The owner argued that because owner property coverage was merely advised rather than mandatory, her insurer's payment should be treated as collateral and ignored.

The court held that whether owner coverage is mandatory or advised is not the controlling factor. What controls is whether the governing documents and the Act contemplate the two policies working together — and where the declaration carries a Section 12(e)-style waiver of subrogation, they plainly do.

Why Section 12(e) is doing more work than boards realise

The waiver of subrogation in a condominium declaration is one of those provisions that sits unread for decades. Its ordinary function is defensive: it stops the association's carrier and an owner's carrier suing each other over the same loss.

List shows it doing something else. Because the declaration's waiver tracks the statute, the court read the whole insurance scheme as an integrated one — and an integrated scheme is not a collateral source. The provision that exists to prevent carriers fighting each other also prevents an owner recovering twice.

Whether a declaration's waiver language tracks Section 12(e) is a question for counsel. Where it does not, this reasoning may not be available.

The limit, which is procedural and real

The association could not enforce the setoff at the summary judgment stage. Damages were disputed, and disputed damages go to trial.

So the practical shape is: an association defending a water-damage claim has a good answer to double recovery, and it will have to try the case to use it. That changes settlement posture more than it changes outcomes.

What this means for each side

Boards: the Section 12(e) waiver is doing real work and can defeat a unit owner's double recovery. Do not expect to resolve it on a motion.

Owners: your own carrier's payment will likely be offset against what you recover from the association. That materially changes the arithmetic of suing — and it is the reason the legislature was asked, and declined, to create a separate reserve-funded remedy for owners whose loss of use was caused by board negligence.

The eleven-year tail

Water intrusion beginning around 2014, a ceiling collapse in 2015, an appellate decision in 2025, and a remand for trial. Anyone assessing whether to litigate a common-element water claim in Illinois should assume a decade.

That is also why the five-year limitations clock matters so much in these cases — a point the same court made pointedly in Narkiewicz-Laine, where an owner's claims over repeated sewage backups were time-barred because the clock started at the first incident rather than the latest.

What to watch next

No petition for leave to appeal was found. The case is a Rule 23 order, so its value is persuasive rather than binding — but the Section 12(e) reasoning is the kind an Illinois court is likely to adopt again.