1209.4858 CL[0110]_40pgrFNL

JANUARY 2010 | VOLUME 13 | NUMBER 4

CondoLifestyles

©

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

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State-of-the-Industry

Report F E AT U R E S

Legislative Update Perspectives on Community Manager Licensing Legislative Panel Offers Insight

table of

COVER STORY

contents

03 Condo Lifestyles State of the Industry Report

By David Mack S P E C I A L F E AT U R E

06 Legislative Update and State of the Industry Report

by Mark Pearlstein M A N A G E M E N T TA L K S

12 Perspectives on Community Manager Licensing

by David Mack L E G A L U P D AT E

26 Legislative Panel Offers Insight

By David Mack 18 Editor’s Message 19 Professional Directory 28 Industry Happenings EVENT HIGHLIGHTS

30 Condo Lifestyles State of the Industry Event

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COVE R STORY

B Y D AV I D M A C K

2009 Condo Lifestyles State of the Industry Report It was comfortably warm in the Chicago Cultural Center for the Condo Lifestyles 2009 State of the Industry gathering but it was frigid outside with temperatures in the single digits and west winds blustering about at twenty to thirty miles per hour.

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ditor Michael Davids opened the proceedings with the greeting, “Happy Cold Holidays,” and thanked those in the audience for braving the elements and setting aside other work for a few hours to participate in this annual event. “We’re especially grateful that you took time out from your busy schedules to be here.” There was a capacity collection of over 140 property managers, lawyers, accountants, colleagues, board members and other friends of the community association industry present.

Davids also took note of the previous night’s fire at the 260 E. Chestnut condominium building, which took the life of one

resident. “We hope the best for them and keep them in our thoughts and prayers,” he said.

Leadership Award The first matter on the agenda was the presentation of the Outstanding Leadership Award which was bestowed on Bob Levin, a principal in the Chicago management firm of Wolin-Levin. Davids offered some comments about Levin’s achievements and accomplishments (see page 30) and noted how he personally had been of assistance to Condo Lifestyles in suggesting articles for publication and very supportive of the publication’s role in

contributing to informing the public on association issues. “We thank Bob and WolinLevin for their leadership,” said Davids.

In accepting the Leadership Award, Levin said, “I would like to thank the Condo Lifestyles Advisory Committee and Mike Davids for selecting me.” He also noted that everyone has a role model and his is Hillary Clinton going all the way back to 2002 when she fought a losing battle to reform the Country’s health care system. “She wrote a book, ‘It Takes a Village’,” he said, “and I believe it does take a village,” to accomplish anything meaningful and worth doing.

Levin also expressed his appreciation to his parents who were there for the support they had always given him, recommending to everyone in the audience that they, “should be grateful for every moment they have with their parents.” About his wife Linda, he said,

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▲ Pictured here are (Lto R) State Senator Kwame Rauol (podium), David Sugar -Arnstein & Lehr, Noah Temaner-Jenkins -The Manhattan Condominiums and Brian Kelly - Chicagoland Management & Realty

“she’s the first person I ever dated and we’ve been married for 28 years. She has great principles and is not afraid of a challenge.”

Acknowledging his children he said, “they inspire me to think that tomorrow will always be a better day.”

Recognizing the staff at Wolin-Levin, he thanked them, noting that in their collective

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▲ Keynote Address Speaker; Bernard Stone, City of Chicago, Alderman 50th Ward

efforts, “there have been ups and downs but mostly ups,” repeating his comment that, “it takes a village,” and adding, “I couldn’t have done anything without them.” Levin closed with the observation, “everyone should always have faith in what they do and should never give up on their integrity and always do the right thing.”

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▲ Bob Levin of Wolin-Levin, Inc. receiving the 2009 Condo Lifestyles Outstanding Leadership award.

Chicago Building Committee Update Fiftieth Ward Alderman Bernie Stone, who is also the Chairman of the Chicago Building Committee, next provided an update on various Chicago Ordinances.

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COVE R STORY

Elevator Inspections Stone noted that there had only been two major changes in the past year in local legislation that affected associations. The elevator ordinance has been amended to get rid of hydraulic elevators over a three-year period because those built before 1972 are potentially dangerous. (Hydraulic elevators operate to a limit of five to six stories and such cars are moved up and down by a cylinder system that is as deep in the ground as the building is high.) Those installed after that date are equipped with a safety device that prevents them from dropping to the bottom of the shaft when the system fails. Existing hydraulics will have to be phased out or will have to be upgraded in one of two ways. In one, the addition of a stop grip, which Stone estimated would cost about $18,000 per car, will only be able to be used once. A total overhaul is estimated to cost about $30,000 but will have the capacity to function after multiple incidents. :”If it drops once you have to replace it (another $18,000 or more),” said Stone of the retrofitting of the stop grip, also called a plunger gripper. “It’s better to convert completely.”

tion’s costs have doubled from $300 to $600 a month since he moved in. “Some of us who are appreciative of the situation are working to help you.”

Building Department Leadership The Alderman also singled out Richard Monochio as the current Building Commissioner as someone who understands the heavy cost burden that ordinances of the recent past have placed on associations, which was why he has acted to lengthen the time between

exterior façade inspections. Stone remembered when overall life safety issues in highrise buildings first became a real concern of the City administration as a result of the exteriors of a number of them beginning to crumble. He cited 1974 as the year when the first life safety ordinance was introduced, part of which provided for compartmentalization of living units in multiple story buildings.

This, “made living in a condo safer than in a continued on page 32

Life Safety Ordinance In the other legislative action the City of Chicago has extended the deadline for the installation of telephone communication systems under the life safety ordinance from 2012 to 2015. This will provide condo buildings with more time to accumulate funds for the work because such installations are very costly. (It remains to be seen whether this extension will hold because the 260 E. Chestnut fire has stirred up public controversy over the delay seemingly allowed by Chicago regarding timely building compliance with the new life safety code.)

“People in condominiums are the least represented group as far as our City Council is concerned,” Stone said. “As far as I know, only 2 aldermen live in condos,” he being one of them. “Most aldermen have little appreciation of what a condo is or an appreciation of what their costs are or do they really care, adding, though, that, “some do care a lot but they are mostly on the Lakefront and have condos in their wards.” Maintenance (operating) expenses are a problem for condominiums, Stone continued, pointing out that his associa-

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B Y M A R K D. P E A R L S T E I N , L E V E N F E L D P E A R L S T E I N , L L C

Legislative Update & State of the Industry Report the year 2009 was marked by a recession that affected the housing industry. A declining sales market, tighter lending standards, and the absence of any significant new construction directly impacted residents and prospective buyers in community associations.

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he struggling economy also placed greater pressures on association boards of directors and owners to finance needed repairs and maintenance, increase legal activity to collect delinquent assessments, and meet regulatory requirements imposed by State and local governments.

Legislation at the State level and changes to national mortgage lending standards reflected the economic difficulties of 2009.

The Chicago City Council provided some

relief to associations on life safety requirements, and is reviewing the impact of conversions and the short term occupancy of units.

Associations were focused on pursing an increased number of collection problems and monitoring the higher number of foreclosures.

Some owners of new condominiums were

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Shown here is Mark Pearlstein presenting a Legislative Update and State of the Industry report along with session moderator Tairre Dever-Sutton -Tairre Management.

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caught in distressed condominium projects.

Boards and owners struggled with issues such as limitations on leasing and handicapped residents’ rights to access, pets, and financing major projects.

Manager Licensing and other Key Illinois Laws Approximately ten Bills were introduced in the 2008-2009 Session of the Illinois General Assembly pertaining to community associations. Four measures were adopted that directly affect Illinois community associations.

The Community Association Manager Licensing and Disciplinary Act became Public Act 96-0726. Effective July 1, 2010, community association managers must be licensed. To obtain a license, a candidate must complete 20 hours of community association management courses, pass an examination and complete a background check by the Department. To maintain their license, the Bill will require licensed managers to complete additional hours of continuing education. The new law will also provide financial security for association clients. Managers or their management companies must produce fidelity bonds. A recovery fund will be available to those associations who may be the subject of manager theft.

There are a series of exemptions from various requirements of the Act. Managers with five or more years of experience are exempt from the initial education and testing requirements. Managers who take courses to

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S P E C I A L F E AT U R E

maintain their real estate licenses will receive full credit for these courses towards their manager education requirements. Office personnel and court appointed receivers will be exempt.

The Act also creates a seven member licensing and disciplinary board consisting of five licensed managers and two owners in community associations. The concept for this board is to enable managers and their clients to advise the Department on licensing requirements and disciplinary cases. Illinois will now join eight other States who require either licensing or certification for their managers.

Right of First Refusal Mortgage financing was a controversial subject with tighter standards for secondary market and government insured financing.

House Bill 155 was adopted as Public Act 960228 to provide that effective January 1, 2010, an association cannot exercise its right of first refusal where a purchaser is obtaining financing guaranteed by the Federal Housing Authority.

Mortgage Fraud To combat increasing instances of mortgage fraud, and with support from the Chicago Corporation Counsel, House Bill 688 was enacted as Public Act 96-174. Also effective January 1, 2010, this measure states that a municipality may obtain a Court order to classify a condominium property as a distressed project and have a Court appointed receiver manage the property. If the property is not viable as a condominium, the receiver may petition a court to sell the project.

