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o ctober 2017 | volume 21 | number 3
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THE SOURCE FOR INFORMATION ON COMMUNITY ASSOCIATIONS, CONDOS, TOWNHOMES, CO-OPS & HOAS
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W H AT ’ S I N YO U R D E C I S I O N M A K I N G TO O L B O X ?
Strategies and Resources for Guiding Community Associations FEATURES...
Satellite Dish Restrictions for Community Associations
Top 10 Questions to Ask When Vetting a Management Company The Illinois Contribution Act, and Why It Matters to Condominium Managers
Changes to CICA and ICP Acts Mediation for Unit Owner Disputes:
The Wave of the Future? DEFENDING UNIT OWNER LAWSUITS IN COMMUNITY ASSOCIATIONS:
A Step by Step Process Does Your Association Experience Glass Pain?
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table of contents
Tom Engblom CMCA, AMS, PCAM VP, Regional Account Executive 312-209-2623 Toll Free 866-800-4656, ext. 7498 tom.engblom@mutualofomahabank.com
COVER STORY
03 WHAT’S IN YOUR DECISION MAKING TOOLBOX? Strategies and Resources for Guiding Community Associations By Pamela Dittmer McKuen BOARD BASICS
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10 Satellite Dish Restrictions for Community Associations by Keith R. Jones GUEST EDITORIAL
12 Top 10 Questions to Ask When Vetting a Management Company By Salvatore Sciacca RISKS & LIABILITIES
15 The Illinois Contribution Act, and Why It Matters to Condominium Managers By David Lewin 18 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 22 From the Editor 23 Directory Advertisements L E G A L U P D AT E
30 Changes to CICA and ICP Acts by David Bendoff L E G A L U P D AT E
35 Mediation for Unit Owner Disputes: The Wave of the Future? By Howard S. Dakoff, Esq. & Christopher M. Heintskill, Esq.. BOARD BASICS
39 Defending Unit Owner Lawsuits in Community Associations: A Step by Step Process by Kelly C. Elmore S P E C I A L F E AT U R E
42 Does Your Association Experience Glass Pain? by Jon Boyd, R.A., S.E., SECB
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COVER STORY
by Pamela Dittmer McKuen
W H AT ’ S I N YO U R D E C I S I O N M A K I N G TO O L B O X ?
Strategies and resources for Guiding community Associations In any community association, the Number One job of its board members is to make decisions. Lots of decisions. Many of those decisions are big ones, involving quality of resident life and large amounts of money.
B
oards make decisions about how much to spend, how much to raise assessments, what kind of siding and shingles to install and who will install them, when to file lawsuits, how much insurance is needed, which management and employees to hire, what kind of trees to plant and when to chop them down, how often to paint the hallways and porches, when to replace balconies, and on and on. but it’s not enough for boards to decide, willy-nilly. As fiduciaries of the association’s assets, they must make GooD decisions, or they could be held accountable.
compounding the matter is the fact that board members are volunteers. Few, if any, have backgrounds in the complexities of property maintenance and management, but their responsibilities encompass all of them. Fortunately, help is at hand. the association industry understands the challenges board members face and provides a myriad of tools to give them support and confidence. consider the collective wisdom of the professionals, and you’ll be making better, more educated decisions for your community.
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10.17
A Professional Team Your most important tool is the group of professionals you surround yourself with, says Kara cermak, president at rowell Inc., part of the realmanage Illinois team. She likens approaching a board decision to resolving a medical issue. “Imagine that you go to the doctor, and you have a muscle tear,” she says. “You may have researched something about that tear. You may even share some of that research and ask questions? but would you outright move in a different direction than the doctor would advise? Perhaps you’d want a second opinion, and that’s perfectly appropriate.” A professional team depends on the needs and size of the association, but is likely to include a community association manager, attorney, accountant, reserve study specialist,
CONDO LIFESTYLES
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architect, engineer, banker and insurance broker, says Al Schroeder, chief operating officer at Heil Heil Smart & Golee ltd. in Skokie. “of course, not every member of this team has to be involved in all important decisions,” he says. “they should only be called upon for advice when their specific expertise is needed.” For example, an insurance broker will make sure you have enough coverage for all potential and changing levels of liability. An architect or engineer will be important players when you’re
undertaking large-scale or restoration projects. “A lot of times associations making decisions, whether they are self-managed or professionally managed, still need professional advisors,” says timothy Haviland, senior vice president of commercial lending and community association loan program at Inland bank & trust in oak brook. “If your Association is selfmanaged and you’ve never done a special assessment before, A professional team depends on the needs and size of the association...
that’s a lot of stress to put on volunteers. consider hiring a management company to prepare your financials and guide you through the special assessment collection process.” the pros can save you miles of legwork, cermak adds. “they can pull from years of experience because we know whether we should consult federal or state law, whether your governing documents supersede a decision you may be relying upon the law for, whether we need to consult county websites for information,” she says. “We know where to look and, honestly, that’s half the battle.”
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COVER STORY
Governing Documents many board decisions are dictated by their association’s governing documents. Among them are the Illinois condominium Property Act, common Interest community Association Act, and Illinois General not-For-Profit corporation Act along with the association’s declaration, bylaws and rules and regulations. “board members should not just review their governing documents, but they should make sure they are updated,” says attorney and Principal Kelly elmore at Kovitz Shifrin nesbit in chicago. “So many
changes have been made to the condo act, especially between 2015 and 2017, that most declarations are completely outdated.” the law firm recommends associations submit their declarations for attorney review at least every 8 to 10 years, she says.
Budget and Financial Reports
are appropriate or whether they should be raised. Schroeder recommends projecting budgeting beyond the immediate period, preferably one document projecting one year ahead and another document extending three to five years to give board members an idea of financial decisions that will have to be made in the short-term future.
A budget is a tool that can determine, among other things, whether assessment levels
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...It is likely to include a community association manager, attorney, accountant, reserve study specialist, architect, engineer, banker and insurance broker.
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CONDO LIFESTYLES
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In addition, boards must be kept apprised of their ongoing financial experience through reports prepared by a competent treasurer, outside independent accountant or the management agent. “they should be professionally prepared and easy to understand,” Schroeder says. “A board should receive them on a timely, usually monthly, basis.” Financial reports should include at a minimum such elements as an income/expense statement, an assessment delinquency report and a general ledger reflecting all the financial transactions that took place during the time period covered. end-of-the-fiscal-year financial statements by an independent auditor are also an important resource and are required by law. “boards and managers should also use financial statements to plan for the future on various fronts,” he says. “maintenance projects, capital projects, assessment levels and other decisions can be guided.”
Updated Reserve Study every board should have a reserve study developed in its early years, generally by a knowledgeable professional in a related technical field that lays out a plan for the maintenance and/or replacement of all of an association’s critical physical components. Such studies "are going to determine how much (an association) will need to spend in the next 5 to 30 years and a funding plan should also be developed,” says Schroeder. “In most cases you’ll want to update your reserve plan every three to five years as it may become out of date.” An important part of a reserve study is a condition analysis of all common elements to determine useful life, their current status and when those elements are likely to have to be replaced. this analysis, "will tell you how the buildings and property are holding up (to that point) and give you the schedule of what you must plan to do,” Schroeder explains. When Haviland begins a relationship with an association, it’s generally because they have an upcoming project or are planning a
6 C O N D O L I F E S T Y L E S 10.17
project. He always asks them if they have had a reserve study completed recently. “Some people talk three to five years, and that’s a good benchmark,” he says. “I think five years is too long. three years helps the board plan financially and see what reserves can be contributed and what they need to make up the shortfall. usually, it’s a loan that needs to be structured. of course, they can always look farther down the road.” Haviland equates a reserve study for associations with an owner’s manual for a car “only on a much larger scale.”
Strategic Plan Schroeder advises boards to establish goals or priorities on both a short and long term basis, the former being for up to three years and the latter from three to five years. A forward-looking board may wish to project its future focus beyond five years, but whatever time frame is selected an attempt should be made to identify or quantify what the board and association hopes to achieve at critical points along that spectrum. In conjunction with that forecast, a board
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10.17
CONDO LIFESTYLES
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would be well advised to devise a strategic plan, which gets into specific steps or actions to take, identifying the means to be used in the accomplishment of the various objectives that are identified. this plan for action should be implemented along a continuum projected by a board with oversight given to the action steps as they are taken to assure that planning is more than just a paper exercise. thomas Skweres, regional vice president at Acm community management in Downers Grove also advocates for a strategic plan. “Planning helps an association not just survive day to day and month to month but to thrive,” he says. “A strategic plan enables the association to systematically reach toward a future that conforms to the vision, mission and values of the board. It facilitates a proactive rather than a reactive approach to decision-making. It is a way of formulating the direction the board is going to be taking the association in from where it is today and into the future.” However, a strategic plan must be somewhat resilient, he adds. “Any good strategic or long-term plan
needs to be evaluated along the way and revised as unforeseen events occur, or the wants and needs of the association change, or even if the board changes,” he says.
Educational Events and Publications Join the community Associations Institute and the Association of condominium, townhouse and Homeowners Associations. these are non-profit industry organizations that offer educational programs and publications for board members and homeowners. “these organizations advocate locally and federally on community associations’ behalf, and they are more than willing to provide you with information you seek,” cermak says. In addition to the educational component, industry conferences, seminars and events are a great place to network, Haviland says. “You’ll meet board members who have been through what you are going through,” he says. “You can get good recommendations for a vendor from someone who has used that company before, or a recommendation for another class someone took that was helpful.”
8 C O N D O L I F E S T Y L E S 10.17
Websites & Publications many association professionals and vendors post articles and how-to information on their websites, and you don’t have to be a client to access them. Depending on the organization website that you select, you’ll find content that includes legal updates, industry news, laws and ordinances, booklets and podcasts on demand. of course. Industry publications such as this one and those offered by others are a great resource for boards and managers as you can find a wealth of information and contacts there also.
YOU! After the research has been done, the documents and experts have been consulted, and the time has come to vote, your most important tool is your own common sense, cermak says. “Your common sense, your positive attitude and your willingness to work with other board members will lead you to arrive at fair, impartial decisions that enhance your community and the lives of your family and your neighbors,” she says. Y
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CONDO LIFESTYLES
by Keith R. Jones – Keay & Costello, P.C.
Satellite Dish Restrictions for Community Associations The presence of satellite dishes in various locations on condominium buildings is a common situation for many condominium associations. In addition to the impact satellite dishes can have on the overall aesthetic appearance of a community, many associations also have concerns regarding the impact satellite dishes may have on resident safety and association warranties.
