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O CTOBER 2011 | VOLUME 15 | NUMBER 3

CondoLifestyles

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THE SOURCE FOR INFORMATION ON COMMUNITY ASSOCIATIONS, CONDOS, TOWNHOMES, CO-OPS & HOAS

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Rights and Obligations for Non Condo Associations F E AT U R E S

Meeting & Governance Ask an Attorney Greying Boomers Create Legal Concerns for Community Associations Common Questions for Community Associations The Threat to Condominium Values

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table of contents COVER STORY

03 Rights & Obligations for Non Condo Associations

By David Mack BOARD BASICS

07 Meeting & Governance

by Pamela Dittmer-McKuen BOARD BASICS

10 Ask an Attorney

By David Mack 13 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo RISKS & LIABILITIES

14 Greying Boomers Create Legal Concerns for Community Associations

By Linda Stanzione, Parness &Associates 16 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 17 CondoLifestyles State-of-the-Industry 18 Editors Message 19 Directory Advertising 26 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo S P E C I A L F E AT U R E

27 Common Questions for Community Associations

By David Mack EVENT HIGHLIGHTS

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32 The Threat to Condominium Values

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COVER STORy

By David Mack

Rights and Obligations for Non Condo Associations Anyone familiar with the Illinois Condominium Act (ACT) will know that essentially only Section 18.5, pertaining to master associations, had any relevance to common interest communities (CICs) such as townhome and homeowner associations.

T

hat section applied some other provisions of the ACT, which as its name indicates is primarily concerned with condominiums, to CICs but not all of them. Unit owners in CICs did not have all the protections of the ACT afforded to condo residents nor did boards have all of the same responsibilities of those in condo associations. For a number of years advocates of parity in terms of those issues had pushed for separate legislation dealing exclusively with CICs. “Non- condo associations really had no comprehensive statute to guide them and their

governing principles were largely driven by each association’s governing documents,” said Kerry Bartell of the law firm of Kovitz Shifrin Nesbit.

Fred Rodriguez of management company Heil Heil Smart & Golee, explained that those instruments were often inadequate and not always precise in their meaning. “In many instances these regulatory documents fell short of providing any specific definitive provisions or structure for the operation of the community, which unfortunately resulted in varying interpretations in regard to the administration of the community,” he said.

Origination of New Law Finally one legislator in the Illinois General Assembly persuaded enough colleagues to back a new law. “The primary sponsor of the Common Interest Community Association Act (CICAA), which became law on July 20, 2010, was Senator A.J. Wilhelmi from Joliet,” said Mark Pearlstein, a principal in the law firm of Levenfeld Pearlstein. “His motivation was to seek a statute that would give owners in non-condominium communities the same rights and boards the same obligations found in the Illinois Condominium Property Act.” Constituents of his in various Kane County CICs had urged him to put the bill in the legislative hopper for consideration, after which it worked its way through the deliberative process and eventually led to passage and signing by Governor Quinn.

There was broad backing for the law by nonlegislators in the association business. “My understanding is the CICAA had wide support conceptually from most attorneys who practice association law as well as other industry professionals,” said Bartell, who is among the former group. “Non-

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condos are different conceptually than condos (and) it was not appropriate (originally) to include them under the Condo Act so the CICAA in that sense was necessary.”

Eliminate Confusion Pat Costello of the law firm of Keay & Costello said it was important for a new law to be enacted to eliminate confusion as to which associations were covered by Section 18.5. Some CICs had previously taken the position that the Condo Act did not apply to them because they didn’t believe they could be defined as common interest communities. “Accordingly, I think it was important to create a separate piece of legislation,” he said. “The enactment of the CICAA makes it clear that all, except those associations exempt under Section 1-75, are bound by the provisions in the CICAA.”

Good Baseline Rodriguez supports the law too. “In the overall scheme of things, the adoption of the CICAA should be seen as a step in the right direction, (as) the components of the act provide organizational structures and the protocols that are typically lacking in the declarations and by-laws of HOAs,” he said, affirming his comments above. “The general consensus on the adoption of the CICAA is

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that it is an instrument that was long overdue and will have a favorable outcome and influence on the operations of these communities.” It is a good baseline to apply to a cross section of common interest communities and will provide a more substantial degree of structure and transparency in administering them.

However, if Rodriguez had his druthers, he would have preferred an alternative course of action. “My personal opinion is that it may have been more expedient to amend the (Condo Act) and incorporate CICs under (its) similar provisions and umbrella, where applicable, in order to achieve more of a single source consistency rather than adopting a separate act,” he said.

Better Legal Direction Pearlstein, too, had felt that non-condos needed their own, but reasonably equivalent, statute, to give them better legal direction. “I think it was time to clarify laws pertaining to non-condominium homeowner associations and have them operate in the same manner as condominiums,” he said. “Owners in those communities are entitled to open board meetings, financial disclosure and rights to records inspection just as condominium unit owners,” among other protections that 18.5 did not comprehensively provide them. It was also

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a matter of fairness that prospective buyers of units in CICs have the same opportunity to obtain financial information about a community they were interested in as potential condo buyers do.

Mini Bill of Rights The new law was generally welcomed by those associations to which it applies. “I think that boards and owners in common interest communities appreciate the clarification,” said Pearlstein.

“Boards have a guide for their obligations and owners essentially have a mini-bill of rights.” He did point out that some objections had been raised, one dissenter being the Illinois Board of Realtors, because the law did not contain an exemption for small CICs but that was resolved by removing associations of 10 or less units or budgeted assessments of $100,000 or less from coverage under the law.

Adjustments Made Prior to Passage Bartell said that any opposition from CICs was resolved by the subsequent revisions to the law (discussed below) “With the recent amendment and the removal of master associations, I think most are in favor of it.” She noted one provision of the original law that had generated some negative reaction and that was the matter of requiring master associations, which as just indi-

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COVER STORy

cated, were included in the 2010 version, to hold open elections, a process that had generally not been followed under 18.5. “Many master associations appoint or elect board members in such a way that each underlying association has a representative on the board. With open elections there was no way to guarantee that each sub-association would have a member on the board.”

Condensed Version of ICA Costello said he had not heard of any resistance to the CICCA other than,” some confusion” regarding election procedures that Bartell described above.

The new law is shorter than its precursor, the ICPA. “Most of Section 18.5 was transferred to the CICCA,” said Pearlstein, and then it was fleshed out with many provisions similar to those in condominium law. “The statute is essentially a condensed version of the Condominium Act,” but no less meaningful to CIC unit owners as it,” contains essentially the same basic governance and disclosure provisions (as) the Condominium Act.” Bartell went into some detail on what she saw as the rationale behind the differing lengths of the two laws. “Condos generally require more oversight and governance as the type of ownership involved is shared ownership of property and buildings where owners (individually) essentially own air space,” she explained. There is much less of a shared arrangement in CICs in which the common areas are more limited and,” owners actually own a parcel of solid ground.” It is that lesser degree of sharing that reduced the size of the statute in comparison to the Condo Act.

opportunity to unit owners, whereas only some had previously and solely at their discretion.

Bartell offered a broader overview in comparing 18.5 to the new statute. “Section 18.5 addresses developer turnover requirements, budgets, document disclosure, amendments and other minor issues,” she said, but in addition to those matters, the CICCA also,” addresses board elections, notice and meeting requirements, voting rights and special assessments.”

No Right to Record Meetings On the other hand, Costello pointed to one

right of owners embedded in 18.5 that is excluded to the owner’s disadvantage in the CIC law. “One thing, which I was most surprised about, which is absent from the CICCA but is contained in Section 18.5 is the specific acknowledgement that owners have a right to record meetings. Section 18.5 (c) (4) (C) grants this right while the CICCA does not.”

Recent Amendments As most new laws when first enacted, the original CICCA had some flaws that were discovered when it went into effect. They were subsequently corrected when the law was amended on

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Guidance on Critical Issues What does the CICCA do for common interest communities that Section 18.5 had not? In general it gives them better operating direction than the prior statute. “I think it was essential to provide guidance on critical issues facing the boards and the owners in their associations,” said Bartell, something which 18.5 came up short on and their governing documents did not offer much additional help in making decisions. Echoing Rodriguez, she added, “for many non-condominium associations, their declarations are minimal and leave many normal operating procedures unexplained.”

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Resident Participation is Different What are some of the ways that the CICCA differs from 18.5? Both Pearlstein and Costello pointed out one important difference that involves resident participation. “Section1-40 (b) (c) codified the requirement that owners be allowed to comment at a board meeting,” said Costello, adding that,” this provision is not new in practice but new in a piece of legislation.” All CICs will now have to afford the

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8/29/2011. The automatic exemption granted to associations of 10 units or less was modified in the amendment to permit a majority of the board of an exempt CIC to vote to be covered by it. Also master associations and CICs were separated. “The recent amendment to the CICCA creates a formal distinction between master associations and common interest communities,” said Pearlstein.

“Master associations are governed by Section 18.5,” while,” common interest communities are governed by the CICCA.” Section 18.5 was amended to eliminate reference to CICs. Bartell and Pearlstein are completely satisfied that the CICAA, as amended, has now met all objections to it. “The CICAA is (now) concise and clear,” said Pearlstein. With the separation of master associations and CICs, added Bartell, “I think it is detailed enough to provide guidance where it is needed but not overbearing for associations that can be quite different in character and operation.”

Delinquent Assessments & Foreclosures In addition to the issue of owners not being given the right to record meetings in the CICAA, Costello questions another exclusion from the statute, which, concerns the collection of delin-

quent assessments in connection with foreclosures. They had been given this authority in paragraph (g) (1) of Section 18.5 but it was not picked up in the CICAA. That provision refers to the (collection of) six months of (delinquent) assessments following a foreclosure,” he said. “Instead of placing this provision in the CICAA, the legislature chose to place it in Section 18.5 and not add a similar provision to the CICAA.”

Conflicts With Governing Documents?

In some CICs there will likely be conflicts between the CICAA and their governing documents and where any disparity exists the new statute is controlling, noted Rodriguez. “Boards (should) review their respective declarations/bylaws to determine the issues of conflicts,” he said, and they,” should seriously consider amending their documents- with the help and advice of counsel- in order to provide congruency with the statute.”

Future Amendments or Challenges

ment was supposed to take care of all omissions and oversights, Costello is more confident there will be. Recording meetings and collecting assessments at foreclosure are two potential areas of future revision. “I think further amendments will be necessary as associations begin to deal with the differences between Section 18.5 and the CICAA,” he said.

As to whether there will be legal challenges to the CICAA, Pearlstein said, “I hope not,” but,” let’s see how the law works in practice.”

Bartell doesn’t believe there will be because any apparent opposition was put to rest by the changes made to the law in August. “I think the recent amendments were the result of the concerns expressed by those professionals in the industry and non-condo board members who were unhappy with the applicability of the first draft of the CICAA,” and those concerns have now been allayed.

Common interest communities have until January 1, 2012 to come in to compliance with the statute. Y

Will there be future amendments to the CICAA? Pearlstein is hopeful there will be no need to again revise the law. While Bartell believes it is hard to tell at this time because the recent amend-

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BOARD BASICS

By Pamela Dittmer McKuen

Meetings and Governance During the course of a community association year, boards hold numerous meetings. They need to do so, because that’s where they conduct the association’s business.

But not all meetings are the same. Different meetings are held for different purposes. The Association of Condominium, Townhouse and Homeowners Associations, at its Spring Conference, presented a two-part education seminar on governance. Part II, “Meetings,” explored the various meeting types and the board’s legal responsibilities for each one. It also covered the role of committees and commissions. The session was led by James Slowikowski, an association attorney with Dickler Kahn Slowikowski & Zavell in Arlington Heights and Michael Rutkowski, president of First Properties LLC management company in Chicago.

Types of Meetings Rutkowski led off the program with an explanation of the various types of association meetings and the most common meeting tasks: • Board Meetings. Board members convene on a regular basis, perhaps monthly or quarterly, for the purpose of conducting association business. They make decisions and vote on various issues.