Collection Gesture In perhaps a more symbolic gesture to associations saddled with high collection projects, Senate Bill 154 was enacted as Public Act 96-0155 to provide that a unit owner who is more than 60 days delinquent on his or her condominium assessments will not be counted toward a quorum at association meetings.

E-mail In a step forward into the electronic age, the General Not-for-Profit Corporation Act

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was amended by Senate Bill 1390 to provide for communications among directors by e-mail and a format for non-profit corporations to conduct electronic elections. While clarification in the condominium statute is probably necessary for e-mail elections, this statute will enable associations to use modern day technology in all facets of condominium operations.

Still Pending Still pending in the Legislature are two Bills introduced in the last Session pertaining to leasing restrictions and legislation for noncondominium homeowner associations.

House Bill 821 initially sought to limit the power of a condominium to restrict leasing.

The current version of this Bill seeks to permit tax exempt 501(c)(3) charitable organizations to purchase and lease units in homeowner associations with board consent. While the sponsors of the Bill seek to promote affordable housing, the question is whether this particular measure will have a larger impact on condominium associations.

With the growth of community associations, now numbering in excess of 30,000 in the

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State, Senate Bill 1933 would essentially create a separate statute for townhome, single family and other forms of community associations.

Designated as the Common Interest Community Association Act, the Bill essentially transfers the rights and obligations now given to master associations under the Condominium Act to all associations in the form of budget notice, annual accounting, open meetings, and buyer disclosure. The Bill does provide that the board must reserve a portion of the board meeting for comments by unit owners.

Condominium Advisory Council In the 2007-2008 Session of the General Assembly, the Condominium Advisory Council was created to propose changes to the Condominium Act. In the forthcoming Session, you can expect to see proposed legislation derived from the recommendations of the Council. While industry representatives may not agree with all recommendations, certainly the Council’s proposals to make lenders responsible for assessments during the foreclosure period is laudable and necessary. The recommendation that common interest com-

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▲ Shown here (R to L) are Gladys Montemayor - 7306 North Winchester Condominium Association, David Sugar Arnstein & Lehr, Tim Snowden -Heil Heil Smart & Golee, Tairre Dever-Sutton - Tairre Management and Mark Pearlstein - Levenfeld Pearlstein (at podium).

munities should obtain the same tax relief for common areas now enjoyed by condominium associations, is beneficial. Condominium boards should disclose the topics they discuss at closed sessions. Owners should have the option of electing to receive notices by e-mail.

Tighter financial controls are also necessary to set an exact date for boards to deliver financial statements to their members.

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Mortgage Lending Standards From an operations standpoint, perhaps recent changes to mortgage lending standards will have the greatest impact on community associations.

Fannie Mae purchases mortgages in the secondary market. Last March Fannie Mae announced new guidelines stating that it will not purchase mortgages where 15 percent of

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S P E C I A L F E AT U R E

the owners are delinquent on condominium assessments or where one owner has more than 10 percent of the units in the association.

Requirements for FHA insured mortgages are more strict. As of December 7, 2009, the association must fund reserves in an account representing 10% of the total budget; if the association does not fund reserves in this amount, the lender can request a reserve study that cannot be more than 12 months old. No more than 15% of the total units can be more than 30 days past due. In addition, no more than one entity may own 10% of the units; and the owner occupancy ratio must be at least 50%. The association can have a right of first refusal, but cannot use that option to violate the civil rights of a seller or buyer. For associations that do not insure interior units and betterments the borrower must purchase an HO6 policy that provides “walls-in coverage.”

Why are these changes significant, particularly the FHA standards? FHA insurance is required for mortgages with less than a 20% down payment. Approximately one third of all first mortgages are now insured by the FHA. This level is up from 20% in 2008 and 6% in

2007. Considering the fact that the basic mortgage limit for FHA insured mortgages is $417,000 in this area, the agency has a major influence on mortgage lending.

owners who use their units as vacation clubs when their association documents prohibit short term or transient use.

Condominium Task Force Chicago Ordinances Update – Façade & Life Safety The City of Chicago also recognizes the scope of the condominium market in both adopted and proposed ordinances. Having granted associations some relief from reporting under the exterior wall maintenance ordinance, the City extended the compliance deadline for voice communication systems from January 1, 2012 to January 1, 2015. Associations currently without these facilities are given additional time to install one or two way voice communications systems.

Vacation Rentals?

Currently pending in the City Council is an ordinance proposed by Alderman Brendan Riley to regulate the leasing of dwelling units as vacation rentals. If passed this measure will stop the practices of those condominium

In 2007, the City Council created the Condominium Conversion Task Force to examine the process of condominium conversions and the impact of this practice on affordable rental housing. Chaired by Alderman Ray Suarez, the Task Force reviewed the problems created by developers who fail to comply with the requirements of the Chicago Condominium Ordinance; the impact of conversions on tenants who chose not to buy their apartment; and the necessary education for tenants regarding their rights as owners. The Task Force will issue a report that will establish a condominium registration program; and protect existing tenants in a condominium conversion with longer conversion notices, lease extensions and relocation assistance. The Task Force will also recommend a clear standardized disclosure summary and Property Report, plus consumer education for existing tenants

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and condominium purchasers.

Issues Facing Daily Operations What are some of the issues facing associations in their daily operations? As we have seen in past years, the major challenge for boards and managers is funding the operations of associations at assessment levels owners can afford. The economic difficulties of 2009 have increased the tension between owners, directors and managers. While utility costs and insurance premiums have stabilized, it is often difficult to persuade owners to pay higher assessments or special assessments on new windows, roofs or even to comply with city ordinance requirements.

In planning their budgets associations must now consider the possibility of not collecting full assessments from unit owners, particularly those increasing numbers of unit owners in foreclosure or bankruptcy. It is incumbent upon boards and managers to carefully watch their assessments accounts and adopt consistent and strict collection policies.

We have all heard about the increase in fore-

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closures. The larger problem is that the increased volume of foreclosures and evictions delays the collection of delinquent assessments, or payment of assessments by the new owner of a foreclosed unit. In Cook County, it now takes eight to twelve weeks to process an eviction. In foreclosure cases, banks are now waiting until owners are three to four months delinquent before filing a lawsuit. A foreclosure filing moratorium in the summer led to a spike in foreclosure filings in October. From the initial filing, service, foreclosure judgment, redemption period and sale, the foreclosure process can easily take twelve months.

Leasing Amendments Every unit owner considers the impact of association operations on their ability to sell or refinance their unit. We know that lenders are more strict and ask more questions in their dreaded mortgage questionnaires. One particular question relates to the level of resident ownership. The condo boom generated a high level of investor ownership. Now the question faced by associations is whether a

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large number of leased units will affect the ability of owners to sell or refinance, or lower their property values.

To address this dilemma, more associations are considering amendments to restrict leasing. Generally, these amendments will prohibit future owners from leasing units, but exempt current leases, current investors or all current owners before the amendment. The amendments often include hardship exemptions. Illinois courts and the courts in a majority of jurisdictions have ruled such amendments to be valid. The reasoning of the courts is that owners are buying into a system of housing where the rules can be changed.

Our firm has seen associations approve about one half of proposed leasing amendments.

Units in Distressed Projects I discussed the concept of distressed condominiums from the perspective of a new statute. The market use of this concept is a development that is partially sold, the developer has defaulted on a construction loan, and the lender is about to or has taken control of

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the project. Distressed projects also generally come with delinquent assessments on unsold units and liens from unpaid contractors. We have seen too many scenarios of this nature in the current market.

Lenders must cooperate with their fellow owners by paying their share of assessments and even contributing to unpaid bills due before the formal transfer from the developer/borrower. Unit owners must organize themselves, meet with both the developer and lender as a working partnership to rescue the project, and, when necessary, assert their right to record assessment liens. Lenders seek to avoid liability as successor developers; developers either seek to salvage their projects or avoid a judgment under a personal guarantees; and owners simply want to enjoy their unit, pay their assessments at a consistent level and eventually gain some value appreciation from their investment.

On the Horizon Looking ahead to 2010, there are plenty of challenges awaiting all of us in this industry.

Perhaps time may eventually eliminate distressed projects with the sale of units from the current inventory. Many of us have been through real estate cycles, and we all learn from the lessons of each downward trend.

On a positive note, the boom times brought us more buildings to service so there are more clients. Boards will learn to administer their associations in a manner that maximizes disclosure to owners and with a greater discipline in collecting and spending assessments. We will all persevere and prosper because community associations will continue to be the dominant form of housing in the Chicagoland area.

Legislative Update Q & A Below is a summary of the question and answer exchange he engaged in with audience members after his presentation.

Q/ Is there any legislation on the books regarding self management?

A/ No, but any manager hired as an employee to run a self-managed association will have to be licensed.

Q/ Can associtation boards use e-mail communication as a substitute for a meeting?

A/ E-mail is not a substitute for a meeting. We may see electronic meetings but we haven’t gotten there yet. Communication by e-mail is a first step.

Q/ Must homeowners provide their own insurance?

A/ In condominiums boards have the power to mandate personal liability insurance by unit owners. Associations can’t get policies that name owners as additional insureds.

Owners should get an HO6 policy.

Q/ What chance is there to pass a developer accountability ordinance (for Chicago)?

A/ The Condominium Advisory Council recommended it. David Sugar has been working on this. Thought is being given to a City ordinance like Evanston has. The accountability of developers can be accomplished by mandating specific warrantee periods and requiring them to set aside funds to cover warrantees. I think we’ll see an ordinance like Evanston’s.

