Channon v. Westward Management, Inc.

2021 IL App (1st) 210176No. 1-21-0176
Opinion filed December 7, 2021
SECOND DIVISION
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
HARRY CHANNON and DAWN CHANNON, )
Individually and on Behalf of All Others Similarly ) Appeal from the
Situated, ) Circuit Court of
) Cook County.
Plaintiffs-Appellees, )
) No. 19-CH-4869
v. )
) The Honorable
WESTWARD MANAGEMENT, INC., an Illinois ) Anna M. Loftus,
corporation, ) Judge Presiding.
)
Defendant-Appellant.
PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the court,
with opinion.
Justices Lavin and Cobbs concurred in the judgment and opinion.
OPINION
¶1 The plaintiffs, Harry Channon and Dawn Channon, have filed a class action complaint against
the defendant, Westward Management, Inc., the property management agent retained by the board
of managers of the condominium unit owners’ association for the building in which the plaintiffs
formerly owned a condominium unit. The plaintiffs allege that, when they sold their condominium
unit in 2016, the defendant charged excessive and unreasonable fees to provide them with the
documents and other information that the plaintiffs were required to provide to the prospective
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purchasers of their unit in connection with the sale. Relevant to this appeal, the plaintiffs allege
that the defendant’s actions violated section 22.1 of the Condominium Property Act. 765 ILCS
605/22.1 (West 2016). The trial court denied the defendant’s motion to dismiss the complaint but
certified a question of law to this court, which we allowed. The certified question asks whether
section 22.1 of the Condominium Property Act (id.) provides an implied cause of action in favor
of a condominium unit seller against a property manager, as agent of a condominium association
or board of directors, based on allegations that the property manager charged excessive fees for
the production of information required to be disclosed to a prospective buyer under that statute.
For the following reasons, we hold that such an implied cause of action exists under the statute.
¶2 I. BACKGROUND
¶3 When the owner of a condominium unit (other than the developer) sells that unit, section 22.1
of the Condominium Property Act requires the owner to obtain from the board of managers of the
condominium unit owners’ association—and make available to the prospective purchaser—nine
categories of documents and information concerning the condominium and its unit owners’
association. Id. Generally speaking, these items include governance documents of the unit owners’
association, as well as statements concerning any liens, anticipated capital expenditures, the status
and amount of funds held in reserve and any portion earmarked for specific projects, the
association’s financial condition, the status of any pending lawsuits or judgments in which the
association is a party, the insurance coverage provided for unit owners, the compliance with
condominium instruments of the prior unit owner’s improvements or alterations, and the identity
and mailing address of the association’s principal officer or the other officer or agent designated
to receive notices. Id. § 22.1(a)(1)-(9). Section 22.1(b) requires “[t]he principal officer of the unit
owner’s association or such other officer as is specifically designated” to furnish this information
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within 30 days of a request. Id. § 22.1(b). Section 22.1(c) provides in pertinent part that “[a]
reasonable fee covering the direct out-of-pocket cost of providing such information and copying
may be charged by the association or its Board of Managers to the unit seller for providing such
information.” Id. § 22.1(c).
¶4 The plaintiffs’ class action complaint alleges that the defendant violated section 22.1(c) by
charging more than a “reasonable fee covering the direct out-of-pocket cost” of providing the
plaintiffs with the information that they were required under section 22.1(a) to obtain and provide
to the prospective purchasers when selling their condominium unit. The plaintiffs allege that, in
February 2016, they decided to sell the unit that they owned in a condominium property located
on North Kenmore Avenue in Chicago. They entered into a contract with prospective purchasers,
which was a standard form contract requiring the plaintiffs to obtain and provide the prospective
purchasers with the various documents and information set forth in section 22.1(a). The defendant
was the management agent retained by the board of managers of the Kenmore Club Condominium
Association (Kenmore Club Board or Kenmore Club Association, respectively), which is the unit
owners’ association for the building in which plaintiffs owned their condominium unit.
¶5 Among the duties designated to the defendant as management agent was the duty to provide
a selling unit owner with the documents and information required by section 22.1(a). Knowing
that the defendant had been assigned this duty by the Kenmore Club Association, the plaintiffs
notified the defendant of their intent to sell their unit. The defendant provided them with a standard
form with which to request documents. The form listed various categories of documents, along
with a price next to each category of document. The plaintiffs submitted the form to the defendant,
requesting to be provided with (1) a paid-assessment letter at a cost of $150.00, (2) a year-to-date
income statement and budget at a cost of $20.00, (3) a “Condo Questionnaire/Disclosure
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Statement/22.1 (each)” at a cost of $75.00, and (4) insurance contact information at a cost of $0.00.