Non-board-member owners are permitted to attend, but they cannot speak except during specified times.

• Owners Meetings. These meetings are held so that the owners can perform a specific action as required by the association’s governing documents. The most

common reason is to elect board members at an annual election. Non-boardmember owners may speak as required (such as to nominate a candidate to the board) or as their input is requested.

• Open Meetings. This term refers to any meeting to which all owners may attend.

Board votes and decisions must be made at Open Meetings.

• Closed Meetings. Boards may meet privately for three reasons: to discuss litigation, personnel, or rules violations. Generally speaking, board members only attend these meetings, although an owner who is in violation may be present for the portion that applies to him or to her.

“The important part to know is that the discussion is closed, but any votes are not,” said Rutkowski. “For example, the discussion leading up to whether to file a lawsuit against someone is private, but the vote to proceed must be made at an open board meeting.”

• Special Meetings. Special Meetings are Owners Meetings that are called for a

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specific purpose that requires an owner vote or approval other than electing board members. Such purposes include: removing a director, rejection of a special or separate assessment or (where applicable) a significant increase in the budget; and buying or selling units or property. Calling a Special Meeting simply to discuss an issue may not be a proper basis. Consult your governing documents for procedural guidance.

Common Meeting Tasks Governing documents, which include state law and the association’s declaration and bylaws, assign tasks to both board members and owners. These tasks are accompanied by various procedural requirements, including meeting type and meeting notice. The most common tasks are: • Board members must pass new rules and regulations at a Board Meeting. They must mail copies of the proposed rule to the owners at least 10 days but not more than 30 days in advance. Owners are allowed to comment on the proposed rule at the meeting.

“This is a good example of where owner

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input can be meaningful,” said Rutkowski.

“Suppose you want to make a rule that requires dogs to use the back stairs. Well, if several units can’t access those back stairs without walking around the whole building, that rule isn’t practical.”

• Boards must pass the annual budget at a Board Meeting. Owners may comment on the budget. The budget must be mailed to the owners at least 30 days before the meeting. However, notice of the meeting must be mailed to the owners at least 10 days before the meeting but not more than 30 days before the meeting. The two documents are best mailed separately, said Rutkowski.

“If you put the budget and the meeting notice in the same envelope, unless you time it to the very day, you’re either not sending the budget far enough in advance, or you are sending the meeting notice too far in advance,” he said. “You’ve got to have two mailings to be sure.”

• Owners must elect board members at an Owners Meeting to represent them.

Board members elect officers among themselves at a Board Meeting.

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The Legal Requirements of Board Meetings Before Slowikowski delved into the legal requirements of Board Meetings and Owners Meetings, he stated that unless he specified otherwise, his comments addressed both condominium associations and non-condominium associations. The new Common Interest Community Association Act replicates many of the provisions and requirements of the Illinois Condominium Property Act. • Associations must have at least 4 Board Meetings a year. The actual number that your association will hold depends on how much business the board needs to conduct.

• A quorum of board members must be present at a Board Meeting before votes can be taken. A quorum is usually a majority of the total current number of board members. Check your bylaws.

• Board Meetings must be open to all members of the association.

• Owners may record open portions of the meeting that is open, by audio or video.

Boards may pass reasonable rules that govern the right to make such recordings.

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BOARD BASICS

• Many boards schedule a Homeowners Forum, at which owners may make comments or offer information, at the beginning or end of the Board Meeting. The Common Interest Community Association Act requires non-condo associations to schedule an owner comment period at Board Meetings. Boards may make reasonable rules that control how long the comment period will be and how long a person can speak.

• In event of a true emergency or urgency, the board may make a decision that is in the interests of the association outside a Board Meeting, and then ratify that decision at the next meeting. Slowikowski cautioned that the measure should be taken only rarely. An example of an acceptable situation is when the association is in litigation, and the attorney calls with a settlement offer that is good for only 24 hours. “Otherwise, do your voting at a meeting, or you can have problems,” he said.

• Notice of Board Meetings must be given in accordance with governing documents.

The Legal Requirements of Owners Meetings • At the least, the association must hold an annual Owners Meeting. The primary purpose of the Owners Meeting is to elect the board members. Additional Owners Meetings, which would be categorized as Special Meetings, may be held as needed.

• A quorum of owners must be present at the Owners Meeting. Typically it is 20 percent of the total ownership, which must be present either in person or by proxy. The exact number may be different in your governing documents.

“If there’s no quorum, the owners can’t vote and the meeting must be rescheduled,” said Slowikowski.

• Notice of Owners Meetings and Special Meetings must be given in accordance with governing documents.

Committees and Commissions Committees and Commissions may be formed to assist the board. Although many associations use the two terms interchangeably, the Not for Profit Corporation Act sees them as different. Most associations are incor-

porated under this Act. A “committee” has some degree of authority, as allowed and defined by the declaration and bylaws. A “commission” serves only to advise the board, which makes the final decisions, determinations and policies. The Latin phrase, “ad hoc,” means “for this.” It refers to a group that is formed for one specific purpose, such as a lobby decorating committee or commission that disbands after the lobby is decorated.

Slowikowski said that unless your governing documents expressly allow for committees and give them specifically authority, a provision he has rarely encountered, your committees by whatever name are purely advisory. For that reason, their meetings need not be open to all owners and minutes are not necessary.

The attorney also said he is in favor of boards setting up a committee structure.

“Boards have a lot of work to do, and property managers have a lot of work to do,” he said. “Committees are a good way to get some of that work done. And it’s a great way to get input from people who are not on the board.” Y

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Q/ How do you remove an inactive board president?

By David Mack

Ask an Attorney A

s always, in starting the Ask an Attorney session, usually the most popular session at any ACTHA conference, attorney Charles (Chuck) VanderVennett, acting as moderator, briefly cautioned the audience that what they were about to hear was not legal advice, that before trying to apply what was said to similar situations affecting them they should first consult their own legal professionals.

Referring to panelists Stuart Fullett of Fullett Rosenlund Anderson, P.C. and Jim Slowikowski of Dickler, Kahn, Slowikowski and Zavell, Ltd., VanderVennett said,”they are not your attorneys and you are not their clients. Today you will be given some general information, a surface coating of issues.” The responses were not intended to be the final answers to the questions raised but a starting point upon which their lawyers could build more specific and relevant opinions. Y

A/ That is governed by your by-laws. The Condo Act has no provision for removal of directors. Whether inactive or not doesn’t make a difference. There has to be a specific provision in the by-laws to do it and usually it would have to be done by the unit owners who elected the person in the first place. Short of that, I don’t think any board has the authority to remove a sitting member. Section 18(a) (4) of the Act provides that the by-laws of a condo association should include,” the method of removal from office of members of the board.” (A board could, however, remove a member as an officer- the president in this case- and elect another to replace the person as that officer.)

Q/ What can be done about a board member who is elected but then refuses to serve?

A/ Removal is again covered by the by-laws per Section 18(a) (4).

Q/ What can be done about a board member who refuses to take on assignments?

A/ Again, same answer as above.

Q/ Must there be unit owners on a committee?

A/ The majority of members on a committee should be board members because committees can take action in some situations. Others on a committee can be unit owners who are not board members but there do not have to be non-board members on a committee. On the other hand, commissions, which do not have the power to act, can be comprised entirely of non-board members.

Q/ What recourse do unit owners have if board members do not apply policies, procedures, rules and by-laws to themselves?

A/ Go through the process of removing any such violators, again according to 18(a) (4) of the Act. There also might be a basis for legal action depending on the nature and seriousness of what such a director does nor does not do.

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BOARD BASICS

Q/ In a small Eight unit association can all unit owners be board members?

A/ Only if the governing documents provide for that. Otherwise, a board of the size specified in the documents must be elected. The minimum by law is three.

trusted

Q/ Under what circumstances can a board file a claim for the improper use of funds under its fidelity bond policy?

verb

[truhst·ed]

A/ It really depends on what specific actions are prohibited under the policy. The term improper use is vague. If owners are just unhappy with how funds are spent but they weren’t spent illegally that won’t kick in the fidelity policy.

Q/ In our association, the treasurer is being denied access to financial reports/ statements. What can be done?

A/ The treasurer needs to take back control over finances and be able to see the reports. That may take other board members to back up the treasurer’s demand to see them or go as far as getting the unit owners to replace the uncooperative board members under 18(a)(4) and the by-laws.

Q/ Can a board re-purpose funds set aside in a budget for designated purposes because of changing priorities?

A/ It’s my opinion that if funds are needed for other legitimate purposes, a board has the discretion to re-purpose them. It could also go further and prepare a revised budget to reallocate funds.

Q/ Our declaration states that excess funds at the end of a year must be returned to the owners. Can we do something else with them?

A/ Not unless you amend your declaration. I’d try to amend it to provide that excess funds be put into the operating reserve. If they are given back, the association may end up having to increase assessments the next year.

Q/ Can an association collect anything other than up to six months of delinquent assessments from the buyer of a unit at a foreclosure sale?

A/ There is a slight difference between condominiums and non-condominiums on this point. Condos can recover attorney’s fees and also, in my opinion, late charges, repairs etc. But while the law has been amended to now permit noncondos to collect up to 6 months of delinquent assessments, that authority does not include legal fees or other charges.

Q/ Is there any legal action an association can pursue with regard to a hoarder?

A/ Try to get family members or social service agencies involved first. If that doesn’t work, begin legal proceedings under the laws of the local governing body to force a clean up.

persons worthy of reliance; confidence Trusted by Illinois Community Associations Since 1983

Q/ Can solar panels be permitted to be installed by unit owners much like satellite dishes or flags?

A/ There is a new statute that gives owners the right to install solar energy systems but they cannot violate the integrity of the common elements in doing so.

Q/ Our association has a policy that prohibits rentals except under a hardship.

Can we set a percentage of units that can be rented under a hardship claim?

A/ I wouldn’t set a percentage limit but if you do it has to be specified in your governing documents. And remember you have to be uniform in approving a hardship- usually it would be granted for something like job transfer, medical reasons, being called up for military service, etc, Q/ What should be included in board minutes?

A/ The purpose of minutes is to have a corporate record of what the board does.

They should only include what actions are taken- the issues voted on and the outcomes. And possible other limited comments necessary for clarification.

Q/ Does a board have to send notices by U.S. Mail if all the units are in one building? Can notices be placed under doors?

A/ The Condo Act and your by-laws provide for notices of meetings to be “mailed or delivered” to unit owners and that a copy of the annual budget shall be “received” by them. That could include delivery by placing those documents under the doors of units.

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Q/ Two connecting water pipes were not tied together correctly when our building was first built. Does the association have any legal recourse against the developer for poor construction?

A/ If it is a construction defect, the association may have a claim against the developer under various breach of contract theories but there must be damages. But it really depends on the circumstances and statute of limitations. Usually action must be initiated within 4 years of discovering the problem. And there is a 10 year time limit on construction claims after they are discovered.

Q/ Our garage has forty deeded parking spaces. It is periodically power washed. Can this cost be charged to just those forty owners or must the whole association pay the cost?

made available for review by unit owners and for how long they should be kept by the association. Generally my policy is to recommend that all records be kept for at least 10 years but you may want to keep them for as long as you can for historical purposes.

Q/ Our association has a twenty pound limit on pets. A person moved in with a dog over that limit but claims it is a service dog. The person is asking for a hardship exemption. How do we handle this?

A/ I would tread cautiously. It may be a companion animal and the person may need it and this arrangement is protected under fair housing laws. You can ask for proof as to what kind of service dog it is by getting a letter from a doctor that the person needs the animal. But, again, be careful because I’ve seen plenty of lawsuits on this issue.

A/ If there is some mention in the governing documents, you have to follow what that is. Otherwise I would say you could likely charge back some of that cost to those owners with the deeded units but probably not all of it.

