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Vijay Seth, Nirmal Seth, Shiva Vallabhapurapu-Seth v. Aqua At Lakeshore East

September 26, 2012

VIJAY SETH, NIRMAL SETH, SHIVA VALLABHAPURAPU-SETH, ASHEESH SETH, GURDIP SINGH, KULWINDER K. SAINI, RADHIKA REDDY, CHENNA GUNDA, SANJAY A. BHATIA, ANURADHA RAO, RAVI GUDAMEDA, MEETA YADAVA, NIRUP KRISHNAMURTHY, RICHARD PODRAZA, SUSAN PODRAZA AND CASEY JAGIELNICK,
PLAINTIFFS-APPELLEES,
v.
AQUA AT LAKESHORE EAST, LLC,
DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY No. 10 CH 04483 HONORABLE KATHLEEN M. PANTLE, JUDGE PRESIDING.

The opinion of the court was delivered by: Justice Steele

JUSTICE STEELE delivered the judgment of the court, with opinion. Presiding Justice Salone and Justice Sterba concurred in the judgment and opinion.

OPINION

¶ 1 Defendant, Aqua at Lakeshore East, LLC (Aqua), appeals from an order of the circuit court of Cook County granting partial summary judgment to plaintiffs, Vijay Seth, Nirmal Seth, Shiva Vallabhapurapu-Seth, Asheesh Seth, Gurdip Singh, Kulwinder K. Saini, Radhika Reddy, Chenna Gunda, Sanjay A. Bhatia, Anuradha Rao, Ravi Gudameda, Meeta Yadava, Nirup Krishnamurthy, Richard Podraza, Susan Podraza, and Casey Jagielnick (plaintiffs). The trial judge ruled plaintiffs were entitled to rescind purchase agreements related to a prospective condominium development because the developer failed to provide them with a recorded declaration. For the following reasons, we disagree, reverse the judgment, and remand the case to the circuit court for further proceedings.

¶ 2 BACKGROUND

¶ 3 The record on appeal discloses the following facts. Aqua is the seller of condominium units plaintiffs contracted to purchase as part of a luxury real estate development located on 28 acres northeast of Millennium Park in Chicago, Illinois. The development was to include a high-end hotel, which would offer condominium residents additional amenities not available in most residential towers.

¶ 4 Plaintiffs signed their respective purchase agreements on various dates in August, September, October and December 2006, and July 2007. Plaintiffs made earnest money deposits ranging between $39,169 and $73,730, depending on the purchase price of each respective unit. The deposits were to be held in segregated, interest-bearing escrow accounts.

¶ 5 The purchase agreements state that the developer anticipated accepting title to the property in December 2006, and estimated construction would be completed on or about December 2010, although closings might occur before the latter date. The purchase agreements also provided that, prior to closing, the seller would cause to be recorded, in accordance with the Illinois Condominium Property Act (Act) (765 ILCS 605/1 et seq. (West 2006)), the declaration of condominium ownership and of easements, restrictions, covenants and bylaws for the Aqua at Lakeshore East Condominium Association (Association), as well as the plat showing the building and purchased unit at issue. The purchase agreements further required the purchasers to acknowledge receipt of the "condominium documents," which the agreement defined as: (1) the floor plan of the purchased unit; (2) a master association declaration; (3) the Association declaration, including the Association bylaws; (4) an estimated operating budget for the property and estimated monthly assessments for the Association; (5) a copy of the heating cost disclosure statement; and (6) the City of Chicago property report (Property Report) for the property.*fn1 The agreements then provide in part:

"Seller reserves the right to make any changes in the Condominium Documents and Plans (as hereinafter defined) permitted by law, subject to the provisions of section 22 of the Act. To the extent that section 22 of the Act requires Purchaser's approval of certain changes in the Condominium Documents or Plans, Purchaser's sole remedy in the event of Purchaser's non-approval of such changes shall be to the rescind this Agreement within the time and in the manner provided by the Act."

Each plaintiff initialed the acknowledgment in his or her respective agreement.

¶ 6 The 61-page Association declaration provided to purchasers contained, among other things, the Association bylaws, a description of the common elements, and the percentage ownership of the common elements. The Association declaration refers several times to the plat of survey as an exhibit to the declaration. However, the plat was not included as an exhibit to the Association declaration. Instead, a preliminary plat based on architectural drawings was included in the Property Report.

¶ 7 The Property Report states that the developer planned to submit the project to the provisions of the Act by recording the declaration in the form provided as an exhibit to the report. The Property Report also states the purchases of the units were subject to the terms of the Association declaration and bylaws. The report further states the final declaration and as-built surveys had not been completed and the developer could not guarantee there would be no material changes to the units. Moreover, the report reserved the right for the developer to change the plans to include greater or fewer units than indicated in the condominium documents.

¶ 8 Aqua recorded the Association declaration with the recorder of deeds' office on September 10, 2009. The percentage ownership of the common elements is not identical to the percentages listed in the Association declarations provided to the plaintiffs in connection with their purchase agreements. The recorded declaration also includes seven units not identified in the Association declarations provided to the plaintiffs regarding their purchase agreements.

ΒΆ 9 On February 2, 2010, plaintiffs filed this lawsuit against Aqua, alleging that Aqua failed to provide them with a recorded declaration. Plaintiffs also allege that on November 5, 2008, Aqua informed them that the high-end hotel had terminated its contract to purchase the lower 15 floors of the development, which plaintiffs claim would result in higher monthly assessments for condominium unit owners. Plaintiffs further allege that Aqua marketed the building as residential, but the project was legally classified as commercial, which created additional difficulties and costs for the plaintiffs. Plaintiffs seek to rescind their contracts under section 22 of the Act (765 ILCS 605/22 (West 2006)) and section 2 of the Illinois ...


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