases have
traditionally applied contract remedies, including damages, rescission, reformation, or
abatement of rent. Glasoe v. Trinkle, 107 Ill. 2d 1, 15-17 (1985). Cf. Mohanty v. St. John Heart
Clinic, S.C., 225 Ill. 2d 52, 70 (2006) (“Under general contract principles, a material breach of
a contract provision by one party may be grounds for releasing the other party from his
contractual obligations.”).
¶ 21 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 (1 Gary A. Poliakoff, The Law of Condominium Operations
§ 1:23 (1988 and Supp. 2012-13)), the relationship is largely a creature of statute, defined by
the provisions of the Condominium Act (765 ILCS 605/1 et seq. (West 2008)). Under that Act,
the board of managers, through whom the association of unit owners acts (765 ILCS 605/2(o)
(West 2008)), has the duty “[t]o provide for the operation, care, upkeep, maintenance,
replacement and improvement of the common elements.” 765 ILCS 605/18.4(a) (West 2008).
The Condominium Act also addresses the “[s]haring of expenses” among unit owners, and
establishes that: “It shall be the duty of each unit owner *** to pay his proportionate share of
the common expenses.” 765 ILCS 605/9(a) (West 2008). 2 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.
¶ 22 The forcible statute itself distinguishes between the landlord-tenant relationship and the
association-unit owner relationship. Section 9-209, applicable to leaseholds, states that a
landlord may, after rent is due, “notify the tenant, in writing, that unless payment is made
within a time mentioned in such notice, *** the lease will be terminated,” and the landlord may
sue for possession and unpaid rent. (Emphasis added.) 735 ILCS 5/9-209 (West 2008). Thus,
2
“Common expenses” is defined as “the proposed or actual expenses affecting the property,
including reserves, if any, lawfully assessed by the Board of Managers of the Unit Owner’s
Association.” 765 ILCS 605/2(m) (West 2008).
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when a landlord successfully litigates its forcible action, the landlord-tenant relationship
ceases and, except for any money judgment for past due rent, the tenant’s rental obligation
terminates.
¶ 23 With respect to condominium property, however, the forcible statute nowhere indicates
that the association-unit owner relationship, or the condominium declaration, “will be
terminated.” A unit owner does not cease to be a unit owner even if dispossessed of his or her
unit, and the obligations of condominium ownership, including the obligation to pay
assessments, continue unabated. As set forth in section 9-111 of the forcible statute, a unit
owner may only file a motion to vacate a judgment in favor of the association if, inter alia, the
unit owner “is not in arrears on his or her share of the common expenses for the period
subsequent to that covered by the judgment.” (Emphasis added.) 735 ILCS 5/9-111(a) (West
2008). Section 9-111.1 also provides that the obligation to pay assessments continues, stating
that where the board of managers rents the unit to satisfy the judgment, rental income may be
applied, following satisfaction of the judgment, to “assessments accrued thereafter until
assessments are current.” 735 ILCS 5/9-111.1 (West 2008). These statutory sections also
reveal that, unlike an order of possession in favor of a landlord, an order of possession in favor
of an association is intended to be temporary, not permanent, “with possession eventually
returning to the unit owner.” Knolls Condominium Ass’n, 202 Ill. 2d at 457. See also Ill. Ann.
Stat., ch. 30, ¶ 309.2, Historical and Practice Notes, at 198 (Smith-Hurd Supp. 1992) (“The
relationship between a landlord and tenant is purely contractual and terminates upon a breach
of that contract. By contrast the relationship between the condominium unit owner and the
board of managers is statutory and ongoing.”).
¶ 24 The different treatment that the forcible statute accords to leased property, on the one hand,
and condominium property, on the other hand, underscores that the landlord-tenant
relationship and the association-unit owner relationship are not analogous, and that the
defenses available to a tenant are not necessarily available to a unit owner. Whether a unit
owner may, nonetheless, assert a nullification defense requires a closer examination of the
Condominium Act and the nature of a unit owner’s obligation to pay assessments.