Q/ Assuming a proper purpose, what kind of records can be obtained from an HOA that is very small. Is it exempt under Section 18.5?

Q/ In our association, twenty eight units have balconies and twenty six do not.

They are limited common elements. Who pays for painting and repair work, the association or the balcony owners?

A/ It is not exempt. The statute is very broad and includes documents under the Illinois Not for Profit Act. There’s typically not much reason to deny access. A board should want to be transparent.

A/ I’m assuming this is a condominium in which case the answer will be in the governing documents. The association is responsible for painting and repairing since they are common elements but whether the cost can be charged back to those owners with the balconies depends on the language in the declaration and by-laws.

Q/ Do you need a sign language interpreter at board meetings?

Q/ How long must an association keep its records?

A/ That’s an absolutely open question as to whether you need one. An association is obligated to accommodate a disability under fair housing laws but having to hire and pay for an interpreter is questionable. However, you may want to err on the side of caution. You might want to handle it in the way an association accommodates a physical disability- by requiring the person to pay for the service.

A/ For a condo association the answer is in Section 19 of the Condo Act and for non condos in Section 18.5(d). This is where you will see which records must be

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INDUSTRy HAPPENINGS

Industry

Happenings

Sudler Property Management Sudler Property Management was recently named Managing Agent for The Private Residences at Ontario Place Condominium Association. The condominium consists of 467 units and is located at 10 East Ontario. Steven Levy, Sudler’s President, stated that Sudler was chosen over several other well-known management firms and that he was particularly pleased to have had Sudler chosen because of the location and fine reputation of this premier building. Marci Weiner will join Sudler as the Property Manager.

Sudler has reported that the following managers have earned professional designations in recent weeks: Susan Rhyne has earned the AMS/Acctredited Management Specialist designation and Linda Guo, Jackie Baker, and Erica Gomez have earned the CMCA/Cerrtified Manager of Community Associations designation.

Recent Promotions at Sudler include: Jennie Kobzarez, Vice President and Property Manager at Hancock/100 E.

Legislation Impact Rental of Condos

by Gene Fisher Some condo associations’ radar has probably yet to detect legislation that recently passed the Illinois General Assembly and was signed into law on August 22 of this year.

Because the legislation (HB 1233) amends the Landlord and Tenant Act (765 ILCS 705), many condominium associations would have normally, and understandably, considered it to be of little interest. However, we have been told that the Act’s new provisions also apply to the units in your building whose owners are employing them as rentals.

Our thanks to State Representative Sara Feigenholtz and her staff, whose response to our request for help in navigating the State legislature’s procedural labyrinth made it possible for us to offer you the following highlights of the Act’s new provisions.

HIGHLIGHTS OF THE LANDLORD AND TENANT ACT’S NEW PROVISIONS As we understand it - - -

Delaware Place; Natalie Blackmon, Property Manager at Plaza on DeWitt, 260 E. Chestnut; Daniel Ortiz, Property Manager at 2 E. Erie; Cheryl Roseman, Assistant Property Manager at 2 E. Erie; Patty Hartman, Assistant Property Manager, 1700 E. 56th; Lindsay Weinstein, Assistant Property Manager at 800 N. Michigan. Sudler recently announced a new electric savings program for individual residential dwellings.

Heil Heil Smart & Golee

Manager Licensing The Community Association Manager Licensing and Disciplinary Act has been enacted by the State of Illinois.

The Rules were finally adopted as of October 1, 2011.

Community managers must now satisfy the requirements in order to make sure they are in compliance with the licensing guidelines.

Below is a summary of the new rules: 1. The minimum requirements are as follows: • The applicant must be 21 years of age.

• Twenty classroom hours in community association management are required, unless the person has a real estate broker or salesperson license.

• The candidate must pass an exam authorized by the Department of Financial and Professional Regulation, must not have committed any violations of the Act and must have good moral character.

• Convictions for crimes, other than felonies, will be taken into consideration but are not a ban; however, one cannot have any felony convictions.

2. Grandfather clause: • Experienced property managers can avoid the initial 20 hours education requirement and exam if the manager has either: » practiced for 5 years, or

Heil Heil Smart & Golee (HHS&G) announces the opening of their new facility located at 5215 Old Orchard Road in Skokie. The office presently houses the insurance division, as well as their commercial and residential condominium division. A grand opening Oktoberfest Event was held on October 11, 2011.

In addition HHS&G is pleased to announce the opening of a Property Management Office in Naperville, IL. Located at 1250 Diehl Road in Naperville, the office facilitates the servicing of our western suburban clients.

HHS&G would like to acknowledge our paid summer interns for their efforts over the past few months : Brandon Taylor, John Corrigan, Rafael Mora and Roberto Medina.

HHS&G is pleased to introduce Linzie Janvier and Kathy Mayer as additions to the Home Owner Services Department. New additions to our client partners: Atherton Gardens North in Evanston, Devonshire Terrace in Skokie and Elmwood Court in Chicago, IL. The announcements were made by Fred Rodriguez, Vice president of HHS&G.

• The landlord must now change the locks on a unit between any change in tenants.

» achieved professional designations such as CMCA, AMS, PCAM, ARM, or CPM from various community association management organizations. CAI's affiliate NBC-CAM administers the CMCA exam and CAI administers the AMS and PCAM designations.

• Existing community managers will have until April 1, 2012 to submit their application with proof of satisfaction of 1 of 2 requirements above.

3. All community managers in Illinois must be licensed within one year after Rules are adopted.

ACTHA The Association of Condominium Townhouse and Homeowners Associations – will host its annual Spring Conference and Trade Show on Saturday, March 24 at Drury Lane in Oakbrook. This all-day event features nine different educational seminars directed at board members, managers and owners along with an “Ask an Attorney” panel at the end of the day. Last year there were 100+ exhibitors in attendance – a great way to do that first-impression interview! Details and registration information will be posted January 20. Go to www.actha.org and click on “Education/Spring Conference."

• The landlord must also supply the new tenant with a disclosure form which verifies that the locks have been changed.

• The landlord is liable for any damages resulting from failure to change the locks before the new tenant moves in. However, if there is a lease agreement that allows the tenant to change a lock, then the landlord will not be liable.

COMMENTARY Typically, when a condominium is rented, the landlord is an individual unit owner, not the condominium association.

Even so, awareness of the information in this bulletin may prompt an association to consider forestalling future problems by adopting rules which assure that activity in its building are compliant with the amended Act. In that event, it is suggested that it would be desirable for the association to first obtain the counsel of its attorney.

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All material herein is copyrighted 2011©.

10.11

CONDO LIFESTyLES

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CONDO LIFESTyLES

by Linda Stanzione, Parness & Associates

Greying Boomers Create Legal Concerns For Com

H

omeowners’ associations are adept at tackling problems like cracked swimming pools or unkempt lawns. But given that America’s 65-and-over population is projected to grow by more than 70 percent in the next 13 years, boards will be forced to confront a new set of challenges—namely, sorting through legal questions created by the “aging in place” of the massive baby boom generation, said LeClairRyan attorney Megan McDonald Scanlon during a July 30,2011 presentation in Hot Springs as part of the Virginia Leadership Retreat, a three-day event sponsored by the Community Associations Institute.

The Williamsburg-based attorney, who routinely helps property owners form and operate private community associations, co-presented “Agingin-Place: The Boomer Community” with Thomas L. Willis of Zalco Realty Inc. and Association Bridge LLC. “Thanks to a confluence of demographic, economic and social factors, more and more elderly

residents are staying put rather than moving into institutional settings such as retirement or assistedliving communities,” Scanlon noted. “This trend toward ‘aging in place’ makes it inevitable that a higher proportion of residents in a given community will face challenges such as loss of strength, coordination and mental acuity over time, or will be diagnosed with a catastrophic illness. Unfortunately, this can create significant legal and safety questions for community associations.”

Legal Implications The chronic neglect of house and yard often is the first sign that older residents are declining physically, mentally or sometimes both, Scanlon noted. But in the most severe cases, elderly residents could actually pose a danger to themselves and others, with potential legal implications for the association. “An elderly person might be incompetent to drive and yet still be motoring through a

neighborhood full of kids playing and people walking their dogs,” she explained. “Or a person with Alzheimer’s disease might end up wandering through a condominium complex, completely disoriented and in need of help. Naturally, concerned members of the association’s board might want to act, but the potential legal risks involved in doing so require careful consideration.”

If an association steps in as a response to the noticeable deterioration of a resident’s mental acuity—perhaps by seeking an involuntary commitment—the association could be sued for false imprisonment, the attorney cautioned. If board members were to check on an elderly resident by, say, forcing open a door, they could incur liability risk as well. And yet failure to intervene might also result in legal action, particularly if someone were harmed amid perceived inaction. “Ultimately, it might not be the association’s legal responsibility to make sure people are competent to drive or

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RISKS AND LIABILITIES

Next, associations should take a close look at the existing and future needs of their older residents, with a view toward connecting them with helpful resources, Scanlon said. “Some larger communities are moving toward, for example, establishing a weekly shuttle to the grocery store, which could improve transportation safety for individual residents and the community as a whole,” the attorney noted. Community associations can reduce the isolation of older residents by offering them voluntary wellness or telephone checks, or promoting socialization through lunches and other events. They can collect residents’ emergency contact information before a crisis happens and maintain an up-to-date list of people with special needs. Other steps might include forging solid relationships with local non-profit organizations and social services agencies, starting the likes of “Friends Helping Friends” clubs and bringing in experts who can keep older residents apprised of technologies and services that promise to make their lives easier. “Examples include the GPS bracelets that some municipalities now use to help families keep track of elderly people who are at risk,” Scanlon said.

mmunity Associations that they will not wander into the road,” Scanlon said. “Nonetheless, the association could still incur significant legal expense to defend itself.”

Steps for Dealing With Aging In Place Fortunately, there is much that associations can do to be proactive about the trend toward aging in place. During the presentation, Scanlon and Willis offered a number of concrete steps that associations can take to reduce their legal exposure even as they improve the lives and safety of older residents. “A prerequisite is to first take a careful look at all statutes, ordinances and the association’s governing documents. Each of these might affect what the association can and cannot do,” Scanlon said. “In order for directors to be clear about the association’s proper role, they must fully understand their responsibilities under the law.

Likewise, association managers and staff members must be properly trained and informed of these responsibilities.”

Serving Community Associations throughout Chicagoland Area:

Knowing that MedCottages or so-called “granny pods”— miniature mobile home-like structures custom-designed for the elderly and intended to be parked in the back yard of a relative’s home— are bound to become more popular, forwardthinking associations might develop clear architectural guidelines for such projects today rather than be caught off guard by them later. By setting similar guidelines for accessibility ramps and other structural modifications, they could maximize property values even as they protect residents’ safety. “The overall point is to take a positive, engaged, serviceoriented approach,” Scanlon said.

Demographics By 2045, the attorney noted, the U.S. Census Bureau predicts that the number of centenarians will reach 757,000. By 2024, the number of Americans who are 65 or older will have increased by an estimated 70.2%, according to the Centers for Disease Control and Prevention. “Meanwhile, factors such as the high cost of institutional care, economic instability and the smaller families of the boomers themselves all make it more likely that older residents will ‘age in place,’ ” Scanlon said.

“Community associations would do well to prepare for this trend. It is here to stay.” Y

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CONDO LIFESTyLES

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CONDO LIFESTyLES

Industry Happenings Wolin-Levin, Inc. Wolin-Levin welcomes the following prestigious properties to the WL family: Lake Point Tower, landmark 70 story condominium high-rise with unobstructed views on the east side of Lake Shore Drive. The building includes a private 2.5-acre wooded park, indoor and outdoor pools, rooftop restaurant, and valet parking facility.