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Perspectives on Community Manager Licensing the licensing of community association managers (CAMs) is now the law in Illinois, effective January 1, 2010.

It was a goal that its advocates had pursued for probably at least two decades. “It took over 20 years to get this bill in some form passed,” said Jordan Shifrin, a principal in the law firm of Kovitz, Shifrin Nesbit, who pointed out that when condominiums first appeared on the real estate scene in this State in the 1960s, a special department was supposed to be created under the Attorney General to administer the various aspects of the condo statute and program, including the regulation of managers. Action was never initiated, however, by the Attorney General or any

other office or department in the State to get the ball rolling. Shifrin feels it was a mistake not to move ahead then and wait so long to finally put control measures in place. “There is no other profession that operated for so long without any regulation whatsoever. There was no body or authority to require or regulate the education or ethics of an industry that controls billions of dollars of real property.”

While Shifrin believes that State regulation and restraint on the comportment of association managers to better ensure they meet reasonable performance and ethical

standards was way overdue, he feels that the need for the specific legislation that was finally passed could have been avoided if management companies and interest groups had taken it upon themselves to collaborate in creating their own norms rather than arguing amongst themselves on whether it was necessary to do so. “The industry had plenty of time to do its own self-regulation (but) because of so much in-fighting, the Legislature (had to do) it for them.”

Too Long in Coming Tracy Hill, President of Property Specialists Inc., agreed with Shifrin that manager licensing should have been mandated years ago. “This legislation (was) needed and has been too long in coming,” he said. “As all other aspects of real estate transactions are currently licensed, including rental agents, this legislation finally addresses the needs of the common interest community world.”

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Improve Uncertain Opinion of Managers Hill hopes that having licensed managers will improve the uncertain opinion of them that he has detected in a lot of board members. He has sensed a dichotomy of thought and attitude on their part. Boards want managers to know everything but at the same time have doubts that they do and aren’t sure to what extent they can rely on their advice and direction because they are not licensed professionals as are real estate and mortgage brokers. He believes that licensing will instill in boards more trust and confidence in their management companies and managers. “I hope that this legislation will begin to change that (previous) way of thinking.” He is reasonably certain that it will because licensing should produce more informed and skillful managers who stay in the field longer than many have and grow even more in their abilities. “This increased longevity coupled with required ongoing education will indeed increase the overall understanding, skills and competency of the practitioners.”

Handwriting Was on the Wall Despite the internal strife in the industry that Shifrin noted above, the drive for licensing was ultimately the result of efforts by those who are in the business to get the Legislature to act, according to Mike Baum, President of Baum Management Services. They finally saw the handwriting on the wall. “This legislation (was) a pro-active effort from the individuals to be licensed,” he said because they “recognized that licensing was inevitable.” Professionals in many other fields must be licensed, the most closely related to CAMs being rental apartment managers, who are credentialed under the Real Estate Licensing Act. Both have responsibility for the funds of clients- rents or assessments-an important reason for requiring some control by the State. If those in the association management field hadn’t pushed the legislation forward, it would likely have eventually been imposed on them by others, perhaps as the result of another financial scandal involving predatory managers.

In that situation, “the resulting legislation would (have been) overbearing and not as balanced as the legislation that was enacted, “added Baum, who, by the way, believes that the main purpose in requiring a manger to have a license is to give the State the ability to revoke it for any holder who violates the standards of ethics and conduct associated with the program. Prior to this new law, there had been no way to remove a deviant manager from the field except perhaps through criminal proceedings. “An individual involved in any ‘monkey business’ will be forced to leave the industry.”

Unnecessary and Redundant Manager licensing has always had its opponents although some were not against it on principle, just the manner in which the licensing requirements were incorporated into a new law with its own administrative regulators rather than being subsumed under existing related legislation. Barry Katz, President of Omnibus Management Services, believes that CAMs should be licensed but creating a new law was unnecessary and redundant. “The State of Illinois could have gotten there without establishing a new government agency,” he said. “This is more government and more bureaucracy.” Katz feels that the existing Real Estate Licensing Act (RELA) could have been expanded to achieve the same purpose with minimal changes and some modification of the license process. “From my viewpoint, there is no valid excuse for the

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lack of including management of association property as a licensed function under the real estate license law.”

Where the RELA failed to bring association managers under its tent was in the area of collections. Anyone who collects rents (other than the property owners themselves) as part of management duties must be licensed under RELA. Since CAMs collect assessments, which while similar to but not the same as rents, they fall outside the statute’s purview.

Katz had communicated with Greg St. Aubin of the Illinois Association of Realtors (IAR) to get an understanding as to why that organization hadn’t insisted on the licensing of CAMs under the RELA. Actually, at first, IAR did seek that goal and that is one of the reasons the new licensing law was held up until this year. After further analysis, however, the IAR concluded that the work CAMs perform, specifically in the area of financial and administrative management of community associations, just does not fit under the RELA. “So we worked with CAI in crafting this new statute,” St. Aubin told Katz.

Two Licenses for Some

Opposed to Licensing on Principle

Anyone who works in real estate as a broker or salesperson and community association manager will now have to have two licenses and be subject to the expense and educational requirements of both procedures. A provision inserted in the manager licensing law at the insistence of real estate professionals prevents a CAM from performing any function for which a separate license is required under the RELA. “For those of us already licensed under the real estate act, this would impose a very significant and unreasonable hardship- double license fees, double continuing education requirements and double supervision by multiple licensing departments,” said Katz, who did concede, however, that while he disagreed with the need for a new law, preferring an expansion of the RELA instead, the manager licensing act was a positive step. Association, “properties are real estate and their care and maintenance requires professionals. It has (been) all too easy for anyone to become a condominium manager even with no training, schooling, supervision or mentoring. The recent legislation should help in this regard.”

But there are opponents who do oppose licensing on principle, believing that it is an unnecessary imposition on associations.

“ASCO is opposed to the licensing of managers, especially as it has been legislated,” said Sheli Lulkin, President of the Association of Sheridan Condominium/Co-op Owners for which the acronym stands. And so were most managers in the Sheridan Road area to whom ASCO representatives spoke a couple of years ago when the law was first up for consideration by the Legislature. “Two years ago we interviewed some of our property managers and they were unanimously opposed, except for one who worked for one of the major proponents of the bill.” They objected to any classroom education as being irrelevant to their work. “To a person, they agreed that the best training they had received was from the large management companies they had worked for,” Lulkin added. (That is probably very true but there are many managers who work for themselves or for small companies that don’t provide comparable training opportunities.)

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Saves you money by designing proper specifications. through research and engineering, we assist you in hiring qualified contractors & ensuring that their performance is up to the associations’ expectations.

Helps you take a proactive approach in protecting the value of your property from your pavement to your roof tops.

MCD POOLfeaturing PARTY

CONDOLYMPICS FOR THE BENEFIT OF SPECIAL OLYMPICS

March 2010

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M A N A G E M E N T TA L K S

Licensing Management Firms Preferred Tim Snowden, Deputy Director of property management for Heil, Heil, Smart & Golee, is not sold on the idea of licensing managers, preferring instead to limiting the licensing to the firms for which they work. “I was always cautious on the licensing of individual managers,” he explained, “but I always believed that management firms should be licensed.” While he is uncertain as to what the major impetus behind the drive to license was, he feels that if it was consumer protection of the financial interests of associations and their residents, an individual manager, unless he/she is a one person firm, doesn’t have much authority to affect what happens. “Most consumer concerns that I have seen reflect financial reporting and the control and disbursement of funds. These decisions are made by the firm, not the individual manager.”

The management, legal and board representatives interviewed for this article have provided their for and against opinions of manager licensing but what about the many hundreds of others who work for or with associations. In general, the large majority seems to support it, or at least that is the reaction that our interviewees have sensed in their contacts with their colleagues and clients in the field. “My sense is that other than some of the managers and a few board members worried about the costs, everyone else is strongly in favor of it,” said Shifrin. “It’s about time is the most common response.” But, he added, “it is probably considered a harsh bill by most managers.” Snowden has perceived the same receptivity, although in some cases perhaps a reluctant one. “I think most people in the

industry feel it is the coming thing,” he said.

Hill has had numerous conversations with his colleagues in the management executive field and has concluded that the majority support making managers card-carrying members of the industry. “Most of the company executives I have spoken with over the years have wanted to have some type of licensing, if only for the purpose of knowing that the personnel they hire at least have the minimum knowledge needed to function as community managers,” he said, adding, though, that a number of them have also expressed concern about the possible cost to their organizations of the process of their staffs gaining and renewing their credentials and how that expense will affect their bottom lines. They are worried that what they view as minimal fees paid by associations for their services, especially in the competitive environment of seeking and retaining clients, will reduce their overall profitability because of the added cost of licensing. (But if all management companies have this expense then any increased fee billed to associations for licensing costs should be comparable across the board and not compromise any management /association relationships on this point alone. Each management company, however, will have to decide how they are going to share licensing costs with their managers.) Hill added, “I think until we see the enabling rules we really won’t know how the licensing and continuing education will be affecting the industry.”

Lulkin still finds board members who don’t know that manager licensing has become law despite the extent to which her organization and others have spoken and

written about it. But, she said, “the more they know about it, the less they like it.” A primary concern is that boards will lose the power to select their managers, which is probably an unfounded apprehension since, if all have to be licensed, the lack of one won’t be an issue to consider in hiring someone. It will be a matter of reputation, quality of service, proposed fee, etc., that will be the determining factors, just as they are now.

