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JULY 2014 | VOLUME 18 | NUMBER 2
CondoLifestyles
©
THE SOURCE FOR INFORMATION ON COMMUNITY ASSOCIATIONS, CONDOS, TOWNHOMES, CO-OPS & HOAS
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New Law Proposed Regulating Units Sold After Foreclosure F E AT U R E S
The Palm II Court Decision Cracks Down on Condominium Boards Best Practices in the Wake of Palm V 2800 Lake Shore Drive Condominium Association
Common Questions for Community Associations Community Association Residents are Basically Satisfied The ABC’s of Condominium Association Tax Appeals Lake Point Tower Looks Toward the Future
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table of contents COVER STORY
03 new law proposed regulating Units sold after foreclosure By Michael C. Davids L E G A L U P D AT E
09 the palm ii court decision cracks down on condominium Boards By Howard Dakoff and Jennifer L. O’Reilly 11 Best practices in the Wake of palm V 2800 lake shore drive condominium association By Stuart Fullett M O N E Y M AT T E R S
14 condominium association tax appeals …experience is Key By Michael D. Elliott 17 industry happenings Compiled by Michael C. Davids and Sherri Iandolo BOARD BASICS
20 common Questions for community associations By David Mack 22 editors Message 23 directory advertising S P E C I A L F E AT U R E
30 community association residents are Basically satisfied By Frank Rathbun M O N E Y M AT T E R S
32 the aBc’s of condominium association tax appeals By Michael Jacobs PROPERTY PROFILE
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By Michael C. Davids SB 2664 WILL HAVE BIG IMPACT
New Law Proposed Regulating Units Sold After Foreclosure a new proposal that is embodied in senate Bill 2664 that has passed both houses and is awaiting the signature of governor Quinn (at the time of this writing is awaiting gubernatorial action).
T
The new Proposal is also supported by the Creditors Coalition, the Community Bankers of Illinois, the Illinois Bankers Association, and the Illinois Credit Unions System. The main feature of the new (proposed) law passed, would prohibit condominium associations from including special assessments, charge backs, and limit a condominium association's ability to collect late fees, attorney's fees or court costs, from third-party
he leading community association trade groups strongly oppose this proposal which is a joint initiative of the Illinois Association of Realtors and the Illinois State Bar Association to change the provisions of the Illinois Condominium Property Act that require incoming buyers of foreclosed condos to pay six months worth of the regular assessments, past due assessments, unlimited attorney’s fees and other fines, fees and costs.
purchasers following a foreclosure. While these fees and costs may be collected under the new (proposed) law, the total amount that can be collected may not exceed 9 months of regular assessments. Through this new (proposed) law, the IAR and the ISBA (along with many banks) are trying to establish a limit on the amount of money that must be paid to associations for various costs related to foreclosure proceedings so that the buyer (of a foreclosed unit) knows his/her maximum exposure from the outset (9 times regular monthly assessments). Their efforts are also aimed at trying to make foreclosed units easier to sell.
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According to the IAR website, “the new (proposed) law will stop the current practice in which purchasers of distressed condominium units are stunned to discover at closing that they owe back assessments to the association—sometimes in sizable sums. These back assessments may also include special assessments and attorney’s fees incurred and unpaid by the previous owner.” IAR also says that they are trying to protect innocent owners from being put in this position and eliminate the ambiguity that is causing sales of distressed units to be impeded or delayed, often resulting in litigation or a threat of litigation. The new law will apply to distressed units in a purchase at a judicial foreclosure sale (other than by a mortgagee) and a purchase from a mortgagee that acquired title through a judicial foreclosure, a consent foreclosure, a common-law strict foreclosure, or the delivery of a deed in lieu of foreclosure. The community association industry groups see the new (proposed) law much differently. CAI Illinois Executive Director Cheryl Murphy says “The end results in most cases would have associations receiving less repayment than under the current statutory scheme.” Less repayment means
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more fees for unit owners. Chairperson of the CAI Illinois Legislative Action Committee (ILAC) committee Carol Marcou adds, “This law (SB 2664) is being passed without any recognition or understanding of its impact upon community associations and the overwhelming majority of owners who pay their assessments in a timely fashion. This bill seeks to protect a very small group of people: attorneys who represent buyers at a real estate closing. If passed, this bill is a detriment to all of our communities and could ultimately result in difficult decisions for boards in determining how to allocate their already limited resources, and would likely lead to increased assessments for the balance of the owners. The interests of community associations and the owners that live in those community associations have been completely ignored in this bill.” ACTHA Executive Director Gael Mennecke concurs with Marcou and says, “This is a penalization for owners who are victims of individuals who foreclosed on their units, leaving all owners responsible for that unit owner’s neglect: a failure to pay assessments, special assessments, fines, monies to repair