Streeterville Center Condominium Association, located at 233 E. Erie, is a 161-unit condominium with amenities that include 24/7 doorman, sundeck, bicycle room, rooftop deck and pool. 33 East Cedar Condominium, 128 unit upscale mid-rise in the heart of Gold Coast. The building amenities include sundeck, party room, fitness center, bike storage, and 24-hour doorman. Lexington Park Condo Tower, a 35-story high-rise and seven-floor loft styled low-rise development in the South Loop. The building includes a rooftop barbeque and dog run area above the garage, building-wide recycling system with specialized chutes, a green roof and other numerous eco-friendly design elements.

Wolin-Levin is proud to announce new hire John Derby, Director of Suburban Operations. John comes to W-L with over 30 years of experience in on-site management and commercial real estate asset management.

John holds an Illinois Broker’s License, a CPM, and was a former member of the Board of the Chicago Chapter of BOMA. John’s responsibilities include supervision of our large scale HOAs in the Chicago suburbs as well as marketing to new clients. We also welcome Paula Gutierrez, Property Supervisor with a portfolio located in Lincoln Park and the Gold Coast. Paula has over 20 years of experience in the industry and comes to WolinLevin as an entrepreneur of self-managed condominiums.

Community Specialists Community Specialists was recently awarded the management assignment for Tower Residences Condominium Association at 1235 Prairie Avenue. Community Specialists Director Rosemarie Wert also announced the following: Theo Hodges was hired as Manager of The Edge Lofts & Tower Condominium Association Edin Dzafic was hired as Manager for The Hermitage Condominium Association Sheila Brown was hired as Assistant Manager for 1111 S. Wabash Inez Drayton has been hired as the Property Manager for Clinton Complex .

Jasmine Taylor is the new Property Manager for The Tower Residences at Museum Park.

Chris Gibbs is new Property Manager for South Commons.

Scott Pearlstein has joined 900/910 Lake Shore Condominiums as Operations Manager.

Jeannine West has joined the 5445 Edgewater Plaza Condominium Association as Assistant Property Manager.

Jim Friedrichsen was made Director of Administration for Community Specialists in addition to his Information Systems Manager position.

Community Specialists held a training seminar for the maintenance staff of all of their managed properties at 2800 Lake Shore Drive. The seminar featured a safety consultant for Gallagher Basset Services who spoke on topics ranging from OSHA guidelines for handling hazardous materials and use of personal protective devices, to emergency evacuation procedures, lockout/tag out procedures and asbestos training. Jim LaChapelle, Technical Operations Manager for Community Specialists covered subjects such as seasonal equipment start-ups and maintenance, water treatment, loss control and incident reports.

Also, a training seminar for the Doormen of CS managed properties was held at Park Shore Condominiums, 195 North Harbor Drive. Maria Perez of Force Dynamics, LLC covered topics such as "Motivation through Inspiration" and "Developing a Culture of Service excellence" The seminar addressed the importance of being professional and courteous while enforcing the rules and regulations of the association.

Reserve Advisors Reserve Advisors is pleased to announce hiring Timothy J. Matthiesen as a Civil Engineer. Reserve Advisors provides reserve studies and insurance appraisals to homeowner associations and property managers throughout the country. Matthiesen is a graduate of Marquette University with a bachelor’s degree in Civil Engineering. He previously worked for the Archdiocese of Milwaukee where he gained experience in building inspections and condition assessments. Matthiesen works in Reserve Advisors’ corporate office in Milwaukee.

CSR Roofing Contractors OAF, North America's largest roofing manufacturer, announced that CSR Roofing Contractors Inc. has received the OAF Master Select(TM) Installation Excellence Award.

With no property owner incidents or complaints, this industry award recognizes CSR Roofing's dedication to the highest level of quality installations. As a OAF Master Select Contractor, they are also dedicated to improvement and training through access to CARE (the Center for the Advancement of Roofing Excellence). CARE is a nonprofit educational institute supported by OAF.

Hillcrest Management Dale Nusbaum has been named Vice President of Hillcrest Management. The announcement was made by Joel Garson President of Hillcrest Management.

Dale is responsible for all day to day operations at Hillcrest. He has been an active member in the property management industry for over 37 years. Dale brings hands-on experience through the managing, directing and growing of a mid-size real estate property management company located in the Chicago area.

Mr. Nusbaum has a Bachelor of Science in Education.

Presently, Dale holds an Illinois license as a Certified Property Manager and a Real Estate Broker. During his career, Dale has been a very active member in the Institute of Real Estate Management including being the Chicago chapter President and nationally, a regional Vice President. In 2006, Dale was honored with the prestigious "Certified Property Manager" of the year award.

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2 0 1 1 S TAT E O F T H E I N D U S T R Y S E M I N A R 11:00AM - 3:00PM | December 8, 2011 | Chicago Cultural Center | Call 630-202-3006 for more information Schedule/Agenda

Who Should Attend? » Community Association Board & Committee Members » Property Managers

Table Discussion Topics & Information Tables include:

» 11:00 am Registration » 11:30 am Luncheon, Awards & Announcements • Introduce 2011 MCD Media Advisory Board Members • 2011 Outstanding Leadership Awards

» 1:00 pm Legal Update & State of the Industry Update M O D E R ATO R :

Tairre Dever-Sutton Tairre Management Services PA N E L I S T S :

Mark D. Pearlstein Levenfeld Pearlstein, LLC Phil Pritzker The Habitat Company & Fred Rodriguez Heil Heil Smart & Golee

» 2:00 pm What’s on Your Mind?

Impact of Economic Crisis & Current Trends

» Chicago Police - CAPS Program William Townsell

» ComEd & Gas Rates for Commercial Properties Jackie Loftis - EMCOR Services Team Mechanical » Evacuation Plans Chicago Fire Department

» Fire Detection & Signaling Rocco Bartucci - Contech MSI Co.

» Energy Conservation Tips Chicagoland Building & Environments

» Fire Protection & Life Safety Charles Featherling - Simplex-Grinnell

» Evacuation Plans, Emergency Restoration Sheila Malchiodi - QCI Restoration » Painting & Decorating Dave Nolte - CertaPro Painters » TV & Internet

» Urban Landscape Ideas George Markoutsas - Landscape Concepts Management Hand-Outs & Resources will be provided on the following topics: Renters, Pets & Parking, Board Training, Security, Waste Management, Green Building Technologies, Budgeting & Financial Management, Reserve & Transition Studies, and Managing Capital Improvements.

Delinquent Assessments & Collection,

2011 State-of-the-Industry Committee

Evictions, FHA Approval, Foreclosures,

Tony Briskovic - Chicagoland Management & Realty Fred Rodriguez - Heil Heil Smart & Golee Tairre Dever-Sutton -Tairre Management Marla Jackson and Diane White - The Habitat Company Micky Tierney -Community Specialists Tom Skweres, Natalie Drapac and Elana Lugo - Wolin Levin, Inc.

PA N E L I S T S :

David Sugar Arnstein & Lehr The Chicago Cultural Center is located at 78 East Washington. An MCD registration table will be located outside the Washington & Garland rooms on the fifth floor. Use elevators in South lobby.

» Colleagues & Contractors

» Government Officials & Employees

Timing -Structure This event is intended to be structured to accommodate various levels of expertise as well as different types of interests in community associations. It is also intended to be flexible to meet time and schedule concerns. We are pleased to accommodate you in this regard. Feel free to contact our office to make customized arrangements.

Why Should You Attend? » To gain valuable, practical insight on how to deal with special issues of Community Associations » Identify resources needed to help your association(s) solve current challenges that your association(s) is facing » Meet and greet Condo Lifestyles Advisory Board members and other industry experts » To better understand government regulations regarding community associations » To contribute and share your ideas and input in an effort to improve standards in the field of community associations

» Fire & Water Restoration, Mold Remediation Brouwer Bros. Steamatic - Greg Brouwer

Additional topics may be added.

David Hartwell Penland & Hartwell, LLC

» Realtors & Realty Professionals

» Bulk TV, Internet Technology & Community Associations Tracy Haslett - Comcast

(Bad Debts, Bulk Purchasing Issues,

and other current trends)

» Developers

» Bed Bugs & other Pests Steve Seifert - Smithereen Pest Management

What Should you bring?

Your questions. We will provide you with a bag full of paper, pens, and several other items you can use at the program, home or office.

Chicagoland

Buildings & Environments CondoLifestyles

We welcome you to join us!

Please complete the form and return to our office. If you will attend the seminar, return the registration information with your payment. Seminar (per person) Cost is $105.00 for professional colleague or vendor, $85 per additional person from same firm regular registration (includes handouts and other resources to be provided).

Qualified Community Association Volunteers are $25.00 per person. MCD Media, 935 Curtiss, Suite 5, Downers Grove, IL 60515, 630-202-3006 or Fax 630.932.5553

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No. of CA units you are involved with as a:

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EXPIRATION DATE

CONDO LIFESTyLES

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CONDO LIFESTyLES

From the Editor

2

011 will come to a close soon and many of us are already mak-

ing plans for 2012. Autumn is in full swing and Thanksgiving is right around the corner. Thanksgiving is a great holiday because it asks

CondoLifestyles

us to take time to give thanks for people, places and things in our lives. Thanks®

▲ Mike Davids

giving also asks us to reconnect with some of our country’s founding values such as community. So please take time to give thanks as often as you can for whatever good is happening in your life and consider doing something more to make your community(s) even better.

OCTOBER 2011 | VOLUME 15 | NUMBER 3

The stock market continues to be volatile and our economy continues to struggle on many fronts.

Budgeting for next year has been a top priority for many community associations in recent months. While it’s

Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold

never easy, budgeting in a financial crisis is extremely challenging and now commonly includes consideration of bad debts. Hard decisions need to be made and many decisions are not popular. This puts even more stress on volunteer board members as well as management professionals. Despite this challenge, do your best to make sound decisions for your Association. Hopefully, 2012 will bring our local and national economy the improvements that we all would like to see.

Our cover story discusses recent amendments to the Common Interest Community Act, which is intended to provide non-condo associations with many of the same rights and obligations of condominium associations. There is other recent legislation that impacts community associations including the publication of the rules for manager licensing. Be sure to consult with professionals who can help you understand how any new legislation will affect your community.

In one of our Board Basics columns, you can learn more about meetings and governance. Another ses-

Administration Cindy Jacob and Carol Iandolo

sion of “Ask an Attorney” is included in this issue along with a special feature on common questions for com-

Condo Lifestyles Magazine is published quarterly by MCD Media, a wholly owned subsidiary MCD Marketing Associates, Inc. For editorial, advertising and subscription information contact: 935 Curtiss Street, Suite 5, Downers Grove, IL 60515. 630/663-0333.

boomer generation is creating legal concerns for some community associations. A guest editorial is also fea-

Circulation: Condo Lifestyles is available for a single issue price of $8.95 or at a $30.00 annual subscription.

Distribution is direct mailing and delivery direct through authorized distributors to over 5,000 officers and directors of Common Interest Communities, 500 property managers, 400 realtors, 400 developers and 400 public officials. Total Circulation is 7,000.

Condo Lifestyles attempts to provide its readership with a wide range of information on community associations, and when appropriate, differing opinions on community association issues.

All material herein is copyrighted 2010©. No part of the publication may be reproduced whatsoever without written consent from the publisher.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought.

munity associations.

Our risks and liabilities column appears in this issue with an offering on how the graying of the baby tured in this edition. Wayne Hannah, Jr offers his perspective and identifies reasons why one of the biggest threats to condominium values is a lack of knowledge and understanding by many on the subject of governance. As you can read in this article, Hannah, Jr. relates that more than half of the cases in the Illinois Appellate and Supreme Court between 1984-2009 have to do with condo governance. As always, if you have a perspective and opinion to share on this or other sensitive topics, please send us yours.

Our regular Industry Happenings and Event Highlights also appear in this issue.

State of the Industry Program December 8 One of the most pressing topics for community associations is how the financial crisis is impacting community associations and the collateral damage that foreclosures, evictions and bad debts resulting from our economic situation have created. As such, financial issues will be one of the main topics discussed at our Condo Lifestyles State of the Industry program, which will be held on December 8th at the Chicago Cultural Center. Another of our primary topics will be a legislative update including a report on the manager licensing, the Common Interest Community Act and other legal issues. you can find more information and a registration form on page 17 of this issue or at our website www.condolifestyles.net.

