Grady v. Sikorski

In Grady v. Sikorski, 349 Ill. App. 3d 774, 777, 812 N.E.2d 457, 285 Ill. Dec. 637 (2004), the parties entered into a contract for the sale of real property. Grady, 349 Ill. App. 3d at 775. The property included a two-story building that Grady intended to demolish in order to construct a multi-unit condominium building. Grady, 349 Ill. App. 3d at 775. The building had been stripped of its fixtures and, thus, lacked cabinets, toilets, appliances, lighting, a furnace, a water heater, and other amenities. Grady, 349 Ill. App. 3d at 775. The sale was treated as one for vacant property. Grady, 349 Ill. App. 3d at 776. After purchasing the property, Grady discovered a soil condition that resulted in additional costs in constructing the condominium building. Grady, 349 Ill. App. 3d at 776. When Sikorski had purchased the property two years earlier with the intent to develop the lot, he ordered and received a soil test report that indicated the soil was soft to a depth of 27 feet. Grady, 349 Ill. App. 3d at 776. Sikorski decided not to build on the lot. Grady, 349 Ill. App. 3d at 776. Sikorski did not complete a residential real property disclosure report prior to the sale to Grady. Grady, 349 Ill. App. 3d at 776. Grady filed a complaint against Sikorski, alleging that Sikorski violated the Disclosure Act by not disclosing the soft soil, a known material defect in the property. Grady, 349 Ill. App. 3d at 776. Following a bench trial, the trial court determined that the Disclosure Act applied to the transaction but that Sikorski did not knowingly violate the statute, because he had provided his real estate agent with a copy of the soil test report. Grady, 349 Ill. App. 3d at 776. On appeal, Grady argued that the Disclosure Act applied to the real estate transaction and that Sikorski should have provided her with a residential real property disclosure report. Grady, 349 Ill. App. 3d at 776. In making its determination, the reviewing court noted that section 5 of the Disclosure Act defined "residential real property" as "real property improved with not less than one nor more than 4 residential dwelling units." 765 ILCS 77/5 (West 1998); Grady, 349 Ill. App. 3d at 777. The reviewing court further noted: "In the context of other statutes, this court has found 'dwelling unit' to reflect the current or intended future use of a space as a residence. Here, Grady does not dispute that the structure on the property was not habitable and would not be made liveable in the future. Our research has failed to unearth any cases that address whether the Act applies to the sale of property that includes an uninhabitable building. While no court has addressed the Act's definition of 'residential real property,' it is noteworthy that each case already decided under the Act has involved the sale of a home or condominium that the buyers intend to use as a residence or rent to another party as living quarters. If, as in the instant case, the buyer of the property intends to destroy the structure, the Act's disclosure requirements serve no useful purpose." Grady, 349 Ill. App. 3d at 777-78.