Opinion ID: 2133780
Heading Depth: 1
Heading Rank: 6

Heading: The Department's Decision

Text: As noted earlier, the issue before us is not whether the Department's findings of fact were against the manifest weight of the evidence but, rather, whether the ALJ applied the appropriate legal standard to the undisputed facts. We conclude that he did. The ALJ acknowledged the constitutional principles discussed above, including the Methodist Old Peoples Home criteria. The ALJ applied the legal principles to the facts as follows: Eden is an Illinois not-for-profit corporation, consequently it has no capital, capital stock, or shareholders. During 1996 Eden's funds were derived primarily from nursing home fees, independent living apartment and duplex rent, and not charitable contributions. Concerning the criteria of whether the benefits derived are for an indefinite number of persons, charity is dispensed to all who need and apply for it, and no obstacles are place[d] in the way of those seeking the benefits in regard to these units, there is the matter of the substantial entrance fees. Most certainly the benefits derived are only for persons who can pay the substantial entrance fees. While Eden's bylaws provide that the entrance fees may be waived or reduced, in the last 15 years this simply has not happened. The best a prospective resident in the duplexes can hope for is a short delay before being required to pay the entrance fee. Regarding the monthly maintenance fee, the testimony indicates that in the last 15 years out of a total of 100 independent living units, there has been one case where there was a reduction of the maintenance fee. During the first couple of years of that reduction, Eden was able to pay itself out of the reimbursable portion of the Residents' entrance fee. Clearly the entrance fee is an obstacle placed in the way of those seeking the benefits of Eden's independent living units. In addition the entrance fee provides Eden with a method of reimbursing itself if it is required to reduce the maintenance fee. The witnesses for Eden testified that the prospective residents of the duplexes had the option of either executing the Resident Agreement, which required an entrance fee, or a Rental Contract. The Rental Contract requires a security deposit, which is set in the amount of several months rent. The Rental Contract also includes a late payment penalty, provides for interest on late payments, and also provides for eviction on failure to pay rent. The Rental Contract cannot under any circumstances be considered as promoting the charitable use of the independent living units subject to that agreement. In 1996, all prospective residents of the duplexes were required to complete a very detailed financial statement, which along with either the entrance fee or the form of the Rental Contract constituted obstacles placed in the way of those seeking the benefits. I therefore conclude that the five duplex units of Eden here in issue met only one of the six guidelines set forth in the Methodist Old Peoples Home case. Consequently these duplex units were not used primarily for charitable purposes. The ALJ's decision applied the appropriate legal standard to the undisputed facts. We confirm the Department's decision denying plaintiff's application for a charitable-use property tax exemption for the 1996 tax year.