Utility Cost Arbitration Resulting in Clear Win for Condominium Association

The Challenge: Conflicting Interpretations of Utility Obligations 

O’Hagan Meyer attorney Russ Brown represented a condominium association near Chicago’s United Center in a dispute with the owner of the building’s ground‑floor commercial space. The commercial areas were leased to multiple businesses and owned by a single‑member LLC. The parties’ rights and obligations were governed by a recorded declaration of easements referred to as the Operating Agreement. 

The commercial property owner claimed that several unrelated provisions of the Operating Agreement required the association to pay more than 90% of the commercial tenants’ utility costs. The association disputed that interpretation, noting that the cited provisions primarily addressed access to piping and repair costs, and maintained that each party was responsible for its own utilities. 

The Solution: Arbitration and Infrastructure Evidence 

In September 2023, the commercial owner filed suit seeking a declaratory judgment, but O’Hagan Meyer successfully enforced the Operating Agreement’s arbitration clause. After the owner initiated an AAA arbitration in summer 2024, the parties filed cross motions for summary judgment. 

In May 2025, the arbitrator issued a conditional ruling that would impose cost‑sharing only if the residential and commercial utility systems were sufficiently connected. Both sides retained engineering experts to inspect the systems and review schematics, resulting in expert reports, a rebuttal report on behalf of the association, and accompanying briefing. Despite delays caused by changes in opposing counsel, the experts agreed the systems were physically distinct and separately metered. 

The Outcome: Association Owed No Utility Costs 

After reviewing the engineering evidence, the arbitrator ruled entirely in favor of the association, concluding that the utility systems were sufficiently separate and that the cost‑sharing condition was not met. As a result, the association had no obligation to pay any portion of the commercial tenants’ utility bills. 

This ruling spared the association from a substantial and ongoing financial burden with no benefit to unit owners. Although the arbitration was prolonged, O’Hagan Meyer ultimately secured a decisive and favorable outcome for the client.