The plaintiffs also submitted a form authorizing the defendant to charge their credit card in the
amount of $245.00 for providing these documents. The defendant then provided the requested
documents, and the plaintiffs’ credit card was charged $245.00. The plaintiffs allege that the
$245.00 fee charged by the defendant for providing the documents required by section 22.1(a) is
not a “reasonable fee covering the direct out-of-pocket cost of providing such information,” as
required by section 22.1(c). See id. Instead, they allege, it is an “excessive and unreasonable fee”
that does not reflect the defendant’s direct out-of-pocket costs for providing this information. They
allege that they cannot reasonably obtain the documents and information necessary to sell their
unit from any source other than the defendant, and thus they were “beholden” to the defendant and
had no choice but to pay the excessive and unreasonable fee it requested to receive the documents.
They allege that the defendant’s actions violate section 22.1 of the Condominium Property Act (id.
§ 22.1), as well as the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud
Act) (815 ILCS 505/1 et seq. (West 2016)).
¶6 The defendant filed a motion to dismiss the plaintiffs’ complaint. It argued that no implied
private right of action existed in favor of a condominium seller under section 22.1 because the
purpose of that statute is to protect prospective purchasers of condominium units, not unit sellers.
It also argued that section 22.1(c) did not govern the fees that property management companies
providing services to condominiums could charge, as its unambiguous language mentions only
what condominium associations or their boards of managers may charge for providing information.
Finally, it argued that the plaintiffs had failed to plead a cause of action in second count under the
Consumer Fraud Act.
¶7 In a written order, the trial court denied the defendant’s motion to dismiss and determined
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that an implied cause of action existed in favor of condominium sellers under section 22.1. In doing
so, it noted that prior case law had recognized an implied cause of action under the statute in favor
of buyers (see Nikolopulos v. Balourdos, 245 Ill. App. 3d 71, 77 (1993); D’Attomo v. Baumbeck,
2015 IL App (2d) 140865, ¶ 39), but that neither of those cases had addressed the question of
whether an implied cause of action could also exist in favor of sellers. It next considered the
purpose of the Condominium Property Act (765 ILCS 605/1 et seq. (West 2016)) and of section
22.1 specifically. It noted that the Condominium Property Act contained protections for both
buyers and sellers alike, as “[t]oday’s buyer becomes tomorrow’s seller.” It found that section 22.1
reflected this reality by imposing “substantial obligations on sellers to secure the provision of
certain documents from management, but in turn offers them a shred of protection against price-
gouging.” It also noted that a condominium seller was by definition a unit owner and that other
implied statutory causes of action had been recognized in favor of unit owners, citing Boucher v.
111 East Chestnut Condominium Ass’n, 2018 IL App (1st) 162233, ¶¶ 20-21 (majority recognized
cause of action in favor of unit owner against owners’ association under section 18.4(h) of the
Condominium Property Act (765 ILCS 605/18.4(h) (West 2012)) for violating owner’s free speech
rights). Based on its determination that condominium sellers were within the class of persons that
section 22.1 was designed to protect, the trial court concluded that implying a cause of action
against the imposition of unreasonable fees would be consistent with the statute’s purposes, that
the charging of an unreasonable fee was the type of injury that section 22.1(c) was designed to
prevent, and that establishing a cause of action is the only method to enforce the statutory
requirement.
¶8 Next, the trial court rejected the reasoning of Horist v. Sudler & Co., 941 F.3d 274, 279-80
(7th Cir. 2019), in which the federal court of appeals, relying on Nikolopulos and D’Attomi,
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concluded that the purpose of section 22.1 is for the protection of purchasers only and therefore
held that no implied cause of action exists in favor of sellers under the statute. The trial court
reasoned that the court of appeals had read Nikolopulos and D’Attomi too narrowly as “permitting
no other purpose to be read into the statute” than protecting purchasers, whereas the trial court had
concluded that section 22.1 was intended to protect sellers as well as purchasers. The trial court
further reasoned that the decision of the court of appeals was likely based on the hesitancy of
federal courts to recognize “novel state law claims,” which the trial court reasoned that this was.
¶9 Finally, the trial court addressed whether a seller’s implied cause of action for charging
unreasonable fees could be brought against a property manager acting as agent for a condominium
unit owners’ association or its board of managers in providing documents and information to
sellers under section 22.1. The trial court noted that it had been thoroughly alleged in the complaint
that the defendant was acting as the agent of the unit owners’ association, that it had been delegated
and had taken on the association’s statutory duty of providing the requisite documents, and that
the defendant was the only source from which the plaintiffs could have obtained these documents.
Citing and quoting Landau v. Landau, 409 Ill. 556, 564 (1951), the trial court recognized that an
agent may be held liable for breaching a duty owed by a principal where the agent “ ‘takes some
active part in violating some duty the principal owes to a third person.’ ” The trial court reasoned
that the plaintiffs’ allegations fell squarely within this rule, because, to whatever extent the duty
not to charge unreasonable fees was placed on the association, the defendant was the one charging
the fees and was the only party that could fulfill the statutory duty of providing the documents.
Additionally, the trial court denied the motion to dismiss the count under the Consumer Fraud Act.
