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Illinois Supreme Court clarifies enforcement of annexation agreements on successor owners

Updated: Sep 27, 2023

In 2003, the Village of Kirkland entered into an annexation agreement with the owners of 114-acre subdivision. The agreement was recorded and required, among other things, that the owners provide the Village with a “letter of credit from a financial institution to guarantee construction and quality of all public facilities to be constructed in any stage or unit of development for which approval is sought.” The annexation agreement stated that it was executed pursuant to and in accordance with “the provisions of article 11, division 15.1” of the Illinois Municipal Code (65 ILCS 5/11-15.1-1 to 11-15.1-5 “Annexation Agreements”).

When the Village tried to enforce the annexation agreement against a subsequent purchaser of some but not all of the lots, the circuit court dismissed the Village's amended complaint finding that the annexation agreement was a covenant that ran with the land; it did not confer successor status to an entity that purchased only a portion of the property subject to annexation, as opposed to the whole property. Accordingly, the trial court awarded defendants attorney fees and costs pursuant to a prevailing-party provision in the annexation agreement.

The Illinois Supreme Court reversed. The plain language of the Illinois Municipal Code § 11-15.1-4 states that an “annexation agreement … shall be binding upon the successor owners of record of the land” and as such reveals the legislative intent to encourage the natural and orderly development of annexed areas among successive owners of the land that has been annexed to a municipality. Similarly, the annexation agreement provided that all of its provisions were binding upon successors. In finding for the Village, the Court “explicitly reject[ed]” the holding in Doyle v. Village of Tinley Park, 2018 IL App (1st) 170357, 426 Ill.Dec. 147, 115 N.E.3d 1069 to the extent that the case held that a purchaser of less than the whole of property annexed pursuant to an annexation agreement cannot be considered subject to the agreement as a “successor owner[ ] of record of the land which is the subject of the agreement” pursuant to the Municipal Code (65 ILCS 5/11-15.1-4 (West 2002)) or an annexation agreement. As such, the Court concluded that the circuit court erred in determining that defendants were not bound by the terms of the annexation agreement because they owned only a portion of the land that was subject to the annexation agreement.

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