¶ 25 Section 9 of the Condominium Act, which establishes a unit owner’s duty to pay
assessments, does not provide, expressly or impliedly, that such duty is contingent upon the
repair and maintenance of the common elements. Section 9 does state, however, that “[i]f any
unit owner shall fail or refuse to make any payment of the common expenses *** when due[ ]
the amount thereof *** shall constitute a lien on the interest of the unit owner in the property”
which may be recorded and foreclosed by the board of managers. 765 ILCS 605/9(g)(1), (h)
(West 2008). Moreover, section 18 provides:
“[A] unit owner may not assign, delegate, transfer, surrender, or avoid the duties,
responsibilities, and liabilities of a unit owner under this Act, the condominium
instruments, or the rules and regulations of the Association; and *** such an attempted
assignment, delegation, transfer, surrender, or avoidance shall be deemed void.” 765
ILCS 605/18(q) (West 2008).
This section further states that “[t]he association shall have no authority to forbear the payment
of assessments by any unit owner.” 765 ILCS 605/18(o) (West 2008).
¶ 26 These provisions, when read together, demonstrate that a unit owner’s liability for unpaid
assessments is not contingent on the association’s performance. The unit owner cannot “avoid”
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the duty to pay assessments, i.e., the duty cannot be annulled, vacated, defeated, or invalidated
(see Webster’s Third New International Dictionary 151 (1986)), and the association cannot
refrain from enforcing that obligation. Accordingly, a unit owner’s claim that its obligation to
pay assessments was nullified by the association’s failure to repair and maintain the common
elements is contrary to the Condominium Act and is not a viable defense. 3
¶ 27 We recognize that Spanish Court based its right to possession on Carlson’s unfulfilled
obligation to pay assessments under the condominium declaration, and not under the
Condominium Act. Nothing in the declaration or bylaws, however, may conflict with the
provisions of the Act. 765 ILCS 605/18, 4(i) (West 2008).
¶ 28 A nullification defense is not only inconsistent with the express provisions of the
Condominium Act governing the payment of assessments, such a defense is inconsistent with
the legislature’s purpose in adopting section 9.2, authorizing the maintenance of a forcible
action against a defaulting unit owner. 765 ILCS 605/9.2 (West 2008). “ ‘This section was
adopted to provide a constitutionally permissible, quick method for collection of assessment
arrearages ***.’ ” Knolls Condominium Ass’n, 202 Ill. 2d at 457-58 (quoting Ill. Ann. Stat., ch.
30, ¶ 309.2, Historical and Practice Notes, at 179-80 (Smith-Hurd Supp. 1991)). A
nullification defense would inject a myriad of fact-based inquiries into the forcible action,
unduly prolonging what was intended to be an expeditious proceeding. Not only would the
forcible court need to determine whether the association breached its duty to repair or maintain
a common element, the forcible court would need to determine whether that breach was
“material,” and whether that material breach constituted a partial or complete defense to the
forcible action.
¶ 29 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 and the impact a nullification defense would have on their very existence.
Condominium ownership is unique in that a unit owner holds fee simple title to a unit (765
ILCS 605/2(g) (West 2008)), as well as an interest with his or her fellow unit owners in the
common elements (765 ILCS 605/4(e) (West 2008)). See also 1 Gary A. Poliakoff, The Law of
Condominium Operations § 1:01 (1988 and Supp. 2012-13) (“The key characteristic that
distinguishes the condominium concept from other forms of property ownership is the
commonly owned property appurtenant to, and inalienable from each unit.”).
¶ 30 The association, which is comprised of all the unit owners (765 ILCS 605/2(o) (West
2008)), “is responsible for the overall administration of the property through its duly elected
board of managers.” 765 ILCS 605/18.3 (West 2008). The officers and members of the board
must “exercise the care required of a fiduciary of the unit owners.” 765 ILCS 605/18.4 (West
2008). The business of the board, which includes, inter alia, the care and upkeep of the
common elements, the employment of necessary personnel, the acquisition of appropriate
insurance, and the payment of real property taxes (765 ILCS 605/18.4(a), (e), (f), (k) (West
2008)), is funded through the unit owners’ assessments. The assessments are derived from the
3
Although condominium property statutes vary, the argument that the right to collect assessments is
dependent upon the association’s duty to maintain the common elements has “not been generally
accepted by the courts.” 1 Gary A. Poliakoff, The Law of Condominium Operations § 5:19 (1988 and
Supp. 2012-13).