¶ 10 The defendant then filed a motion under Illinois Supreme Court Rule 308 (eff. Oct. 1, 2019),
seeking to have the trial court certify the question of law to this court of whether section 22.1
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provides an implied cause of action in favor of a condominium seller against a property manager
based on allegations that the property manager charged excessive fees for producing documents
and information. The plaintiffs objected to this, arguing that it would be premature because issues
of fact existed on the question of the agency relationship between the defendant and the board of
managers or unit owners’ association of the plaintiffs’ condominium building, and this court had
declined to answer a similar certified question on a previous occasion due to the issues of fact
surrounding the question of agency. See Friedman v. Lieberman Management Services, Inc., 2019
IL App (1st) 180059-U. In reply, the defendant asserted that in this case “agency has been
established,” at least for purposes of the certified question. The trial court agreed but modified the
defendant’s proposed certified question “to explicitly identify the agency relationship.” This court
then allowed the defendant’s application for leave to appeal.
¶ 11 II. ANALYSIS
¶ 12 The certified question is whether section 22.1 of the Condominium Property Act (765 ILCS
605/22.1 (West 2016)) provides an implied cause of action in favor of a condominium unit seller
against a property manager, as agent of a condominium association or board of directors, based on
allegations that the property manager charged excessive fees for the production of information
required to be disclosed to a prospective buyer under that statute. We first address whether an
implied right of action exists under the statute at all before considering the question of agency.
¶ 13 Determining whether an implied cause of action exists under a statute involves an application
of the principles of statutory interpretation. First Capital Mortgage Corp. v. Union Federal Bank
of Indianapolis, 374 Ill. App. 3d 739, 741 (2007). It is a question of law subject to de novo review.
Metzger v. DaRosa, 209 Ill. 2d 30, 34 (2004). A court’s primary objective when presented with
any issue requiring statutory interpretation is to ascertain and give effect to the intent of the
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legislature. Oak Lawn Professional Firefighters Ass’n, Local 3405 v. Village of Oak Lawn, 2018
IL App (1st) 172079, ¶ 18. The court looks first to the plain language of the statute as the best
indication of legislative intent. LaSalle Bank National Ass’n v. Cypress Creek 1, LP, 242 Ill. 2d
231, 237 (2011). The language of the whole statute is evaluated, with words and phrases considered
in context to other relevant statutory provisions and not in isolation. Oak Lawn Professional
Firefighters Ass’n, 2018 IL App (1st) 172079, ¶ 18. A court may also consider the purpose behind
the law, the evils that the legislature was seeking to remedy, and the consequences that would
result from interpreting the law one way or the other. Rivera v. Commonwealth Edison Co., 2019
IL App (1st) 182676, ¶ 25. Where the statutory language is plain, ordinary, and unambiguous, it
will be enforced as written without resort to other tools of statutory interpretation. Stinson v.
Chicago Board of Election Commissioners, 407 Ill. App. 3d 874, 876 (2011).
¶ 14 Section 22.1 of the Condominium Property Act provides in its entirety as follows:
“(a) In the event of any resale of a condominium unit by a unit owner other than the
developer such owner shall obtain from the Board of Managers and shall make available
for inspection to the prospective purchaser, upon demand, the following:
(1) A copy of the Declaration, by-laws, other condominium instruments and
any rules and regulations.
(2) A statement of any liens, including a statement of the account of the unit
setting forth the amounts of unpaid assessments and other charges due and owing
as authorized and limited by the provisions of Section 9 of this Act or the
condominium instruments.
(3) A statement of any capital expenditures anticipated by the unit owner’s
association within the current or succeeding two fiscal years.
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(4) A statement of the status and amount of any reserve for replacement fund
and any portion of such fund earmarked for any specified project by the Board of
Managers.
(5) A copy of the statement of financial condition of the unit owner’s
association for the last fiscal year for which such statement is available.
(6) A statement of the status of any pending suits or judgments in which the
unit owner’s association is a party.
(7) A statement setting forth what insurance coverage is provided for all unit
owners by the unit owner’s association.
(8) A statement that any improvements or alterations made to the unit, or the
limited common elements assigned thereto, by the prior unit owner are in good faith
believed to be in compliance with the condominium instruments.
(9) The identity and mailing address of the principal officer of the unit owner’s
association or of the other officer or agent as is specifically designated to receive
notices.
(b) The principal officer of the unit owner’s association or such other officer as is
specifically designated shall furnish the above information when requested to do so in
writing and within 30 days of the request.
(c) Within 15 days of the recording of a mortgage or trust deed against a unit
ownership given by the owner of that unit to secure a debt, the owner shall inform the
Board of Managers of the unit owner’s association of the identity of the lender together
with a mailing address at which the lender can receive notices from the association. If a
unit owner fails or refuses to inform the Board as required under subsection (c) then that
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unit owner shall be liable to the association for all costs, expenses and reasonable attorneys
fees and such other damages, if any, incurred by the association as a result of such failure
or refusal.
