Two recent cases, one from the Illinois Supreme Court and one from the Illinois Appellate Court, clearly demonstrate how much residential real estate law has changed in America during recent decades.
Consumerism has created a whole new ball game with tenants vs. landlords and home buyers vs. home builders.
Since the Middle Ages, the law greatly favored landlords and builders over tenants and buyers. Contracts involving leasing and sale of residential real estate were different from other kinds of contracts.
The law was so one-sided that in the case of a lease, a tenant's obligation to pay rent continued even if the landlord violated every lease promise. The tenant had the right to sue the landlord, but the landlord's nonperformance had no effect on the tenant's obligation to continue paying rent. It made no difference how unlivable the premises became.
The law also gave much greater protection to a builder of a new house than to the buyer. In no other kind of transaction did the slogan "let the buyer beware" mean so much. Except for what limited written guarantees the seller might choose to give the buyer, newly constructed houses were sold truly "as is" with no recourse for defects that subsequently developed from shoddy construction.
But that has been changing in most of the country as the courts developed an "implied warranty of habitability" concept. Such an implied warranty constitutes a guarantee that the premises are free of building and sanitary-code violations.
In 1972, the Illinois Supreme Court held that if the landlord fails to keep the premises in good repair, and thus violates this implied habitability warranty, the tenant could withhold all or part of the rent until the landlord repairs the place. That landmark case (Spring vs. Little) established that a warranty of habitability was implied in every apartment lease.
Now the court has expanded that ruling to cover leasing of single-family residences as well and makes clear that such a breach of warranty can be a good defense to an eviction suit for nonpayment of rent.
In 1979, a case extended the concept of the implied warranty of habitability to the sale of a newly, but badly, constructed house. The court pointed out that simply because a house can be inhabited doesn't mean the implied warranty of habitability has been satisfied. The warranty is not satisfied unless the premises substantially comply with all pertinent building codes, it said.
Late last year, Illinois took several giant steps forward in protecting home buyers from shoddy construction. A case extended the implied warranty of habitability to buyers of condominiums as well as single family dwellings -- and then some.
In what could be the start of something really big, several individual purchasers of units in a Chicago suburban condominium were held to be entitled to maintain a class action on behalf of themselves and all other unit owners, claiming violations of an implied warranty of habitability. The suit was permitted against the building contractors as well as the devloper. The slogan might well now read, "let the builder beware."