I
f installed incorrectly, a satellite dish could be a safety hazard, such as by overhanging a location with frequent pedestrian traffic or by being too close to a power line. Additionally, the manner in which a satellite dish is installed could void an association’s warranty, for example if a satellite dish is installed by drilling through a roof or siding in order to secure a dish. Many associations have addressed satellite dishes by putting in place a blanket requirement prohibiting owners from installing these items
without the prior approval of the board. While such prior approval requirements are common, and typically enforceable, for most exterior additions and changes in associations, federal law governs what types of restrictions associations may place on satellite dishes. Specifically, the federal Telecommunications Act of 1996 empowered the Federal Communications Commission (“FCC”) to adopt rules regarding what types of restrictions associations may place on satellite dishes, which prompted the FCC to
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BOARD BASICS
adopt the Over-the-Air Reception Devices (“OTARD”) rule, which has been in place since 1996 and amended several times since then. This rule applies for all satellite dishes that are one (1) meter (approximately thirty-nine inches (39”)) in diameter or less that are designed to receive or transmit fixed wireless signals via satellite or that are designed to receive direct broadcast satellite service, including direct-to-home satellite service. In general, the OTARD rule prohibits restrictions adopted by associations that: 1) unreasonably delay or prevent the installation, maintenance or use of a satellite dish; 2) unreasonably increases the cost of installation, maintenance or use of a satellite dish; or 3) preclude reception by an owner of an acceptable quality signal from a satellite dish. The OTARD rule does not necessarily apply to all areas governed by an association, however. Specifically, the OTARD rule does not apply to common elements owned collectively by owners within a condominium association, except in areas where an owner has the exclusive use and control of the area. Therefore, in a condominium association, the association’s rules related to satellite dishes on the common elements would not be restricted by the OTARD rule. In other words, a condominium association could completely pro-
hibit the placement of satellite dishes on that portion of the common elements that are generally accessible to all owners. But, the OTARD rule restrictions would apply for any areas an owner owns or that the owner has exclusive use and control over (such as the limited common elements appurtenant to the owner’s unit, i.e. a balcony, deck and/or patio in many condominium associations). Restrictions adopted by a condominium association related to these portions of the property must not conflict with the OTARD rule. With respect to an association that wishes to require prior approval by the board before an owner installs a satellite dish in an area the owner has exclusive use and control over (such as the limited common elements appurtenant to the owner’s unit), the FCC has ruled that such prior approval requirements are generally not enforceable unless the prior approval is required for a legitimate, written, safety or historical preservation purpose. If an association establishes a prior approval requirement and asserts this is for a safety and/or historical preservation purpose, if challenged the burden will be on the association to prove that its requirement does not violate the OTARD rule. Thus, if adopting a rule out of a safety
concern, the board of directors of a condominium association would be prudent to specifically articulate within the rule the safety concern it has and how requiring prior approval of a satellite dish will help address that safety concern. Now over twenty (20) years old, the OTARD rule has been the subject of a number of FCC rulings. Fortunately for association boards and property managers, the FCC has established a summary guide related to this rule with some frequently asked questions that are quite informative. These can be found at https://www.fcc.gov/guides/overair-reception-devices-rule. While the FCC guide and frequently asked questions can offer a good summary and outline on a number of topics related to association restrictions on satellite dishes, an association would be prudent to consult with its attorney regarding how to draft restrictions within a declaration and/or rules and regulations governing satellite dishes in the association’s community. Due to the fact that in many cases the burden will be on the association to prove the legitimacy of the restrictions it adopts with respect to satellite dishes, it will be important for an association to draft these restrictions correctly before they are applied to owners. Y
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10.17
CONDO LIFESTYLES
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TOP 10QUESTIONS TO ASK WHEN VE Hiring a new community management company is different from choosing a new cable company, but in our age of endless options, some board members may approach their selection process in a similar way.
T
his falls in line with the current consumer mindset. Where once consumers might have had to pick between a few options, they’re now presented with a multitude of choices for basic things like bread, juice, water, telephone, electric, natural gas or tv. And we now (more than ever) have many choices for other service providers that specialize in everything from accounting to xrays. You might say that is a benefit of capitalism or a downfall but regardless of the point of view, the choices are at times daunting. Similarly, the boards of directors of community associations now have overwhelming choices when looking to hire a new management company. based on the latest information, more than 100 community management companies now provide services in the chicagoland area. Whether each can actually deliver a good, consistent level of service is a different question. Salespeople can easily say their company provides proactive support, a large pool of resources and a tireless property manager that doesn’t need sleep. And sometimes board members can be swayed by a representative who can speak well, appear
credible and dress the part. but there seems to be a disconnect between what salespeople are saying during presentations to board of directors and the facts. Drawing from my 16 years of experience in the profession, I know that most associations often change management companies – more than they care to admit. In my experience (others may find different), the average management-company turnover at a small - to mid-sized association is about two to three years. In many cases, I’ve been aware of terms that lasted only one year. could this be a result of boards of directors and homeowners having unrealistic expectations? or perhaps they followed a slick salesperson who said all the right things. It could also indicate incomplete vetting by the board of directors. I would say it’s probably some combination of it all. my goal for you here is to focus on the vital vetting process. I want communities throughout chicagoland to be able to find better-suited management companies for more-fruitful business relationships that last much longer.
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GUEST EDITORIAL
EN VETTING A COMMUNITY MANAGEMENT COMPANY HERE ARE THE TOP 10 QUESTIONS TO ASK IN DETERMINING THE RIGHT MANAGEMENT COMPANY FOR YOUR COMMUNITY: 1.
2.
What are all the services your company offers? Find out if they provide property management for rentals and apartments, high rises, low rises, and both small and large buildings. Inquire if they are insurance or real estate brokers as well. might they also offer landscaping, general contracting, painting and janitorial services? Decide if you are you looking to hire an expert community management company or a jack of all trades and master of none before making a selection. How does your company earn its revenue? Do they upcharge invoices without the board being aware? If they offer services such as landscaping and insurance, do they simply pad vendor invoices with no extra value for the increase? Do they use property
tion’s operations. the process should include scheduling the board meetings throughout the year, inspecting the property and generating an inspection report, posting notices of the meeting and submitting a comprehensive management report as well as the post–board meeting followup. this process alone should take at least 6-10 hours of support from a good management company depending on the size of the association and the issues at hand.
management as a loss leader and profit from general-contracting services on larger-scale projects?
3.
4.
How much does your company anticipate making from our association? this includes the base fee plus all anticipated a la carte charges and hidden income. Don’t think the management company will make money only from its base fees; that isn’t realistic in most scenarios. most companies make more money through tackedon a la carte fees than they do from their base fees. What is your start-to-finish board-meeting support process? You want to understand exactly how the management company handles board meetings because they are the most crucial component of the associa-
5.
What is the average tenure of a property manager at your company? verify that your association won’t be saddled with frequent property-manager turnover, which is high in the profession. many associations have to adapt to a new property manager every six months.
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10.17
CONDO LIFESTYLES
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6.
7.
How many associations do you manage for more than 10 years? Five years? How many have you contracted with during the last 12 months? How many have you lost in the last year? Working with a new association requires a large amount of work. If a company is trying to serve a high volume of new associations, you can presume the property managers won’t have the focus to provide the level of service you need. How many hours do your property managers work per week? How many employees do you have? How many buildings and units do you manage? Here you’ll look to measure how much attention you will receive as a new client as well as a client on an ongoing basis. note this information and compare it carefully with other companies.
8.
What reasons did you part ways with the last five association relationships that ended? this allows you to determine a company’s honesty, because all management companies have client turnover.
9.
What is your capital-project support process? the process should move from capital planning to punch list
resolution. It should also include bid-spec creation and bid-solicitation support through project oversight. Don’t be fooled by companies claiming they provide project support for free. that means either they won’t provide any support (even though the company representative says they will) or they make money from the chosen vendor (without the board knowing it). neither scenario is good for the board or the association. the projectsupport process is labor and time intensive. For a management company to provide high-quality support, it must have some way to be properly compensated for it in a fair and transparent fashion.
10.
How transparent is your community management agreement? Please explain the different ways we may be charged extra a la carte. If the agreement is a mere few pages and says “everything” is included, run away – really fast. It is impossible for a management company to make money just from the base fee unless the fee is very high, especially for a smaller building. the only way a company can take on a smaller building and say everything is included is to generate
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income in ways the board may not know about. So it really is critical for the board to know eXActlY how the management company plans to make money.
SUMMARY Having the right management company is essential for your community’s health and wellbeing in addition to the homeowner’s quality of life. to connect with that company, ask these primary questions when vetting your selections. Don’t devote your valuable time asking them how they fix leaks, how they handle a noise complaint or how often they visit the property. Ask what matters most and base your choice on careful evaluation of the answers you receive. As a community board of director, you will be more satisfied and less likely to have to undergo the selection process repeatedly. commit to making a great decision that leads to a fruitful business relationship you can enjoy for many years. Your friends, family and loved ones will thank you for it. Y
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RISKS & LIABILITIES
by David Lewin – Lewin Law Group, P.C.
The Illinois Contribution Act, and Why It Matters to Condominium Managers Imagine the façade of your building is being repaired. Contractors are on a scaffold. One is working below. A careless worker knocks over supplies, which fall on the worker below. The worker below survives, but suffers a severe closed head injury.
W
hat happens next, and the very future of the association, may depend on whether the association entered into contracts that shifted risk for when things went wrong. Unless proper contract terms were included, the association may be left paying for far more of the loss than a jury determines was the fault of the Association. To understand why the association may be at risk, managers must know about two basic forms of contractual risk shifting related to renovation or repair contracts (although the same ideas would
apply any time that any contractor has workers in the building doing work for the association). The first is through additional insured requirements and endorsements. As discussed in the July issue of this publication, a well drafted insurance provision, combined with proper additional insured endorsements, can shift risk from the association and the association’s insurer to the insurer of the contractor. In that scenario, upon receiving notice of the loss, the association would tender the loss to the contractor’s insurer, which would provide primary and non-contributory coverage for the loss.
Doing so would both increase coverage available to the association while at the same time reducing the association’s own record of losses.
Contribution Action The second form of risk shifting is through what it known as a “Contribution Action.” A Contribution Action is a lawsuit usually filed shortly after the worker sues the association. It seeks to force the employer or other liable parties to pay their share of the loss. Effective use of Contribution Actions requires the association to take proper action before the project begins. In order to shift risk by using a Contribution Action, the contract between the association and the contractor must include certain terms (detailed below) that will cause a court to shift the loss to the contractor.
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In order to understand how a Contribution Action works, the condominium manager must have a basic understanding of personal injury lawsuits. A worker injured on a project has two avenues to recover for the injury. The first is the Illinois Workers’ Compensation Act, 820 ILCS 305/1 et seq.
Worker’s Compensation Act The Workers’ Compensation Act, while allowing a proceeding by the injured party before the Illinois Industrial Commission to recover certain damages, bars an injured worker from filing a civil suit against the worker’s employer. Section 5(a) of the Workers’ Compensation Act provides that the Workers’ Compensation Act is the exclusive remedy for actions against the employer. Although actions directly against the worker’s employer are barred, civil actions may be filed against other parties that may have caused the injury, including the owner and general contractor. Sharp v. Gallagher, 95 Ill. 2d 322, 326, 447 N.E.2d 786, 787, (1983) Kolacki v. Verink, 384 Ill. App. 3d 674, 893 N.E.2d 717, 722, (3d Dist. 2008) (Workers’ Compensation Act was bar to recover against employer). Typically, the owner of the project is also sued.
That concept – that an injured employee cannot sue his or her employer – is a key to understanding the Contribution Act.
Injured Will Seek To Blame Others Given that a direct action against the employer is barred, the employee usually will then turn and blame others, which are typically the general contractor (if the employee was working for a subcontractor) and the owner. Although the employee cannot sue his own employer, the owner can file suit (usually a Third Party Complaint for Contribution, filed as a pleading in the employee’s suit) against the employer. That suit by the owner (the association) would seek to hold the employer liable for the employer’s share of fault. In negligence actions, Illinois has adopted the concept of contribution among tortfeasors. See Joint Tortfeasor Contribution Act (Contribution Act), 740 ILCS 100/0.01 et. seq.; Skinner v. ReedPrentice Division Package Machinery Co., 70 Ill.2d 1, 374 N.E.2d 437 (1977). The Contribution Act creates a right of contribution to any party who has paid more than its pro rata share of the “common liability.” 740 ILCS 100/2.