A reasonable fee covering the direct out-of-pocket cost of providing such information
and copying may be charged by the association or its Board of Managers to the unit seller
for providing such information.” 765 ILCS 605/22.1 (West 2016).
¶ 15 It is undisputed that no express cause of action exists under this statute. However, the absence
of statutory language expressly granting such a right is not dispositive because a court may
determine that a private right of action is implied in a statute. Metzger, 209 Ill. 2d at 35. Implication
of a private right of action is appropriate if four factors are satisfied: (1) the plaintiffs are members
of the class for whose benefit the statute was enacted, (2) the plaintiffs’ injury is one the statute
was designed to prevent, (3) a private right of action is consistent with the underlying purpose of
the statute, and (4) implying a private right of action is necessary to provide an adequate remedy
for violations of the statute. Id. at 36.
¶ 16 The defendant’s principal argument on appeal is that no cause of action may be implied in
favor of the plaintiffs in this case because, as sellers of a condominium unit, they are not members
of the class for whose benefit section 22.1 was enacted. The defendant contends that section 22.1
imposes only obligations on unit sellers and does not provide sellers with any protections or
benefits. Rather, all protections and benefits provided by the statute are conferred on prospective
purchasers, by ensuring that they are provided in a timely manner with the documents and
information necessary to make an informed decision about whether to purchase a unit within a
condominium property. The defendant argues that even subsection 22.1(c) has the purpose of
benefitting purchasers, not sellers, because the information obtained under section 22.1 helps them
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by enabling them to decide whether a condominium property is financially stable and has
acceptable governing documents. The defendant asserts that subsection 22.1(c) also “lets
associations recoup expenses incurred by them in helping sellers satisfy their obligations to
potential buyers” and that the “ ‘reasonable fee’ language prevents sellers from getting away
cheap.” The defendant disputes the trial court’s characterization of subsection 22.1(c) as providing
sellers with “a shred of protection against price-gouging,” arguing that such protection is merely
“tangential” to the statute’s overall intended purpose of benefitting prospective buyers.
¶ 17 The defendant also relies upon the various cases that have recognized that the purpose of
section 22.1 is to protect potential purchasers of units within condominiums by providing them
with important information needed to make an informed purchase. Indeed, multiple cases have
held that section 22.1 was designed to protect prospective purchasers of condominium units. In
Nikolopulos, 245 Ill. App. 3d at 77, this court described the statute as being “designed to prevent
prospective purchasers from buying a unit without being fully informed and satisfied with the
financial stability of the condominium as well as the management, rules and regulations which
affect the unit he is seeking to purchase.” The court thus recognized that an implied right of action
existed in favor of a prospective purchaser to terminate a contract to purchase a unit within a
reasonable time after being furnished with the required documents and information showing
previously undisclosed material expenses or conditions. Id. In Mikulecky v. Bart, 355 Ill. App. 3d
1006, 1012-13 (2004), this court again quoted the above statement of the statute’s purpose from
Nikolopulos before holding that issues of fact precluded summary judgment in favor of a seller of
a condominium unit, where the unit’s purchaser alleged that the seller had violated section 22.1 by
failing to disclose an anticipated capital expenditure for an expensive window-replacement project
at the property of which the seller had reason to know. Finally, in D’Attomo, 2015 IL App (2d)
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140865, ¶ 39, the court extended the holding of Nikolopulos to recognize an implied private right
of action in favor of a purchaser post-closing, where the unit seller was alleged to have concealed
documents requested under the statute, the purchaser did not discover the concealment until after
the closing, and the nondisclosed information materially affected the purchaser’s rights in the unit.
¶ 18 In Horist, 941 F.3d at 276-77, the court of appeals was faced with a case similar to the one
before us—namely, a proposed class action by condominium unit owners alleging that a property
management company and its third-party vendor that compiled electronically-downloadable
disclosure documents had violated section 22.1(c) by charging the plaintiffs excessive fees to
provide those documents in connection with sales of condominium units. Among the issues before
the court was whether the plaintiffs, as sellers of condominium units, had a right of action to
enforce section 22.1. Id. at 278. After reviewing Nikolopulos and D’Attomo, the court of appeals
reasoned that the “unmistakable takeaway from these two decisions is that section 22.1 is designed
to protect the interests of condominium purchasers, not condominium sellers.” (Emphases in
original). Id. at 279. “As owner/sellers they are not within the class of persons the statute was
designed to protect, nor have they suffered an injury that the statute was designed to prevent.” Id.
The court held that it was not persuaded that the statutory provision for a reasonable fee in section
22.1(c) meant that unit sellers were within the class of persons the statute was designed to protect.