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annual budget prepared by the board. See 765 ILCS 605/18(a)(6) to (8) (West 2008)
(discussing procedure for adoption of the “proposed annual budget and regular assessments
pursuant thereto”). The association’s ability to administer the property is dependent upon the
timely payment of assessments, and “any delinquency in unit owners’ payments of their
proportionate share of common expenses may result in the default of the association on its
obligations or the curtailment of association directed services,” impacting not only the
delinquent unit owner, but all association members. 1 Gary A. Poliakoff, The Law of
Condominium Operations § 5:03 (1988 and Supp. 2012-13). Because of the interdependence
that exists among unit owners, 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.” 765 ILCS 605/9.2(a) (West
2008). See also 765 ILCS 605/9(h) (West 2008) (statutory lien for common expenses “shall be
for the benefit of all other unit owners”).
¶ 31 Permitting a unit owner’s duty to pay assessments to be nullified would thus threaten the
financial stability of condominium associations throughout this state. As explained by the
Massachusetts high court:
“Whatever grievance a unit owner may have against the condominium trustees must
not be permitted to affect the collection of lawfully assessed common area expense
charges. A system that would tolerate a unit owner’s refusal to pay an assessment
because the unit owner asserts a grievance, even a seemingly meritorious one, would
threaten the financial integrity of the entire condominium operation. 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, 1302 (Mass. 1992).
The Massachusetts high court thus held that “there is no right to set-off against a lawfully
imposed condominium charge.” Id. Although the Massachusetts court’s holding was entered in
the context of a statutory lien foreclosure action against a defaulting unit owner, its reasoning
applies equally in the context of a forcible action against a defaulting unit owner. See also
Andrea J. Boyack, Community Collateral Damage: A Question of Priorities, 43 Loy. U. Chi.
L.J. 53, 56-80 (2011) (discussing, inter alia, the devastating impact of assessment
delinquencies in today’s housing market, and the unfair financial burden placed on
nondelinquent owners).
¶ 32 Recognition that a unit owner’s duty to pay assessments cannot be nullified does not mean
that a unit owner cannot challenge whether assessments are due, nor does it mean that an
aggrieved unit owner has no recourse. A unit owner could, for example, challenge whether
assessments are due by challenging the association’s recordkeeping, or the manner in which
the assessment was adopted. See 765 ILCS 605/2(m) (West 2008) (defining “ ‘[c]ommon
[e]xpenses’ ” as those “lawfully assessed” by the board). In addition, a unit owner who
believes he or she has been aggrieved by some act or omission of the board of managers may
take steps to remove the offending board members; become involved in the management of the
association by seeking election to the board; or seek recourse through the courts.
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¶ 33 In this case, when the forcible action proceeded to trial, Carlson challenged the manner in
which Spanish Court adopted one of its special assessments, for which Spanish Court sought
payment. After hearing the evidence, the trial court disallowed that special assessment.
Additionally, as noted earlier, Carlson elected to file a counterclaim for damages to her unit,
which was severed by the trial court and transferred to another courtroom for disposition.
Thus, Carlson will have an opportunity for a full and fair hearing on her claim that Spanish
Court failed to repair and maintain the roof and brickwork, causing damage to her unit.
¶ 34 CONCLUSION
¶ 35 Carlson’s claim that her duty to pay assessments was nullified by Spanish Court’s failure to
repair and maintain the common elements is not a viable defense to Spanish Court’s forcible
action as a matter of law, and is thus not germane to that proceeding. We, therefore, reverse
that portion of the appellate court judgment vacating the trial court’s judgment and remanding
for partial reinstatement of Carlson’s affirmative defenses, and affirm the judgment of the trial
court.
¶ 36 Appellate court judgment reversed in part.
¶ 37 Circuit court judgment affirmed.
¶ 38 JUSTICE FREEMAN, dissenting:
¶ 39 The majority holds that in a forcible entry and detainer proceeding for unpaid assessments,
a unit owner cannot raise as a defense an association’s failure to repair or maintain the common
elements. I disagree and respectfully dissent. I would hold that such a defense can be raised and
is germane to the forcible proceeding.
¶ 40 I begin with the premise that Illinois is unique in allowing a condominium association to
utilize the forcible statute to evict a unit owner for failure to pay assessments. Knolls
Condominium Ass’n, 202 Ill. 2d at 458 (quoting Ill. Ann. Stat., ch. 30, ¶ 309.2, Historical and
Practice Notes, at 180 (Smith-Hurd Supp. 1991)). When such action occurs, the unit owner
maintains title to the unit and the association has the right to possession of the unit until the
judgment for possession is vacated after the amount owed is paid. Id. (quoting Ill. Ann. Stat.,
ch. 30, ¶ 309.2, Historical and Practice Notes, at 180 (Smith-Hurd Supp. 1991)). The
association may rent the unit and apply the rental funds to the delinquent common expenses.