Under the Contribution Act, the liability to the plaintiff is apportioned among the defendants pro rata, based on the degree of relative culpability of each defendant. 740 ILCS 100/3. What that means is that the jury will determine the “culpability” (interpreted by courts to mean “fault”) of each party. Any party that pays more than its fault is entitled to recover from parties that have not paid their fair share. As a result, under the Contribution Act, the employee would have to prove that the owner was a proximate cause of the employee’s injuries. If the jury found the owner to be liable, the jury would return a verdict for the employee against the owner (the association). However, the jury would also allocate fault between the owner and others. As a result, a verdict would then be returned stating that percentage of fault of the employer. For instance, let’s return to our initial example. Suppose the jury found that the association took some action to control the means and methods of the work. As such, the jury returned a verdict against the association for $1 million. The jury would then look at the facts and determine what part of that $1 million in damages was caused by the employer. Given that the employer typically
Property • Casualty • Employee Benefits • Workers Compensation
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RISKS & LIABILITIES
will have supervisors on the project and will exercise a great deal of control, a jury could return a verdict allocating fault at 80% for the employer and 20% for the association. Following the verdict, the association would be required to pay the full $1 million. However, the association, because of the Contribution Act, would be entitled to recover some part of that amount from the employer. As such, the association would be responsible for paying the $1 million, but the employer would then be obligated to reimburse the association. Usually this is done simply by the various insurers writing checks to the plaintiff but in larger cases the actual owner and employer may be required to fund the verdict.
Amount Recovered Depends on Proper Contracts While the jury may find that the employer was 80% at fault, how much the association recovers from the employer depends on whether proper contracts were in place. As noted above, under Illinois law bars an employee’s direct action against his or her employer. Because of that limitation, Illinois courts have found that a Contribution Action is similarly limited.
In a Contribution Action, the liability of the employer is limited to the amount of workers’ compensation due the plaintiff. Kotecki v. Cyclops Welding Corp., 146 Ill.2d 155, 585 N.E.2d 1023 (1991). That limitation on the right to recover is commonly known as a “Kotecki cap.” Going back to our initial example. The jury found the damages to be $1 million, which the association was required to pay. The jury also found that the employer was 80% at fault, which would be $800,000.00. What if the employer only paid $100,000.00 to the employee in worker’s compensation? The jury found that the employer’s share of liability was $800,000, but worker’s compensation was only $100,000.00? Under Kotecki, the amount the association could recover from the employer would be limited to $100,000.00.
Indemnification Agreements The good news is that Illinois courts have created a method for owners to recover the full amount, if they take appropriate action at the time
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the association enters into the contract with the contractor. Illinois courts have found that the Kotecki cap may be contractually waived. Indemnification agreements under which the employer is required to indemnify the owner have been interpreted as waiving the Kotecki cap. Braye v. Archer-Daniels-Midland Co., 175 Ill.2d 201, 676 N.E.2d 1295, (1997). The waiver of the Kotecki cap is often referred to as a “Braye waiver.” Such a contractual waiver requires very specific contract language. Without it, a court will find that no waiver exists, and will limit the owner’s right to recover contribution from the employer. As a result, in order to shift risk from the association to the contractor for a loss involving an employee of the contractor, the proper contractual terms must be included as part of the contract. Without such terms, the association may end up paying the contractor’s employee far more than a jury determines is fair. Y
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industry happenings
FirstService Residenital
FirstService Residential, one of Chicagoland’s leading property management companies, has appointed Brian Butler to the position of Vice President of Property Management. In this role, Butler will oversee the Illinois portfolio’s team of regional directors and onsite management staff and report directly to Asa Sherwood, president, FirstService Residential Illinois.
retrofit project that saved the association hundreds of thousands of dollars in energy costs annually.
“Brian’s enthusiasm for delivering exceptional customer service and passion for leadership and associate development dovetail perfectly with our commitment to service excellence aimed at enhancing the lifestyles of every property and resident we serve,” said Sherwood. “His expertise in Chicagoland’s property management sector will benefit our clients greatly and further solidify our position as the industry leader.”
Annual Expo Held
Butler spent five years in a leadership role with another property management firm helping secure more than $26M in external financing and assisting associations with implementing necessary separate and special assessment plans. He brings a depth of knowledge and expertise guiding clients with annual multi-million-dollar operating budgets, planning for and executing tens of millions of dollars’ worth of capital projects. He was responsible for enrolling the first condominium association in the Retrofit Chicago Energy Challenge after undertaking a boiler plant
“FirstService Residential is a respected name in property management circles and I am pleased to join this seasoned team of professionals to maximize the value and services our teams can deliver to the communities we are entrusted to manage,” remarked Butler. FirstService Residential donated the proceeds from its sixth annual Vendor Expo to Ann & Robert H. Lurie Children’s Hospital of Chicago. The expo, held on July 28, 2017 at Abbington Distinctive Banquets, brought condominium, townhome and homeowner association board members together to meet with service providers and experts from the property management industry. Robert Meyer, Jennifer Garza, Tycee Hightower and Asa Sherwood of FirstService Residential Illinois (pictured L-R) presented a check for $10,323.49 to Lurie Children’s during a tour of the facility on July 24, 2017. “The proceeds of our Vendor Expo are donated each year to an organization whose values closely align with our own, such as being genuinely helpful, doing what’s right and building great relationships. These are just a few of the tenets at the heart of everything we do,”
said Asa Sherwood, President. “We are honored to support Lurie Children’s, an organization that has had a significant impact on the well-being of children and families in Chicago for over 130 years.” “Support for Lurie Children’s mission by companies like FirstService Residential propels advances in research and care, trains new generations of specialists and allows us to advocate for the most vulnerable members of our community,” remarked Grant Stirling, PhD, Executive Vice President and Chief Development Officer of Lurie Children’s Foundation. “We thank you for your partnership in creating a healthier future for children.”
Heil, Heil, Smart & Golee
Y Shown above is a group of guests with the staff of Heil, Heil, Smart & Golee at their Oktoberfest 2017 event that was held on Friday, September 15 at the management company's Skokie office.
Dickler, Kahn, Slowikowski & Zavell, Ltd. ~ concentrating in ~
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PRACTICAL REPORTS ON GREEN BUILDING ISSUES News and Information on Building Maintenance, Restoration & Preservation Chicagoland
&
Buildings Environments FOR MORE INFORMATION CALL
630.932.5551
OR VISIT
www.chicagolandbuildingsandenvironments.com
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INDUSTRY HAPPENINGS
Lieberman Management
Lieberman Management Services (LMS) has hired Jessica Towles, CMCA®, AMS®, PCAM® as Director of Property Management and Business Strategy. Jessica Towles has been in the community association management industry for 18 years. She has experience maintaining all aspects of community associations and management company administration, including facilities management, financial management and customer retention. Ms. Towles is a strong advocate of effective communication and ongoing professional education. Ms. Towles will focus on business strategy, operational effectiveness, and excellence in property management. In addition to her role with LMS, Ms. Towles currently serves on the Community Associations Institute (CAI) Board of Trustees, the Board for the Association of Professional Community Managers, the CAI Illinois Board
of Directors, and as a member of the National Faculty for CAI, specializing in the M:100 The Essentials of Community Association Management. In 2014 she was honored to receive CAI’s Rising Star Award at the National Conference and the CAI Illinois Olympus Award for her work both locally and nationally for CAI. “Jessica is a valuable addition to our team of directors, and she has hit the ground running,” said Carla Young Kennedy, CEO of LMS. “Her stature as a dynamic leader in our industry and her wealth of skills will help to drive our business forward.”
Associa Chicagoland
Associa Chicagoland announces a record breaking year with the addition of 23 new clients in the first half of 2017. The new clients are comprised of 2293 units including condominiums, townhomes, high-rises, singlefamily home communities and a co-op in the city. “The Associa Chicagoland team has been working extremely hard to grow the branch and expand our services to a wide variety of communities across the greater Chicago area,” stated Stephanie Skelley, Associa Chicagoland president. “Retaining such an impressive number of new clients in a short period of time is the direct result of the hard work and team spirit of the Associa Chicagoland branch. I am proud to work with this accomplished group of employees and can’t wait to see them continue to grow and succeed.” “It is always exciting to work with new associations and residents and provide them with the best customer service available,” explained Erica Horndasch, Associa Chicagoland director of business development. “Our team will continue to grow the branch and expand our services to new communities in the next half of the year.”
Waldman Engineering
Waldman Engineering held a 10th Anniversary celebration on September 22nd at the Morton Arboretum. Over 100 guests attended the event and enjoyed the beauty of autumn at the Arboretum as well as food, beverages, live music and a silent auction. The silent auction raised over $5,000 for the Hesed House, a local charity that helps shelter, educate, and feed hundreds of people every year including children.
With more than 180 branch offices across North America, Associa serves nearly five million residents worldwide with a 10,000+ member team members.
industry happenings
2018 IS THE TRIENNIAL REASSESSMENT OF THE CITY OF CHICAG0
Is Your Condo prepared? Contact us today about reducing your 2018 Tax Assessment for your Association.
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ABOMA All Stars A
BOMA recently held their All-Star Manager’s Night Out Event on Thursday, September 14, 2017 at the Chicago Sports Museum located at 835 N. Michigan Avenue, Chicago. Over 100 managers and supplier members of ABOMA enjoyed food stations, high-tech interactive experiences and unique sports memorabilia. The ABOMA 80th Annual Meeting, will be held at The University Club of Chicago, on Friday, December 1st, 2017. For more information visit www.aboma.com
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EVENT HIGHLIGHTS
July 14, 2017 at Eaglewood Resort
MCD Golf & Bocce Invitational T
he 21st annual MCD Golf & Bocce Invitational was held on July 14, 2017 at Eaglewood Resort in Itasca. Over 200 participants played golf or bocce and enjoyed industry networking at a special reception. Major sponsors of the event were Suburban Elevator, Xfinity Communities, Midwest Property Services, W.J. McGuire Co., ConTech MSI Co., USA Fire Protection, Alliance Association Bank, Beverly Companies, Inside Out Painting, Construction & Roofing, RCN, American Building Contractors, CertaPro Northshore and DuBois Paving Co.
August 24, 2017 at Arlington International Racecourse
MCD Showcases the Races T
he 21st annual MCD Showcases the Races was held on August 24, 2017 at Arlington International Racecourse Over 175 participants enjoyed horse racing and industry networking at a luncheon in the Million Room. Major sponsors of the event were Xfinity Communities, Suburban Elevator and Adams Roofing Professionals.