Id. at 279-80. It reasoned that neither Nikolopulos nor D’Attomo had distinguished the statute’s
subsections, but rather had discussed only “ ‘[t]he disclosure requirements imposed by
[section] 22.1.’ ” Id. at 280 (quoting D’Attomo, 2015 IL App (2d) 140865, ¶ 34). The court also
relied on the principle of statutory interpretation that statutes are read as a whole without focusing
on isolated subsections, reasoning:
“Reading section 22.1 in this holistic way, subsection (a) of the statute establishes the
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seller’s duty to disclose an array of important documents to the buyer; subsection (b)
requires condominium associations to furnish the required documents to unit owners within
30 days of a written request; and subsection (c) allows associations to charge a reasonable
fee for doing so. The statute works as an integrated whole for the benefit of prospective
condominium purchasers, not sellers.” (Emphases in original). Id.The court went on to reason that subsections (b) and (c) implement the duty of disclosure of
subsection (a) and were not “independent entitlements for the benefit of condominium associations
and unit sellers.” Id.
¶ 19 In addition to Horist, the defendants draw our attention to two other federal district court
cases decided prior to Horist, both of which again involved claims similar to those of this case. In
Ahrendt v. Condocerts.com, Inc., No. 17-cv-8418, 2018 WL 2193140, at *2 (N.D. Ill. May 14,
2018), the district court rejected the plaintiff’s claim based on the absence of any authority that a
private right of action existed in favor of condominium sellers or that the legislature intended to
protect sellers from excessive charges. In Murphy v. Foster Premier, Inc., No. 17-cv-8114, 2018
WL 3428084, at *3 (N.D. Ill. July 16, 2018), the district court reasoned that the plaintiffs, as
condominium unit owners and sellers, fell within the class for whose benefit the statute was
enacted. However, the district court went on to reason that the goal of the statute was to increase
disclosure, and thus the plaintiffs’ injury of paying excessive charges was not the one the statute
was designed to prevent. Id. The court further reasoned that the plaintiffs had alternative remedies
available, such as suing their owners’ association or passing the cost onto the purchasers who
benefited from the sellers’ prompt disclosures. Id. While we may consider the federal district court
and court of appeals decisions interpreting state law for their persuasive value, it is well settled
that federal decisions are not binding on Illinois state courts. Trilisky v. City of Chicago, 2019 IL
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App (1st) 182189, ¶ 43 n.5.
¶ 20 Finally, the defendant discusses the trial court’s reliance on the transcripts of the legislative
debates involving the Condominium Property Act cited by the plaintiffs and argue that other
portions of those transcripts support the purpose of section 22.1 as being for the protection of
purchasers. We note that we have reviewed the transcripts of the legislative debates that are
contained in the supporting record, which are from 1972 and 1983. These debates do not appear
to involve the enactment of section 22.1, which occurred in 1979. See Pub. Act 81-897 (eff. Jan.
1, 1980) (adding 765 ILCS 605/22.1). A fundamental rule of statutory interpretation is that we
interpret statutes as they were intended to be interpreted at the time they were passed. Grauer v.
Clare Oaks, 2019 IL App (1st) 180835, ¶ 157 (citing O’Casek v. Children’s Home & Aid Society
of Illinois, 229 Ill. 2d 421, 441 (2008)). We find these debates to be of little assistance in resolving
the question before us.
¶ 21 Nevertheless, we find that the plain language of section 22.1 requires us to reject the
defendant’s argument that its purpose is only for the benefit or protection of potential purchasers
of condominium units. Although that may be the statute’s primary purpose, it is clear from the
plain language of this statute that it also has the purpose of benefiting condominium unit owners
who wish to sell their units. Most of the information required by section 22.1(a) concerns the
financial status of the property’s unit owners’ association and anticipated capital expenditures
involving the condominium property as a whole. Most of it is information that is not within the
knowledge or possession of an individual unit owner. Regardless, it is information that any
prospective purchaser would insist upon receiving to be “fully informed and satisfied with the
financial stability of the condominium as well as the management, rules and regulations which
affect the unit he is seeking to purchase.” See Nikolopulos, 245 Ill. App. 3d at 77. Thus, a unit
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owner who wants to sell his or her unit would be significantly hindered in doing so if he or she has
no legal method to acquire this information from the party in possession of it to provide to a
potential buyer to assuage that buyer’s concerns about buying a unit within a particular
condominium property or association. It goes without saying that there are many unknowns in
buying a unit within a condominium property. Many condominium properties have owners’
associations that are in strong financial condition and buildings that are not in need of major
improvements. But other properties are not in such a good position, and most potential purchasers
would be hesitant to buy into a condominium property without receiving some information on
these matters in advance. Thus, a seller without a mechanism to obtain this information from an
association to disclose it to a buyer is likely to encounter difficulty finding a purchaser willing to
buy the seller’s unit. Section 22.1 thus protects unit owners who want to sell their condominium
units by ensuring that they have a statutory mechanism to obtain this information from an
association to provide in connection with a sale. It protects unit owners who could otherwise be
locked into the purchase of a condominium unit, unable to sell it. The statute thus facilitates sales,
just as it protects purchasers.