Katz believes that most professionals having a solid management affiliation with associations support licensing. Those who might not think it necessary are those who operate in both fields of community association management and real estate brokerage, as he does, and are already licensed by the State in the latter and feel that having two licenses is redundant.

Cannot Regulate Integrity The intent of licensing CAMs is twofoldto attempt to ensure competence and honesty amongst managers. Will the law be successful on those two points? “You cannot license or regulate integrity,” said Shifrin, “and as far as competence, stupid is as stupid does.” In other words, there is no ironclad certainty of achieving either objective on a universal scale.

Because the testing and educational regimens may not be that difficult, less than fully capable people will still find their way into the ranks of managers. Shifrin, did, however, point out what he believes the law will do. “No one will be able to just call themselves a property manager without completing minimal educational requirements and there will be a code of professional responsibility and ethical con-

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CONDO LIFESTYLES

duct that should become the order of the day and for victims of embezzlement and kickbacks there should be a recovery fund.”

Will Competency Be Raised?

Baum doesn’t feel that licensing will raise the level of performance very much because, as Shifrin suspects, the entrance requirements won’t be difficult. “I believe the class necessary to obtain a license will be basic and will not raise competency very much,” he said. Any test premised on a basic understanding of community association management should not be a high hurdle for those taking it to clear.

As noted earlier, in contrast to some of his colleagues in the industry, Hill feels that the licensing process will improve the performance abilities of managers, especially those getting started in the business, but like most other observers doesn’t think the law will have much impact on the occasional act of misappropriating funds. “I do not believe that a license will limit larceny to any great degree,” he said, although he did think that some potential thieves, especially those who like association management work, may have 2nd thoughts about defalcation because apprehension will end their careers.

Snowden thinks that licensing is pretty much a waste of time and money in terms of what it will bring to the association industry.

“In my opinion, manager licensing will accomplish very little,” he said, noting that passing an exam to qualify for a license is not necessarily a sign of competence so the management field will still be populated by those who can do the job well, (hopefully in the majority) and those who cannot. And as far as theft is concerned, he feels no differently than others in the field- that while it may be

reduced, it won’t be eliminated. “My concern is the cost of administering the licensing prothat the boards of community associations gram- a base of $50 plus $1 per unit per year. will assume that they are safe from embezzleHill believes this charge is fair and affordable ment because their manfor most associations. agers have a license. That “There is really no Although managers or their will still not be the case reason to believe that (and) boards (will) need to such costs to the assoemployers will have to pay for the still perform their due diliciations will create any actual licenses, associations will be gence and require their real hardship despite management firms to the current economic obliged to remit a fee to cover the account for the funds.” conditions in the Katz feels that licensing cost of administering the licensing Country,” he said, will provide for greater especially since associprogram- a base of $50 plus knowledge and competence ations have some lead on the part of managers. time to plan and $1 per unit per year.

However, like Shifrin, budget for the paySnowden and Hill, he ment. The earliest that doesn’t believe the statute procedures will be in will prevent motivated malefactors from grabplace is July, 2010 and Hill believes that date is bing greenbacks surreptitiously when the somewhat suspect. “I will be surprised if the desire strikes them. “A number of previous rules are finalized before the end of 2010, theft and embezzlement perpetrators were which puts costs into 2011.” In the long run he licensed and some even had professional desfeels that the value of licensing will exceed ignations,” he said, although he did concede what associations have to pay for it. “The long that the law might cull out from the manageterm benefits far outweigh any current (finanment profession potential till riflers who sense cial) discomfort.” that greater scrutiny will make their larcenous Shifrin didn’t want to comment on acts more difficult. “Maybe it will help some.” whether the charge to associations is fair or Lulkin was very succinct in her remarks reasonable but did explain what he believes is about any reduction in the potential for misthe rationale for having them bear some of creant managers to filch funds of an associathe financial burden of licensing. “Presumably tion and echoed Shifrin’s words about trying to this was done with some type of budget in make criminally minded people law abiding mind necessary to run the program,” he said. simply by statute. “You can’t educate character Since associations are supposed to enjoy the and you can’t legislate honesty,” she said. advantages of licensing, the apparent intent of the Legislature was to not let, “the burden fall Licensing Fees on tax payers even though it may cause an increase in assessments.”

Although managers or their employers Based on the need to have some state will have to pay for the actual licenses, associentity run the program, the fee, “seems equiations will be obliged to remit a fee to cover table,” said Katz. Lulkin, on the other hand, said it is, “definitely not.” Baum believes it is appropriate to place the cost of administration on associations but would like to see it reduced for HOAs, whose budgets and reserves are typically less than for much smaller condominium associations because most of the property upkeep, in the main, is the responsibility of homeowners. He suggested a fee for HOAs of one half the amount to be paid by condo and townhome associations.

Board Feedback Needed None of the interviewees has received any significant feedback from boards on the

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M A N A G E M E N T TA L K S

new law and the fees associated with it. The associations Hill’s firm manages have shown little concern to this point one way or the other. “While we have announced the legislation to our clients, there has not been any strong reaction pro or con,” he said. “Since it is not immediate, it appears most are simply acknowledging internally that there will be a change in the future.”

Anything Left Out? Was anything left out of the statute that, if included, might have made it better in any way? Shifrin said, “it is very comprehensive,” but added that the law was up for consideration before the Condominium Advisory Council convened, which he chaired, so,” there was little opportunity for public comment.”

But had there been time, he would have liked to see added a provision for penalties against developers who milk associations of funds or fail to properly account for them before turning over control to unit owner boards.

In Hill’s discussions about the law with staff members and executives of other management companies, one issue that has come up is that of compulsory training for first time board members. “They have said that they wish that new board members would be required to attend (at least) a one or two hour session on being a board member, how that state statutes impact their ability to conduct the business of associations and what types of fiduciary requirements are to be met in the conduct of such business.”

Shifin also noted a loophole in the law in terms of associations paying for the cost of administration of the licensing program. A provision therein only requires those who are incorporated as Not for Profit Corporations, as most presumably are, to share in the expense. However, actual incorporation is not obligatory for associations in the State (even though they are bound by the Not for Profit Act’s restrictions). “Every association should have to pay the fee and the only way to do (that) is to make incorporation, and keeping current, mandatory or face fines,” he said. (Or, as an alternative, the legislation should have been written to cover all associations whether or not incorporated.)

amended at some time to include changes such as those discussed above and others for which the need arises as implementation proceeds. “In my opinion, once it is operating it will probably need to be tweaked,” said Shifrin. “Nothing can be perfect when written in a vacuum.”

Katz said he expects that changes will be made but some basic issues he is concerned about- dual licensing for example- he doesn’t believe will be dealt with. “Just as the (legislators have) failed to correct deficiencies in the

basic condo law in the past, they will not be motivated to fix minor issues (in the licensing act) in the future. Often there is no political benefit in doing so, so they don’t bother.”

Snowden anticipates revisions in the law as it is applied and shortcomings are detected.

“I hope that we continue to monitor the effectiveness of licensing and make changes as we begin to understand the real impact on the industry,” he said. Y

Future Amendments Likely The licensing law will likely have to be

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CONDO LIFESTYLES

E D I t O R ’ S M E S S A g E

S

now welcomed in the new year and a streak of cold weather typical of Chicago winter, hit us hard from

Christmas through mid January. Our troubled economy

including poor housing market conditions and a host of other financial

CondoLifestyles

issues continue to challenge many of us. Despite our challenges, we

▲ Mike Davids

®

hope that you and your association(s) are off to a good start in 2010.

Our cover story is a report on our “Condo Lifestyles State of the Industry” program held in

JANUARY 2010 | VOLUME 13 | NUMBER 4

December at the Chicago Cultural Center. Special guests 50th Ward Alderman Bernie Stone (chair of the Chicago Buildings Committee), 13th District Illinois Senator Kwame Raoul and attor-

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 Administration Cindy Jacob and Carol Iandolo

neys Mark Pearlstein and David Sugar provided their insight on recent legislative and government activity concerning community associations.

Mark Pearlstein also provided an overview of industry trends for community associations which is recapped in an article “Legislative Update and State of the Industry Report” in this issue.

Additional coverage of this special event is also featured in this edition including highlights and background on our Outstanding Leadership Award winner, Bob Levin. two feature articles in this issue offer perspectives and insight from a variety of government officials and industry leaders on the recently passed Community Manager Licensing law in Illinois. Manager Licensing is a topic that provokes a lot of discussion and undoubtedly there is more to come on this important issue. Our regular Industry Happenings column appears in this

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.

issue as is customary.

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.

Addison. tournaments will be held for 8-ball (billiards) and darts. Shuffleboard, Bean Bags and

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 2009©. 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.

MCD Pool Party to feature Condolympics Games the 14th annual MCD Pool Party will be held on March 19, 2010 at the Pyramid Club in

other events for Condolympics competition will also be held at the MCD Pool Party. the Condo Lifestyles Condolympics donations will benefit Special Olympics.

Other upcoming MCD special events include our annual golf outing, which will be held in July at Eagelwood Resort in Itasca, and a luncheon at Arlington International Racecourse in September.

We will provide more information on these events as you request and as details are available. 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. those of you who are not current subscribers can obtain subscription information on our website www.condolifestyles.net or by contacting our office.