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From the Editor
F
CondoLifestyles
®
october 2017 | volume 21 | number 3 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 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 1A, Downers Grove, Il 60515. 630-932-5551 or 630-202-3006. 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, 800 property managers, 400 realtors, 400 developers and 400 public officials. total circulation is 9,500. 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 2017. 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. 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.
all is in full swing and so are many of the year end activities that typically occur during this season. It’s hard to believe that Thanksgiving will be here soon and although life’s challenges seem to grow greater and greater, we still have much to be thankful for. Soon after that will Y Mike Davids come many holiday and family events that give us time to pause and reflect on the past year. 2017 has been filled with natural disasters and the violence that occurs far too often can be overwhelming at times. May God help us all to overcome these challenges and to do whatever we can to help others who are less fortunate than us. Fall is a time of budgeting for next year, elections of all type, and finishing up outdoor projects. Then, before you know it, we will be in the grips of the cold and snow of winter. Hopefully you have put in the necessary effort into your budget(s) and election of your Association’s board for next year and are getting your exterior projects finished up. Serving your community association as a board member is as important as ever. Our cover story offers a variety of tools, resources and strategies for board members to use in their decision making. 2017 has seen a moderate amount of legislative activity and court decisions. The impact of the laws that have passed and the new case laws that exist is significant. One of the biggest areas where changes have been made is in the Illinois Condominium Property Act and the Common Interest Community Association Act. This issue features an article that offers a summary of these recently enacted legal changes. We also have a legal update article that discusses the often debated and misunderstood topic of Satellite Dishes and the OTAARD rule. Another legal update article is on mediation, a process that can save valuable time, money and resources for everyone involved in a dispute. Mediation is successful if both sides are committed to work in good faith to reach a mutually acceptable resolution. If you find yourself in a situation with no other option, an article in our Board Basics column outlines a step by step process for community associations defending against a unit owner lawsuit. This edition includes a special feature article that points out the importance of having clearly defined rules regarding timely reporting of the presence of damaged glass, in the interest of public safety, and to reduce exposure to liability due to falling glass. . The risk that comes with ignoring visible glass damage is significant, and the potential liability exposure greatly outweighs the cost of replacing glass. An article in our Risks & Liabilities column in this issue discusses the Illinois Contribution Act, and why it matters to condominium managers. This article is intended to further your understanding of “risk shifting” as it relates to vendor contracts and insurance at your property. A Guest Editorial by Salvatore Sciacca that offers his advice on the key questions to ask when vetting a management company also appears in this issue. Our regular Industry Happenings column along with several event highlight photo spreads can also be found in this issue. State of the Industry Program on December 7 Taking time to review important issues and identify those that will require significant attention in the coming year is the main purpose of our annual Condo Lifestyles State of the Industry program. Economic, legislative and operational issues will again dominate our presentations, discussions and resources that are made available on December 7 at the Chicago Cultural Center. A legal and case law update will be provided and a panel of experts will discuss a variety of key topics facing community associations. We also recognize members of our magazine advisory boards at this program. You can find more information on this event at www.condolifestyles.net or email: mdavids@condolifestyles.net Special thanks to the companies, associations and groups that are Authorized Distributors of Condo Lifestyles. Those of you who are not current subscribers can find subscription information on our website at www.condolifestyles.net. Please enjoy the upcoming holiday season. We encourage you to take this opportunity to make your association and your community all it can be. If you have an idea that would benefit other Community Associations, a success story to share, or some advice on how to avoid a problem or failure, please send us an e-mail, mdavids@condolifestyles.net Y
Michael C. Davids Editor and publisher
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SERVICE DIRECTORY
ACCOUNTANTS CANTEY ASSOCIATES, CPA’S (630) 681-9400
ARCHITECTS/ENGINEERS
ATTORNEYS
RICHARD M. FINK, JR. (847) 802-9197
FULLETT ROSENLUND ANDERSON, P.C. (847) 259-5100
“We Specialize in Emergency Repairs” Architects • Research • Engineering Specifications • Reserve Studies Dick@RichardMFink.com
ANNUAL ACCOUNTING SERVICES: Audits Reviews Compilations / Income Taxes MONTHLY SERVICES: Collection of Assessments Paying of Bills Monthly Financial Statements
KEOUGH & MOODY, P.C. (630) 369-2700
ENGINEERING SUPPORT SERVICES 630-904-9100
www.canteycpa.com
CONDO CPA (630) 832-2222 EXT 113
Legal Representation for Community Associations www.kmlegal.com
Construction Specifications Roof Evaluations Forensic Engineering Project Management Contact Greg Lason, P.E. www.engineeringsupportservice.com
CONTACT BRAD SCHNEIDER Brad@CondoCPA.com CERTIFIED PUBLIC ACCOUNTANTS
Accounting Solutions for Management Companies & Self-Managed Associations Audit & Accounting Services Income Tax Reduction & Planning
www.frapc.com
LAW OFFICES OF KEAY & COSTELLO (630) 690-6446 pcostello@keaycostello.com www.keaycostello.com
FULL CIRCLE ARCHITECTS, LLC (847) 432-7114
CUKIERSKI & COCHRANE, LLC
KOVITZ SHIFRIN NESBIT (855) 537-0500
Daniel Baigelman, AIA dan@fullcirclearchitects.com Capital Improvements • Reserve Studies Engineering Reports
CERTIFIED PUBLIC ACCOUNTANTS
(847) 496-7180 A full-service accounting firm specializing in the unique needs of homeowners’ associations.
www.fullcirclearchitects.com
www.ckwcpa.com
ARCHITECTS/ENGINEERS
KELLERMEYER GODFRYT & HART, P.C. (847) 318-0033
BTL ARCHITECTS, INC. (312) 342-1858
Investigations and Repair Documents for: Exterior Walls, Windows, Roofs, and Parking Garages Condition Surveys and Reserve Studies www.kghpc.com
Bringing Buildings Back to Life Contact Delph Gustitius www.btlarchitects.com
BUILDING TECHNOLOGY CONSULTANTS, INC. (847) 454-8800
ATTORNEYS
ROOFING I WATERPROOFING | FACADES I PARKING GARAGES WINDOWS I RESERVE STUDIES I TRANSITION STUDIES
Howard Dakoff / hdakoff@lplegal.com www.lplegal.com
BALCONY REPAIR
24 HOURS
Structural Repair Services Balcony Repair/Replacement Stair Tower Repair/Replacement Fire and Water Response/Restoration dwells@trgrestore.com www.trgrestore.com
"Matching Legal Solutions to Real World Problems" Contact: Bob Prince www.ccpchicago.com
info@btc.expert
LEVENFELD PEARLSTEIN, LLC (312) 476-7556
THE RESTORATION GROUP (630) 231-5700
CERVANTES, CHATT & PRINCE, P.C. (630) 326-4930 ext 202
Experts in Evaluating and Solving Building Problems
Advising and Consulting with Business Owners, Community Association Law & Collection Services, Construction Defects, Real Estate Assessed Valuation Reduction, Litigation, Commercial Restructuring, Bankruptcy & Creditors' Rights, Real Estate, Business ,Estate Planning www.ksnlaw.com
WALDMAN ENGINEERING CONSULTANTS (630) 922-3000
DICKLER, KAHN, SLOWIKOWSKI & ZAVELL, LTD. (847) 593-5595
www.waldmaneng.com
www.dicklerlaw.com
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 2017©.
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BANKING
BUILDING RESTORATIONS
DOORS
ALLIANCE ASSOCIATION BANK (888) 734-4567
LMC CONSTRUCTION 708-714-4175
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667)
Full service banking and lending solutions for management companies and associations. www.AllianceAssociationBank.com
COMMUNITY ADVANTAGE, A WINTRUST COMPANY (847) 304-5940 Loans, Reserve Investments & Lock Box Services www.communityadvantage.com
INLAND BANK & TRUST (630) 908-6708 Commercial Lending and Community Association Loan Program Contact: Timothy J. Haviland, CMCA www.inlandbank.com
Masonry Concrete General Contracting Roofing www.LMCTeam.com
DAKOTA EVANS RESTORATION, INC. (847) 439-5367
DOOR SYSTEMS 1-800-THE-DOOR
Tuckpointing ~ Masonry Repairs Waterproofing ~ Terra Cotta Repairs Caulking & Sealants ~ Structual Repairs Cleaning ~ Balcony Restoration Concrete Restoration www.dakotaevans.com
PEDESTRIAN DOORS / REVOLVING DOORS SECTIONAL DOORS / STEEL ROLLUP DOORS / FIRE DOORS HIGH SPEED DOORS / DOCK LEVELERS
www.doorsystems.com
LS CONTRACTING GROUP, INC. T (773) 279-1122 F (773) 279-1133 Contact: Tom Laird tlaird@lscontrtacting.com www.lscontracting.com
ITASCA BANK & TRUST (630) 773-0350 “Together We’ll Shape the Future” www.itascabank.com
Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com
www.airwayssytems.com
QUALITY RESTORATIONS (630) 595-0990
ELEVATORS/CONSULTANTS SMART ELEVATORS CO. (630) 544-6829
RIGGIO/BORON LTD. (847) 531-5700 A Total Exterior Facade Restoration Company www.RiggioBoron.net
BASEMENT WATERPROOFING THE REAL SEAL, LLC (847) 756-7987
AIRWAYS SYSTEMS, INC. 630-595-4242 Cleaning: Air/Laundry/Toilet Exhaust Ducts, Coils, Trash Chutes, Parking Garages. Also Air Filters, Belts Aeroseal® & Duct Sealing
MUTUAL OF OMAHA BANK (866) 800-4656 HOA Banking • Internet Cash Management HOA Loans • Online Payment Services www.mutualofomahabank.com
DUCT CLEANING
W. J. MCGUIRE COMPANY (847) 272-3330
austinwerner@therealsealllc.com
BUILDING RESTORATIONS
Simplifying Vertical Transportation Contact: Max Molinaro www.suburbanelevator.com
CONCRETE RAISING
ENERGY SOLUTIONS
CRC CONCRETE RAISING & REPAIR (847) 336-3400
Masonry and Concrete Restoration www.bralrestoration.com
We Save Concrete, You Save Money! www.SaveConcrete.com
Masonry Repair Services, Tuckpointing, Caulking and Concrete Restoration
SUBURBAN ELEVATOR CO. (847) 743-6200
Tuckpointing, Caulking, Masonry and Concrete Restoration
BRAL RESTORATION, LLC. (847) 839-1100
HOLTON BROTHERS, INC.
www.smartelevatorsco.com smartin@smartelevatorsco.com
CENTERPOINT ENERGY SOLUTIONS (630) 795-2594 Natural Gas & Electric Energy Reliable Service. People You Trust. Contact: Vickie Farina Vickie.Farina@centerpointenergy.com www.CenterPointEnergy.com/CES
(847) 253-3886 TEL / (847) 253-3255 FAX John@holtonbrothers.com www.holtonbrothers.com
24 C O N D O L I F E S T Y L E S 10.17
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SERVICE DIRECTORY
ENERGY USE/BENCHMARKING
FIRE/FLOOD RESTORATION
FIRE SAFETY & PROTECTION
WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690
SKYLINE DKI (708) 629-0563
EMCOR SERVICES TEAM MECHANICAL F I R E P R OT E C T I O N D I V I S I O N
"Restoring Happiness" www.skylinedki.com
(847) 229-7600
FIRE SAFETY & PROTECTION
GARBAGE CHUTE CLEANING
CHICAGO FIRE PUMP TESTING (773) 609-1510
BROUWER BROS. STEAMATIC (708) 396-1444
Serving the Tri-State Area Since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com
www.emcortmi.com
FACILITY MAINTENANCE SP+ FACILITY MAINTENANCE (773) 847-6942
www.chicagofirepumptest.com
Daily Cleaning Services / Power Sweeping and Washing Painting and General Repairs / Seasonal Services (Snow/Ice Removal) Parking Facility, Surface Lot, PedestrianPlaza, Large Venue or Commercial Retail Building.