¶ 22 The statute also protects unit owners wishing to sell (as well as owners’ associations and their
boards of managers) by specifying what may be charged for providing the selling unit owner with
the information required under section 22.1. Without the last sentence of section 22.1(c), it is not
difficult to imagine how disputes could arise between a unit seller and an owners’ association or
board of managers about whether and how much the unit seller could be charged to receive this
information. Much of the information required by section 22.1(a) requires a certain amount of time
or expense to accurately compile, but in many cases the person compiling it will hold a voluntary,
nonremunerative position on a condominium association board of managers. Thus, the association
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or board might insist on charging a fee that compensates those compiling the information for their
time and for reimbursement for expenses in doing so, whereas a unit seller might dispute the
amount of the charge or insist that he or she is entitled to receive the information without charge.
Thus, the final sentence of section 22.1(c) prevents such disputes and protects all parties in the
process by (1) specifying that copying and providing documents or information is something for
which the association or its board of managers may charge the unit seller and (2) providing general
parameters of what the amount of that charge may be. The fact that the General Assembly chose
to specify that only a direct out-of-pocket charge would be considered reasonable is especially
indicative of a legislative intent to protect unit sellers needing to obtain this information.
¶ 23 Having concluded that the plaintiffs, as sellers of a condominium unit, are members of the
class for whose benefit section 22.1 was enacted, we next consider whether the injury alleged by
the plaintiffs is one that section 22.1 was designed to prevent. See Metzger, 209 Ill. 2d at 36. Here,
the injury alleged by the plaintiffs’ class action complaint is that the defendant charged them an
“excessive and unreasonable fee” of $245.00 for providing the documents required by section
22.1(a), which did not reflect the defendant’s direct out-of-pocket costs for providing that
information. Section 22.1(c) states, “A reasonable fee covering the direct out-of-pocket cost of
providing such information and copying may be charged by the association or its Board of
Managers to the unit seller for providing such information.” 765 ILCS 605/22.1(c) (West 2016).
Setting aside for a moment the question of whether this section controls what an entity acting as
agent of an association or board of managers may charge, we hold that the plaintiffs’ alleged injury
of being charged an excessive fee to receive documents and information required by section 22.1
is an injury that the statute was designed to prevent.
¶ 24 Our third consideration is whether a private right of action is consistent with the underlying
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purpose of section 22.1. See Metzger, 209 Ill. 2d at 36. As discussed above, we find that the
purpose of section 22.1 is both for the protection of prospective purchasers and to ensure that
condominium owners wishing to sell their units have a legal mechanism to obtain information
about the financial status of the owners’ association and the condition of the condominium
property as a whole necessary to assuage the concerns of a potential purchaser about buying a unit
within a condominium property. It also protects unit sellers by specifying that the fee they may be
charged to receive this information is a reasonable fee covering the direct out-of-pocket cost of
providing such information and copying. Again, setting aside for a moment the issue of agency,
we find that implying a private right of action in favor of unit sellers charged fees in excess of this
amount to receive the documents and information they need to provide to buyers in connection of
the sale of their condominium units is consistent with these statutory purposes.
¶ 25 Finally, we consider whether implying a private right of action is necessary to provide an
adequate remedy for violations of the statute. Id. A private right of action is implied “ ‘only in
cases where the statute would be ineffective, as a practical matter, unless such an action were
implied.’ ” Id. at 39 (quoting Fisher v. Lexington Health Care, Inc., 188 Ill. 2d 455, 464 (1999)).
Here, section 22.1 provides for no penalty or other enforcement mechanism for the charging of an
excessive or unreasonable fee for documents or information. Without an implied private right of
action in favor of a seller, the statutory prohibition on the charging of an excessive fee would be
ineffective.
¶ 26 The defendant argues that implying a private right of action under section 22.1 of the
Condominium Property Act is unnecessary because the Consumer Fraud Act (815 ILCS 505/1
et seq. (West 2016)) “provides a cause of action against a property manager for unfairly charging
for documents.” The defendant points out that the plaintiffs’ count under the Consumer Fraud Act
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remains pending in the trial court. We note, however, that the defendant took the contrary position
in the trial court, arguing in its motion to dismiss that the misconduct alleged by the plaintiffs is
not the type of conduct that falls within the purview of the Consumer Fraud Act. The trial court
rejected this argument, but the issue is not before us on the certified question. The issue is also not
adequately briefed to allow us to resolve it, and we decline to address the sufficiency of the
consumer fraud count in the absence of briefing by the parties. The defendant’s cursory assertion
that the Consumer Fraud Act provides an adequate cause of action for relief is insufficient to allow
us to conclude that it is unnecessary to imply a private right of action for violations of section 22.1.