Id. at 457; see 735 ILCS 5/9-111.1 (West 2008). We are unaware of any other state that permits
an association such a remedy in forcible entry and detainer. See 1 Gary A. Poliakoff, The Law
of Condominium Operations § 5:48 (1988 and Supp. 2012-13).
¶ 41 The forcible statute permits a defendant to offer into evidence any matter in defense of the
action that is germane to the distinctive purpose of the proceeding. 735 ILCS 5/9-106 (West
2008). Neither the forcible statute nor the Condominium Act defines germane. Yet, sections
9-106 and 9-111 of the statute permit a claim for rent (735 ILCS 5/9-106 (West 2008)) as well
as a claim for unpaid assessments (735 ILCS 5/9-111 (West 2008)) to be included in the action.
This court has already determined that since a landlord can include a claim for unpaid rent in a
forcible proceeding, a tenant may raise as a defense that no rent was due. Jack Spring, 50 Ill. 2d
at 359. Specifically in Jack Spring, we held that the tenant could assert as a defense that the
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landlord breached the implied warranty of habitability and as a result, the tenant’s duty to pay
rent was excused or nullified by the landlord’s breach. Jack Spring, 50 Ill. 2d at 359. We
reasoned that to hold that a landlord could, at his discretion, expand the issues (i.e., assert a
claim for rent) in a forcible proceeding, but the tenant could not (i.e., assert a defense for
breach of the lease terms, express or implied), violated “common sense and accepted rules of
statutory interpretation.” Id. at 358.
¶ 42 We should employ a similar analysis here. Spanish Court brought its complaint pursuant to
the forcible statute and asserted counts for possession and breach of contract (the
condominium declaration) as well as a claim for unpaid assessments. Similar to the tenant in
Jack Spring, Carlson should be permitted to raise as a defense that the association’s breach of
its duty to repair or maintain the common elements excused or nullified her duty to pay
assessments. Though the majority acknowledges Spanish Court based its right to possession on
Carlson’s failure to pay assessments under the condominium declaration and not the
Condominium Act, it nevertheless maintains that the relationship between an association and
unit owner is controlled by statute rather than contract. Thus, the majority concludes, for
purposes of the forcible statute, analogies between the landlord-tenant relationship and unit
owner-association relationship are “ill-fitting” and the defenses available to a tenant are not
necessarily available to a unit owner. My view is more moderate. The unit owner-association
relationship is governed both by statute (the Condominium Act) and contract (the
condominium’s declaration, bylaws and rules and regulations). Therefore, I believe that such a
comparison is not “ill-fitting” and that a nullification defense should likewise be available to a
unit owner.
¶ 43 Although the majority cites to Rosewood Corp. for support, I believe it supports my
position. In Rosewood Corp., we considered whether the defendants, who had entered into
installment contracts for the purchase of residential properties, could assert as affirmative
defenses in a forcible proceeding that the installment contracts were unconscionable and
unenforceable based on the defendants’ allegations of fraud and violations of their civil and
constitutional rights. The defendants had stopped making their installment payments and
“appear[ed] to have embarked upon a concerted course of self-determination and self-help, for
an apparent purpose of securing a modification and renegotiation of their contracts.”
Rosewood Corp., 46 Ill. 2d at 252. Noting that “germane” had been defined as “closely allied,”
“closely related,” “closely connected,” “relevant,” and “pertinent,” we held that the
defendants’ affirmative defenses challenging the validity and enforceability of their contracts
were germane to a determination of the right to possession. Id. at 256-57. Specifically, we
found that: “[w]here as here, the right to possession a plaintiff seeks to assert has its source in
an installment contract for the purchase of real estate by the defendant, we believe it must
necessarily follow that matters which go to the validity and enforc[ea]bility of that contract are
germane, or relevant, to a determination of the right to possession.” Id. We further noted that
construing the statute in this manner “may interfere with the summary aspects of the remedy.”
Id. at 258. However, we concluded that the rights of the purchasers to be heard on relevant
matters and to be secure in their constitutional rights were superior to that of the summary
aspects of the remedy for possession. Id.
¶ 44 Similarly here, whether a unit owner owes condominium assessments is “closely allied,”
“related,” “connected,” “relevant” and “pertinent” to the condominium association’s forcible
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action for possession and unpaid assessments. When Spanish Court’s right to possession is
based on Carlson’s failure to pay assessments pursuant to the condominium declaration, it
must necessarily follow that the question of whether Carlson owes those assessments is
germane or relevant to a determination of the right to possession.