HANDYMAN/MAINTENANCE
CONTECH MSI CO. (847) 483-3803
Contact: Daniel W.Nicholson dnicholson@spplus.com www.spplus.com/FacilityMaintenance
Fire Detection & Signaling Systems Fire Alarm Systems Chicago Life Safety Evaluation Solutions Security Systems/CCTV Card Access Systems www.contechco.com
FIRE/FLOOD RESTORATION BROUWER BROS. STEAMATIC (708) 396-1444
NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) 708-403-4468
All types of environmental cleaning. www.BrouwerBrothers.com
FIRECON CONSTRUCTION SERVICES, INC. 847-534-9400
www.firesprinklerassoc.org
24 Hour Emergency Services www.FIRECONCONSTRUCTION.com
SIMPLEX GRINNELL (630) 948-1235
GENESIS CONSTRUCTION, INC. (847) 895-4422
Fire Alarm / Sprinkler Systems Fire Pumps / Extinguishers Fire Panel Monitoring Installation / Testing / Maintenance 24/7 Service: (630) 948-1200 www.simplexgrinnell.com
www.genesisconstruction.com
All types of environmental cleaning. www.BrouwerBrothers.com
MIDWEST PROPERTY SERVICES, INC. (630) 656-1000 Construction / Maintenance / Painting Electrical / Snow Removal "No Job Too Big or Too Small"
service@midproservice.com / www.midproservice.com
HVAC AMS MECHANICAL SYSTEMS, INC. (800) 794-5033 24 Hour Service HVAC • Industrial Refrigeration Service/Maintenance • Systems Integration Energy Management • Electrical Process Piping • Plumbing www.amsmechanicalsystems.com
EMCOR SERVICES TEAM MECHANICAL (847) 229-7600 www.emcortmi.com
J. C. RESTORATION, INC. (800) 956-8844
THE RESTORATION GROUP, LLC (630) 870-0658
USA FIRE PROTECTION (224) 433-5724 Fire alarm / Sprinkler systems Fire pumps / Fire extinguishers Backflow prevention Fire panel / Monitoring INSTALLATION | INSPECTION | TESTING | MAINTEnance
PARAGON MECHANICAL, INC. (847) 321-9428 CHICAGOLAND’S HIGHEST RATED TECHNICIANS Heating | Cooling | Domestic Hot Water Refrigeration | Tankless | Boilers | RTUs | IAQ
24/7 EMERGENCY SERVICE: (847) 816-0050
SERVICE | INSTALLATION | MAINTENANCE
www.usafireprotectioninc.com
www.pmcomfort.com
www.trgrestore.com
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 2017©.
10.17
CONDO LIFESTYLES
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CONDO LIFESTYLES
HVAC
LANDSCAPE CONTRACTORS
LOCKSMITH
WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690
ACRES GROUP (888) 231-1300 / (847) 526-4554
NONSTOP LOCKSMITH (312) 929-2230
Serving the Tri-State Area Since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com
Professional Landscaping and Snow Removal www.acresgroup.com
ALAN HORTICULTURAL ENTERPRISES, INC. (630) 739-0205
H V A C CLEANING
MAILBOXES MAILBOX WORKS (630) 355-9989/(773) 528-3111
BROUWER BROS. STEAMATIC (708) 396-1444
www.alanhorticultural.com
All types of environmental cleaning. www.BrouwerBrothers.com
BALANCED ENVIRONMENTS, INC. (847) 395-7120 | (630) 916-8830
INSURANCE HOLLINGER SERVICES, INC. (847) 437-2184
www.BalancedEnvironmentsInc.com
Info@christywebber.com www.christywebber.com
ALLIANT/MESIROW INSURANCE SERVICES (312) 595-8135 Nancy Ayers www.condorisk.com
info@abcdecoonline.com www.abcdecoonline.com
FIRECON CONSTRUCTION SERVICES, INC. 847-534-9400
SEBERT LANDSCAPING, INC. (630) 497-1000
For more information E-mail: xfinity_communities@cable.comcast.com www.comcast.com/xfinitycommunities
26 C O N D O L I F E S T Y L E S 10.17
www.aaapaintco.com
www.iltvignocchi.com
www.landscapeconcepts.com
XFINITY COMMUNITIES 1 (800) XFINITY
AAA PAINTING CONTRACTORS, INC. (630) 231-8350
ABC DECO (773) 701-1143
INTERIOR CONSTRUCTION
INTERNET TECHNOLOGY
Since 1989
www.MailboxWorks.com
ILT VIGNOCCHI (847) 487-5200
LANDSCAPE CONCEPTS MANAGEMENT, INC. (847) 223-3800
24 Hour Emergency Services www.FIRECONCONSTRUCTION.com
Large Variety of Commercial and Residential Mailboxes Intercoms and Tele-Entry Address Signage & Engraved Nameplates Installation Services
PAINTERS
CHRISTY WEBBER LANDSCAPES (773) 533-0477
Property Casualty • Employee Benefits Workers Compensation www.HollingerInsurance.com
Locksmith Services, Intercom & Access Control Systems, CCTV, Overhead Garage Doors www.nonstoplocksmith.com
ABBOTT PAINTING, INC. (312) 636-8400 (773) 725-9800 Quality Painting & Decorating since 1973 Our Mission: Guaranteed Committment to Quality Now offering Parking Lot Painting www.Abbottpainting.com
www.sebert.com
SEMMER LANDSCAPE (708) 926-2304 gsemmer@semmerlandscape.com
LAWN CARE
CERTAPRO PAINTERS OF THE NORTH SHORE (847) 989-4791 Interior & Exterior Painting Wallcoverings • Decorating • Remodeling Drywall Repair • Decks & Staining Tile Installation • Metal & Iron Painting www.certacommercial.com rmuldoon@certapro.com
SPRING-GREEN LAWN CARE (800) 830-5914
HOMETOWN PAINTERS, INC. (847) 870-1600
www.spring-green.com
www.hometownpainters.com
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SERVICE DIRECTORY
PAINTERS
PEST CONTROL
PROPERTY MANAGEMENT
MIDWEST PROPERTY SERVICES, INC. 630-656-1000
SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500
CHICAGO PROPERTY SERVICES, INC. (312) 455-0107 X102
www.smithereen.com
www.chicagopropertyservices.com
Construction / Maintenance / Painting Electrical / Snow Removal "No Job Too Big or Too Small"
MORE LIVING. LESS WORRYING.
service@midproservice.com / www.midproservice.com
PLUMBING
PARKING GARAGE CLEANING
DRAPER AND KRAMER INC. (312) 346-8600
LIFELINE PLUMBING (847) 468-0069
SP+ (773) 847-6942
Contact Ian Novak
dnicholson@spplus.com www.spplus.com/facilityMaintenance
Plumbing - Heating & Air Conditioning Water Heaters - Sewer Cleaning & Repair Hot Water Drain Jetting www.INEEDLIFELINE.com
PARKING MANAGEMENT
PROPERTY MANAGEMENT
CONTRACT TOWING (815) 953-5310
ACM COMMUNITY MANAGEMENT (630) 620-1133 www.acmweb.com
DUBOIS PAVING CO. (847) 634-6089 info@duboispaving.com www.duboispaving.com
www.fsresidential.com
G&D PROPERTY MANAGEMENT (630) 812-6400
Managing in the Chicago Suburbs since 1988 www.advocatepm.com
www.gd-pm.com
ASSOCIA CHICAGOLAND (312) 944-2611 / (847) 490-3833 www.associachicagoland.com
THE HABITAT COMPANY (312) 527-5400 Contact Diane White
www.habitat.com
SP+ (773) 847-6942
BAUM PROPERTY MANAGEMENT, AAMC (630) 897-0500
dnicholson@spplus.com www.spplus.com/facilityMaintenance
TWIN BROS. PAVING & CONCRETE (630) 372-9817
Guiding board members since 1988 www.condomanagement.com
Contact Asa Sherwood
ADVOCATE PROPERTY MANAGEMENT (630) 748-8310
PAVING
FIRST COMMUNITY MANAGEMENT (312) 829-8900
FIRSTSERVICE RESIDENTIAL (312) 335-1950
Contact Tom Skweres
Outsource your parking to the EXPERTS in towing. Jennifer Olson 815.953.5310 Jason Buffone 219.677.1617 www.contracttow.com
www.draperandkramer.com
HILLCREST MANAGEMENT (630) 627-3303 / (312) 379-0692
Contact Mike Baum MikeB@BaumProp.com
www.hillcrestmgmt.com
www.BaumProp.com
Asphalt Paving & Sealcoating / Concrete www.TwinBrosPaving.com
CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300
PEST CONTROL
www.chicagoland-inc.com
ALL-OVER PEST SOLUTIONS (773) 697-1100 Bed Bug Specialists. Results Guaranteed! www.all-overpest.com
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2017©.
LIEBERMAN MANAGEMENT SERVICES (847) 459-0000 www.liebermanmanagement.com
COMMUNITY SPECIALISTS (312) 337-8691
MCGILL MANAGEMENT, INC. (847) 259-1331
www.communityspecialists.net
www.mcgillmanagement.com
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CONDO LIFESTYLES
PROPERTY MANAGEMENT
PROPERTY MANAGEMENT
RESERVE STUDIES
KANE PROPERTY MANAGEMENT CORP. (773) 472-2300
WERK MANAGEMENT (630) 241-0001
Our Reserve Studies Now Include ForeSite™
RESERVE ADVISORS, INC.
For All Your Property Needs www.werkmanagement.com
Professional Property Management. Affordable Rate. Contact: Dennis R. Kane; DKane@KanePM.com
(312) 625-4958 Custom, Comprehensive Studies Conducted by Professional Engineers www.reserveadvisors.com Long-term Thinking. Everyday Commitment.
KaneManagement.com
PROPERTY TAX APPEALS NIMROD REALTY GROUP, INC. (847) 724-7850
SARNOFF & BACCASH 312-782-8310
www.nimrodrealty.com
Attorneys at Law www.sarnoffbaccash.com
PROPERTY MANAGEMENT SPECIALISTS 847-845-6067
ROOFING ACTIVE ROOFING CO., INC. (773) 238-0338/(708) 430-8080
REAL ESTATE TAX ATTORNEY
www.Pmgrs.com
ELLIOTT & ASSOCIATES (847) 298-8300
PROPERTY SPECIALISTS INC. (847) 806-6121
www.elliottlaw.com
Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing www.activeroofing.com
ADAMS ROOFING PROFESSIONALS INC. (847) 364-7663
ROLLING MEADOWS OFFICE
(630) 633-5450
KSN TAX (847) 537-0500
WOODRIDGE OFFICE
www.psimanagement.net
TAIRRE MANAGEMENT SERVICES (847) 299-5740 tsutton@tairremgmt.com
www.KSNLaw.com
Roofing / Siding / Gutters / Insulation www.adamsroofing.com
MCCRACKEN MCCRACKEN BEHRENS (312) 263-4308
ALL AMERICAN EXTERIOR SOLUTIONS (847) 438-4131
Concentrating in Property Tax Appeals since 1976
www.mmbtaxlaw.com
Roofing, Siding & Windows www.aaexs.com
REALTY & MORTGAGE CO. COMMUNITY ASSOCIATION MANAGEMENT
773-989-8000 1509 W Berwyn Chicago IL 60640 Contact: Hugh Rider www.RealtyMortgageCo.com
SUDLER PROPERTY MANAGEMENT (312) 751-0900
www.wvproptax.com
www.sudlerchicago.com
VILLA MANAGEMENT 847-367-4808
Easy-to-Read, Customized Reserve Studies created by Reserve Specialists & Engineers www.BuildingReserves.com
7370 N Lincoln Ave., Suit A, Lincolnwood, IL 60712
www.villamgt.com
Roofing • Siding • Windows • Gutters Maintenance • Capital Budget Projects A+ BBB Rating www.abc-usa.com
RESERVE STUDIES BUILDING RESERVES INC. 1 (877) 514-8256
Complete Association Management Since 1976.