¶ 27 For these reasons, we hold that the necessary elements are satisfied to imply a private right
of action in favor of a condominium unit seller charged an excessive or unreasonable fee to receive
the documents or information required by section 22.1 of the Condominium Property Act. 765
ILCS 605/22.1 (West 2016). In doing so, we disagree with the analysis of Horist, 941 F.3d at 279-
80, and other federal cases discussed above and conclude that they interpreted the purpose of
section 22.1 too narrowly. Neither Nikolopulos nor D’Attomo held that the section 22.1 had the
exclusive purpose of protecting purchasers of condominium units and had no purpose of providing
protection to sellers. Whether the statute also protected sellers was simply not the question before
the courts in those cases.
¶ 28 We now turn to the question of agency and consider whether a unit seller’s implied right of
action exists only against a unit owners’ association or board of managers, or whether it also exists
against a property manager that acts as agent for that association or board. The plain language of
section 22.1 contains no mention of agents acting on behalf of unit owners’ associations or their
boards of managers. Instead, section 22.1(a) provides that a unit owner shall obtain the requisite
documents and information “from the Board of Managers.” 765 ILCS 605/22.1(a) (West 2016).
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Section 22.1(b) provides that “[t]he principal officer of the unit owner’s association or such other
officer as is specifically designated shall furnish the above information.” Id. § 22.1(b). And section
22.1(c) provides that a reasonable fee “may be charged by the association or its Board of Managers
to the unit seller for providing such information.” Id. § 22.1(c). However, the Condominium
Property Act separately grants the board of managers of a condominium association the ability to
“engage the services of a manager or managing agent.” Id. § 18(a)(5).
¶ 29 It is undisputed for purpose of appeal that the defendant was acting as agent of the Kenmore
Club Association in providing the documents and information required by section 22.1 to the
plaintiffs and in charging them for doing so. The trial court, in concluding that the defendant could
be held liable as the association’s agent for allegedly charging excessive fees in violation of section
22.1(c), found that, on the allegations, the defendant “took on the Section 22.1 duty” owed by the
association to the plaintiffs when it accepted the Kenmore Club Association’s delegation of every
aspect of its duties under section 22.1. The trial court cited and quoted Landau, 409 Ill. at 564, for
the principle that an agent may be held liable for the breach of a duty owed by a principal where
the agent “ ‘takes some active part in violating some duty the principal owes to a third person.’ ”
The trial court reasoned that the plaintiffs’ allegations fit squarely within this rule, that “to
whatever extent the duty to not charge unreasonable fees remains on Kenmore Club’s shoulders,
Defendant is the one charging the fees—and, on the allegations, Defendant is the only party who
can assemble or otherwise provide the document[s].” (Emphasis in original).
¶ 30 We agree with the trial court’s reasoning. Although section 22.1 itself does not specifically
mention that the statutory duties of a condominium unit owners’ association may be performed by
its managing agent, we see no reason why this would not be one of the “services” for which an
association’s board of managers may engage a managing agent under section 18(a)(5). 765 ILCS
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605/18(a)(5) (West 2016). While the defendant correctly points out that only a few sections of the
Condominium Property Act mention managing agents or property managers and that none involve
the issue here, this shows a legislative intent not to delineate the specific services that an agent or
property manager can and cannot provide to condominium associations. The fact that the Kenmore
Club Association delegated the performance of its duty under section 22.1 to the defendant and
that the defendant agreed to accept it supports the conclusion that this is a service that a property
manager may provide as agent to a condominium association.
¶ 31 Where a property manager, as part of the services for which it is engaged as an agent by a
condominium association, is delegated and agrees to perform the duties of an association or board
of managers under section 22.1, it cannot be delegated or agree to perform those duties as agent in
a way that the association or board would be prohibited from doing as principal. An agent’s power
is inherently limited by the power of the principal to act on its own behalf, since the capacity to do
a legally consequential act by means of an agent is coextensive with the principal’s capacity to do
the act itself. 2A C.J.S. Agency § 161 (2021). This includes a property manager’s charging, as
agent, a fee to unit sellers that the association or board of managers would be statutorily prohibited
from charging, as principal, for performing the same duty itself. After all, the property manager is
acting as the association’s agent both for purposes of producing the documents and information
and in charging the fee. If a property manager used its status as agent to collect a fee from sellers
greater than that allowed by the statute and then remitted that fee to the association or board, it
would be taking an active part in violating a statutory duty owed by the principal; its defense to
liability in that instance would be that the principal had received the money. But, if the property
manager charged a unit seller the exact same fee and kept the money instead of remitting it to the
association or board, we fail to see how the agent could not be liable under the statute.
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¶ 32 The defendant argues that the plain language of section 22.1 neither requires the retention of
a property manager to disclose documents and information nor imposes any affirmative duties on
property managers. It argues that the statute places duties, including the duty of imposing
reasonable charges, only upon unit owners’ associations. While the defendant may be correct that
it was not required to take on the Kenmore Club Association’s statutory responsibilities under
section 22.1, it is undisputed in this instance that it did so and agreed to act as Kenmore Club
Association’s agent for that purpose. Having agreed to act as agent, the defendant can be held
liable if it takes an active part in violating a statutory duty that its principal owes to a third party.