Thanks to the many new subscribers that have found our publication useful and informative. Special thanks to the firms, associations and groups that are Authorized Distributors of Condo Lifestyles.

As we get ready to welcome in another new year, we encourage you to take this opportunity to make your association and your community all it can be. If you have an idea that would benefit other Community

Advertisers assume liability for all content of advertisements printed, and also assume personal liability for any claims arising therefrom against the publisher relating to advertising content. The publisher and editors reserve the right to reject advertising or editorial deemed inappropriate for the publication.

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CONDO LIFESTyLES

Associations, a success story to share, or some advice on how to avoid a problem or failure, please send me an e-mail (mdavids@condolifestyles.net) Y

Michael C. Davids Editor and publisher

10.11

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

SERVICE DIRECTORy

ACCOUNTANTS

ARCHITECTS/ENGINEERS

ATTORNEYS

MICHAEL J. COCHRANE, CPA (847) 301-0377

KELLERMEYER GODFRYT & HART, P.C. (847) 318-0033

KEOUGH & MOODY, P.C. (630) 369-2700

Specializing in Accounting Services for Homeowner Associations.

CONDO CPA A Division of Schneider, Cupuro & Associates, LTD.

Investigations and Repair Documents for: Exterior Walls, Windows, Roofs, and Parking Garages Condition Surveys and Reserve Studies www.kghpc.com

630-832-2222 EXT 113 CONTACT BRAD SCHNEIDER Brad@CondoCPA.com

KLEIN AND HOFFMAN, INC.

CERTIFIED PUBLIC ACCOUNTANTS

312-251-1900

Accounting Solutions for Management Companies & Self-Managed Associations Audit & Accounting Services Income Tax Reduction & Planning

Building Envelope Structural Renovation/Adaptive Reuse Curtainwall/Windows Capital Maintenance Planning New Structural Design, Civil/Environmental Marine/Waterfront Structures Transportation Facilities www.kleinandhoffman.com

FROST, RUTTENBERG & ROTHBLATT, P.C. 847-282-6340

WALDMAN ENGINEERING CONSULTANTS (630) 922-3000

Contact: Steve Silberman, CPA

www.waldmaneng.com

SELDEN FOX, LTD. Contact: Michael C. Majewski, CPA

ASBESTOS/LEAD ABATEMENT

(630) 954-1400

IFD INC. ASSOCIATED ENVIRONMENTAL LLC 847-364-6800

ARCHITECTS/ENGINEERS CODER TAYLOR ASSOCIATES coder@codertaylor.com

(847) 382-4100

KOVITZ SHIFRIN NESBIT (847) 537-0500 www.ksnlaw.com Covenant Drafting & Enforcement Advising & Consulting with Boards Construction Defect Litigation Collecting Delinquent Assessments

ORUM & ROTH, LTD. (312) 922-6262 Intellectual Property Law Trademarks • Patents Condominium Law • General Litigation Contact Mark D. Roth

BANKING

ATTORNEYS

Loans, Reserve Investments & Lock Box Services www.communityadvantage.com

FULLETT ROSENLUND ANDERSON, P.C. (847) 259-5100

(847) 564-3880 FAX

85 REVERE DRIVE, SUITE B, NORTHBROOK, IL 60062

LAW OFFICES OF KEAY & COSTELLO (630) 690-6446

COMMUNITY ADVANTAGE OF BARRINGTON BANK & TRUST (847) 304-5940

FULL CIRCLE ARCHITECTS, LLC (847) 564-0884

www.fullcirclearchitects.com

www.kmlegal.com

Asbestos Abatement • Lead Paint Mitigation www.ifd-associated.com

“We Specialize in Emergency Repairs” Architects • Research • Engineering Specifications • Reserve Studies

Daniel Baigelman, AIA dan@fullcirclearchitects.com Capital Improvements • Reserve Studies Engineering Reports

NAPERVILLE OFFICE: 630-369-2700 1250 E. Diehl Rd., Suite 405, Naperville, IL 60540

Structural and Restoration Engineers

CERTIFIED PUBLIC ACCOUNTANTS

CERTIFIED PUBLIC ACCOUNTANTS

CHICAGO OFFICE: 312-899-9989 30 North LaSalle, Suite 2340, Chicago, IL 60602

www.frapc.com

DICKLER, KAHN, SLOWIKOWSKI & ZAVELL, LTD. (847) 593-5595 www.dicklerlaw.com.com

CondoLifestyles State-of-the-Indust ry

12.08.11

Chicago Cultu ral Center For more informatio www.condolifestylen visit s.net

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

10.11

CONDO LIFESTyLES

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CONDO LIFESTyLES

BUILDING RESTORATIONS

CARPET CLEANING

ELEVATORS/CONSULTANTS

BRAL RESTORATION, LLC. (847) 839-1100

R & S CARPET & UPHOLSTERY CLEANING, INC. 708-243-0635

SMART ELEVATORS CO. (630) 544-6829

Masonry and Concrete Restoration www.bralrestoration.com

FORUM GROUP, INC. (773) 732-3051 Peter.Maneyski@ForumGroupInc.com

"We specialize in cleaning High Rise Buildings" Garbage Chute Cleaning Tile & Grout • Pressure Washing Move Out/Detail Cleaning Serving Chicagoland Area for Over 10 years

L E A K R E PA I R S

FM&J ASPHALT PAVING, INC. 708-544-6700 / 630-279-0303

GOLF CONSTRUCTION (219) 933-3420

Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack Filling & Striping www.fmjasphalt.com

CONCRETE RESTORATION

(847) 253-3886 TEL / (847) 253-3255 FAX John@holtonbrothers.com www.holtonbrothers.com

HARD SURFACE SOLUTIONS (847) 228-7230 / (630) 674-4520 Concrete Flatwork Specialists Asphalt Paving Curbs & Driveways | Sidewalks Footings & Foundations Colored Concrete Stamped Concrete Aggregate Finish Concrete www.hsshardsurfacesolutions.com

QUALITY RESTORATIONS (630) 595-0990

RIGGIO/BORON, LTD. (847) 531-5700

12.08.11

ral Center Chicago Cultu n visit For more informatioles.net www.condolifesty

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CONDO LIFESTyLES

FHA/FANNIE MAE CONDOMINIUM PROJECT APPROVALS

CONDO APPROVAL PROFESSIONALS LLC (847)293-2962 www.condo-approval.com

FIRE SAFETY & PROTECTION

HARRIS EXTERIORS & MORE, INC. (630) 372-7050 Serving Community Associations throughout Chicagoland Quality Service at the Right Price Roofing • Siding • Windows Doors • Soffit• Facia • Gutters Repairs • Carpentry • Maintenance www.harrisexteriors.com

CondoLifestyles ry State-of-the-Indust

SELECT ENERGY PARTNERS LLC (312) 593-6412

contact: Steve Stenger

DOORS

A Total Exterior Facade Restoration Company www.RiggioBoron.net

COST CONTAINMENT INTL. LLC (877) 265-2799

Contact: Ryan Anthony www.selectenergypartners.com

www.golfconstruction.net

Masonry Repair Services, Tuckpointing, Caulking and Concrete Restoration

ENERGY GAS & ELECTRIC

Contact: Hans Herrmann www.c2intl.com

MASONRy, CONCRETE, TUCKPOINTING, CAULKING See our ad on page 9 for more details or visit our website at: www.ForumGroupInc.com

HOLTON BROTHERS, INC.

www.smartelevatorsco.com smartin@smartelevatorsco.com

EMCOR TEAM MECHANICAL FIRE PROTECTION DIVISION (847) 229-7600 www.emcortmi.com

CONTECH MSI CO. 847-483-3803 Fire Detection & Signaling Systems Fire Alarm Systems Chicago Life Safety Evaluation Solutions Security Systems/CCTV Card Access Systems See our ad on page 9 www.contechco.com

WOODLAND WINDOWS & DOORS 630-529-DOOR (3667) Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

10.11

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

SERVICE DIRECTORy

FIRE SAFETY & PROTECTION

FORECLOSURE & EVICTION RELATED SERVICES

NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) 866-2NIFSAB (866-264-3722)

BROUWER BROS. STEAMATIC (800) CLEAN54

Nancy Ayers

E.L. JOHNSON INVESTIGATIONS, INC. (312) 583-1167

SIMPLEX GRINNELL (630) 948-1235

FIRE/FLOOD RESTORATION

MESIROW FINANCIAL (312) 595-8135

Photo Inventory, Moving, Storage or Disposal www.bbsteamatic.com

708-403-4468 www.firesprinklerassoc.org

Fire Alarm / Sprinkler Systems Fire Pumps / Extinguishers Fire Panel Monitoring Installation / Testing / Maintenance 24/7 Service: (630) 948-1200 www.simplexgrinnell.com

INSURANCE

HOLLINGER SERVICES, INC. (847) 437-2184 Property Casualty • Employee Benefits Workers Compensation www.HollingerInsurance.com

(312) 583-1169 FAX State Licensed Private Detectives All Types of Investigations Specialization in Foreclosure Process Service and Eviction Notices on Foreclosed Property stacey@eljohnson.com

INTERNET SERVICE

GARBAGE CHUTE CLEANING

SILVERIP COMMUNICATIONS 312-420-2782

BROUWER BROS. STEAMATIC (800) CLEAN54

Bulk and Retail Internet Service Provider for Residential Towers Fastest Internet in Chicago Contact Ashkan Marsh www.silverip.com

AYR RESTORATION, INC. (847) 729-8810

(708) 396-1477 www.bbsteamatic.com

HVAC BROUWER BROS. STEAMATIC (800) CLEAN54 All types of environmental cleaning.

(708) 396-1477

JANITORIAL SERVICES

ALTHOFF INDUSTRIES 312.332.5700 Mechanical - Plumbing - Electrical - Building Automation www.althoffind.com

KINGSBURY CLEAN (847) 768-1200

QCI RESTORATION 847-891-2929 866-832-6724

EMCOR SERVICES TEAM MECHANICAL (847) 229-7600

www.QCIrestoration.com

www.emcortmi.com

“GREEN” Janitorial & Sanitizing Services for hospitality businesses, health care providers and commercial, industrial and multi-unit residential buildings.

Jed Levenstein / David Melone www.kingsburyclean.com

INSULATION (PIPE & HVAC) THE RESTORATION GROUP, LLC (630) 580-5584

TOWER BUILDING SERVICES 312-404-3943

ALL THERMAL INSULATION CO. (847) 698-7543

www.trgrestore.com

www.towerservices.net Cost efficient Janitorial & Maintenance services for homeowners associations.

Carpet cleaning, pressure washing, snow removal, etc.

