449 N.E.2d 151 (Ill. App. Ct. 1983)
The resident owned a condominium and was a member in good standing of the condominium association. She wished to sell her unit and purchase another in the building, but the board exercised its right of first refusal. The court first held that the resident had standing to bring the instant action for unreasonable restraint on alienation. The resident had a substantial, real interest in the action because she was unable to purchase the unit for which she contracted. The resident first alleged that the board acted in violation of the condominium bylaws without an affirmative vote of two-thirds of the building's total ownership.
- The court held that the board could only exercise a right of first refusal, reasonably, upon consideration of the resident's qualifications.
- Thus the board members breached their fiduciary duties in failing to follow the condominium association's bylaws, which required a two-thirds vote.
- The court also held that the resident stated a cause of action under the Chicago, Ill. Ordinance ch. 198, para. 198.7B-3, which prohibited discrimination with regard to the purchase of condominium units.
- The resident was a female, single mother.
The court reversed in part the trial court's dismissal of the resident's claims against the condominium association and board. The court held that the resident's causes of action for unreasonable restraint on alienation and for violation of a city ordinance against discrimination should proceed to trial. The court affirmed the dismissal of the resident's allegations against the individual board members for willful and wanton disregard.
The Board of Directors for a condo complex exercised its right of first refusal regarding P’s offer to purchase a condo. P alleged she was refused on the basis that she was an unmarried woman who planned to occupy the unit with her children.
- Rule: No person shall be denied the right to purchase or lease a unit because of race, religion, sex, sexual preference, marital status, or national origin.
- A board must exercise a right of first refusal reasonably upon consideration of the prospective purchaser’s qualifications. Criteria:
- whether the reason for exercising the right of first refusal is rationally related to the protection, preservation or proper operation of the property
- whether the power was exercises in a fair/nondiscriminatory manner.