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La Salle Nat'l Bk v. Homeowners Ass'n

OPINION FILED SEPTEMBER 30, 1982.

LA SALLE NATIONAL BANK, TRUSTEE, ET AL., PLAINTIFFS-APPELLANTS,

v.

TRIUMVERA HOMEOWNERS ASSOCIATION, DEFENDANT-APPELLEE. — (TRIUMVERA HOMEOWNERS ASSOCIATION, PLAINTIFF-APPELLEE,

v.

JOSEPH ZEKAS, INDIV. AND D/B/A SRA-TRIUMVERA, ET AL., DEFENDANTS-APPELLANTS.)



Appeal from the Circuit Court of Cook County; the Hon. Albert Green, Judge, presiding.

JUSTICE JIGANTI DELIVERED THE OPINION OF THE COURT:

This is an interlocutory appeal from an order denying preliminary injunctive relief to the plaintiffs, La Salle National Bank as trustee, Joseph P. Zekas and TA Corporation as general partners of SRA-Triumvera, an Illinois Limited Partnership (SRA), and granting a cross-motion for preliminary injunctive relief to the defendant, Triumvera Homeowners Association (Homeowners).

The action arose out of a dispute between SRA and the Homeowners which developed when SRA attempted to rent rather than sell 80 vacant units in the Triumvera condominium complex. In April 1982, SRA took over the Triumvera sales offices and model apartments; changed the promotional signs located about the complex from advertising "sales" to advertising "rentals"; and informed the Homeowners that they intended to take prospective renters on tours of the common areas, recreational building, swimming pool and tennis courts>. SRA also represented to their prospective tenants and tenants that they would be allowed to use and enjoy the common areas and community facilities at Triumvera.

According to the testimony of Joseph Zekas, the general partner of SRA, the following events took place in response to SRA's actions. On April 5, the Homeowners' attorney phoned him and demanded that SRA remove the signs in the common areas. This phone call was followed by a letter from the attorney advising Zekas that the signs were in violation of the association rules. Then on April 19, Zekas said that he received a phone call from his rental agent at Triumvera advising him that the association had posted a notice in the community center and had informed her that prospective tenants and actual tenants would be denied access to the recreational facilities. On April 21, Zekas testified that he met with the Homeowners and was told that SRA, their agents, prospective tenants and tenants would be barred from access to the recreational facilities. Zekas said that he then talked to the Homeowners' attorney on April 22 and was advised that the Homeowners' policy in regard to SRA's activities remained unchanged. Zekas testified that he then tried to phone the president of the association, but when he was unable to reach him, phoned the association's treasurer and convinced him to arrange another meeting. According to Zekas, a second meeting was then held in which nothing was resolved in his favor. Zekas then testified that on April 23, he received another phone call form his rental agent at Triumvera informing him that the Homeowners had forcibly removed and confiscated the advertising banners from the common areas. Zekas claimed that he immediately verified this fact in a phone call to the resident manager of the complex. Then, that same afternoon, SRA filed the instant lawsuit.

SRA makes two claims in this appeal. First, SRA contends that it is entitled to use the common areas to advertise rentals and to maintain model apartments for rental purposes. For convenience we will refer to this as the claim to conduct rental activities. In response to this first claim, the Homeowners do not deny that if SRA is the owner of 80 units, it may rent them as any other owner can rent. However, the Homeowners contest SRA's right to use the common areas to conduct rental activities.

SRA's second claim is that it is entitled to rent units which it owns with a guarantee to its tenants that they will be granted membership in the recreational facilities and that SRA's tenants and prospective tenants are entitled to access to the recreational facilities at the present time. The Homeowners respond that such membership and access is not automatic and proper application must be made for membership and access to these facilities. The Homeowners further contend that no factual record has yet been made on the issue of membership and access to the recreational facilities.

The trial court after hearing this matter for several days and considering the relevant documents enjoined SRA from conducting rental activities in the Triumvera common areas but declined to order the Homeowners to grant access to the recreational facilities "at this time."

