Seller fails to disclose repairs required by association board
Q: My daughter bought a townhouse and closed in May. The homeowners association supplied its information just three days before closing in a faxed document that was difficult to read and did not address any work to be done. Now, six months later, the homeowners association has issued a directive requiring improvements to be made to the unit per a notice sent to homeowners several weeks or months (either March or April) prior to the unit being put on the market.
The requirement was not disclosed earlier in the listing or at closing. The sale price would have been much different had my daughter known she might have to pay for updates. She is working with the association but my question is: Does she have any recourse or remedy?
A: You do not indicate exactly what work the association is mandating. However, review the Residential Real Property Disclosure Report you should have received from the seller at the time the contract was executed. That report covers the most common defects associated with a property and requires the seller to disclose to the purchaser any known problems that may exist regarding the issues listed.
If the problem(s) you are writing about are covered in the report and the seller failed to disclose the defects, you may have a cause of action under 765 ILCS 77/35, the relevant Illinois statute.
Even if your issue(s) are not covered under one of the sections of the disclosure report, sellers are required to disclose any defects they are aware of to prospective purchasers. As a general rule, to prevail against a seller for defects discovered by the purchaser after a sale, the purchaser must establish that the defect existed prior to the sale and that the seller was aware of the defect.
Often in these lawsuits, the far more difficult hurdle is establishing the seller's knowledge of the defect. Given the association's letter sent prior to the sale informing the seller of the required work, establishing seller's knowledge should not be difficult.
I would start by obtaining at least two cost proposals to complete the work. Then, have either the attorney that represented your daughter with her purchase or another attorney who regularly practices real estate litigation write a letter to the seller's attorney (and seller if you know where he or she has moved) laying out your case and demanding that the cost of the work be covered by the seller. It never hurts to remind the seller that there is a provision in the contract that awards attorneys fees to a prevailing party in this type of litigation.
Frankly, I would also have an issue with the homeowners association if the paid assessment letter produced by the association and provided to your daughter at closing made no reference to the required work. Associations generally provide much useful information in these required documents and disclosure of work required to be completed would sure seem to me to be a good way to avoid this type of problem.
Q: Over time, "investors" have taken over the board of my homeowners association. This past week the board sent a letter stating they have received a Letter of Intent from an outside investor to buy all 10 buildings that make up our condominium community.
The board has told us there will be a vote because it believes the offer is a good one. The offer may be slightly above market but not by that much. We have been told a vote of 75% would be needed to proceed. I think the group of investors may be looking to cash out as they have purchased units when prices were much lower.
My concern is I have put a lot of money into my unit and I like it. I don't want to be kicked out of the unit I purchased (and thought I owned … until now). It would cost a great deal more to live anywhere else close by. I am a senior and will be retiring at the end of this year.
The reason I'm writing to you is to ask if everything I've described sounds legal. I don't believe that 75% of the owners will vote to sell this time. However, I'm wondering if you see any legal options that would prevent me from being forced out now or in the future.
A: In Illinois, an individual condominium owner may be forced to sell his or her property if at least 75% of the unit owners vote in favor of the sale of all units to a bulk sale purchaser.
There are two important exceptions. One, your condominium governing documents (Declaration of Condominium and bylaws) may provide otherwise. If your governing documents require 85% approval for passage, that would control. Two, the city of Chicago recently passed a local ordinance requiring 85% approval for most bulk condo sales. I would suggest speaking to a real estate attorney who regularly practices in the area of condominium law for further advice.
• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.