As we welcome in another new year, we encourage you to make your association and your community all it can be. If you have an idea that would benefit other Community Associations, a story to share, or some advice on how to avoid a problem or failure, please call our office at 630-

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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932-5551 or send us an e-mail (mdavids@condolifestyles.net) Y Michael C. Davids Editor and publisher

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BANKING

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ENERGY GAS & ELECTRIC

FIRE/FLOOD RESTORATION

SELECT ENERGY PARTNERS LLC (312) 593-6412

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Cost efficient Janitorial & Maintenance services for homeowners associations.

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LANDSCAPE CONTRACTORS

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for more information, visit our website at

Design • Build • Maintain www.wdlinc.com jimbennecke@wdlinc.com

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S E RVICE DI R E CTORY

PAINTERS

PROPERTY MANAGEMENT

PROPERTY MANAGEMENT

CERTAPRO PAINTERS (866) 441-8259

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

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

www.BaumProp.com

www.psimanagement.net

CARUSO MANAGEMENT GROUP, INC.

SUDLER PROPERTY MANAGEMENT (312) 751-0900

Interior & Exterior Painting • Wallcoverings Stucco, Masonry & EfIS Repair • Drywall Repair www.certapro.com bkurschner@certapro.com

WOODRIDGE OFFICE

PAINTERS TOUCH SERVICES/ PTS CONSTRUCTION, INC. (630) 372-8400

RESIDEntIAL & COMMERCIAL www.carusomg.com

www.sudlerpropertymanagement.com

www.painterstouchservices.com

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

TAIRRE MANAGEMENT SERVICES (847) 299-5740

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

www.chicagopropertyservices.com

tsutton@tairremgmt.com

www.duboispaving.com

COMMUNITY SPECIALISTS (312) 337-8691

(630) 717-7188

PAVING

“Premier Community Management”

HARD SURFACE SOLUTIONS (630) 674-4520

VANGUARD COMMUNITY MANAGEMENT www.vanguardcommunity.com

www.communityspecialists.net

www.hsshardsurfacesolutions.com

THE HABITAT COMPANY (312) 527-5400

THE LORUSSO COMPANIES (630) 231-9009

WOLIN-LEVIN INC. (312) 335-1950 Contact Tom Skweres

www.wolin-levin.com

www.habitat.com

COnCREtE & ASPHALt Install New • Remove Old • Repair • Footings Foundations • Sidewalk • Parking Lots • Driveways www.lorussocompanies.com

LEGUM & NORMAN MIDWEST (312) 944-2611

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

www.lnchicago.com

www.hhsg.net

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

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

MCGILL MANAGEMENT, INC. (847) 259-1331 www.mcgillmanagement.com

www.hillcrestmgmt.com

www.smithereen.com

PROPERTY MANAGEMENT

JONES & JONES, INC. (630) 963-9000

AEGIS PROPERTIES CORPORATION (773) 667-8900

www.jonesjonesinc.com

www.aegisproperties.com

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

All material herein is copyrighted 2009©.

NIMROD REALTY GROUP (847) 724-7850

REAL ESTATE TAX ATTORNEY KANE PROPERTY MANAGEMENT CORP. (773) 472-2300

ELLIOTT & ASSOCIATES (847) 298-8300

www.kanemanagement.com

www.elliottlaw.com

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CONDO LIFESTYLES

REMODELING CONTRACTORS

ROOFING

SWIMMING POOLS

ABC DECO INC. 773-701-1143

SUAREZ ROOFING, INC. 773-235-5455

SPMS 630-692-1500

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

your Complete Roofing Solutions www.suarezroofing.com

ROOFING

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

SECURITY SERVICES

TREE CARE

ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888

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

www.admiralsecuritychicago.com

www.autumntree.com

A&R SECURITY (630) 366-4103

ACTIVE ROOFING CO., INC. (773) 238-0338 (708) 430-8080 Established 1965 Maintenance & Repairs Roofing/Sheet Metal/tuckpointing www.activeroofing.com

KRAMER TREE SPECIALISTS, INC. 630-293-5444

www.arsecurity.com

SEAL-TIGHT PROTECTIVE SERVICES, INC. (847) 640-2210

MCGINTY BROTHERS

www.stpsguards.net

PROfESSIOnAL LAWn & tREE CARE

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

(847) 438-5161

SNOW REMOVAL

www.McGintyBros.com

See our ad on page 5. www.lakeroof.com

CSR ROOFING CONTRACTORS (708) 848-9119 www.csr-roofing.com See our ad on page 35.

PRO★TOP ROOFING (847) 559-9119

HARD SURFACE SOLUTIONS (630) 674-4520

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THE CARE OF TREES Certified Arborists, Accredited, 5-time “Company that Cares” Honor Roll Member

SIDING / RENOVATIONS B.T. LAKESIDE ROOFING (630) 628-0093

www.thecareoftrees.com

www.lakeroof.com See our ad on page 5.

SWIMMING POOLS

S&D ROOFING SERVICE (630) 279-6600 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

tree Pruning, tree Removal, Cable Bracing, Plant Health Care, tree Planting & transplanting www.kramertree.com

DOWNES POOL COMPANY (800) 939-9309 Build Commercial/Residential Weekly Service, Open/Close Renovations, vgB Compliance Leak Detection, Largest Staff of Experienced technicians & Pool Attendants 40 years in Business www.downespool.com

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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 2009©.

CONDO LIFESTYLES

TV-BULK CABLE & SATELLITE

WASTE SERVICES

COMCAST (866) 594-1234

LAKESHORE WASTE SERVICES (773) 685-8811

www.comcast.com

WINDOWS/REPLACEMENTS WOODLAND WINDOWS & DOORS 630-529-DOOR (3667) www.woodlandwindows.com

ONSHORE NETWORKS 312-850-5200 Ext. 131

WINDOWS/REPLACEMENTS

Bulk or Retail, Internet & Satellite tv www.onshore.com

ASSOCIATED ENVIRONMENTAL LLC

RCN (312) 955-2322

www.ifd-associated.com Renovation • new Construction Window Systems • noise Abatement Curtain Wall Systems Aluminum Windows: Wausau,Winstrom, fulton, Alumitech Wood Windows: Andersen, Kolbe& Kolbe Steel Windows: Crittall, Steelite

WINDOW RESTORATION

IFD, INC. (847) 364-6800

rcnchicagoapts@rcn.net www.rcn.com

WINDOW WALL SERVICES, INC. THE CAULKING COMPANY (708) 361-9333 www.windowwallservices.com All Types of Window Restoration Weather Stripping / Hinges Handles and Adjustments Curtain Wall Repair Specialists

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006

Baum

Property Services, AAMC

Professional Community Management CE LE BR AT IN G OU

25

R

th

ANNIVERSAR

Y

Contact: Michael D. Baum, CPM, PCAM

630-897-0500 6 3 0 . 9 9 0 . 9 5 9 5 K 2 N

C R E S T

K 2 N . C O M

www.BaumProp.com

P. C .

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All material herein is copyrighted 2009©.

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CONDO LIFESTYLES

B Y D AV I D M A C K

Legislative Panel Offers Insight Michael Kim of Michael Kim & Associates, State Senator A.J.Wilhelmi. State Representative Andre thapedi and Richard Lockhart of Social Engineering Associates addressed the audience in an October 2009 seminar hosted by ACtHA on recently passed, rejected and proposed state legislation impacting community associations.

Manager Licensing Kim focused on this important topic for which he indicated there was general support in the industry for two primary reasons. The first is a concern over a lack of (management) competency on the part of a number of companies and individuals practicing the profession. “There is a wide range of service providers and it doesn’t matter whether (they) are large or small,” he said. “Competent and incompetent people can be everywhere.”

The other basis for the move to require managers to have state sanctioned credentials was the occasional incident where individuals entrusted as management pilfered money from their clients. They range from those persons who are just plain larcenous to those who were caught up in a personal tragedy such as a health crisis- which did not justify their illegal acts- and took funds to pay off mounting debts. “I have seen situations where I would never have dreamt that the person could be guilty of that kind of misconduct,” he said, summing up the causes for theft of funds by adding that, “competency (the lack of it) and criminality were the two catch words that

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were the basis for licensing.”

Kim referred to Section 18.7 of the Condo Act, passed in a previous year, which set standards for managers but fell short of full licensing, which he called “manager licensing lite.” But there was not a method established to enforce the standards, which were a compromise worked out with those individuals and entities that opposed licensing. But, Kim said, “the standards coming in were the camel’s nose under the tent.”

He explained that persons will have to be licensed when they manage any kind of association that involves ownership of or an interest in property- condo units, townhouses, villas, single family homes, cooperatives etc.and that is authorized to impose assessments, which constitute a lien on a unit or lot. “It was meant to be a very wide net,” Kim said, although he indicated there was a loophole through which a cooperative might slip because in that type of community association, which provides members with shares in the corporation rather than the ownership of property, there is no assessment lien of the

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kind contemplated in the statute.

It is also important to note that where unit owners perform management services in self-managed associations for compensation, they too will have to be licensed.

License Enforcement Licensing will be supervised and controlled by the Illinois Department of Financial and Professional Regulation, which must appoint a board to administer the whole program through the creation of rules and procedures to meting out punishment for transgressors. The law goes into effect on July 1, 2010 but the licensing requirement will not be enforced until one year after the policies and practices have been written by the board.

Licensing Fees The cost of manager licensing will be shared by all covered community associations.

