Condo Assessment Liens And Slander of Title

Section 9 of the Illinois Condominium Property Act (765 ILCS 605/9) allows a condominium association to place a lien on a unit for unpaid assessments.    

But what if an association records an inflated assessment lien against a unit owner? Does the unit owner have any recourse? 

The First District answered these questions in Kurtz v. Hubbard, 2012 IL App (1st) 111360.

The plaintiff, a Gold Coast condo unit owner, filed a multi-count action against her condo association alleging slander of title and the tort of presenting someone in a false light when the association sued for possession of plaintiff’s unit and recorded a lien two weeks later.

The plaintiff sued the association, alleging the lien was false and impaired the unit’s marketability and placed her in a false light before the community since the lien was a public record.

The lien stated that the plaintiff owed over $15,000 in delinquent assessments.  Plaintiff eventually paid off the lien (under protest) and then filed suit.  The  trial court dismissed all claims on the association’s 2-619 motion.  Plaintiff appealed dismissal of the false light and slander of title claims.

The First District reversed the dismissal of the slander of title and false light claims.  It first held that unlike court pleadings (which are absolutely privileged), assessment liens don’t merit th same level of protection.  Assessment liens are only qualifiedly privileged.  A qualified privilege can be defeated by a showing of malice.  Malice means knowledge of a statement’s falsity or a reckless disregard as to its truth or falsity. ¶¶ 10, 22.  Otherwise, the court wrote, “unscrupulous condominium associations could record fraudulent assessment liens against homeowners with impunity.”  ¶ 18. 

Yeah?  So?

Kurtz teaches important lessons for associations and unit owners alike.  It vindicates the power that associations have to record liens and sue to evict defaulting unit owners.  But the case also cautions associations to lien the proper amount.  Otherwise, the owner may have valid slander of title and false light claims against the association.  However, the unit owner will still have the burden of proving the association’s knowledge of the lien’s falsity or reckless disregard as to the lien’s accuracy.

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PaulP

Litigation attorney at Fisher Kanaris, P.C. representing businesses and individuals in all types of commercial disputes.

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