After the Spanish Court case: Limits of Board authority to maintain collection action highlighted in recent appellate court opinion

In the recent case of 4934 Forrestville Condominium Association v. McKinley, the First District Appellate Court held in the context of an Association’s action to collect delinquent assessments under the Illinois Forcible Entry and Detainer Act, that a Unit Owner’s claim that a Board was not validly constituted could go forward and potentially defeat the Association’s claim.

The facts
The Association brought an action to collect delinquent assessments against a Unit Owner pursuant to the Illinois Forcible Entry and Detainer Act.

The Unit Owner’s position
In response to the complaint, the Unit Owner claimed that the Association lacked the ability to bring an action because the Association’s Board was not validly constituted and could not validly act on behalf of the Association. The Unit Owner claimed that (a) the Association had less than the three Board Members required by the Association’s Governing Documents; (b) both of the Board Members were owners of a single unit in violation of Section 18(a)(1) of the Illinois Condominium Property Act; and (c) neither Board Member was validly elected.

The Association’s position
The Association claimed that the defenses asserted by the Unit Owner were not “germane” to the claim for possession in accordance with the Illinois Supreme Court’s decision in Spanish Court Two Condominium Association v. Carlson. Spanish Court held that a defendant Unit Owner’s attempt to defend an action for possession under the Forcible Entry and Detainer Act by claiming a set-off and breach of covenants by the Association’s Board were invalid and could not be raised, as they were not germane/relevant to the Association’s claim for possession. In Forrestville, the defendant Association tried to convince the court that the Unit Owner’s claim of an invalid Board was also not germane to the Association’s claim for possession.

The court’s holding
The court held that the Unit Owner’s defenses were in fact germane and could be raised in response to the collection action. Quite simply, the case against the Unit Owner could not be brought in the first place if there was no validly constituted Board. Without a validly constituted Board, the Association cannot validly bring any legal actions.

What this means for Illinois condominiums
The real import of this holding is that Associations must have the capacity to bring court actions if they wish to collect delinquent assessments under the Forcible Entry and Detainer Act. Beyond the obvious requirement of holding annual meetings and electing a minimum number of directors to conduct business, the Association likewise must make sure that other formalities are observed. For example, Associations should always ensure that they are properly registered with the Illinois Secretary of State – if an Association’s registration as an Illinois not for profit corporation is not maintained, a unit owner could seek to defend an action, like the Unit Owner in Forrestville, by claiming that the Association could not validly bring suits because it is not in good standing.

Feel free to contact one of the Condominium and Common Interest Community Association attorneys for additional information regarding the collection process or the Illinois Forcible Entry and Detainer Act. 

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: David J. Bloomberg, Principal

This alert originally appeared in the Condominium & Community Association Focus newsletter.