Implied Warranty of Habitability

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A condominium association claims that various parties involved in the design, construction, and sale of a condominium complex breached the implied warranty of habitability by incorporating latent defects into the units via the design, material, and construction.

The theory of implied warranty of habitability initially arose because the application of the common law principles of caveat emptor and merger meant that a new home buyer had little or no recourse against a builder that constructed a defective residence. Caveat emptor prevented a new home buyer from suing the builder if he failed to discover any defects before taking possession. However, the doctrine of caveat emptor is based on the expectation that the buyer and seller possess comparable skill and experience and could use their own judgments to come to a conclusion. The implication of a warranty of habitability came as a judicial response to the fact that in the twentieth century, new home buyers and sellers were no longer in an equal bargaining position. As the ordinary home buyer no longer had the skill or training to make a meaningful inspection and discover latent defects, caveat emptor fell out of favor.

In this case, the record demonstrates that each Condominium Purchase Agreement disclaimed implied warranties on behalf of the developer-seller and its agents. Though the condominium association argues that the language in the purchase agreement was not called to the buyers’ attention or worded properly, a seller is not required to specifically point out a disclaimer in a written contract or use a particular method to bring it to the buyer’s attention. A disclaimer is deemed legally effective if it (1) is a conspicuous part of the agreement, (2) refers to the warranty by name, and (3) discloses the consequences of its inclusion. The court rules that the included provision meets the criteria of an effective disclaimer.

Generally speaking, only builders or builder-sellers warrant the habitability of their construction work. Engineers and design professionals – such as the defendant architectural firm in this case – provide a service and do not warrant the accuracy of their plans and specifications. Breach of implied warranty of habitability claims against design professionals have consistently been rejected in Illinois and most other jurisdictions. This court holds that the designer’s role did not subject it to a claim for breach of the warranty of habitability of the builder’s work. The developer-seller is also dismissed from these proceedings due to the effective waiver.

The court then must consider whether the wording of the Agreement encompasses the other defendants. The contract defines the seller, but does not define officers, agents, or other representatives. An agent is commonly understood to be a person “who is authorized to act for or in the place of another.” The allegations that the contractors provided development services and held themselves out as knowledgeable developers and contractors do not allege that the contractors were authorized to act on behalf of the developer-seller. Therefore, they do not fall under the scope of “agents” and were improperly dismissed at the trial level. The case is affirmed in part, reversed in part, and remanded for further proceedings.
Board of Managers of Park Point at Wheeling Condominium Association. v. Park Point at Wheeling, LLC, 2015 IL App (1st) 123452 (December 31, 2015).

Having A POA For Healthcare Is A Good Start, But Might Not Be Enough

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A Power of Attorney For Healthcare tells the doctor who should make medical decisions in the event you are unable to do that yourself. The problem is that there could be a gap between your medical emergency and the healthcare provider’s ability to contact your POA. What if your POA isn’t around or reachable when you stop breathing or in that moment of a heart attack when a decision has to be made? What then? A delay in treatment can make a big difference in how you spend the balance of your days on earth.

That’s why in addition to your POAs (and your will), you need to take one more step to make sure your wishes are followed in the event of a medical emergency. You need an “Advance Directive,” also called a POLST (Physician Orders for Life Sustaining Treatment). The Illinois POLST is designed to help a person with an advanced illness and his or her physician craft a plan of action in the event of an emergency. The Illinois POLST identifies a person’s healthcare wishes prior to a life-threatening emergency and acts as a physician order. It protects a person’s wishes in all settings (i.e. hospital, home, nursing home.) By Illinois law, healthcare providers must do what your POLST says.
Having a prepared and signed POLST puts you in charge of the kind of treatment you want and fills the gap between your ability to verbally express your will to a medical provider and the moment when it becomes necessary for your POA for Healthcare to take over.

Landlord/Tenant Litigation

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Here is a recent case regarding landlord/tenant litigation:

Plaintiff landlord had entered into a five-year lease with SSM and that SSM later assigned this lease to defendant with plaintiff’s consent. Defendant acknowledged that, upon assuming the lease and during the remaining term of the lease, defendant paid both the rent and the monthly payment for the HVAC improvements. However, defendant claimed that it was not obligated to pay the remaining cost of the HVAC improvements after the lease ended.

The court said, Plaintiff alleges that defendant’s predecessor agreed that certain improvements to the property would be paid over a 15-year amortization schedule, in addition to the rent payments due during the 5-year term of the lease. Defendant then assumed its predecessor’s obligations when it was assigned the lease. Plaintiff alleges that it fully performed its HVAC obligation under the lease when it improved the HVAC units on the property. If plaintiff fully performed this requirement as it alleges, then the alleged debt to repay for these improvements had matured prior to the sale of the property. Our holding is similar to the holding in Metropolitan Trust, where the tenant’s rent debt had matured because the landlord had fully performed prior to the cancellation of the lease. Since defendant’s debt had allegedly matured, it did not pass on to the subsequent owners of the property.

A.M. Realty Western, LLC. v. MSMC Realty, LLC., 2012 IL App (1st) 121183 (November 30, 2012) Cook Co.,6th Div. (R. GORDON) Reversed and remanded