McHenry veteran objects to $11 million condo complex sale, demanding replacement housing costs

A McHenry veteran has objected to the forced sale of his condo unit as part of a planned sale for almost $11.3 million of the Greens of Irish Prairie complex, which will see the conversion of the property completely to apartments.

Tensions between the resident, U.S. Marine Corps veteran Ken Dill, and the Greens of Irish Prairie Condominium Association have escalated as work continues on finalizing the sale of 124 units across 12 buildings, according to correspondence Dill provided between him and the association.

Dill, who bought his condo in 2007, said his issue is not with the price he has been offered for his unit – although it’s less than he paid for it – but over replacement housing costs he thinks – and an independent legal expert agrees – he is entitled to under the law.

“I have no idea what’s going to happen to me,” Dill said, adding he does not want to lose his home and face the possibility of homelessness.

The company buying the condo complex is a business entity tied to McHenry-based housing developer Cunat Inc., according to documents provided by Dill and filed with the U.S. Securities and Exchange Commission. They share leadership and an address.

Cunat already rents units to residents in the complex and is seeking to turn the remaining condos into apartments through a legal process referred to as condo deconversion.

Jason E. Orth, an attorney for the firm representing the condo association, said the dispute likely is headed to court.

Orth said his firm and the association are unable to comment on Dill’s situation or the sale, citing the likelihood of litigation, and added the parties are “otherwise unable to provide a statement regarding these issues.”

Cunat, the McHenry developer associated with the entity seeking to buy the Greens of Irish Prairie, called the Cunat Multi-Family Investment Fund III LLC, according to Dill’s documents, did not grant interview requests for this story and did not respond to a detailed list of emailed questions.

Dill said he voted against the sale of the Greens of Irish Prairie property at a condominium association board meeting in September. But he said he was in the minority.

State law requires at least 75% of a condo complex’s ownership vote in favor of a sale for it to move forward.

Many of the units, and thus their association votes, already were owned by Cunat affiliates, according to McHenry County property records and the Illinois Secretary of State.

Records show the affiliates acquired a handful of Irish Prairie units this year, sometimes at prices tens of thousands below their previous sale price, while others saw better prices.

Some condos sold for more than $100,000 more than a decade ago and fetched less than that this year from the Cunat affiliates, according to a Northwest Herald review of property records. Other recent sales to the Cunat affiliates left their previous owners with some earnings on the condo units.

Market prices for condo and rental buildings inverted around a decade ago, said R. Kymn Harp, a real estate lawyer in Illinois with more than 40 years of experience in real estate law, including condo deconversion projects. Now, single-owner apartment properties can be worth about 40% to 70% more than the total value of all units as condominiums, said Harp, who is not involved in Dill’s case.

Becoming an objector during a condo complex sale opens a path for those unit owners to obtain money from the property sale to help them find new housing – in addition to the price they get for their unit, Harp said.

It can amount to tens of thousands of dollars, the law states, that someone such as Dill could use for a down payment on a home comparable to the one they’re leaving.

But Harp said condo associations and attorneys representing them often ignore the requirement to provide objecting unit owners such costs or argue that they are inapplicable. Instead they acknowledge they are responsible for paying moving costs, which are usually less expensive than replacement housing costs.

There is little Illinois case law, Harp said, on the matter of whether relocation costs are required to be supplied by condo associations to objecting unit owners undergoing deconversions.

That’s partly because the amendment causing the state and federal law to interact for condo sales is just three years old and unit owners, even ones who object to a property sale, sometimes walk away with more money than what they originally paid.

Dill was offered $66,500 for his unit, according to a copy of the document, which is less than the $92,000 Dill bought it for in 2007.

Ralph Schumann, also an Illinois real estate lawyer, said another reason the law hasn’t been thoroughly explored in court is because state law does not allow objectors to request the cost of attorney fees if they win.

Schumann has been supportive of proposed changes to the law to give unit owners such as Dill the chance to get their attorneys fees covered when they win. But legislation that would have allowed for that has not gained traction in Springfield, including one 2017 bill that was approved by the House but did not make it out of the Senate.

Dill has not retained an attorney to help navigate this dispute with the Greens of Irish Prairie association, he said.

“Filing a lawsuit against the association under the Illinois Condominium Property Act is not for the faint of heart. Without the ability to request the attorneys fees, it can be a very expensive proposition,” Schumann said.

There are legitimate concerns about opening up condo associations and their board members to potentially covering unit owners’ legal fees when a judge rules in favor of an owner, as noted by Kristofer Kasten, an attorney who wrote about the matter for the Illinois chapter of the Community Associations Institute.

Opponents of the idea say giving unit owners the chance to recover attorneys fees from litigation with condo associations would lead to more lawsuits, higher legal and insurance costs for condo associations and thus, higher association dues for condo owners. Proponents argued the bill would have leveled the playing field for unit owners and discouraged frivolous actions by boards.

“The support that bill received, and its relative success in moving out of the [Illinois] House, seems to indicate that we have not heard the last about fee-shifting in favor of unit owners,” Kasten said.

Harp said there was another recent sign the legal landscape may be altering to benefit unit owners.

He pointed to a partial reversal issued in June 2020 of a ruling out of a DuPage County trial court by the Second District of the Appellate Court of Illinois, which includes McHenry County, involving a Roselle condo complex’s association.

He said the appeals court’s ruling clarified that condo association board members are bound by “common law fiduciary duties to unit owners” in connection with a deconversion sale.

“It’s an indication the appeals court takes condo owners’ rights seriously,” Harp said.

Dill said he is not trying to be purposely difficult, and many of his communications to the Greens of Irish Prairie association and its law firm have gone unanswered and his requests for association documents unfulfilled.

“I have requested the relocation costs I am entitled to under the same law that allows this deconversion sale to occur,” Dill said. “I have nothing to explain to the judge except I’ve been trying to facilitate this process.”