Serving Chicago Over 50 years

UNIVERSAL RESTORATION SERVICES 877-864-8266 P 888-596-4966 F

We NEVER Charge for Estimates All Pipe & HVAC Insulation all_thermal@sbcglobal.net

Water, Fire and Disaster Restoration Joe Lamotte, General Manager Commercial Division

For more information, visit our website at

www.4universal.com

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

www.condolifestyles.net 10.11

CONDO LIFESTyLES

21

CONDO LIFESTyLES

LAKE & POND MANAGEMENT ACRES GROUP (888) 231-1300 / (847) 526-4554 Ceritfied Aquatic Applicator Department of Agriculture www.acresgroup.com

LANDSCAPE CONTRACTORS

MOLD REMEDIATION

THORNAPPLE LANDSCAPES, INC. 630-232 2076 / 800-464-3443

UNIVERSAL RESTORATION SERVICES 877-864-8266 P 888-596-4966 F

Quality Landscaping Since 1947 www.thornapplelandscapes.com

Water, Fire and Disaster Restoration

LANDSCAPE CONTRACTORS ACRES GROUP (888) 231-1300 / (847) 526-4554 Professional Landscaping and Snow Removal www.acresgroup.com

LAUNDRY SERVICES & EQUIPMENT

Joe Lamotte, General Manager Commercial Division www.4universal.com

LAUNDRYLAND ROUTE, LLC. (847) 998-4050 Contact Andrew Neuman

ALAN HORTICULTURAL ENTERPRISES, INC. (630) 739-0205

PAINTERS AAA PAINTING CONTRACTORS, INC. (630) 231-8350

LAWN CARE

www.aaapaintco.com

www.alanhorticultural.com

SPRING-GREEN LAWN CARE (800) 830-5914

BALANCED ENVIRONMENTS, INC. (847) 395-7120 www.BalancedEnvironmentsInc.com

MAILBOXES

ILT VIGNOCCHI (847) 487-5200

MAILBOX WORKS (630) 355-9989 (773) 528-3111

www.iltvignocchi.com

KINSELLA LANDSCAPE, INC. (708) 371-0830

www.landscapeconcepts.com

SEBERT LANDSCAPING, INC. 630-497-1000

Quality Painting & Decorating since 1973 Our Mission: Guaranteed Committment to Quality Now offering Parking Lot Painting www.Abbottpainting.com

Large Variety of Commercial and Residential Mailboxes Intercoms and Tele-Entry Address Signage & Engraved Nameplates Installation Services Since 1989

Creating Lifestyles From The Outside In…™ www.kinsellalandscape.com

LANDSCAPE CONCEPTS MANAGEMENT, INC. (847) 223-3800

ABBOTT PAINTING, INC. 312-636-8400 773-725-9800

www.MailboxWorks.com

MOLD REMEDIATION BROUWER BROS. STEAMATIC (800) CLEAN54 “All types of Environmental Cleaning” www.bbsteamatic.com

ABC DECO INC. 773-701-1143 Painting & Wall Repairs Hardwood Floors/ Tile Installation Kitchen cabinetry sale & installation "Serving Community Association's for over 10 Years" Contact: Mike Chinte info@abcdecoonline.com

CERTAPRO PAINTERS 630-742-5119 Interior & Exterior Painting • Wallcoverings Stucco, Masonry & EFIS Repair • Drywall Repair www.certapro.com bkurschner@certapro.com

www.sebert.com

IFD, INC. ASSOCIATED ENVIRONMENTAL LLC

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CONDO LIFESTyLES

10.11

(847) 364-6800

THE INSIDE OUT COMPANY 630-406-3000

Environmental Remediation www.ifd-associated.com

Painting, Construction & Maintenance www.insideoutcompany.com

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

SERVICE DIRECTORy

PAVING

PROPERTY MANAGEMENT

PROPERTY MANAGEMENT

DUBOIS PAVING (847) 634-6089 (800) 884-4728

CHICAGO PROPERTY SERVICES, INC. (312) 455-0107 X102

PARAGON PROPERTY MANAGEMENT (847) 465-1483

www.duboispaving.com

www.chicagopropertyservices.com

contact: Tracy Davis tracy@paragonmanagement-inc.com www.paragonmanagement-inc.com

FM&J ASPHALT PAVING, INC. 708-544-6700 / 630-279-0303 Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack Filling & Striping www.fmjasphalt.com

HARD SURFACE SOLUTIONS (630) 674-4520

“Premier Community Management”

CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300 www.chicagoland-inc.com

COMMUNITY SPECIALISTS (312) 337-8691 www.communityspecialists.net

www.hsshardsurfacesolutions.com

PROPERTY MANAGEMENT SPECIALISTS, LTD. (847) 845-6067 “A Management Company with Values” contact: James Krech service@pmgrs.com

PROPERTY SPECIALISTS INC. (847) 806-6121 (630) 633-5450 WOODRIDGE OFFICE

THE HABITAT COMPANY (312) 527-5400

MAUL ASPHALT & SEALCOATING (630) 420-8765

www.habitat.com

Sealcoating / Crack-sealing / Striping Asphalt Installation www.maulasphalt.com

HEIL, HEIL, SMART & GOLEE (847) 866-7400

PEST CONTROL SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500

TAIRRE MANAGEMENT SERVICES (847) 299-5740

HILLCREST MANAGEMENT (630) 627-3303 / (312) 379-0692

tsutton@tairremgmt.com

WOLIN-LEVIN INC. (312) 335-1950

www.hillcrestmgmt.com

PROPERTY MANAGEMENT AEGIS PROPERTIES CORPORATION (773) 667-8900

SUDLER PROPERTY MANAGEMENT (312) 751-0900 www.sudlerpropertymanagement.com

www.hhsg.net

www.smithereen.com

www.psimanagement.net

Contact Jennifer Feldman, Tom Skweres

LEGUM & NORMAN MIDWEST (312) 944-2611

www.wolin-levin.com

www.lnchicago.com

REAL ESTATE TAX ATTORNEY

MCGILL MANAGEMENT, INC. (847) 259-1331

ELLIOTT & ASSOCIATES (847) 298-8300

www.aegisproperties.com

BAUM PROPERTY SERVICES, LTD., AAMC (630) 897-0500

www.elliottlaw.com

www.mcgillmanagement.com

www.BaumProp.com

CARUSO MANAGEMENT GROUP, INC.

NIMROD REALTY GROUP (847) 724-7850

RESIDENTIAL & COMMERCIAL

(630) 717-7188 www.carusomanagementgroup.com

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

10.11

CONDO LIFESTyLES

23

CONDO LIFESTyLES

SNOW REMOVAL

REMODELING CONTRACTORS

ROOFING

ABC DECO INC. 773-701-1143

S&D ROOFING SERVICE (630) 279-6600

Painting & Wall Repairs Hardwood Floors/ Tile Installation Kitchen cabinetry sale & installation "Serving Community Association's for over 10 Years" Contact: Mike Chinte info@abcdecoonline.com

50,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS Our experience & technical know-how gets the job done right the first time!

Serving the area since 1963 www.sdroofing.com sales@sdroofing.com

ROOFING

SECURITY SCREENS

ACTIVE ROOFING CO., INC. (773) 238-0338 (708) 430-8080

MIDWEST SECURITY SCREENS (800) 615-6754 Quality Security for Windows and Doors www.midwestsecurityscreens.com

Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing www.activeroofing.com

B.T. LAKESIDE ROOFING (630) 628-0093

CSR ROOFING CONTRACTORS (708) 848-9119

www.admiralsecuritychicago.com

CONDO LIFESTyLES

TREE CARE

Tree Pruning, Tree Removal, Cable Bracing, Plant Health Care, Tree Planting & Transplanting www.kramertree.com

B.T. LAKESIDE ROOFING (630) 628-0093 www.lakeroof.com See our ad on page 31.

HARRIS EXTERIORS & MORE, INC. (630) 372-7050 Serving Community Associations throughout Chicagoland Quality Service at the Right Price Roofing • Siding • Windows Doors • Soffit• Facia • Gutters Repairs • Carpentry • Maintenance www.harrisexteriors.com

Certified Arborists, Accredited, 5-Time “Company That Cares” Honor Roll Member

TV-BULK CABLE & SATELLITE COMCAST (866) 594-1234

Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

10.11

THE CARE OF TREES (847) 394-3903

www.thecareoftrees.com

WOODLAND WINDOWS & DOORS 630-529-DOOR (3667)

PRO★TOP ROOFING (847) 559-9119

24

Heaters Pumps • Repairs • Chemicals Pool Maintenance • Complete Water Analysis Pool Guards, Inc. ross@spmspools.com

KRAMER TREE SPECIALISTS, INC. 630-293-5444

SIDING / RENOVATIONS

Serving Community Associations throughout Chicagoland Quality Service at the Right Price Roofing • Siding • Windows Doors • Soffit• Facia • Gutters Repairs • Carpentry • Maintenance www.harrisexteriors.com

We’re Here When you Need Us! www.protoproofing.com

SPMS 630-692-1500

A comprehensive aboricultural firm building relationships in every season for more information, please visit our website: www.autumntree.com

ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888

www.csr-roofing.com See our ad on page 4.

HARRIS EXTERIORS & MORE, INC. (630) 372-7050

SWIMMING POOLS

AUTUMN TREE CARE EXPERTS, INC. (847) 729-1963

SECURITY SERVICES

See our ad on page 31. www.lakeroof.com

HARD SURFACE SOLUTIONS (630) 674-4520

www.comcast.com

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

SERVICE DIRECTORy

TV-BULK CABLE & SATELLITE

WINDOWS/REPLACEMENTS

RCN (312) 955-2322

WOODLAND WINDOWS & DOORS 630-529-DOOR (3667)

CHICAGO WINDOW SYSTEMS, INC. (312) 915-0591

rcnchicagoapts@rcn.net www.rcn.com

Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

Window and Patio Door Replacement Aluminum and Wood Clad Steel UL Rated Windows Aluminum Store Fronts www.cwins10@yahoo.com

SILVERIP COMMUNICATIONS 312-420-2782 DirecTV, Internet, Voice www.silverip.com

WASTE SERVICES

WINDOWS/REPLACEMENTS

HARRIS EXTERIORS & MORE, INC. (630) 372-7050

WINDOW RESTORATION WINDOW WALL SERVICES, INC. THE CAULKING COMPANY (708) 361-9333 www.windowwallservices.com

Serving Community Associations throughout Chicagoland Quality Service at the Right Price Roofing • Siding • Windows Doors • Soffit• Facia • Gutters Repairs • Carpentry • Maintenance www.harrisexteriors.com

LAKESHORE WASTE SERVICES (773) 685-8811

All Types of Window Restoration Weather Stripping / Hinges Handles and Adjustments Curtain Wall Repair Specialists

For more information, visit our website at

www.condolifestyles.net

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2011©.

10.11

CONDO LIFESTyLES

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CONDO LIFESTyLES

Industry Happenings ABOMA Anchors Away T

his year ABOMA marks 74 years of service to the Chicago Condominium and Rental Residential industry. To celebrate their anniversary ABOMA held it’s Anchors Away event at the Columbia yacht Club, Chicago on September 1, 2011.

A group of over 200 attended including condominium board officers & directors, residential property supervisors, property managers, ABOMA Supplier Members and others from the real estate and building community.

Gold Event Sponsors included: BlueStar Energy Services, Quality Restorations, RCN Telecom

and Scandinavian Builders. Silver sponsors included: Abbott Painting, ACR, Brouwer Bros., Condo Lifestyles, Chicagoland Community Management, Community Advantage of Barrington Bank & Trust, Community Specialists, ConTech MSI., CSR Roofing, Inside Out Company, Lakeshore Waste, Landscapes Concepts Management, Penland & Hartwell, Reliable Building Services, Riggio/Boron, Smart Elevators, Smithereen Pest Management, The Habitat Company, Titan Security Services and Wolin-Levin. There were also 16 bronze sponsors. Y

Working Exclusively with the Community Association Industry

n Audit & Accounting Services n Expertise in Developer Turnovers n Election Tabulations n Income Tax Reduction & Planning n Monthly Accounting Solutions for Management Companies

Call Brad Schneider at 630-832-2222 188 Industrial Drive, Suite 300, Elmhurst, IL 60126 • Visit our website at www.CondoCPA.com

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CONDO LIFESTyLES

10.11

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2009©.

2011©.

BOARD BASICS

By David Mack

Common Questions for Community Associations Following is a group of questions that have been posed to Condo Lifestyles recently. Our answers are general in nature and not intended as legal advice. you should consult an attorney to assist with any specific legal issue you may have.

Suspect Mishandling of Funds Q/ If unit owners suspect that the board is mishandling funds and refuses to allow an audit to be completed, what should the owners do?

A/ The Condo Act and your by-laws require the board to furnish the unit owners with an annual accounting of the common expenses for any year.

It doesn’t have to be audited although it is a good idea to have a formally audited accounting every couple of years at least. And any audit should be done by an independent party who had no hand in the regular accounting for the association’s funds during the year.

