Illinois Condominium Act: Supreme Court Refuses To Acknowledge New Private Right Of Action For Sellers

• Published date: 02 December 2022
• Law Firm: Wilson Elser Moskowitz Edelman & Dicker LLP
• Author: Mr Robert F. Merlo

Reversing the decisions of the Circuit and Appellate courts, the Illinois Supreme Court entered an opinion holding that section 22.1 of the Illinois Condominium Act does not imply a private right of action in favor of condominium-unit sellers.

In its Opinion ( Channon v. Westward Management, Inc., 2022 IL 128040), the Supreme Court explained that both lower courts erred when they affirmatively answered the question of whether such private right of action was implied in section 22.1.

Section 22.1 of the Condo Act (765 ILCS 605/22.1) requires condo-unit sellers to obtain specific disclosure documents from the Association or its agent prior to a sale and to provide those documents to potential buyers upon request. The Association, in turn, is entitled to reimbursement for the Association's "direct out-of-pocket" costs associated with the provision of the documents.

Background

The plaintiffs alleged that in the course of selling their condo units, the defendant management company (Westward) charged them $245, a purportedly unreasonable and excessive amount. Westward moved to dismiss, arguing that section 22.1 does not imply a private right of action for condo-unit sellers. The Circuit Court rejected that argument and certified the issue for appeal.

The First District affirmed, holding that while section 22.1's "primary purpose" may be to protect condo buyers, the "plain language" of section 22.1 also benefits sellers and, thus, section 22.1 did imply a private right of action in favor of sellers. 2021 IL App (1st) 210176, '21.

Indeed, the First District held that the Channon plaintiffs satisfied the four-part test used to determine whether a private right of action is implied in a statute, as set forth in Metzger v. DaRosa. 209 Ill. 2d 30, 34 (2004).

After the First District's December 7, 2021, opinion, a litany of similar class-action lawsuits were filed...