SRA's first contention that it is entitled to conduct rental activities by using the common areas to advertise rentals and to maintain model apartments for rental purposes is based on the fact that the original developer, referred in the documents as the developer/declarant, had such a right and that they are "successors/assignees" as defined under those documents and consequently have the same right. That claim is controlled by the governing documents of Triumvera. Section 2.07(a) and (f) of the "Declaration of Covenants, Conditions, Restrictions and Easements for Triumvera" (Master Declaration), which is the overall governing document for Triumvera, read as follows:

"2.07 DECLARANT'S RESERVED RIGHTS:

* * * Declarant, and its agents and invitees shall have the following rights:

(a) The right to ingress and egress over, in, through and upon the Common Area and the right to use the Community Facilities, without the payment of any fees or charges which may be set by the Homeowners' Board, for the purpose of showing and otherwise promoting the Common Area and the Community Facilities to prospective purchasers of Dwelling Units constructed or to be constructed by Declarant on the Development Area;

(f) The right to place and maintain on the Premises model apartments, sales offices, advertising signs or banners, and lighting in connection therewith at such locations and in such forms as the Declarant may, in its discretion, determine." (Emphasis added.)

SRA's first claim is also based upon sections 2.07(a) and (b) of the "Declaration of Condominium Ownership and of Easements, Restrictions and Covenants For the Triumvera 701 Form Square Condominium Association" (Building Declaration) which is the governing document for the 701 Form Square building where the office and model units are located. These sections read:

"207 DECLARANT'S RIGHTS:

Anything herein to the contrary notwithstanding, the Declarant and its agents and invitees shall have the following rights:

(a) The right to place and maintain on the Property model apartments, sales offices, advertising signs or banners, and lighting in connection therewith, at such locations and in such forms as the Declarant may, in its discretion, determine,

(b) The right of ingress and egress and transient parking in and through the Common elements for the purpose of showing and otherwise promoting any building in the Development Area to prospective residents of the planned development of Triumvera." (Emphasis added.)

SRA's second claim involving its right to present access to the recreational facilities and its right to rent 80 units with a guarantee to the tenants that they will be given membership in the recreational facilities because it is the owner of 80 units as the assignee/successor of the Developer/Declarant is based on sections 2.04 and 2.05 of the Master Declaration. These sections read:

"204 RIGHT OF ENJOYMENT:

Every Owner shall have the perpetual right and easement to use and enjoy the Common Area and Community Facilities, which right and easement shall include but not be limited to easements for operation and parking of vehicles, pedestrian ingress and egress, and use and enjoyment of open spaces and Community Facilities. Such right and easement shall be appurtenant to and shall pass with the title to every Dwelling Unit, subject to and governed by the provisions of this Declaration, of the By-Laws and of the rules and regulations of the Homeowners' Board.

2.05 DELEGATION OF USE:

Subject to this Declaration, the By-Laws, and the reasonable rules and regulations of the Homeowners' Board, any Owner may delegate his right to use and enjoy the Common Area and Community Facilities to persons in his Family or to his tenants or contract purchasers who reside in his Dwelling Unit." (Emphasis added.)

The Homeowners contend that they have standing to dispute SRA's claim as the not-for-profit corporation established under Article Four of the Master Declaration, which designates the Homeowners as the "governing body for all the Owners for the administration and operation of the Common Area and Community Facilities." The Homeowners claim further rights to control the common area and community facilities under section 2.06 of the Master Declaration, which empowers the Board of the Homeowners to use, maintain, lease, grant licenses or concessions and to charge fees to gain access to the common areas and community facilities. SRA concedes that the Homeowners have control over the common areas used by residents of "all Triumvera buildings" but challenges its standing to complain of SRA's use of the office and model apartments for rentals.

In response to SRA's first claim that it is entitled to conduct rental activities at Triumvera, the Homeowners initially challenge SRA's status as the Declarant/Developer but argue that even if SRA is eventually proved to be the Declarant/Developer, sections 2.07(a) and (f) only grant the Declarant the right to conduct sales activities at Triumvera and not rentals. Specifically, the Homeowners cite the language in 2.07(a) which speaks of "showing" and promoting the common area and the community facilities to "prospective purchasers of Dwelling Units" and specific language in section 2.07(f) which speaks of "the right to maintain model apartments, sales offices, advertising signs or banners, and lighting in connection therewith." The Homeowners further claim that section 2.07(b) of the Building Declaration, which grants the Declarant the right to show "prospective residents" around the complex, must be read in conjunction with section 2.07(a), which speaks specifically of sales activities. The Homeowners argue that because there is no specific language in either the Master ...


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