A good first step might be for the owners to petition for a special meeting under your by-laws to discuss and confront the board about its failure to have the annual accounting done. Usually 20 % of owners must petition for such a meeting.

Unit owners can also request to see the books and records of the association for the previous 10 years under Section 19 of the condo act by submitting a written request and by stating a proper purpose. If the board doesn’t provide the annual accounting or denies unfairly the right to review the books and records, the options for the unit owners are to vote them out of office or to hire an attorney to sue the board. Keep in mind, however, that the latter choice would cost litigants money and it’s possible that association funds cold be used to defend the board against the suit.

If you suspect criminal fraud in the mishandling of funds, you could try to approach the county or local district attorney to see if they would be interested in pursuing the matter. Often they are not, but it’s worth a try, especially if there is some compelling evidence to support a charge of misuse.

through the bathroom cabinet into the tub.

Because we caught them with that set up they are now complaining that they do not want me- they called me the sheriff- in their unit ever again. It is my understanding that any board members has the right to enter a unit when there is a problem with a common area that may be caused by a defect suspected to be in that unit. Is this correct and where can I find that information.

A/ Check section 18.4(j) of the Condo Act, wherein it is stated under powers and duties of the board of managers that the board is to have access to each unit as may be necessary for the maintenance, repair or replacement of common elements or to make emergency repairs necessary to prevent damage to common elements or other units. It is preferable to have the cooperation of the unit owners in doing this and to provide advance notice of the need for entry but in emergencies, especially where no one is home and unit owners can’t otherwise be reached, boards have the authority to enter without such notice. That is why many associations ask unit owners to provide the board or management with a key.

Who Pays for Leaky Air Condotioners?

Q/ I live in a condominium and have an issue that I hope you can help me with. The building has individual air conditioning units that sit in metal

sleeves in the wall. On the outside of the building the caulk and insulation materials surrounding the sleeves have started to deteriorate. Consequently some unit owners are experiencing occasional water leaking into units along the sleeves.

We have been notified by the association that the individual unit owners are financially responsible for the repair, not the association. Since the damage is with the sleeves on the outside of the building, how can this be possible?

A/ Your governing documents hopefully will make it clear who is responsible for the upkeep of the air conditioning units so check them closely. Exterior walls are the responsibility of the association but through the wall a/c units may be the responsibility of the individual owners. However, while you and other owners may have to maintain or replace the a/c units, the association may be on the hook for repairing any deterioration to the caulking or other insulation materials on the exterior of the sleeves.

See if you can determine how responsibility may be shared between owners and association by reviewing the declaration and by-laws. If you can’t determine this, ask the board or management to show you exactly where in the documents the evidence is supporting their position on responsibility.

(Correspondent later wrote back that the governing documents clearly showed that the sleeves and insulation had to be maintained by the association and the a/c units by the owners and the matter was resolved in this way.)

Ban Delinquent Owners from Meetings?

Q/ Can the board ban unit owners from attending board meetings and voting in elections if the owners are delinquent in their assessments?

A/ We consulted a legal expert on this issue and here is his answer. “I have always taken the position

Dickler, Kahn, Slowikowski & Zavell, Ltd.

Enter Unit to Inspect Leaky Problems?

Q/ We had a leak in a garage area that came from a unit on the 2nd floor. The maintenance man and I, as a member of the board, inspected and found the problem. I took pictures because they had their wash draining into the bathtub and a hose running from the washer in their bedroom

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~ concentrating in ~

Condo & HOA Representation Corporate • Real Estate • Litigation • Wills Personal Injury 85 W. Algonquin Rd., Ste #420, Arlington Heights, IL 60005

847-593-5595 10.11

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that the board has the power to adopt a resolution/policy that delinquents cannot either run for the board, as it would be a conflict of interest, or vote in an election because they are not a member in good standing. However, nothing has ever been discussed about barring delinquents from attending meetings altogether. I believe that may be overreaching, although to my knowledge it has never been addressed (in legal action.)”

But, “I have drafted policies and advised boards that a truly disruptive owner, after notice and due process, can be barred from meetings because (being there) becomes a life, health and safety issue. But, again, never for a mere delinquency without multiple instances of inappropriate conduct to go with it.”

Car Loan for Treasurer?

www.carusomanagementgroup.com

Baum

Q/ We have a four member board of directors in our forty-four unit condo association. The board decided among themselves to loan the treasurer $6000 to buy a car. We (the other unit owners) just became aware of the transaction a couple of weeks ago. It has been determined that it is a three year loan at five percent interest. These funds belong to our association, not private funds put up by the other board members. It appears that nothing has been paid back in the seventeen months since the loan was given.

Since this is our condo association’s money I’d like to know if the board has the authority to make such a loan without the approval of the other 40 unit owners. Were the procedures improper or illegal?

A/ Such a loan is prohibited specifically by the Illinois Not for Profit Corporation Act, which is applicable to

PROPERTY MANAGEMENT

all condo associations in the State. See Section 108.80. The purpose of this loan is not covered by the exceptions noted in the NFP Act. All the directors of the board who approved the loan violated their fiduciary duty to the unit owners. Fiduciary duty is referenced in Section 18.4 of the Illinois Condominium Act, immediately following paragraph (r).

Under 108.80 of the NFP Act, the board members are liable for the amount of the loan until its repayment. Certainly the loan was improper but whether it rises to the level of being “illegal” you would have to consult law enforcement authorities to determine. You should bring these facts to the board’s attention, pointing out that the loan funds should be recovered as soon as possible.

Board Members Refuse to Meet Due to Personal Issues?

Q/ Do board members have any recourse if two of the three officers (president and treasurer in our case) refuse to meet as a group because they have personal issues with two of the other board members? How do we get them to meet with us to discuss taking care of the common areas of our property? I sent a couple of e-mails to the other board members concerning some landscaping issues but they were ignored. The secretary and I then called for a special meeting of the board to discuss landscaping which to me has become a safety issue but the president and treasurer told the secretary there would be no meeting. How do we get our voices heard by the three board members who consider me and the secretary persona non grata? The treasurer seems intent to hire a landscaper without discussing the selection or the cost with us as well as other important issues.

Professional Community Management C O N TA C T

Michael D. Baum, CPM, PCAM

630-897-0500 www.BaumProp.com

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BOARD BASICS

A/ The treasurer can’t hire anyone without board approval at a meeting where a quorum of the board members is present to conduct and vote on business issues. A quorum in the case of a five member board is typically a majority or three unless your by-laws or articles of incorporation provide otherwise. Special meetings can be called in a couple of ways, one of which is by 25% of the board. That should be in your by-laws. Therefore you and the secretary can call for the special meeting of the board. However, you would need three members to be present to conduct business.

If only two appeared then only discussions could take place but no official votes taken.

As far as getting a more functional board in place, a campaign to oust those who don’t appear to be serving the association’s interests could be mounted at the next annual election. It is also possible to remove board members during their terms of office and the procedures for that should be in Section 18 of your by-laws. It is also possible to change the board officers at a regular or special board meeting by a simple vote of the board which selected the officers in the first place. To do that would take three directors voting to make a change.

Whatever you choose to attempt, it is safe to assume there will be continuing friction since the ousted directors or officers will likely not go quietly into the night. That is something you will have to deal with. As a last resort, when board members refuse to follow approved policies and procedures they can be sued by the other board members or the unit owners but that may be an extreme step that you may not want to take.

Replacing Board Member That Resigned Q/ We are a nine member board and one of our members resigned in the middle of his term. At our next meeting, we will vote among the remaining board members for a new member.

Do we need a 2/3’s vote among the eight member board and what is that number? Or can we operate with the eight members until the next election? (which is about a year away) A/ According to Section 18(a)(13) of the Condo Act and somewhere in your by-laws, if the remaining board is going to select a new ninth board member, you would need a 2/3 vote of those sitting members to make the appointment to fill out the unexpired term until the next annual election.

That would be a fraction over five so you would have to move up to six- meaning six members would have to vote for a new appointee. The unit owners could also call for a special election with a petition signed by 20 % of their total and that is also in the law as well as your by-laws. You could also continue to operate with eight board members until the election but that may result in some four to four votes in voting on issues and result in an inability to take some necessary actions.

Board Meets With Manager Without Notice Q/ Our board met with the manager in an executive committee session without notice of the time and place of meeting being given to the residents so they could attend. I have a few questions regarding what they did. First, does the executive committee have the right to act on issues that come up before the committee in the

meeting? Secondly, am I correct that the executive committee meeting minutes need to be approved at the next open session board meeting? And finally, should the minutes include a sensitive issue regarding a pay-back plan for one of the distressed unit owners?

A/ A condo board can’t make any decisions in so called executive sessions and there are only a few issues that can be discussed behind so called closed doors without unit owners being invited to attend. You’ll find those reasons in the Condominium Act as well as your by-laws but they relate to pending litigation, employment matters, violations of rules and regulations and owner assessment delinquencies. And even though they can meet in private to discuss those issues, they must vote on action to take in open meetings.

There is nothing in the law about keeping minutes of closed meetings because the issues that can be legitimately discussed, as noted above, are not for the public record. Keeping minutes would undermine the purpose of having a closed meeting since minutes of all board meetings, whether executive sessions or otherwise, for seven years must be made available for inspection by unit owners under Section 19 of the Condo Act. If your board discussed any matters except those they legally can away from unit owner presence, they would be in violation of condo law. To your third question, I would say that the matter should have been discussed in private but a vote on the pay back plan would have had to be taken in an open meeting and the minutes would only reflect the voting results but not the details of the plan.

Paying Lawyers Fee Q/ Our board hired a lawyer to collectively appeal the assessed valuation of the units in our association. We won the appeal. The lawyer’s fee is nearly $18,000. It is our understanding that each owner is responsible for a portion of that expense. This was figured out by the lawyer and we passed it on with a complete explanation of what the owners were being charged for. We are now receiving complaints from some unit owners about paying their share. Is there anything in the Illinois Condo Act concerning this and whose responsibility is it to pay the bill to the lawyers. I have looked in our declaration and have been unable to find anything about this issue.

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10.11

A/ You’ll find the answer in Section 10(c) of the Condo Act. All expenses in connection with the appeal of assessed valuation of the units, among other things, can be charged and collected as common expenses, which means that unit owners would be required to pay their proportionate share. I assume that 2/3 of the board voted to seek this relief as this Section of the law also provides.

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EVENT HIGHLIGHTS

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Over 150 clients and guests attended to the annual MCD Showcases the Races event that was held on Thursday, September 15, 2011 at Arlington International Racecourse. Major sponsor for the event was Comcast XFINITy.

Over 150 guests attended the annual MCD Golf Invitational & Bocce Games on July 15, 2011 at Eaglewood Resort in Itasca, IL. Major Sponsors of the event included Kinsella Landscape, Inc., Balanced Environments, & Riggio/Boron, Ltd.

▲ Shown above is a group from Wolin-Levin, Inc. on a paddock tour prior to race that was sponsored by the company.

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CONDO LIFESTyLES

31

CONDO LIFESTyLES

By Wayne R. Hannah, Jr., SNR Denton

The Threat to Condominium Values record heights.

We all know what happened next. As early as 2006, housing prices began to fall. Foreclosure rates went sky high.

Under the collapse of the subprime mortgage industry, and its rippleeffect on commercial and investment banks heavily invested in mortgage-backed securities, the condominium market (along with all other housing) turned from a cash cow into a national emergency that threatened to unravel our economy.

Today, among the myriad of problems now threatening the recovery of condominium values, none appears more dire and urgent than the issue of condo governance.

There are 16,674 active condominium associa-

Over a span of nearly four decades since the adoption of the Illinois Condominium Act of 1963, the State of Illinois (along with the rest of the country) witnessed a virtual explosion in the condominium market. Readily available mortgage loan financing and lax regulation within the housing market triggered a boom in condominium purchases, construction and development.

