Fact Sheet in Opposition of HB 4489, 4490 and 4491

ILLINOIS LEGISLATIVE ACTION COMMITTEE
COMMUNITY ASSOCIATION INSTITUTE OF ILLINOIS

FACT SHEET IN OPPOSITION OF HBs 4489, 4490 and 4491

House Bills 4489, 4490 and 4491 were introduced in an attempt to reverse the Illinois Supreme Court’s holding in Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342 (2104).

Instead of “leveling” the playing field, the bills as introduced will encourage and increase litigation between condominium association and their owners. The result of the bill will see an increase of attorney’s fees being imposed on the association and passed back to all non-defaulting unit owners.

Additionally, the bills:

Will increase the time and expenses associated with delinquent assessment collection cases by allowing unit owner to interpose many defenses to the non-payment of assessments.
Limit (or in some matters bar) an association’s ability to recover attorney’s fees incurred as a result of an owner’s failure to pay or default, thereby increasing the expense on the remaining, non-defaulting owners.
Creates the legal defense to non-payment of assessments of “improper motive,” which is undefined and wholly subjective.
Increase litigation for any default of the governing document to ensure that an association has the ability to pass back any attorney’s fees incurred as a result of a default.
Prevent associations from choosing their own counsel if counsel represents the members of the board of directors collectively.
Increase lawsuits by owners against associations with the ability to recover attorney’s fees if the owner prevails on any claim or affirmative defense.
Ignores the alternative dispute and mediation provisions in the “Condominium and Common Interest Community Ombudsperson Act” and effectively encourages litigation.
Furthers the myth that condominium associations are hostile abusive entities instead of a collective of owners and neighbors working toward common understanding.

SYNPOSIS OF HOUSE BILLS 4489, 4490 AND 4491 (REP. DRURY)

HB4489 (Rep. Drury) – UNIT OWNER LITIGATION. This bill amends the Illinois Condominium Property Act by creating Section 33 entitled “Unit owner’s right to fairness in litigation.” The bill states that an owner has a right to “fairness” in all litigation between the owner and a condominium association regardless of whether the owner commenced the litigation or the litigation is commenced against the owner. The bill voids any covenant or rule which limits the owner’s right to commence litigation. The bill provides an owner be awarded attorney’s fees if the owner prevails in any litigation or if the unit owner prevails on any affirmative defense against the association. The bill further provides for a judicial reduction of attorney’s fees in litigation (except assessment collection matters) and a complete bar to an association recovering attorney’s fees in an assessment collection matter if the owner prevails on any affirmative defense or counterclaim. Finally, the bill prevents an association from being represented by counsel of it’s choosing in any litigation if such counsel “also represents the board of managers either individually or collectively.” On January 22, 2016 this bill was referred to Rules Committee.

HB4490 (Rep. Drury) ATTORNEY’S FEES IN THE EVENT OF AN OWNER DEFAULT. This bill amends Section 9.2 (b) of the Illinois Condominium Property Act. Currently Section 9.2 provides that attorney’s fees incurred by an association arising out of default by a unit owner,
tenant guest or invitee of the governing documents or the Act can be added to the unit owner’s share of the common expense or unit owner’s account. The bill amends the section to prohibit an association from adding attorney’s fees to an owner’s account without a finding by a court.
The bills require a court to award attorney’s fees, in every default, before attorney’s fees can be added to the unit owners account, thereby requiring a judicial finding on any default. On January 22, 2016 this bill was referred to Rules Committee.

HB4491 (Rep. Drury) EXPANSION OF UNIT OWNER DEFENSES IN COLLECTION CASES UNDER THE FORCBILE ACT. This bill amended Sections 9-106 and 9-111 of the Illinois Forcible Entry and Detainer Act. Effectively this bill seeks to overturn the Illinois Supreme Court’s decision in Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342 (2104). In Spanish Court Two the Supreme Court held that the obligation to pay assessments was an independent covenant and a unit owner’s attempt to raise as a defense a breach of duty by an association was not “germane” to the collection case and thereby not permitted. This bill seeks to amended the Forcible Act to reverse the holding of the Supreme Court and permit an owner to raise, in any delinquent assessment collection case, a “material breach of any duty” in the condominium instruments, rules or statutes, or an “improper
motive” by the association in bringing the action. Further, the bill amends the Forcible Act to bar an association in a collection case from recovering any attorney’s fees and costs if the court finds that the association breached an obligation under the governing documents or a fiduciary duty to the unit owner, regardless of non-payment of assessments. On January 22, 2016 this bill was referred to Rules Committee.

This document has been prepared by the
Legislative Action Committee of the Community Association Institute of Illinois Chapter

Please refer to the latest legislation for updates on dates and deadlines.

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