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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