Homeowners May Not Enforce Terms of Annexation Agreement
A recent Illinois appellate court decision examined who is a
“successor in interest” under an annexation agreement and state law. The
result is informative for municipalities and developers seeking to better
understand what rights and obligations flow to successors in interest of all or
a portion of the property subject to such agreements.
In 1990, a developer entered into an annexation agreement
with a village to develop a subdivision over approximately 828 acres. The
agreement included a requirement that the developer design and construct a
storm drain system for the subdivision. In 2004, Patricia and Brian Doyle
contracted with the developer to build a home in the subdivision and
approximately three years later the Doyles began to notice their sump pump
ejecting water every few seconds during times of rain or heavy snow. Two
years later, in March 2010, the Doyles noticed erosion around the storm drain
next to their home causing them to file a drainage complaint with the
village.
After attempting several minor fixes, the village eventually
corrected the problem in December 2011 but not before the failed system damaged
the Doyles’ home. The Doyles then brought suit including a claim of
negligence against the developer for failing to install a properly working
storm drain system. The Doyles claimed the developer breached its duty
under the annexation agreement to install a functioning sewer system and the
Doyles had standing to recover because the annexation agreement was binding on
“successor owners of record of the Subject Property.” The trial court
dismissed the Doyles’ claim and, on appeal, the First District Court of Appeal
agreed.
In Doyle
v. Village of Tinley Park and Malone, the appellate court found that both the
annexation agreement, and the Illinois Municipal Code provisions governing these agreements bind successor owners of land subject to an annexation agreement
and that any party to such an agreement may bring a civil action to enforce its
provisions. However, the Court added that these provisions did not
apply to subsequent purchasers of each and every lot in a subdivision.
To do so, the Court explained, would result in absurd results such as a village
being able to sue homeowners for a developers failure to construct a working
sewer system.
The court held that the phrases used in the annexation
agreement (“successor owners of record of the Subject Property”) and in the
statute (“successor owners of record of the land) were intended to only mean
those successors who take title to the entire subject property. If the
agreement or statute intended otherwise, the Court wrote, it would have
expressly stated that it applied to successor owners of the subject property “or
any portion thereof.”
The decision has practical implications for parties drafting
annexation agreements who are seeking to clarify what provisions will remain
enforceable by and against subsequent owners. As the court pointed out,
in order to make provisions of an annexation agreement specifically applicable
to subsequent purchasers, the parties must expressly provide say so in the
agreement rather than merely relying on generalized assignment and successor in
interest
provisions.
Post Authored by David Warner, Ancel Glink
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