AMERICAN BUILDING CONTRACTORS, INC. (847) 670-1887
WORSEK & VIHON LLP (312) 368-0091
CSR ROOFING CONTRACTORS (708) 848-9119 All Types of Roofing Installation, Repairs & Maintenance www.csr-roofing.com
SUPERIOR RESERVE ENGINEERING & CONSULTING (888) 688-4560 www.superiorreserve.com
28 C O N D O L I F E S T Y L E S 10.17
D-WING CONSTRUCTION (630) 397-8889 Your Home, Our Reputation A+ BBB Rating www.DWingConstruction.com
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2017©.
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SERVICE DIRECTORY
ROOFING
SIDING / RENOVATIONS
TREE CARE
M&T EXTERIORS INC. (331) 248-0447
MI CONSTRUCTION AND ROOFING (630) 241-0001
ACRES GROUP (888) 231-1300 / (847) 526-4554
Roofing Siding Windows and Service. www.mt-exteriors.com
www.mancioneinc.com
SITE MAINTENANCE, INC. (847) 697-1077
Certified Arborists & Certified Tree Care Safety Professionals www.acresgroup.com
PROHTOP ROOFING (847) 559-9119
TV-BULK CABLE & SATELLITE
We’re Here When You Need Us! www.protoproofing.com
UPSTREAM MEDIA 630-230-0555
www.sitemaintinc.com
INSIDE-OUT PAINTING CONSTRUCTION & ROOFING (630) 406-3000
S&D ROOFING SERVICE (630) 279-6600
rcnchicagoapts@rcn.net www.rcn.com
MIDWEST PROPERTY SERVICES, INC. 630-656-1000 Siding & Gutters / Wood Replacement Welding & Railings / Snow Removal "No Job Too Big or Too Small"
VAN DOORN ROOFING, INC. (847) 228-5800
service@midproservice.com / www.midproservice.com
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667)
A Respected Name in Commercial Roofing For Over Three Decades Roofing/Sheet Metal/Maintenance/Repairs www.vandoornroofing.com
SAFETY - OSHA COMPLIANCE SNOW REMOVAL
KBaker@skyclimber.com
SECURITY SERVICES ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888
LAKESHORE RECYCLING SYSTEMS (773) 685-8811
SP+ (773) 847-6942
WINDOWS/REPLACEMENTS
dnicholson@spplus.com www.spplus.com/facilityMaintenance
D-WING CONSTRUCTION (630) 397-8889 Your Home, Our Reputation A+ BBB Rating www.DWingConstruction.com
THE WINTER WERKS (630) 241-0001
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667)
www.mancioneinc.com
SIDING / RENOVATIONS
SWIMMING POOLS
D-WING CONSTRUCTION (630) 397-8889
SPMS (630) 692-1500
Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com
Heaters Pumps • Repairs • Chemicals Pool Maintenance • Complete Water Analysis Pool Guards, Inc. ross@spmspools.com
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2017©.
For more information E-mail: xfinity_communities@cable.comcast.com www.comcast.com/xfinitycommunities
www.LakeshoreRecyclingSystems.com
www.admiralsecuritychicago.com
Your Home, Our Reputation A+ BBB Rating www.DWingConstruction.com
XFINITY COMMUNITIES 1 (800) XFINITY
WASTE SERVICES
Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com
SKY CLIMBER ACCESS SOLUTIONS 847-600-3900
RCN (312) 955-2322
www.insideoutcompany.com
250,000 roofs installed since 1963 TEAR OFFS • SHINGLES • FLAT Multi-Family ROOFING Specialist Our experience & technical know-how gets the job done right the first time! www.sdroofing.com sales@sdroofing.com
www.accessmedia3.com
10.17
For Display or Professional Services Directory Advertising Info, Call (630) 202-3006
CONDO LIFESTYLES
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by David Bendoff - Kovitz Shifrin Nesbit
changes to cIcA and IcP Acts On August 24, 2017, Governor Rauner signed HB0189, and it is now known as Public Act 100-0292. The law amends both the Common Interest Community Association Act and the Illinois Condominium Property Act. The new law will become effective January 1, 2018. Here is a summary of the changes. Common Interest Community Association Act creates new Section 1-20(e). the section provides that if the community instruments require the approval or consent of any mortgagee or lienholder of record to an amendment to the community instruments, the mortgagee or lienholder of record is deemed to have approved or consented to the request unless a negative response is delivered within sixty (60) days of mailing of a request for
approval by certified mail by the Association. creates new Section 1-45(h)(i). this section states that an Association subject to cIcAA and consisting of one hundred (100) or more units shall use generally accepted accounting principles (“GAAP”).
Illinois Condominium Property Act creates new Section 9(c)(5) which states that at the end of the Association’s fiscal year, and after the Association has approved any year end fiscal audit, if applicable, if the fiscal
30 C O N D O L I F E S T Y L E S 10.17
year ended with a surplus of funds over actual expenses, including budget reserve fund contributions, then, to the extent that there are not any contrary provisions in the Association’s declaration and bylaws, the board has the authority to dispose of the surplus in one of the following ways: 1. contribute the surplus to the reserve fund. 2. return the surplus to unit owners as a credit against remaining monthly assessments for the current fiscal year. 3. return surplus to unit owners in the form of a direct payment to unit owners. 4. maintain the funds in the operating account, in which case funds shall be applied as a credit when calculating the following year’s annual budget.
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If the fiscal year ends in a deficit, then to the extent there are no contrary provisions in the Declaration and bylaws, the board has the discretion to address the deficit by incorporating it into the budget for the following year. unit owners may object to the board’s decision as follows: If twenty percent (20%) of the unit owners object within thirty (30) days after notice to the unit owners of the action, the board shall call a meeting of the unit owners within thirty (30) days of the date of delivery of the petition. At the meeting, unit owners may vote to select a different option than that chosen by the board. unless a majority of total votes of the unit owners are cast at the meeting to reject the board’s selection and choose a different option, the board’s decision is ratified. Amends Section 15. If a unit owner objects to the sale of the property pursuant to Section 15 of the Act, the unit owner may be entitled to receive the greater of: 1. the value of his or her interest, as determined by fair appraisal, less the amount of any unpaid assessments; or
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| ACCOUNTING | ADMINISTRATION | BOOKKEEPING | CONSULTING | MANAGEMENT |
| ACCOUNTING | ADMINISTRATION | BOOKKEEPING | CONSULTING | MANAGEMENT |
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| ACCOUNTING | ADMINISTRATION | BOOKKEEPING | CONSULTING | MANAGEMENT | No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2017©.
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2. (this is the new language) the outstanding balance of bona fide debt secured by the objecting unit owner’s interest which was incurred by such unit owner in connection with the acquisition or refinance of the unit owner’s interest, less the amount of any unpaid assessments or charges due and owing from such unit owner. the objecting owner is also entitled to receive from the proceeds of a sale under Section 15, reimbursement for reasonable relocation costs, as determined by the federal uniform relocation Assistance and real Property Acquisition Policies Act of 1970, and as implemented by regulations promulgated under that Act. Importantly, changes made by this law apply to sales under this Section that are pending, or commenced on and after the effective date of this law. Amends Section 18(a)(8)(i). the Act permits owners to object to certain increases in regular or special assessments in excess of one hundred fifteen percent (115%) of the prior years assessments, by submitting a petition to the board signed by twenty percent (20%) of the owners of the Association. the amendment increases the amount of time, previously fourteen (14) days, to submit such
32 C O N D O L I F E S T Y L E S 10.17
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a petition to the board to within twenty-one (21) days of the board action. Amends Section 18(a)(16). the Act permits unit owners to object to any contract entered into with a current board member, a board member’s immediate family, or a company which the board member or immediate family member has twenty-five percent (25%) or greater interest in, by filing a petition. the amendment increases the amount of time to file such a petition, previously twenty (20) days, to thirty (30) days of the board’s decision to enter the contract. Amends Section 18(b)(9)(c). the Act provides that if the board adopts a rule which permits the use of mail-in absentee ballots or electronic voting for board elections in lieu of proxies, the unit owners may object to such rule by filing a petition to the board. the amendment increases the amount of time, previously fourteen (14) days), to submit such a petition to the board to thirty (30) days after the board’s adoption of the rule. Amends Section 18.4(a). the Act pro-
vides that unit owners may file a petition, signed by owners twenty percent (20%) of the percentage of ownership, to contest certain capital improvement projects approved by the board in excess of five percent (5%) of the annual budget (excluding repair, replacement or restoration of existing portions of the common elements). the amendment increases the amount of time, previously fourteen (14) days, to submit such a petition to the board, to twenty-one (21) days of the board action to approve the expenditure. creates new Section 18.10. this section states that Associations with one hundred (100) or more units shall use generally accepted accounting principles (“GAAP”). Amends Section 19. Section 19 governs the books and records that must be maintained for examination and copying by owners. Subsection (a)(7) is amended to provide that the board must maintain a list of the email addresses and telephone numbers of all members for examination and copying by unit owners, if requested for a purpose that
relates to the Association. Previously, only names and addresses were required to be maintained. this new language could potentially conflict with, and needs to be read in conjunction with, Section 18.4(s) that permits an owner to consent to receive notices by email, but permits an owner to designate an electronic address or a u.S. Postal Service address, or both, as the unit owner's address on any list of members or unit owners which an association is required to provide upon request pursuant to any provision of the Act or any condominium instruments. Subsection (a)(9) is amended to seemingly make more of a stylistic change than anything else with respect to the books and records of account that the Association must maintain for examination and copying by owners. Subsection (b) is amended to expand the categories of documents that an owner is entitled to examine and copy by simply making a request in writing. An owner previously had to recite a proper purpose in order
Condominium Law Commercial Litigation Estate Planning
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to examine books and records in Section 19(a) (6) and (9). this will make it easier for owners to obtain the books and records identified in these subsections. Subsection (d-5) is added to define “commercial purpose” as the use of any part of a record or records described in Section 19(a)(7) and (8), or information derived from such records, in any form for sale, resale, or solicitation or advertisement for sales or services. Subsection (e) is amended to eliminate
the requirement that an owner state a “proper purpose” to examine books and records in Section 19(a)(7) and (8). However, as a condition of exercising this right, the board may require that the requesting unit owner certify in writing that the information will not be used for any commercial purpose or for any purpose that does not relate to the Association. the amendment also permits the Association to impose a fine against any person who makes a false certification. the amendment
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removes the provision stating that in any action to compel examination of records, the burden of proof is on the unit owner who requested documents to prove they are requesting the records for a proper purpose. Importantly, the time frame within which the board must respond to a request for records is reduced to only ten (10) business days; the law previously permitted a board to respond within thirty (30) business days. the amendment also makes a change such that the board may, but is not required to charge the actual cost of retrieving and making records available for inspection and examination, or the actual costs of reproducing the records, to the requesting owner. As a result, charging these costs is no longer mandatory. Amends Section 27. the section provides that if the condominium instruments require the approval or consent of any mortgagee or lienholder of record to an amendment to the condominium instruments, the mortgagee or lienholder of record is deemed to have approved or consented to the request unless they deliver a negative response within sixty (60) days of mailing of a request for approval by certified mail by the Association. Amends Section 31. Adds new subsection (a) that defines “combination of any units. Importantly, in an attempt to overcome the 2011 appellate court decision in Picerno v. 1400 museum Park condominium Association, subsection (a) and new subsection (e) underscores that the combined unit can be granted the exclusive right to use as a limited common element, a portion of the common elements within the building adjacent to the new combined unit (for example, without limitation, the use of a portion of an adjacent common hallway). this scan be done by the board, and does not require unanimous approval of all of the owners in the Association. the language provides that if units are combined, the exclusive right to use, as a limited common element, any portion of the common elements that is not necessary or practical for use by the owners of any other units is not a diminution of the ownership interests of all other owners and does not require the unanimous consent of all unit owners under Section 4(e). Y
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L E G A L U P D AT E
by Christopher M. Heintskill, Esq. and Howard S. Dakoff, Esq. – Levenfeld Pearlstein, LLC
Mediation for Unit Owner Disputes: The Wave of the Future? With the continuing growth of condominium communities in both urban and rural areas, more and more unit owners are living on top of each other and disagreements among unit owners, and boards of directors and unit owners, are increasing in frequency. More often than not, those disagreements resolve themselves or are readily manageable; however, sometimes they spill over into threatened or actual litigation.
