Unrecorded Declaration Provides Sufficient Notice Under Illinois Condominium Property Act

A recent case, Seth v. Aqua at Lakeshore East, 2012 IL App (1st) 120438 (September 26, 2012), provides insight on how courts interpret the portion of Section 22 of the Illinois Condominium Property Act (the “Condo Act”) requiring that developers present a copy of the condominium declaration to buyers purchasing new condominiums. 

In 2006 and 2007, the plaintiffs in Seth signed contracts to purchase units in a new development, Aqua at Lakeshore East.  The condominiums were scheduled to be delivered in December of 2010.  When they signed their contracts, plaintiffs received a Property Report with the proposed condominium declaration as an exhibit.  The Property Report stated that the developer had a right to modify the condominum documents in certain respects. 

In September of 2009, the developer recorded the condominum declaration.  It was not identical to the condominum declaration that had been previously presented to the plaintiffs.  There were seven additional units, and the units had different percentage interests assigned to them.

A few months later, the plaintiffs filed suit.  While their allegations were specific, the reality is that the economy had changed drastically since they initially signed their contracts, and perhaps they no longer wanted to purchase the condominiums.  Whatever their motives, plaintiffs claimed, among other things, that their contracts were void because the developer did not provide them with a recorded declaration.  The trial court ruled that the defendant should have provided a recorded declaration, and since it did not, the plaintiffs could rescind their contracts. 

The developer appealed, citing Section 22 of the Condo Act and setting forth a number of fairly logical and practical reasons why it was not required to provide a recorded declaration before the project was complete.  The appellate court stated that they would not focus on whether the developer or the trial judge intepreted the Condo Act correctly.  Rather, they decided that since plaintiffs had actual knowledge of the unrecorded declaration, that was functionally equivalent to the document being recorded.  The presentation of the unrecorded declaration was sufficient under Section 22 of the Condo Act. 

The Condo Act has a provision for how amendments to a condominium declaration must be handled, and, as the trial court pointed out, the plaintiffs had knowledge of that too.  As long as changes are consistent with the requirements of the Condo Act, the fact that the declaration was modified is insufficient to nullify the sales contracts.