Paul Esposito and James Weck Team Up in Big Illinois Supreme Court Win for Condominium Property Managers

November 29, 2022 / News

Clausen Miller trial attorney James Weck and appellate attorney Paul Esposito battled their way through the Illinois court system to secure victory for condominium property managers statewide. Two unit-sellers brought a class action alleging that a property manager overcharged them for providing disclosure documents to buyers required under the Condominium Property Act. The trial court rejected the manager’s defense that the statute does not provide a right of action against property managers. The Illinois Appellate Court sided with the trial court.

But in this case of first impression, the Illinois Supreme Court agreed with Paul and Jim. The Court unanimously ruled that the statute was not intended to benefit sellers claiming overcharges for disclosure documents. Instead, the legislature imposed an obligation on sellers to timely provide documents to buyers. Channon v. Westward Mgmt., Inc., 2022 IL 128040.

Channon provides a big win for property managers and their insurers. The courts were seeing a rise in class actions against property managers for alleged overcharges. The problem was serious because allowing suit against a property manager exposes it and its insurer to liability for alleged overcharges at every condominium it managed, not just at the unit-seller’s condo. Now, sellers disgruntled with charges for documents must seek relief from their own condo associations, which could have set the fee rates for documents. This greatly reduces the potential for needless and expensive class actions against managers.

The case was also covered in Law360 (subscription required).

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