They, “will pay for licensing as they will be its beneficiaries,” said Kim. The fee will be a base $50 plus 1$ per unit per year and will apply to all associations over 10 units. It is this charge to associations that has elicited opposition to manager licensing. One of those opposed is Steven Heuberger, an attorney and President of Villa Management. He spoke out against it at various points in Kim’s presentation. He called the fee “an unnecessary imposition in bad economic times.”

Even umbrella organizations will have to pay the charge, which almost seems like a duplicate fee, considering that the umbrella will bring no additional units to the mix that is assessed the fee. For example, Kim noted, where two associations are joined by a master association for common property, all three will have to pay the toll.

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All material herein is copyrighted 2009©.

L E G A L U P DAT E

Senate Bill 1933 – Homeowners’ Bill of Rights Next on the agenda to offer remarks was State Senator A.J.Wilhelmi representing the 43rd Senatorial District in Will County. He is the sponsor of S.B.1933, which was first introduced in the legislature on February 20,2009.

It creates what has been referred to as the Homeowners’ Bill of Rights. Its intent is to provide protection for homeowners from the excesses of their boards of directors. Wilhelmi said his constituents have clamored for protection against what they characterized as arbitrary actions by their boards. “About two years ago, a group of residents came to me and said we don’t feel we have rights in our associations,” he said. “We believe we have some directors who are acting as dictators.”

They asked for his help with a bill of rights to prevent what they called the abuse and disrespect by boards. Wilhelmi responded with his bill- you can google for particulars-, noting that in petitioning him for assistance they were very persuasive. “Constituents make the best lobbyists,” he added.

Wilhelmi did cite some of the specific protections in the draft Bill of Rights dealing with elections, terms of directors, meetings, records inspection and the right of owners to sue their boards. Heuberger countered that most of these safeguards for owners were already in the Condo Act to which Wilhelmi responded by saying, “what’s in the current bill will not be enacted. That is (just) a starting point to have a conversation.” No final decision has yet been made on the provisions to be included in the law.

Heuberger further commented, “if the bill is passed, no one will want to run for the board,” but Wilhelmi reiterated it is only the start of a dialogue and that he, “wants to have a collaborative effort on this.” There is much more work to be done in designing the statute.

“We’re going to fashion the homeowners’ rights act after the Illinois Condo Act,” explaining that it would eventually be either an extension of the latter or an entirely new law that will mirror it in its appearance. But whatever form it eventually takes, it will apply equally to condominiums and common interest communities.

Not Moving Fast Wilhemi acknowledged that the bill was not moving fast enough in the legislature to satisfy those he represents. “I’m getting yelled at by constituents to speed things up,” he said.

As noted above, the bill as now written will give homeowners the right to sue when directors act toward them with deliberate malice.

“There is a provision in the draft to allow unit owners to recover damages against board members who act willfully and wantonly. This would be a personal suit. It may be a realistic check on the conduct and behavior that some board members engage in.”

House Bill 821 –Leasing Restrictions Wilhelmi also commented on HB 821, which was pending in the Senate Judiciary Committee at the time. It provides that if a condominium’s documents are amended to prohibit leasing, an organization that is incorporated as a 501(c) (3) entity and is leasing the unit at the time of the amendment may continue to lease the unit. He opposed the statute. “If boards want to exclude renters by changing the by-laws, they should be able to do so,” he said.

In summing up his coming efforts in Springfield, Wilhelmi declared, “I will make sure we end up with good bills at the end of the legislative process.”

House Bill 1811 – Mandatory Training for Board Members Andre Thapedi represents the 32nd District in Chicago’s Hyde Park area in the State House of Representatives. He is a co-sponsor of HB 1811, which amends the Condo Act to require mandatory training for condominium board members. But there is an incentive to take the training to make it acceptable to potential and actual board members. “To make it more palatable, we will help you (board members) in your pocket,” said Thapedi. “After you complete it and you are on the board, we plan to provide you with some form of property tax relief.”

He explained why he had authored this law. “Many times people are managing million dollar businesses (associations) and they don’t have a clue.” He was frank enough, however, to

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All material herein is copyrighted 2009©.

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concede that this training might not accomplish what he hopes it would. “I may have higher expectations than are possible.”

Thapedi is also looking for ideas from the general public for aspects of his bill.

Reaching out to citizens, “is the only way we can know when we will have a good piece of legislation.”

Mandatory training will be imposed on all associations but Thapedi understands that, “it’s the small (ones) where you have the problem.” He noted that his effort is not very far along in the legislative process. “I haven’t called the bill and it hasn’t even been brought to committee yet.” Funding, he hopes, should be provided privately by free programs that are now available. The education would be primarily for associations organized after the bill is passed but the law would likely consider prior experience as a trade off that would, in many situations, give some individuals an exemption from the training.

Brian White of Lakeside Development Corporation, an organization that now provides such training to board members, commented from the audience that he believes that self interest of owners should be the incentive for the training and that he is opposed to any financial inducement, including tax relief.

Richard Lockhart, a lobbyist who heads Social Engineering Associates, closed the seminar with comments about the licensing bill, indicating that managers who become licensed will eventually form an association, hire their own lobbyist and present bills to the legislature to modify the statute. “We’re not at the end of the process, we’re at the beginning,” he said. “We have to be prepared for a lot of activity.”

Lockhart also suggested an outreach effort to inform more politicians, especially those outside of the Chicago area where there aren’t many condominium or common interest communities, about their nature and purpose. “I have a feeling that there are a lot of legislators who don’t know anything about associations,” he said. Y

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Sudler Property Management Sudler Property Management recently rolled out it’s upgraded state-of-the-art Sudler@Home web-based program for the exclusive use of homeowners living in approximately 100 Sudler managed properties.

Sudler@Home is a virtual account summary and communications platform by which any Owner can review accounting information, make payments on-line and receive communication from Management. Owners will benefit from the convenience of electronic access to information 24/7 and, in keeping with the firm’s green initiative, Owners will also have the option of receiving paperless monthly billing statement and additional payment options including using credit cards as well as simply hitting a key to make a direct payment from a bank account. Sudler will continue to offer it’s long-standing automatic-debit payment option known as SnAPP. Steven P. Levy, the firm’s president reports that, “Sudler, having more CMCA designated employees than any residential property management firm in Illinois, proudly announced that Kevin Marcus, Sudler vice President and Manager at 2626 n. Lakeview, is now one of the very few in our industry who has earned the PCAM Designation as awarded by the Community Associations Institute”.

While Sudler requires that all Sudler managers earn the CMCA Designation, the PCAM is the highest and most coveted designation that is awarded by CAI. to put it in perspective, there are approximately 750,000 property managers in the US. fewer than 2,000 have earned the PCAM Designation. In addition to Kevin Marcus, Steven Levy, Sudler’s President, Dean Lerner, a Sudler Executive vice President and Dale young, a Sudler Manager, are Sudler employees who have earned the PCAM. PCAM stands for Professional Community Association Manager. to earn the PCAM, one must attend a significant number of classroom study hours and participate in a two-day case study and pass a very long and all encompassing exam. We are extremely proud that the firm now has 4 executives who have earned the PCAM. Sudler managers that have recently earned the CMCA designation include Sky franke, Ed Heil and timothy Bulger.

Sudler Property Management welcomes the following new clients: 440 n. Wabash a 457 unit luxury high-rise, terra Cotta Commons, located at 1760 W. Wrightwood, a 40 unit loft property, 1325 n. Astor, a 12 unit prestigious cooperative in the gold Coast and Millennium Centre, located at 33 W. Ontario, a 360 unit luxury highrise condominium property.

Expressing sincere thanks to loyal and valued clients, Steven Levy thanked the following Associations for their continued support and vote of confidence, having recently renewed management agreements: 2626 n. Lakeview, Lakeside on the Park, located at 1250 S. Indiana, 400 S. green. 232 E. Walton, 70 E. Cedar Corporation, 1500 n. Lake Shore Building Corporation, 630 n. State Parkway, El Lago, located at 6157 n. Sheridan, Haberdasher Square Lofts, located at 628 W. Jackson, the Residences at River East, located at 512 n. McClurg Ct., 850 DeWitt and 2 E. Erie.

In September of 2009 Mr. Louis D’Angelo, President of Metropolitan Properties of Chicago, proudly accepted a Chicago Landmark Award from Mayor Daley on behalf of Metropolitan tower, a Sudler managed property located at 310 S. Michigan. the award for Preservation Excellence and Adaptive Reuse was bestowed upon the building, located at 310 S. Michigan Avenue, as it was redeveloped from an office property to a top-notch condominium. the neo-classical structure, located near the Art Institute, was built in 1924 and remained an office

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building until it was gutted and rebuilt as classic residences starting in 2004. Of course the beautiful façade remains in place, including the world famous glass ‘beehive,’ an ornate dome at the top of the building that has lit up the skyline with a blue light for over 80 years. On hand for the award along with Mayor Richard Daley was also David Mosena, Chairman of Chicago’s Commission on Land▲ Metropolitan Tower - 310 marks. “Metropolitan South Michigan Ave tower is truly a disChicago Landmark Award tinctive building for a condo conversion because of the quality of the building and its restoration,” said Louis D’Angelo. Sudler Property Management has proudly managed the building since it opened its doors to residents in late 2007.

▲ The Streeterville Organization of Active Residents (SOAR) presented the Beautification Award for Landscaping to the 600 N. Lake Shore Drive Condominium Association, managed by Sudler Property Management since inception of the building two (2) years ago.

