By Michael J. Anselmo, Esq.

Codilis & Associates, P.C. *

USFN Member (IL)

If you mention associations and management companies related to fees to an Illinois practitioner, you will likely cause them inner turmoil. For years, associations and related management companies have been charging what many real estate practitioners and unit owners perceive to be exorbitant fees for the release of documents that are required upon resale of a unit by Section 22.1 of the Condominium Property Act (the “Act”). Any objection to these fees often causes unnecessary delays for a real estate closing – sometimes lasting months. Associations and their management companies have largely gone unchecked and held transactions hostage with this power. Recently, through case law and legislative action, some movement has been made in the direction of protections for owners and purchasers.

Channon v. Westward Management, Inc.

These excessive fees and delays were at the center of the issue in Channon v. Westward Management, Inc., 2021 IL App (1st) 210176, where a condominium unit owner filed suit against a property manager for same. Here, the Plaintiff alleged that $150 for a paid assessment letter, $20 for a budget income statement, and $75 for a condo questionnaire were arbitrary and excessive.[1] Defendant filed a motion to dismiss alleging that Section 22.1 of the Act was intended to protect prospective purchasers and, also, did not govern charges by property managers – only those charged by associations and boards.

Unpersuaded by the defendant’s argument, the trial court certified the following question to the appellate court: “Whether the Act provides an implied cause of action in favor of a condominium unit seller against a property manager, as agent of the condominium association or board of directors, based on allegations that the property manager charged excessive fees for the production of information to be disclosed to a prospective buyer under that statute.” The appellate court allowed review and held that such implied cause of action exists.

While the ruling does not necessarily provide a clear limit on what associations and their management companies may charge, it should give them pause. Whereas it was previously unclear whether a seller of a unit could bring a cause of action for such fees, the appellate court made it clear that they now can.

Condominium Property Act – House Bill 5246

Coincidentally (or maybe not), House Bill 5246 was passed into law on May 27, 2022. It changes the Act with respect to providing information to a prospective buyer by a unit owner. It requires that the principal officer of the unit owner’s association or other designated officer shall provide the information within 10 business days, rather than 30 days, of the request by the prospective purchaser. It also changes the fee to be imposed on the unit owner from “a reasonable fee” to “a reasonable fee not to exceed $375” covering the direct out-of-pocket cost of providing and copying the information. An association may also charge an additional $100 for rush service completed within 72 hours.