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In June of this year, the Appellate Court of Illinois issued an opinion that provided a novel take on the conditional nature of condominium common expense assessments. Condominiums throughout the country are often incorporated and governed by a board that oversees the care, maintenance, and management of commonly owned property. An example of such commonly owned property is a detention basin that handles stormwater that affects common property (and even individual property) within the association. To help maintain this and other commonly owned property, associations commonly assess each homeowner within the association maintenance fees to cover theses costs.
In Spanish Court Two Condominium Ass’n v. Carlson, No. 2-11-0473 (Ill. App. Ct., June 27, 2012), the Appellate Court in Illinois held that while an association may pursue the collection of unpaid assessments via a collections complaint against the homeowner, the homeowner may claim neglect as a defense. That is, the homeowner may justify his or her non-payment of assessments by pointing to the association’s failure to adequately maintain common elements of the community. To be clear, however, the Illinois’ Court allowed this defense only in the instance where the association was seeking relief to possess the homeowner’s property for her failure to pay the required assessments.
Still, this case provides an interesting twist on seemingly settled law. New Jersey courts, for instance, are clear that a homeowner’s duty to pay its common expense assessments is “unconditional.” See Glen v. June, 344 N.J. 371 (App. Div. 2001). New Jersey condominium and homeowner associations act under the belief that even if a disconcerted homeowner takes issue with how the association is being managed and the common elements maintained, that homeowner must pay their assessments regardless of their concerns. Condominium and homeowner association governance is said to be the smallest form of local government. Just as citizens must pay their taxes notwithstanding their disagreement with government policy or management, so must homeowners pay their maintenance fees.
The rationale behind Carlson, however, is that the duty to pay assessments and the duty to maintain the common elements are just an exchange of promises which equates to nothing more than a contract between the homeowner and the association. In the event one party breaches their duty (i.e. duty to maintain common elements), that should excuse the other party’s performance (i.e. duty to pay common expense assessments). What is more is that the Illinois Appellate Court relies heavily on the fact that nowhere does it say that the duty to pay common expense assessments is “absolute.”
If you are on the board of or mange an association, what you should take away from the Carlson ruling is that associations should take all reasonable steps to adequately maintain the common elements and respond to homeowner concerns. Homeowners, on the other hand, should always stay current on their assessments. In the event, a homeowner is concerned about possible neglect by the association, the most proper and effective means of raising those concerns is to bring them before the board while remaining in good standing with respect to maintenance assessments.
Lieberman & Blecher represents numerous condominium, homeowner and commercial community associations throughout New Jersey. Our firm seeks to assist associations in effectively managing their communities and addressing legal issues that they arise. Our attorneys prepare and revise governing documents, analyze maintenance procedures for common elements, and arrange for the efficient collection of maintenance fee delinquencies.