All Sudler employees wish to express sorrow to the friends and relatives of fire victim, Beata Bihl on December 10, 2009 at 260 E. Chestnut. the fire started on the 36th floor due to an as yet unconfirmed origin. Our thoughts and prayers go out to the family at this difficult time. We are grateful that additional injuries were minor. the firm also wishes to thank a number of individuals and organizations for their swift action that prevented further injury and inconvenience to the residents. the Chicago fire Department, under the command of fire Commissioner John Brooks, with hundreds of firefighters worked throughout the night to contain the fire, evacuate residents and restore access to the building in an exemplary manner in sub-freezing temperatures. We also appreciate the efforts of the Red Cross and other emergency personnel. fire Commissioner John Brooks credited Sudler Property Management for its’ outstanding leadership during this horrific incident. the ABC7 news broadcast with Commissioner Brook’s statement can be viewed on the Sudler Property Management website at: www.sudlerpropertymanagement.com.

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

All material herein is copyrighted 2009©.

INDUSTRY HAPPENINGS

Wolin-Levin,Inc.

Community Specialists

Wolin-Levin, Inc. has recently been named managing agent at the following buildings: the zen Condominium Association, Landmark village Condominium Association, Landmark village Homeowners Association, Kilbourne Court Condominium Association, 1 Museum Park West Condominium Association, Winston towers no. 5 Condominium Association and Museum Park Place Condominium Association.

Community Specialists recently announced that the company’s annual award of Excellence in Leadership went to Connie Woodworth of the new york Private Residences and the company’s Director’s Cup award went collectively to Lisa Congelosi, Sandra Broadway, Joan Rabe, Drew godzik, Doris fuentes, Jim friedrichsen and Cathy newman. According to managing director Rosemarie Wert, “the Director’s Cup went to the wonderful team that kept our accounting dept running with no delays during the period we were without a controller due to the sad loss of Kathy Patton (Controller) who died of colon cancer at the end of October.”

Laura Cullen has joined Wolin-Levin,Inc.as a portfolio Manager. Belinda Collins is the on-site Manager at Museum Park Place and Anna Barbato is the on-site Manager at 1400 Museum Park.

America Moyeno is property manager for Museum Park West Condominium Association, Palma Paolillo is property manager for 2500 Lakeview Condominium Association, Eileen tardy is property manager for 1242 n. Lake Shore Drive Condominium Association and Lisa Schiewe is property manager for 3950 n. Lake Shore Drive Condominium Association.

ABOMA Annual Meeting

Kathleen gallo has taken the position of Controller for Community Specialists. We welcome the expertise Ms. gallo brings as a former Controller at gE Healthcare and vP at LaSalle Bank. David Pope has joined the company’s Information Systems and Accounting departments under the direction of Jim friedrichsen. We welcome David’s experience in the use of Jenark Business Systems software. vicky Keene is the new parttime property manager for Horizon House at 5733 n Sheridan Road, the most recent property that Community Specialists has been named managing agent at.

Cheryl Carter is now Administrative Assistant at Burnham Park Plaza.

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All material herein is copyrighted 2009©.

01.10

▲ ABOMA President Bob Graf of Sudler provides a report of the group's activities at their annual meeting and holiday luncheon held on December 4, 2009 at the East Bank Club.

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DECEMBER 10, 2009

| Chicago Cultural Center

|

Co-SponSoR Chicago police CApS PREMIERE SPONSOR Comcast INFORMATION TABLE SPONSORS Brouwer Bros. Steamatic Certapro painters Kinsella Landscape, Inc. Landscape Concepts Management penland & Hartwell, LLC Simplex –Grinnell CORPORATE SPONSORS Admiral Security Services, Inc Chicagoland Management & Realty Community Advantage of Barrington Bank & Trust Community Specialists Construction Technology Laboratories ConTech MSI Co. Lakeshore Waste Services, LLC Levenfeld pearlstein, L.p.

CSR Roofing Harris Bank Hayes Mechanical Heil, Heil, Smart & Golee Quality Restorations The Forum Group Universal Restoration W.J. McGuire Co. GENERAL SPONSORS AAA painting Contractors Edwards Engineering Full Circle Architects Smart Elevator Co. Smithereen pest Management Services

Outstanding Leadership Award

Bob Levin, Wolin Levin-Inc. Bob Levin is a proud graduate of the Chicago public schools. He received his BS in Finance from the Univ. of Illinois (Urbana) and MBA in Finance from the Univ. of Wisconsin (Madison).

Bob began working for the family company in 1978 after working for a Fortune 50 company and management consulting firm. He quickly earned his brokers license and CPM degree.

While learning the trade and gaining ownership in the company, he indulged in service to the industry as VP Education and Legislative affairs for the Chicago Chapter of IREM (Institute of Real Estate Management) and became a Director and President of ABOMA(Apartment Building Owners and Managers Association).

Bob serves on the Advisory Board for Condo Lifestyles and Chicagoland Buildings and Environments. He has been quoted in banknote.com, written an article to be published in January, 2010 in Common Interest magazine and participated in research for the Univ. of Illinois Office of Real Estate Research.

Under his leadership, Wolin-Levin has grown to approximately 20,000 managed units in over 200 properties in the Chicagoland area. The company has progressed from entirely rental to condominium management and grown expedientially during his tenure.

▲ Linda and Bob Levin

In 2004, Bob sold a majority interest in the firm to FirstService Residential, a division of FirstService Corporation, a publicly traded firm. Collectively, the FSR division manages over 1,000,000 units nationally with WolinLevin acting as their Chicago “platform”.

Bob married his high school sweetheart (Linda) 28 years ago and has two children (Adina and Evan). He lives in downtown Chicago and rides his bicycle to work when the weather is appropriate.

MCD Media Advisory Board & Editorial Committee Recognition

State-of-the-Industry Committee

The Alter Group Harvey Alter Baum Property Services, Ltd. Michael D. Baum Brouwer Bros. Steamatic Rick Brouwer Chicagoland Management & Realty Tony Briskovic Community Specialists Rosemarie Wert Environ International Corp.

Delph Gustitus, Frank Gonzalez Heil, Heil, Smart & Golee Tim Snowden, Al Schroeder Hillcrest Management Joel Garson Kinsella Landscape, Inc. John Algozzini, Greg Semmer George Kinsella

Tony Briskovic Chicagoland Management & Realty Brian Kelly Chicagoland Management & Realty Tony Dister Community Advantage of Barrington Bank & Trust, John Matranga 3600 N. Lake Shore Drive Condominium, Micky Tierney Community Specialists Tim Snowden Heil Heil Smart & Golee Tairre Dever-Sutton Tairre Management Services Tom Skweres Wolin-Levin, Inc.

Tairre Management Services

Kovitz Shifrin Nesbit Jordan Shifrin, Rob Sternberg Legum & Norman Mid-West Lou Lutz McGill Management, Inc. George Wolf, Linda Wolf Omnibus Services, Inc. Barry Katz Orum & Roth Mark D. Roth Smithereen Pest Management Andy McCormack, Steve Seifert Tairre Management Tairre Dever-Sutton Vanguard Management Mike Dorociak Property Specialists, Inc. Tracy Hill, Cathy Ryan Wolin-Levin, Inc. Bob Levin, Elena Lugo, Tom Skweres

Waldman Engineering Wolin-Levin, Inc.

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

All material herein is copyrighted 2009©.

EVENT HIGHLIGHTS

2 0 0 9 S TAT E o F T H E I n D U S T Ry S E M I n A R EDITIon

CondoLifestyles

14

®

Chicagoland

&

Buildings Environments ▲ (L to R) Mark Pearlstein - Levenfeld Pearlstein and State Senator Kwame Raoul.

▲ Shown here are(LtoR) Keith Weber -B.T. Lakeside Roofing, Suzy Martin -Smart Elevators Co., Bob Levin -Wolin-Levin,Inc., Peter Maneyski - The Forum Group,and Gert Ulrich Schoengart

▲ Candy Nelis & Charles Fetherling - Simplex-Grinell and John Matranga -3600 North Lake Shore Drive Condominiums

▲ Shown above are (LtoR) David Berke - Wolin-Levin,Inc., Tom Wykle-B.T. Lakeside Roofing, Jack Mancione- Werk Management, Tom Skweres- Wolin-Levin,Inc.,and Marty Klauber -The Private Bank.

▲ Shown here (LtoR) are Jenny Armistead - Community Specialists, Dave Butler Comcast, and Brian Kelly -Chicagoland Management.

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All material herein is copyrighted 2009©.

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COnDO LIfEStyLES

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State-of-the-Industry 2009 Report from page 5 single family home,” and which was the reason the blaze at 260 E. Chestnut was contained in the unit in which it began. Stone said emphatically that anyone living in a high rise during a fire should, “listen to what the firemen tell you. Stay in your unit. Lives are lost because people leave their units.”

Garbage Rebate One person in the audience asked if there was any chance the garbage rebate to condominium associations in Chicago would be increased. In reply Stone exclaimed, “Raised! They tried to knock out the refuse rebate but we were successful in keeping it in.

Getting it raised? I don’t think so.” He added a comment about the City’s financial picture.