T
ypically, when a unit owner complains to the board or management about an alleged violation of a provision of the declaration, by-laws or rules and regulations, the board or management send a cease and desist notice to the allegedly offending unit owner. Sometimes fines ensue, and if the alleged violations continued unabated, the board has to decide whether to file a lawsuit for injunctive relief in the circuit court.
Other times, there is a financial dispute between unit owners or a condominium association and a unit owner. Currently, in Illinois, the law holds that if the condominium association prevails in the enforcement action, per Section 9.2 of the Illinois Condominium Property Act, the condominium association is entitled to recover its attorneys’ fees and costs, which is a factor a board considers when
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10.17
deciding whether to file suit. However, that could be changing in 2017 or early 2018 if the sponsors of House Bill 3755 in the Illinois General Assembly have their way. House Bill 3755 would amend the Illinois Condominium Property Act to allow unit owners to recover reasonable attorney’s fees and costs if they are the “substantially prevailing party” in a lawsuit against their condominium association, its board, or other unit owners. Thus, the risk of losing and being responsible for a unit owners attorneys’ fees is now a consideration the board of directors and unit owners will have to contemplate if House Bill 3755 is adopted by the legislature and not vetoed by the governor (House Bill 3755 passed the Illinois House in April 2017 and is currently in the Illinois Senate for consideration through the date of publication of this article).
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Given this realty to consider should the proposed legislation become law, there are less expensive ways to resolve cases before filing suit or trial for that matter. Mediation is such an option assuming both sides truly wish to make the process fruitful to resolve the ongoing dispute. So what is mediation, how does it work, and what are the practical things to consider before foregoing full-fledged litigation in favor of this dispute-resolution process? This article sets out to answer these questions and to provide a roadmap for a successful mediation.
The Mediation Process In its most basic terms, mediation is an informal process to resolve disputes. Those disputes can be anything, whether or not they involve litigation. While the majority of disputes are already a part of litigation, parties can – and indeed are encouraged to – submit their disputes to mediation before suing one another. After all, one of the points of mediation is to save both time and money. And nothing can drain more resources quicker than being a party to a lawsuit. The mediation process starts with the parties
to the dispute; they must both agree to mediate. While in some jurisdictions courts can order mediation, practically speaking, if one side refuses mediation the courts will not order it. And on this point, it cannot be overstated: mediation is only successful if both sides are committed to work in good faith to reach a mutually acceptable resolution. If one party is not mediating in good faith, then the entire process will be a waste of both time and money. After the parties agree to mediate, they select a mediator. That mediator can be anyone, but more often than not, he or she is a either a legal/industry practitioner or a retired judge. There are myriad of dispute-resolution outfits throughout the country with well-staffed, well-trained mediators for almost any dispute ranging from large firms to oneperson shops. Universities and law schools also sometimes have their own programs from which to choose a mediator. After the parties select a mediator, they usually sign a mediation agreement and submit any written materials to educate the mediators about the facts and their position. It is then time to mediate. Typically, the mediator will have the parties sit in separate rooms and, like shuttle diplomacy, go back and forth hearing their positions and getting their settlement demands and offers. The mediator may point out the relative strengths and weaknesses of each side’s position with the goal of narrowing the gap and convincing both sides to reach an agreement. Unlike litigation and arbitration, there is no evidence and there are no issues being decided by the mediator. In fact, the mediator cannot force the sides to settle since the process is strictly voluntarily, but is used to assist the parties finding a mutually acceptable resolution to their issues without the need to fully litigate the issues. It is often anecdotally said that a good settlement is one where both sides are partially unhappy.
The Costs While mediation is a way to ultimately save money by avoiding more expensive litigation, with the exception of court-subsidized programs, it is not free. Mediators more often than not charge by the hour, and depending on their qualifications and background, their fees can indeed be expensive. But again, one day of mediation will be less expensive than litigating. One important thing that the sides often fail to consider is that except in the most-limited circumstances, the unit owner is not only paying her or his own attorneys’ fees, but also a portion of the association’s fees if the association is spending common expenses funds for their representation.
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Those amounts come out of the unit owner’s monthly assessments.
Other Practical Considerations There are many things to consider when evaluating whether mediating a homeowner dispute makes sense. Some of them come up more than others, including the following: • Confidentiality: The mediation process is usually agreed to be confidential and could be conditioned on the parties signing a confidentiality agreement. Nothing said or done in the context of mediation can be used in litigation against the other party. This is to encourage an open dialogue between the parties; • Confidentiality of Settlement Agreements: Depending on the issue and facts at bay, a confidentially agreement might be appropriate. It is important to remember that depending on the particular state, even with a confidentiality provision, another unit owner may make a records request per Section 19 of the Illinois Condominium Property Act and could ultimately gain the right to inspect a settlement agreement. • Board Authority: A condominium association can only negotiate through its duly elected board of directors. Each settlement is subject to fullboard approval by passing a resolution at an
open meeting notwithstanding discussions about the mediation would occur in closed session. To make the mediation process worthwhile, it is important that before the mediation the board designates a representative to attend with full authority to settle and with terms upon which the association is willing to settle. This should be communicated to the other side during the mediation, with any agreement to settle being in principle until a majority of the board approves the settlement in an open board meeting; • Pre-Mediation Negotiations: It is a good idea to exchange settlement proposals early in the process before agreeing to mediation. Indeed, if the sides are so far apart, that may indicate that one side is so unreasonable that spending the time and money on mediation may be an exercise in vain. Even negotiating after mediation is scheduled but before it takes place makes sense; the parties will know what to expect during the process and how to prepare for it; and • Litigation Disclosures: In Illinois, condominium associations are required to disclose pending litigation in Section 22.1 disclosures to would-be buyers and their lenders. Litigation that drags on and on could jeopardize lender consideration of offering prospective purchasers a loan in a condominium association with too much litigation.
The sooner cases settle, the sooner the ligation can be removed from these disclosures. Several other considerations can influence settlement such as the allocation of costs to engage in the mediation, whether the litigation is stayed during the mediation process, and whether any settlement is binding on future boards or subject to amendment. It is important to understand each of these components when evaluating mediation over litigation.
Conclusion Given the likelihood of the adoption of new legislation allowing unit owners to recover legal fees against a condominium association (or other unit owners), alternative dispute resolution is something condominium boards will be forced to consider before embarking on full-fledged litigation. With willingness from both, mediation may be a substitute for litigation to resolve contested unit owner disputes. Y
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BOARD BASICS
by Kelly C. Elmore - Kovitz Shifrin Nesbit
Defending unit owner lawsuits in community Associations: A Step by Step Process While being named as a defendant in a lawsuit is never ideal, community associations have a number of defense tactics available to prepare for the possibility of litigation. These defense measures may enable an association to avoid costly litigation and defer additional liability when faced with an action filed by an owner or resident in the association.
T
he following is a general overview of the actions that should be taken when a lawsuit is filed, or when an association, through its board members or management, receives a threat or notice of a claim that may result in litigation.
Ensure Proper Insurance Coverage
and future claims is to obtain, and continue to carry, proper insurance coverage. community associations should consult with an insurance agent who specializes in coverage for community associations when determining which policies to select. the policy should be reviewed annually to confirm that the association has adequate amounts of coverage.
one of the best ways that an association can prepare itself to defend against litigation
Notification of Claim: Insurance Carrier(s) and Attorney Depending on the nature of the claim that is asserted, the association may have an insurance policy available to fund a defense of the litigation and to cover a potential judgment. While it may be difficult to determine whether insurance coverage will be available when a claim is first threatened or filed, an association should always err on the side of caution, and timely communicate the threat of litigation to its insurance carrier(s). many associations often contact their insurance providers simply to put the provider on notice that they have received a communication which contains a threat of a claim, prior to the filing of actual litigation. It is important to note that many
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insurance companies have very strict terms as to when the insurance company must be notified about a claim or even a potential claim. under many policies, associations are required to provide “reasonable” notice to their insurance provider to obtain coverage under the policy. As a result, notifying the insurance company at the outset will aid in ensuring that the association is complying with the insurer’s reporting requirements, even if a claim is not immediately opened. contemporaneous with notifying the insurance company, management and/or the board of directors should also contact the association’s legal counsel upon receipt of the threat of a claim or notice of a lawsuit. counsel may provide specific direction to the association regarding certain steps that may be taken to preserve evidence or to minimize potential liability.
Determining if Insurance Coverage Exists many claims that are filed against associations and board members may be covered by
one or more of the association’s insurance policies. For example, a number of claims filed against a board of directors may be covered under the Directors and officers liability (“D&o”) policy. this policy covers claims filed against board members who are sued for acts or omissions that have occurred in the course of their service as board members. the D&o policy may provide coverage for the defense of the litigation and/or indemnification for board members and management. A common claim that typically triggers coverage under the D&o policy is a claim for breach of fiduciary duty filed against the association’s board of directors. Generally a claim of breach of fiduciary duty includes allegations against board members for wrongdoing or failing to properly address issues within the association. Some common breach of fiduciary allegations include failure to maintain the common elements, failure to maintain sufficient association reserves, mishandling of association funds, self-dealing, and failure to adhere to or enforce the association’s governing documents.
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In addition to claims covered under an association’s D&o policy, certain claims may trigger insurance coverage under an association’s General commercial liability policy. claims that may trigger coverage under such a policy typically include allegations involving property damage, such as water leaks, damaged patio decks, and damage to personal property. In sum, whether insurance coverage exists for a particular claim will depend on the facts of the case, the cause of the alleged damage (whether monetary or property damage), and also whether the alleged acts fall within the insurance policy period. As a result, it is crucial that an association be mindful of the terms of its insurance policies and comply with all notice requirements set forth in the policy.
Confirm Legal Representation When a lawsuit is filed, an association’s insurance carrier may assign legal counsel from a panel of “pre-approved” attorneys often used by the insurance company. Generally
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speaking, the insurance-appointed counsel works for insurance companies on all types of non-community association matters, and generally has pre-existing fee arrangements with the insurance provider. In many cases, the legal counsel assigned by the insurance company will begin work on a case before the board has agreed to accept the representation. However, in many cases, the association may actually have the right to select its own attorney to defend the litigation. For instance, when there are multiple counts in a lawsuit filed against the board and/or the association, and the insurance company agrees to cover some but not all of the counts, the association may be entitled to select its own counsel at the insurer’s expense. thus, prior to agreeing to work with the insurance-appointed legal counsel, management and the board should consult with the association’s own legal counsel to determine if the insurer has the absolute right to choose counsel for the association. Similarly, the association’s counsel often has knowledge of a history with the unit owner or resident who has filed the claim, or
history with the particular building issue that is involved in the litigation. In this regard, the association may prefer to utilize its own legal counsel who is experienced and knowledgeable in the association’s history rather than proceeding with an attorney who is unfamiliar with the facts, and who may not specialize in the representation of community associations. It is important for management and/or the board to immediately address the issue of representation and confirm the arrangement in writing, whether it be the use of insuranceappointed counsel or the association’s own counsel.
