CAI says HOAs are more ‘creatures of statute’ than contractual

This Research Memo focuses on the Illinois Supreme Court opinion in Spanish Court. Excerpts from the Memo —

Assessments are like taxes with no contractual right to offset ‘failures to perform.’

[CAI argued]

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 the relationship is largely a creature of statute, defined by the provisions of the Condominium Act.

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.

The very real impact of the Second District’s  decision [appellate court validating the withholding of assessments for the HOA’s failure to perform] is peculiarly analogous to our government’s need to collect taxes free from objection by individual taxpayers. Surely, if people could refuse to pay taxes and then defend against their collection based upon a claim that the government had been negligent in the maintenance of public spaces and providing services, the government would find itself in dire financial straits and unable to fulfill its obligations.

Read the full Research Memo No. 3.