Landau, 409 Ill. at 564.
¶ 33 The defendant argues that the plaintiffs’ only cause of action was against the Kenmore Club
Association, which is the only party upon which the statute imposes responsibilities or duties. The
defendant points out that the Kenmore Club Association, as principal, had the ability by contract
to limit the prices that the defendant, as its agent, could charge unit owners for providing
documents under section 22.1. It states that regardless of the delegation by Kenmore Club
Association of its duties or the defendant’s agreement to perform them, Kenmore Club Association
still owed the plaintiffs a statutory duty to keep costs reasonable. It contends that if the plaintiffs
were dissatisfied with the charges for documents, the party from whom they should have sought
recourse was the Kenmore Club Association. We reject this argument. Whether the plaintiffs could
also assert a cause of action against Kenmore Club Association based on the defendant’s
agreement to perform its duties under section 22.1 is not the issue before this court. In any event,
the defendant could be liable as agent it if took an active part in violating a statutory duty that
Kenmore Club Association owed to the plaintiffs. See id.
¶ 34 The defendant also directs our attention to section 19 of the Condominium Property Act,
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which addresses a unit owner’s right to inspect, examine, and copy various documents to be kept
by a unit owner’s association, including the association’s governing documents, articles of
incorporation, meeting minutes, insurance policies, contracts, information about voting members,
ballots and proxies, and books and records. 765 ILCS 605/19(a), (b), (e) (West 2016). Section
19(f) provides that the “actual cost” to the association of retrieving, copying, or making the records
available may be charged “by the association to the requesting member.” Id. § 19(f). Section 19(b)
contemplates that a unit owner who is denied the right to inspect, examine, or make copies of the
listed records may bring an “enforcement action” in which the prevailing owners “shall be entitled
to recover reasonable attorney’s fees and costs from the association.” Id. § 19(b). The defendant
argues that section 19 demonstrates a legislative intent of the Condominium Property Act to
impose duties on associations and boards of managers, not property managers or agents, and that
the parties against whom unit owners “displeased with the cost of documents” shall have recourse
are associations and boards.
¶ 35 Overall, we find the language of section 19, which appears to contemplate an express cause
of action, unhelpful to our interpretation of section 22.1, which we have held permits an implied
cause of action. Whether section 19 would permit a cause of action against a managing agent that
takes on an association’s duties under that section is not before us. Ultimately, we cannot agree
that section 19 demonstrates a legislative intent that only a condominium association or its board
of managers may be held liable if a managing agent has accepted a delegation of the association’s
duties to provide documents and information required by section 22.1 and that agent takes an active
part in violating the statutory duty owed by the association or board to a unit owner.
¶ 36 Finally, the defendant argues that it is no different than other vendors hired by a condominium
association—such as painters, electricians, roofers, or landscapers—and it points out that the
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Condominium Property Act does not control what such vendors may charge for services even
though they are ultimately paid for by unit owners. The defendant asserts that the Condominium
Property Act does not authorize unit owners to sue vendors with whom they have no contractual
relationship. While there may be a number of distinctions between a condominium association’s
managing agent and the painters, electricians, roofers, or landscapers it hires, the primary
difference would be that the latter are independent contractors. They are not agents acting on behalf
of the association who have undertaken the performance of the association’s statutory duties owed
to unit owners. Thus, the fact that the Condominium Property Act does not control what such
independent contractor vendors may charge for services or authorize unit owners to sue such
vendors has no bearing on the certified question in this case.
¶ 37 III. CONCLUSION
¶ 38 For the foregoing reasons, our answer to the certified question is that section 22.1 of the
Condominium Property Act (765 ILCS 605/22.1 (West 2016)) provides an implied cause of action
in favor of a condominium unit seller against a property manager, as agent of a condominium
association or board of directors, based on allegations that the property manager charged excessive
fees for the production of information required to be disclosed to a prospective buyer under that
statute.
¶ 39 Certified question answered.
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No. 1-21-0176
Cite as: Channon v. Westward Management, Inc., 2021 IL App
(1st) 210176Decision Under Review: Appeal from the Circuit Court of Cook County, No. 19-CH-4869;
the Hon. Anna M. Loftus, Judge, presiding.
Attorneys Melinda S. Kollross, Brian J. Riordan, James M. Weck, and Paul
for V. Esposito, of Clausen Miller P.C., of Chicago, for appellant.
Appellant:
Attorneys Terrie C. Sullivan, Jeffrey C. Blumenthal, and Michael D.
for Richman, of Jeffrey C. Blumenthal Chtrd., of
Appellee: Northbrook, Karnig S. Kerkonian and Elizabeth Al-Dajani,
of Kerkonian Dajani LLP, of Evanston, and Richard
A. Greenswag, of Greenswag & Associates, P.C., of Northfield,
for appellees.
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