Vote to Defend Against Litigation note that one of the most important and most overlooked – steps in the process of defending litigation is the formal vote to defend the lawsuit. As the court in the Palm case expressly held, a board of directors must also vote to defend the association (whether the claim was filed against the board members, management or the association) in a lawsuit. Accordingly, any time an action is filed
against individual board members, the “board” as a whole, the property manager or management company, or the association, the board must take the formal action of voting in an open meeting to defend the litigation.
Conclusion In summary, in order to ensure your association is well prepared to properly defend against litigation or threats of litigation, it is important that management and/or the board obtains appropriate insurance coverage long before a claim or potential claim arises. management and the board should work swiftly to notify the insurance carrier and report the claim, and contact legal counsel to discuss steps to minimize liability and coordinate the effort to determine whether insurance coverage exists. lastly, if the option exists, the association should select legal representation based upon the case and opt for an experienced and trusted legal counsel to resolve the litigation. Y
630-369-6690 www.wsmech.com
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by Jon Boyd, R.A., S.E., SECB - Klein and Hoffman
Does Your Association experience Glass Pain? When you serve on an association board, you have a significant fiduciary responsibility in protecting and safeguarding assets -- both physical and fiscal.
M
onitoring and maintaining physical ‘brick and mortar’ is crucial, as is assuring balance in the responsibilities of the Association to its members, and equally important, the responsibility of individual members to their Association. mutually shared responsibility requires a broad understanding of potential threats, including detecting and addressing damaged glass. As structural engineers and architects who work with condo associations, we see many associations encounter “glass pain”: broken window glass in high-rise and midrise residential buildings that goes undetected
or unreported. Damaged window glass is a potentially deadly hazard, to building occupants as well as pedestrians below.
Many Ways Damage Can Occur Properly selected, window glass withstands normal weather exposure conditions. Yet glass can be damaged by a variety of causes. Hail and airborne objects carried by heavy winds can create impact damage in common window glass, ranging from minor abrasion, small chips and cracks, to serious sometime dramatic breakage. Window glass can be damaged by interior impact as well
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unless the windows have been upgraded or replaced. this type of glass is somewhat more prone to accidental breakage, due to lesser original strength, as well as the likelihood of surface wear, edge damage, and support flaws.
Broken Glass is Hazardous regardless of the type of glass, the behavior of glass under design load can be significantly influenced by flaws in the glass, including surface abrasions and chips. Small cracks or chips may seem insignificant, but
often do not stay that way for long. Glass with visible abrasions present should be evaluated by an experienced professional to determine if replacement is warranted. Fractured glass, including both partial length breaks or full separation of the glass into two or more pieces, offers significantly less resistance to normal wind load and impact. All broken glass should be considered hazardous, with action taken to secure the damaged pane until replacement glass can be installed.
Y Duct tape on a broken outer pane of an insulated glass units in a double hung window on a vintage building.
from things as innocent as a child’s toy that becomes air-borne.
Knowing the Glass in Your Windows modern insulating glass units, or IGus, sometimes referred to as ‘dual-pane’ or ‘thermopane’ glass, resists wind and impact loading by ‘sharing the load’ between the inner and outer panes of glass across a sealed air-space. An IGu with a single broken pane, whether inner or outer, should not be presumed to be safe due to the remaining unbroken pane. It’s load capacity is reduced by approximately one half due to that single broken pane, which is a potentially deadly missile, ready for an untimely launch. laminated glass is made of two or more thin glass panes bonded with an interlayer capable of retaining a level of integrity against fallout, when adequately secured to the framing members. In the case of glass breakage, this provides an additional level of security until the broken glass can be replaced. broken laminated glass should not be considered ‘safe’ to resist normal loading. this type of glass is not as common as typical window glass, but may be used as safety glazing in specific applications. most buildings constructed prior to 1970 will likely have single pane window glass,
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[ Multiple fractures in the outer pane of an Insulated Glass Unit on a concrete high-rise building.
Have Rules to Report Damage In the case of residential glass, whether rental, condominium or other HoA, rules differ as to who is financially responsible for the replacement of damaged window glass. this can lead some building occupants to knowingly ‘tolerate’ damaged window glass over concern about the cost of glass replacement. regardless of financial responsibility for replacement, we counsel clients to have clearly
defined rules regarding timely reporting of the presence of damaged glass, in the interest of public safety, and to reduce exposure to liability due to falling glass. the risk that comes with ignoring visible glass damage is significant, and potential liability exposure greatly outweighs the cost of replacing glass.
Use of Professionals Minimizes Risk
professionals for both temporary measures of stabilization or board-up, as well as proper glass replacement. occasionally, buildings are subjected to repeated glass breakage, suggesting potential systemic conditions that should be addressed. these can include improper glass selection, improper framing design or glass installation details, or deteriorating support conditions. Such situations should be evaluated by qualified design professionals familiar with glass behavior and design. routine visual monitoring of window glass by building maintenance staff can be a simple low-cost way to help safeguard against potentially hazardous conditions and resultant liability. Special attention should be paid by unit occupants and building staff after extreme wind events. With any building, glass pain happens. Dealing with it in a systematic, timely and professional manner will minimize the risk – and pain. Y
In mid-rise and high-rise buildings, damaged glass should be addressed by experienced
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2 0 1 7 S TAT E O F T H E I N D U S T R Y S E M I N A R
Advanced Registration is Required.
11:00AM - 3:00PM | December 7, 2017 | Chicago Cultural Center | Call 630-202-3006 for more information
CondoLifestyles
®
~ S C H E D U L E / A G E N D A ~
» 11:00 am – Registration & Visit Information Tables » 11:30 am – Luncheon, Announcements & Legal Updates • Introduce 2018 MCD Media Advisory Board Members • Community Association Legal & Case Study Update (ICPA and CICA Act updates, Collecting Assessments from Lenders that Foreclose & more) FE ATU R E D S PE A K E R :
Gabriella Comstock - Keough & Moody, P.C.
» 1:15 pm – Hot Topics, Trends & Challenges: • OSHA Facade Access Requirements • MANAGING CAPITAL PROJECTS: Ventilation & Air Quality, Energy Efficiency, Riser Replacements, Windows & Roofing. • Funding & Financing Capital Projects • RFP's & Contracts • Property Tax Appeals, Property Values & Assessments • Technology & Communication • Chicago Ordinance Current Issues • Bulk Purchasing Trends (Cable & Internet Wiring, Energy, & Other areas) • Managing Business Relationships Panel Discussion Participants: MO DE R ATO R : Natalie Drapac - Community Specialists Ian Novak - Draper and Kramer, Inc. Kyle Baker - SkyClimber Access Solutions Brian Butler - Firstservice Residential Mike Naponelli - Klein and Hoffman Michael Bonnick - Kellermeyer Godfryt Hart, P.C. Pete Santangelo - Community Advantage, A Wintrust Company Matt Panush - Worsek & Vihon, LLP Tax Attorneys Howard Dakoff - Levenfeld Pearlstein LLC The Chicago Cultural Center is located at 78 East Washington. An MCD registration table will be located outside the Washington & Garland rooms on the fifth floor. Use elevators in South lobby.
Table Discussion Topics & Information Tables include: » Chicago Police Department / William Townsell » Chicago Fire Department » Bulk TV, Internet Technology & Community Associations Jake Garechana - XFINITY Communities » Fire Detection & Signaling Rocco Bartucci - Contech MSI Co. » Fire Protection & Life Safety Charles Fetherling - Simplex-Grinnell » Exterior Building Restoration & Maintenance Jarrell Johnson - Kellermeyer Godfrydt Hart, PC » FAQ’s of Bulk Energy Purchasing Vickie Farina - Centerpoint Energy » Ideas & Trends in Waste & Recycling Jack Nugent - Flood Bros. Disposal » LED Lighting & Energy Cost Savings Frank Vannucci - Crown Commercial Lighting, Inc. » Property Tax Appeals Ed Wittenstein - Worsek & Vihon, LLP » Windows & Door Replacement Phil Mariotti -Woodland Windows & Doors » Fire & Water Restoration, Mold Remediation Rick Brouwer - Brouwer Brothers Services » Safety - OSHA Facade Access Requirements Kyle Baker - SkyClimber Access Solutions » Legal Q & A » Managing Mechanical Systems & Replacing Risers
Hand-Outs & Resources will be provided on the following topics: Renters, Pets & Parking, Board Training, Security, Waste Management, Green Building Technologies, Budgeting & Financial Management, Reserve & Transition Studies, and Managing Capital Improvements Additional topics may be added.
2017 State-of-the-Industry Committee Tony Briskovic - Chicagoland Community Management Michael Donnell - FirstService Residential Tairre Dever-Sutton - Tairre Management Natalie Drapac - Community Specialists Gail Filkowski - First Community Management John Hancko - The Habitat Company Marla Jackson - DRAPER AND KRAMER, INC. Caree Shtulman - Peak Properties Tom Skweres - ACM Community Management William Townsell - Chicago Police Dept.
Luncheon Seating is limited to the first 140 registrants.
Who Should Attend? » Community Association Board & Committee Members » Property Managers » Developers
» Realtors & Realty Professionals » Colleagues & Contractors
» Government Officials & Employees
Timing -Structure This event is intended to be structured to accommodate various levels of expertise as well as different types of interests in community associations. It is also intended to be flexible to meet time and schedule concerns. We are pleased to accommodate you in this regard. Contact our office to make customized arrangements. Why Should You Attend? » To gain valuable, practical insight on how to deal with special issues of Community Associations » Identify resources needed to help your association(s) solve current challenges that your association(s) is facing » Meet and greet Condo Lifestyles Advisory Board members and other industry experts » To better understand government regulations regarding community associations » To contribute and share your ideas and input in an effort to improve standards in the field of community associations What Should you bring? Your questions. We will provide you with a bag full of paper, pens, and several other items you can use at the program, home or office.
Chicagoland
&
Buildings Environments CondoLifestyles
We welcome you to join us! Please complete the form and return to our office. If you will attend the seminar, return the registration information with your payment. Seminar (per person) Cost is $125.00 for professional property manager, $175 for colleague or vendor, $150 per additional person from same firm (includes handouts and other resources to be provided). Qualified Community Association Volunteers are $40.00 per person. MCD Media, 935 Curtiss, Suite 1A, Downers Grove, IL 60515, Phone: 630-202-3006 or Fax: 630.932.5553 email: mdavids@condolifestyles.net
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No. of CA units you are involved with as a:
No. of CA properties you are involved with as a:
DEVELOPER; __________
DEVELOPER; __________
MANAGER; ____________
MANAGER; ____________
REALTOR; ____________ COLLEAGUE/ CONTRACTOR; ________
REALTOR; ____________ COLLEAGUE/ CONTRACTOR; ________
DIRECTOR ____________
DIRECTOR ____________
UNIT OWNER __________
UNIT OWNER __________
NAME(S) List additional names on back or seperate sheet
NUMBER OF PROFESSIONAL GUESTS @________________________ = $ __________________ NUMBER OF VOLUNTEER GUESTS @________________________ = $ __________________
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