Q-Recently, I purchased a condominium unit in Chicago. The seller of my unit is also a real estate agent.
In the contract, he represented that to the best of his knowledge, and with no duty of inquiry, there were no pending or threatened special assessments affecting the condominium property. After signing the contract, I was advised by the association president and the property manager that no special assessments were contemplated.
One week after the closing, the owners received a letter from the president stating that an investigation by a structural engineer revealed significant damage to the common elements, and the board of directors would have to levy a special assessment for the repairs.
Now the president informs me that he advised my seller before the closing of the information contained in his letter to the owners. What is my recourse?
Do I have to pay the special assessment? Can I seek reimbursement from my seller?
A-The first question is why the association president disclosed the structural engineering report and the possible assessment to the seller, but advised you to the contrary.
Your recourse lies with the seller of the unit if he was given information by the president and failed to advise you before the closing. If the lack of a special assessment was a material factor in your decision to buy the unit, you may have a basis to cancel the contract on a theory of fraudulent misrepresentation.
At this point, there is no basis to determine the amount of any damages, because the exact amount of the special assessment has not been determined by the board. Had you been aware of the structural engineering report, you could have negotiated a lower purchase price.
Your remedies also depend on whether you made a specific request for information under Section 22.1 of the Illinois Condominium Property Act as to whether there were anticipated capital expenditures by the association within the current or succeeding two years.
Under the 1993 case of Nikolopulos vs. Boulourdas, a condominium purchaser has an implied right to cancel a contract arising from information received from an association under Section 22.1. There is no evidence that you submitted a written request for this information.
You should first determine whether you want to retain the unit or attempt to cancel the contract.
You have to pay the special assessment, but when you receive the bill, you can seek to recover the assessment payment from the seller if, in fact, the association president told the former owner that special assessments were contemplated from the structural engineering report.
Q-The portion of our condominium declaration entitled “Use and Occupancy Restrictions” states that each unit or any adjoining units shall be used as a residence or a single-family (dwelling). What is the legal definition of the term “single-family?”
An absentee owner rented his unit to a couple who have sublet the premises. May the original lease provide for subleasing? Does the single-family use restriction apply to this situation?
A-The use of a condominium unit by a tenant or a subtenant is permissible under your declaration. The term single-family is broadly defined to permit a group of individuals, whether married or unrelated, to use a condominium unit as a residence.
Unless your condominium declaration prohibits or restricts subleasing, this use is consistent with the provisions of your condominium document.
Q-Is it legal for an absent board member to be reelected at the annual meeting? Is it legal for board members to collect double digit proxies from unit owners to ensure their reelection? Is it proper to elect a board member who is absent three to four months a year at his winter home?
A-The answer to all three questions is yes.
Candidates for reelection do not have to be present at the annual meeting. The owners merely have to submit their name for nomination to be a candidate for reelection.
There is no restriction on the right of the unit owner or a candidate to accumulate proxies for the annual meeting.
The only restriction is that the proxies be signed and dated by each unit owner who issues the proxy.
There is no legal prohibition on the selection of a board member who is absent from the association for several months.
However, it is questionable whether this person can fulfill his fiduciary duty if he is unable to attend board meetings during this time.
The candidate’s absence during the year should be brought to the attention of the association members so they can determine whether the owner can render the required service to the condominium.
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Mark Pearlstein, is a Chicago attorney who specializes in condominium law. Write to him c/o Condo Log, Real Estate Section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, he can’t make personal replies.