¶ 45 Additionally, a nullification defense is not contrary to the provisions in the Condominium
Act that govern the payment of assessments, as the majority asserts. The Condominium Act
imposes a duty on unit owners to pay their proportionate share of the common expenses as well
as a duty on associations to repair and maintain the common elements. Yet, it does not address
a situation such as here where a unit owner stops paying assessments because the association
failed to repair and maintain the roof, a common element. Since the Condominium Act is silent
in this regard, permitting a unit owner to raise a nullification defense is not contrary to the
Condominium Act’s provisions.
¶ 46 The majority also references in a footnote that “the argument that the right to collect
assessments is dependent upon the association’s duty to maintain the common elements has
‘not been generally accepted by the courts,’ ” Supra ¶ 26 n.3 (citing 1 Gary A. Poliakoff, The
Law of Condominium Operations § 5:19 (1988 and Supp. 2012-13)). However, this assertion
ignores the fact that Illinois is unique in that it permits condominium associations to utilize the
forcible statute to evict a unit owner for failure to pay assessments. Therefore, a comparison to
other courts’ decisions is not persuasive.
¶ 47 Moreover, a nullification defense is not contrary to the express purpose of forcible
proceedings to provide a “quick method” to collect assessment arrearages unencumbered by
“extraneous matters.” If a tenant can raise the defense in a forcible proceeding, I fail to see
much difference in the nature and extent of the proceeding if raised by a unit owner. The
majority acknowledges that a unit owner could challenge whether assessments were due,
though on a basis other than a nullification theory; yet, it does not explain why a nullification
defense would make the proceeding any longer or more cumbersome than any other defense.
Likewise, the majority does not explain how such a defense is an “extraneous matter” when the
sole basis for Spanish Court’s complaint was Carlson’s failure to pay assessments. We pointed
out in Jack Spring that the forcible statute had to some extent lost its distinctive purpose of
only restoring possession, and, in Rosewood Corp., we recognized a departure from the
summary aspects of the remedy. Jack Spring, 50 Ill. 2d at 358; Rosewood Corp., 46 Ill. 2d at
258. Here, the forcible action proceeded to a bench trial on Spanish Court’s claim for unpaid
special assessments, accrued assessments, late charges, attorney fees and costs. Clearly, the
proceeding is not quite as “quick” as the majority asserts. I disagree that permitting a unit
owner to raise a nullification defense would interfere with the summary aspects of the forcible
proceeding.
¶ 48 Further, we noted back in 1972, in Jack Spring, the “salutary trend” toward determining the
rights and liabilities of litigants in one, rather than multiple, proceedings. Jack Spring, 50 Ill.
2d at 359. Interpreting the forcible statute as permitting a unit owner to raise such a defense is
consistent with this pronouncement.
¶ 49 Lastly, the majority’s decision rests upon an unfounded fear that permitting a unit owner to
raise a nullification defense would threaten the financial stability of condominium associations
throughout the state. As the appellate court noted, the association’s breach must be material
and cannot be based on a general disagreement with the association. The threat of eviction also
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serves as a very powerful tool to encourage compliance by unit owners and a unit owner who
ceases paying assessments does so with the utmost peril. It is true that the form of
condominium ownership only works if each unit owner faithfully pays his or her share of the
common expenses. It is equally true that condominium ownership only works if the association
likewise fulfills its obligations. Not permitting a unit owner to raise a nullification defense in a
forcible action denies a voice to an ever-growing segment of the population which purchases
condominium property. True, unit owners can continue to pay assessments and bring a lawsuit
against the association for its failure to repair or maintain; however, that puts an expensive and
time-consuming burden on the unit owner rather than litigating the matter in the forcible
proceeding that is already before the court, as is done in a landlord-tenant situation.
¶ 50 In the end, I believe this is a matter best left to the legislature. The legislature included
condominium property within the province of the forcible statute and further provided that a
claim for unpaid assessments may be included in the forcible action for possession. Yet, it
provided no further guidance as to what defenses may be germane to the proceeding. If the
legislature had wanted to foreclose a unit owner from raising a nullification defense in a
forcible action, it could have so provided. It did not.
¶ 51 JUSTICES KILBRIDE and BURKE join in this dissent.
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