Do you live in a mixed-use building, one that has a portion of the building reserved for commercial use? If so, from time to time, commercial owner disputes may arise. Prepare yourself and your homeowner’s association with the different types of disputes and how you handle them.
Is the commercial owner a part of the association declaration or do they have a reciprocal easement agreement (REA)?
This is where some disputes may surface. If the commercial property is a part of the association, then they must be treated the same as residential owner. This means they are subject to any association fees and maintenance for the common areas of the building.
If the commercial owner has a REA, that exempts them from the association declaration. This, however, doesn’t exempt them from all regulations. A REA will contain rules and regulations for the commercial owners’ use of the building and common areas.
Note that a REA does not fall under the Illinois Condominium Property Act, but is a contract between two parties. Therefore, while the community association plays no role in the purchase or sale of the commercial unit (and therefore cannot possess lien rights) the contract is still a binding legal document.
Disputes may arise between the commercial and residential units in terms of repairs, trash removal, ground floor maintenance, or anything involving common areas of the building. The first step is to determine if the commercial unit is bound by the same declaration as the residents or has these provisions set aside in the easement agreement, before moving forward with the resolution of the issue.