The break-neck speed with which condominiums arrived as a legitimate housing alternative created seemingly endless profit streams for all involved—from buyer to developer, from lender to insurer and attorney.

I

n Chicago alone, the growth in the number of condominiums was staggering. According to the Cook County Assessor’s records, there was a 139% increase in the total number of condominium units between 1996 and 2006. According to Chicago Condos Online published by the Chicago Realtors Association, based on number of units, Chicago is the nation’s third-largest condo market with an estimated 260,000

condo units in more than 12,000 buildings in the city. The rapid increase in units resulted in spectacular increases across the board: premiums paid to title companies, transaction taxes paid to the City, real estate taxes paid to the County, fees paid to attorneys employed to handle the creation and purchase of condo units, not to mention, property values and home equity available for condominium owners as condo purchase prices soared to

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GUEST EDITORIAL

tions in Illinois, most of them located in Chicago and a staggering number of them are strife with conflicts that require legal action.

This past August, the Chicago Tribune reported in its Money & Real Estate section that few condominium buyers have the knowledge or skills to determine the financial health of their association. Whether drafting bylaws, counseling developers or grooming potential association board members, lawyers must play a pivotal role in revamping the way associations govern if the condominium market is to successfully weather the storm and stabilize values. The time to act is now.

The number of reported Illinois Appellate and Supreme Court cases decided in the period of 1984-2009 involving condominium law stands at 646; more than half of these cases involve issues of governance. Why is there such escalating controversy among unit owners, developers and condominium associations? What is the effect of this strife and how can it be reduced?

First, the effect is not hard to identify. Any lawsuit or controversy undermines the reputation of the condominium building involved.

What buyer wants the emotional drain, let alone the economic cost of litigation against the developer, the association or disputes between unit owners? Value in the marketplace is often determined by status and reputation.

Any real estate broker will affirm that a unit in a condominium where improvements and fiscal affairs are well managed will command a higher price per square foot than competing buildings that suffer the cost and trauma of pending litigation and owner discord.

The cause, in large measure for the prolific controversies that undermine value is simple.

The legislature in creating one of the best housing options of the 20th century decided that condominiums should be controlled like a local governmental unit and not as a business.

The vast majority of condominiums are controlled by associations of unit owners who have chosen to operate as not-for-profit corporations. An easy solution to the governance problem was to apply the Illinois Not-for-Profit Corporation Act to the election of a board of directors, the bylaws and the adoption of annual budgets. Or, the drafters could have incorporated many of the time-tested provisions of the Business Corporation Act dealing with governance, especially the actions of the board of directors and members. Instead, the

legislature has enacted numerous provisions that are difficult to apply and interpret.

Conducting the annual election of members of the board of directors has been a timeconsuming and expensive proposition often frustrated by low owner attendance. Quorums are difficult to achieve. Now the Illinois legislature has enacted Public Law 096-0649 amending the Illinois Not-for-Profit Corporation Act of 1986 to permit balloting by e-mail provided a 5day notice is given by e-mail and the balloting remains open for 5 consecutive days.

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The association bylaws may require amendment to adopt this method if another balloting procedure is required by the bylaws or condominium declaration.

There are many amendments to the Illinois Condominium Act now in effect that cause confusion and doubt in the administration of association financial and governance affairs.

A. Financial.

Section 18(a)(7): No time limit is given for delivery of an itemized accounting of

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CONDO LIFESTyLES

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before it is effective.

Thirty days notice is required to notify unit owners before the adoption. (Section 18(a)(6)) If 20% of members decide to call a unit owners’ meeting, that must be filed in 14 days. Then, the notice of a unit owners’ meeting to approve or reject the budget requires 10-30 days (Section 18(8)(i) and Section 18 (b)(6)). ▲ For more information on condominium association legal issues, attend the State-of-the-Industry Seminar on December 8, 2011 at the Practically, the board Chicago Cultural Center. For more information call 630-202-3006. must begin the budget process 6 months before a fiscal year end at a ments that exceed 115% of the current assessexpenses for the preceding year. It should be time when all relevant financial data needed ments, then 20% of members have a right to “90 days after the end of such years,” but in to formulate a realistic budget is not known or call a unit owners’ meeting within 14 days of any event well before a new budget is propredictable. First, the results of the prior year’s the board’s adoption of the budget to chalposed for the succeeding fiscal year. There are budget is the base on which a new budget is lenge the budget. A majority vote at the unit no year end adjustments that require an based and second, at least six months of the owners’ meeting will approve the budget. extended accounting analysis. current year information is necessary to forThese time periods require a board to conSection 18(a)(8): If a newly adopted mulate a new budget for the prospective year. sider and adopt a new budget at least 90 days budget results in regular or special assess-

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GUEST EDITORIAL

Section 18(a)(8)(v) is little used but is an alternative procedure to raise assessments for “additions and alterations” to the “common elements.” This is the new version of the former “special assessment” provision of the Act. This is confusing to unit owners who must adopt such an “assessment” by a twothirds vote at a meeting called by a 10 to 30 day notice. Using this provision could result in two separate assessments in a fiscal year.

This problem can be corrected only by a statutory amendment to replace the existing budget process by a provision requiring all budget assessments to be adopted by twothirds of the board or if approved by a simple majority then ratified by a majority of members present at a meeting called within ten (10) days after the board vote. No further action should be required.

B. Governance.

The provisions of Section 18(a)(17) and (8) dealing with the election of board members is confusing and difficult to enforce.

Section 18(b)(7) requires unit owners

voting on a percentage basis. This makes it difficult to count votes in large buildings such as Marina City, John Hancock or Outer Drive East, with many different common element percentages and many units. It requires the aid of a public accounting firm to determine election results.

It is difficult to see why a legislative mandate of 1-unit 1-vote would not be fair to all and cost effective to all associations.

Section 18(b)(9)(B) permits adoption of an association rule to allow voting at a unit owners’ meeting by ballot sent to all members before the election meeting. Using this power a board can effectively stifle any serious contest at a unit owners’ meeting where the usual apathy to meetings prevails. This type of premeeting ballot should be eliminated.

Section 18(b)(9)(C) allows 20% of the holders of unit owner vote to call a meeting within 14 days after adoption of the rule to contest the voting rule (use of pre-meeting ballot) adopted under Section 18(b)(9)(B).

Here, too, the rule is ratified unless a majority of votes is cast against the rule.

The adoption of rules is governed by Section 18.4 (POWERS AND DUTIES OF BOARD OF MANAGERS). Section 18.4(h) allows a board to adopt rules for the operation and use of the property but only after an open meeting of unit owners called to consider the rules set forth in the meeting notice and where the proposed rules are discussed. Unit owners are not given the right to “discuss the rules” or to even vote on the proposed rules. This issue should be handled the same as yearly decisions on the budget; namely, all rules must be passed by two-thirds of the board or if by a majority, then by a majority of members present at a meeting called for that purpose. A statutory amendment is required to do this.

These are some of the more difficult statutory provisions condominium lawyers and owners must grapple with.

C. Qualification of Board Members and Their Election.

If a condominium association is to operate as a business, it should have an elected board of directors with all of the powers neces-

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sary to operate a business with substantial income and assets. There should be one election every year. The election should be held only after the income and expenses of the prior fiscal year are known and disseminated to all unit owners. Proxies are appropriate but premeeting balloting is not the best means of promoting the election of the qualified directors.

The timing of annual meetings is often established now by the “turnover date” required by Section 18.2(b)(i) which fixes that date “60 days after conveyance by the developer of 75% of the units holding 75% of the common elements or 3 years after recording the declaration.”

This provision delays for an unreasonable time the transfer of power from a selfinterested developer entity with a real conflict of interest vis-à-vis the unit owner buyers to the buyer-controlled condominium association. Thirty days after 51% of common elements and voting control has passed by recorded deed to unit buyers is more than enough time to hold the turnover meeting. To save more time the developer should furnish

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CONDO LIFESTyLES

the names of all purchasers’ and their unit numbers in the notice of unit owners meeting.

This important first meeting of unit owners should be called by sending the 30day notice of first meeting when 51% of all units are conveyed. The provisions of Section 18.2(A) should be amended to require delivery of all association records within 10 days after the new board is chosen. There is no reason for 60 days for such delivery. Substantial amounts of money are at stake and these existing provisions only delay the inevitable accounting for the budget the developer delivered to each owner purchaser pursuant to Section 22(c). The newly formed association cannot begin operations without adequate financial records.

Section 18(a)(1) requires that at least one-third of terms of board members (with 2year terms per Section 18(a)(11)) shall expire annually. This is impossible to implement. A staggered board term is important to maintenance of stability and continuity of management. The only way to fix this is to amend Section 18(a)(11) to allow for 3-year terms.

10.11

D. Director Compensation.

Section 18(a)(3) requires the association bylaws to provide the “compensation, if any, of members of the board.” I know of no condominium association in Illinois that provides for compensation of board members. This is a shortsighted policy if unit owners wish to attract intelligent and committed board members. The time and effort required to discharge the duties of a board member warrant a fee of at least $1,000 per meeting in the case of large associations where the annual income and expenses are in the millions of dollars. The corporate for-profit world demonstrates the efficacy of such compensation. In small associations with budgets of less than $500,000 per year a lesser fee, say $100/$200 per meeting, seems adequate. This is an important step to secure better-qualified directors to effectively manage the association’s affairs.

A recent amendment to 805 ILCS 105/108.70 exculpates condominium directors from liability if the director receives less than $25,000 per year unless the conduct is willful or wanton. The former compensation limit

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GUEST EDITORIAL

was $5,000 per year.

estate brokerage and legal communities.

E. A Lawyers Role.

Addressing Governance Issue

Lawyers who draft the association bylaws are able to draft bylaws in this way and still conform to the statutory requirements.

Lawyers also can improve the status quo by counseling developer clients to act promptly and prudently in the turnover process and to groom future board members as soon as the association starts to function, namely, the date of the first unit closing (Section 9(a)). Unless there is a clear intent to hide problems or to take advantage of unit buyers, developers will benefit from such action.

Resale prices do not increase where there is developer/unit owner strife. Monthly assessments on unsold units continue to be due and payable by the developer after the developer is forced to turn over control of the association.

The reputation of a developer will follow the resale prices of the units sold.

Until we address the issue of condo governance, the ensuing legal battles will continue to hold condominium values hostage.

Lawyers must play a substantive role in helping condo owners and associations bridge the knowledge gap, and establish fiscally responsible and beneficial bylaws. In Chicago, we can work with the condominium subcommittee of the Real Estate Committee of the

CBA to propose statutory changes. However, as drafters of condominium declarations and bylaws, we can review with developer clients better ways to construct a workable governing structure. The statute is basically a default statute; you must provide for certain meetings at certain times but you can provide more by the terms of the bylaws. We may very well improve the condominium resale market by so acting. That will improve the bottom line of profitability to all concerned parties. Y

F. Casualty Insurance/Reserves.

Two additional areas of concern for unit owners and a basis for unit owner/developer conflict are (a) adequate casualty insurance and (b) adequate reserves. The Act (Section 12) makes competent provision for insurance.

Thankfully, we have not seen any cases on this issue because serious casualties have been few, if any.

The requirement of adequate reserves under Section 9(c)(2) is often neglected by developers’ initial budget and the need to create and maintain such reserves passes, almost without notice, to the unwary unit owner who much later finds his assessments dramatically increased.

The statute is clear on how reserves should be calculated. Section 9(c)(2) should be read with Sections 22(c) and (e)(4) requiring a budget and in conversions of more than six (6) units, an engineering report on the present condition of “all structural components and major utility installations…” the “dates of construction, installation, major repairs and expected useful life of such items, together with the estimated coast…of replacing such items.” There in plain language is the first replacement reserve calculation. How many lawyers and buyers connect the dots? It will undoubtedly take a case of substantial damages awarded against a developer and/or an engineer to bring this into focus for the real

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