“Our economic situation is terrible right now but don’t cry for Chicago. We’re much better off than most big cities.”

said, “I’m rather sensitive to condominium issues whey they come up in the General Mark Pearlstein followed the Alderman Assembly.” and his presentation and comments appear in The Senator said his association has had another article in this issue on page 6. Pearlto recently evict two owners for non-payment stein introduced State of assessments. He also Senator Kwame Raoul related that his associawhose 13th District seat ...the City has backed off on some of tion had switched manwas occupied earlier by agement companies its government mandates including President Barack Obama because of, “our concern before he moved up to granting the intercom system extenabout how our funds the U.S.Senate. Senator were being managed.” He Raoul gave some brief sion, how condo doors are handled stressed his support for remarks, noting at the the licensing law and under the life safety ordinance and outset that he had just closed by saying, “I come from a meeting the frequency of façade inspections. wanted to let you know with a colleague in the who I am and my sensiSenate, A.J. Wilhelmi, tivity to condo issues,” who was the chief sponsor of the manager and that he intends to be in the forefront of licensing statute. Senator Raoul’s district legislative action concerning condos. “I repreincludes Hyde Park/Kenwood and extends sent one of the critical pieces of geography in north of Diversey by two blocks. “There are a Illinois on the Lakefront,” with its hundreds of considerable number of condo units there,” he associations and thousands of units. They said, in fact probably more than in the district form a considerable part of his constituency. of any other State legislator. He also owns two units, renting one to others. As a result, he

State Senator Kwame Raoul

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extension, how condo doors are handled under More Positive Changes the life safety ordinance and the frequency of In the area of finance, there are a number façade inspections. “Critical façade exams have of banks willing to make loans to associations. changed dramatically,” he said, to the point that “If you are well run and are capitalized (have if an exam is all clear or if repairs dictated by an adequate reserve) sufan inspection have been ficiently, you can get made, an association money for projects,” said …electronic communication has won’t have to submit Sugar. Also electronic another unless requested made it easier for associations to communication has by the City. They will no made it easier for associprovide information to residents longer be automatically ations to provide inforrequired. “All of this is mation to residents comcompared to the copying and very welcome news from pared to the copying and the City of Chicago.” distribution of documents that distribution of documents that was necessary Utility Services was necessary in the past. in the past. “Now it’s Another good news posted on websites. The item is the wider availability of discounted communication ability of associations is utility services. “Most associations can lock in unparalleled- a big sea change opportunity to rates for a year at a time on natural gas or save tremendous amounts of money.” Sugar electricity,” Sugar said. Also associations have also noted the advantage Illinois has over unprecedented access to bulk communication other states when it comes to taking possesservices. They have the,” ability to buy these sion of units. “The lawyer in me says we have services on a bulk or deeply discounted basis to be thankful for provisions in the State law for much less than I pay in my single family that allows us to evict for non-payment of home.”

What’s on Your Mind?

A panel of association professionals and representatives collaborated in the final session of the day entitled, “What’s on your mind…..the impact of the economic crisis.”

Moderated by Tim Snowden of Property Management for Heil, Heil, Smart & Golee, the group included David Sugar of Arnstein & Lehr, Brian Kelly of Chicagoland Management & Realty, (Ms.) Noah Temaner Jenkins of the Manhattan Condominiums and Gladys Montemayor of the 7306 North Winchester Condominium Association.

Positive Changes Sugar began the panel presentation with remarks about the state of condominiums in the Chicago area, opening by observing that, “we spend a lot of time on how rough 2009 is and it has been rough in condo land but I’m going to talk not about doom and gloom but the positive things that have happened.” As others before him, he noted that the City had backed off on some of its government mandates including granting the intercom system

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protect your rights. » Talk to your property manager about taking the necessary steps to protect the six months of assessments collectible from a buyer at a foreclosure sale. » After a bank takes over a unit following foreclosure, don’t sit back and wait for the bank to pay assessments.

Go after the banks. Be aggressive. Bill them.

assessments. Other states don’t allow this.”

Suggestions for 2010 Looking ahead to 2010, Sugar counseled associations to be proactive in a number of ways in advancing their interests. He urged them to protect their money. Everybody is worried about the insolvency of so many banks. “Make sure your money is safe. If your

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funds exceed $250,000, spread them around,” to insure FDIC insurance coverage. Additionally he advised: » Look for utility savings in gas and electric. This is an opportunity only available to condo associations. » Don’t be afraid to do evictions and take possession. Be aggressive and

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» Seek a savings in property taxes on a collective basis for unit owners.

Lawyers seek assessment reductions on a contingency basis. Associations have nothing to lose by having lawyers challenge assessments to get tax reductions for owners. » Look at capital projects. Financing costs should be comparatively low.

“This is the time to do today a project an association might have to do in 2 or 3 years because it’s cheaper now.”

Finally Sugar encouraged boards to, “in a

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spirit of good will to all, or most, run your associations for the benefit of the average unit owners- people who are paying the bills and are entitled to get the service they have the right to expect.”

Q & A Session –Economic Crisis Snowden and the audience than asked questions of the panel of Sugar, Temaner Jenkins, Kelly and Montemayor.

Q/ Is your association doing anything to tighten leasing?

A/ Montemayor - We don’t have any leasing restrictions. We do try to do an orientation for all new move-ins, including renters after a lease is signed. I go through the rules and regulations. I feel if they realize we really care about what goes on in the building, they will be careful about what goes on.

A/ Temaner Jenkins- We don’t have leasing restrictions either. Renters can be as good as owners. We’re working on what Gladys (Montemayor) is doing.

A/ Kelly- The building I manage requires owners to own a unit for at least a year before renting.

Q/ What are the pros and cons of getting FHA approval for a building?

A/ Montemayor - We don’t have anyone who is FHA approved but the only issue we would have is with FHA approved owners who would think they wouldn’t have to pay assessment increases just because they are FHA approved.

A/ Kelly- Our building has the Right of First Refusal to buy units for sale and therefore not approved for FHA financing, adding, however, that for a lot of people buying now the FHA is the only viable way to go.

Q/ Do you see FHA loans getting foreclosed?

A/ Sugar- Rarely.

Q/ What is a fair collection policy?

A/ Temaner Jenkins- Everybody needs to pay their bills on time. It’s not that I’m unsympathetic but if we let someone pay late, everyone else in the building has to cover that. It’s not fair. Delinquent accounts are sent to collection as soon as legally possible. The legal process takes a long time.

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A/ Montemayor - Our association initially sent delinquent accounts for legal action at 90 days but lowered the time frame to 60 days with great results. We have seen a dramatic decrease in people being delinquent because of the extra legal costs. We have also had good success in collecting assessments from owners who are losing their units, people in foreclosure are paying their assessments. We’ve gotten our money.

A/ Sugar- From my perspective, the collection of assessments has become very complicated to figure out the best way to proceed when a unit is put into foreclosure.

Q/ What about payment plans?

A/ Montemayor - I would have said no before but this year I might say yes. You have to see what is going on with each owner on a case by case basis. We offer a pretty tough payment plan and we have them sign a confidentiality agreement so that they don’t tell others in the building.

In Memoriam

Kathleen Patton It is with heavy hearts that Community Specialists announces the loss of one of its integral team members, Kathleen Patton. Kathleen served as the company Controller for Community Specialists from August of 1999 until this past October during which time she hired and trained each person in the accounting department. She was the boss everyone loved. Kathy lost her battle with cancer one year after her diagnosis in October of 2008.

Her standard of excellence and careful attention to detail were well known to her industry peers and auditors alike. She was the “go to” person for every situation that arose – not only for her staff but for managers and supervisors alike. She is sorely missed by everyone at Community Specialists. We extend our deepest sympathy to Kathy’s family and friends.

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A/ Temaner Jenkins- We’ll do payment plans after a judgment has been entered and the lawyer advises us to. We’re careful to apply the same rules to everyone. We don’t want to get into trouble by changing the rules from owner to owner.

Q/ Our building is forty years old and we have five projects to do regarding safety, elevators, boilers and more. Should we increase regular assessments or do a separate (special) assessment to cover the costs?

A/ Sugar- History tells us that a special is a better way to go than to raise your base assessment. And instead of having one special, break it into several. If someone goes into foreclosure, you’ll preserve the balance of the multiple special assessments (for subsequent owners to pay.).

A/ Snowden- I advise boards if you can get the cash up front, get it. People may be able to get home equity loans. Another option is to take out a loan and then include repayment in the budgeted assessments.

A/ Temaner Jenkins- In 2000 we had to do structural repairs that turned out to be a three year $4.5 million project. I was surprised that about fifty percent wanted to pay up front.

Q/ In Cook County, when a unit is in foreclosure what can be done?

A/ Sugar- A foreclosure from beginning to end will take a minimum of twelve to fourteen months. An eviction by an association can happen in about five months. My suggestion is to get an order of possession and evict and rent out the unit. Remember that in Cook County, the sheriff no longer actually removes possessions from the unit at eviction. The association must arrange to have that done. No more heavy lifting for the sheriff.

Q/ Do your associations purchase bulk cable services?

A/ Temaner Jenkins- The last time we looked into it no cable company was interested in it.

A/ Montemayor- We’ve thought about doing bulk cable but we are still trying to decide.

A/ Kelly- We’re currently with a cable TV vendor and the residents like it because what they get is a lot more than a single family home gets. (As Sugar noted earlier).

You’re getting far more services for the cost.

We’ve also seen a huge savings in purchasing bulk electric. But if you don’t have bulk cable, satellite or internet service yet, people may object, saying they don’t want it.

A/ Snowden- Do a poll of your residents before you enter any of these kinds (bulk) of contracts. Try to get at least 70% in favor of doing it.

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