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Briarcliffe Townhouse v. Wiseman Con. Co.





Appeal from the Circuit Court of Du Page County; the Hon. Richard A. Lucas, Judge, presiding.


The principal issue is whether a homeowner's association which holds title to common land in a planned unit development may maintain an action for breach of an implied warranty of fitness of the common land, in which the homeowners possess easements. The plaintiff, Briarcliffe West Townhouse Owners Association, a not-for-profit corporation (Association), appeals from the order granting the motion of Wiseman Construction Company (Developer) for a directed verdict as to count I of the third amended complaint on the basis that the Association lacked standing.

The Developer cross-appeals from the trial court's judgment in favor of the Association as to count II of the third amended complaint.


The Developer purchased land adjoining the city of Wheaton, entered into annexation and subdivision agreements with the city, subdivided the land, and sold townhouses to various purchasers with accompanying easements, party wall rights and covenants, as set forth in the Declaration. The Declaration provided in essence that the Developer would convey described common land to the Association to be managed for the benefit of the homeowners, that each homeowner would have an easement to use the common land and would be a member of the Association, and that the Association could assess members to pay for the maintenance, capital improvements, and unforeseen expenses of the common land. In October 1976, the Developer conveyed the common land to the Association by quitclaim deed.

The Association proceeded to trial on its third amended complaint. That complaint alleged in count I that the Developer designed and fashioned the topography of the development, and impliedly warranted to the Association and individual members of the Association that the townhouses and drainage systems were habitable and fit for their intended use; that serious and continuous storm drainage problems occurred and were brought to the Developer's attention but that corrective action had not been taken; and that the common `areas have retained and held surface storm water, resulting in substantial damage.

At the close of the Association's case, the court granted the Developer's motion for a directed finding on count I, finding that the Association did not have standing to bring an action under the implied warranty of habitability theory.


• 1, 2 It is now clear that an implied warranty of habitability may extend to a subsequent purchaser who discovers a latent defect within a reasonable time after the purchase of a home even though the party is not in privity with the original developer/builder. (Redarowicz v. Ohlendorf (1982), 92 Ill.2d 171, 183.) Defendant initially argues that there can be no implied warranty of habitability to vacant common land. We cannot agree. There may be circumstances in which a latent defect in the common land can affect the habitability of the living quarters. This has been recognized in Tassan v. United Development Co. (1980), 88 Ill. App.3d 581, 584 (in which one of the defects claimed was "[t]here was inadequate drainage of the surface waters in front of the building"); Kramp v. Showcase Builders (1981), 97 Ill. App.3d 17, 21 (defects in the septic system). See also Park v. Sohn (1980), 90 Ill. App.3d 794, 798, aff'd (1982), 89 Ill.2d 453, as here material (faulty septic system and drain tiles).

• 3 Under the terms of the purchase agreement, the Declaration was to be delivered to the purchaser of a townhouse together with the deed. The townhouse purchaser under his contract agreed to subscribe to membership in the Association and to comply with the Declaration, and agreed to be bound by the covenants and restrictions contained in the Declaration. The Declaration stated the purpose to create a community consisting of the townhouses and the common facilities and to promote and enhance the value of the amenities in the community. We perceive no real distinction between the buildings and the common land in the application of the public policy protecting a purchaser of a new or reasonably new home from latent defects in the building or the required amenities since the purchaser in a substantial degree must rely in either case on the expertise of the building-vendor creating the defect. See Redarowicz v. Ohlendorf (1982), 92 Ill.2d 171, 183.


The basic issue then becomes whether the Association has standing to enforce an implied warranty of habitability either in its own right as owner of the common land, as third-party beneficiary of the contract between the Developer and the homeowners, or as a representative of the homeowners.

• 4 The doctrine of "standing" requires the party bringing suit to allege an injury to a legally protected interest, so that the court may decide only specific controversies. (See, e.g., Hill v. Butler (1982), 107 Ill. App.3d 721, 725; Lynch v. Devine (1977), 45 Ill. App.3d 743, 747-48.) What amounts to a legally protected interest has been given an increasingly broad interpretation. See Maiter v. Chicago Board of Education (1980), 82 Ill.2d 373, 381 (community organization had "enforceable and recognizable right" to participate as local nominating committee for selection of school principals and had standing to intervene in suit brought by school principals against the Board); De Witt County Taxpayers' Association v. County Board (1983), 112 Ill. App.3d 332, 335 (taxpayers association could maintain action on behalf of taxpayers of the county who are members of the association).

In determining whether the Association has the necessary legally protected interest in the litigation, we must consider the purport of the homeowners purchase agreements, the effect of the quitclaim deed of the common lands to the Association, and the declaration of covenants, conditions and restrictions for Briarcliffe West which were made a part of the purchase agreements and to which their individual deeds were subject. The entire scheme of marketing the townhouses included not only the sale of the buildings but the assurance in the sales contract that the common areas would be deeded to the not-for-profit ...

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