damaged unit and legitimate attorney fees to pursue these amounts. As it is, associations under current law only get six months—now proposed to be extended to nine months—for an action that generally takes anywhere from 18—to 36 months to complete.” The community industry groups say they are all in favor of doing things that actually help the sales value and the sale of condos. Although Mennecke asks “What about responsible current owners who are left holding the bag to pay for common expenses such as property maintenance, snow plowing, landscaping and other expenses that everyone agrees to when they buy into a condominium association? It’s not fair to let those who did nothing wrong pay for these very real expenses.” ASCO’s Executive Director Sheli Lulkin is also against the law and had this to say “If the previous owner damages their home on the way out and the Association has to repair the unit, you and your fellow unit owners pay. If the case drags on in the courts, sometimes for a few years, the association and it’s members/unit owners pay. If special assessments are owed ---same story. The Illinois Associa-
tion of Realtors spent a lot of money lobbying for this bill so that their members can sell more property. The bankers lobbied hard so that they do not have to pay past due bills.”
Unintended Consequences Proponents claim associations “load up” unknown and unlimited costs and that this bill will limit a buyer’s maximum exposure. Mennecke’s response on behalf of ACTHA is that this is a clear case of passing legislation that will result in unintended consequences. “Associations will do just what proponents claim now—it will force Associations to put all of the uncollected costs into a regular assessment—that means responsible owners, including these new buyers (of foreclosed units) who are now owners—to pay more each month in a regular assessments. An association’s board has a fiduciary duty to its owners to maintain the property and they cannot do it if they no longer can collect these funds. Do realtors now want to try and sell a unit whose assessments are double or triple what they are under current law?” Beth Lloyd is a Realtor that also serves as
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a past community association board President. Lloyd says, “The IAR wants to make things easy so agents don't need to find out what is due and owing to an association on REO's. They should be asking listing agents as they submit offers on REO's to find out how much the buyer must pay. I recently asked on one unit and found out that I am one of the very few who does that. To not do your job is pure laziness and is a disservice to one's buyer. If the IAR gets their way, this will involve big losses for associations and really have a devastating affect on their financial situation. If they don't recover this money (and this may not be all that's due) who do you think is going to pay so the association can continue to pay for the services it provides to all the owners? The owners who have paid their assessments, that’s who. And the regular monthly assessment will undoubtedly have to go up to make up for the short fall. I uphold IAR’s side on most issues, but this one surely has another side that I strongly support. This is a very serious matter.”
Illinois is Alone One of the arguments that proponents of the new (proposed) law make is that Illinois is the
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only state in the country that requires incoming buyers of foreclosed condominiums to pay for the unpaid assessments, fees, fines, and attorney's fees accrued by the former owner when they purchase a foreclosed condominium. The Realtors say this requirement often comes as quite a shock to buyers at the closing table, and since these amounts cannot be financed, it often results in major disruptions in transactions because buyers cannot come up with the sometimes thousands of dollars necessary to pay these past-due expenses.
campaign aimed at Governor Quinn requesting him to veto the new law and send it back for changes and compromise. “It’s not too late and it’s important,’ pleads Mennecke. A contingent of ACTHA representatives met with the Governor's staff at the end of June to discuss the necessity of vetoing Senate Bill 2664. “We were able to address all of the points raised and staff let us know that the Governor had not yet made up his mind, that contacting him is important and he does pay
attention to these efforts. So anyone involved in community associations who has not already done so should call or write the Governor now. The Governor will need to act shortly, so there is no time to waste.” Lulkin concludes, “Unfortunately, we have been besieged with some bad condo/co-op legislation this session (in addition to judicial decisions referring to the Palm II case that was ruled on by the Illinois Appellate Court). Y
Time to Respond for Information Requests Another aspect of the (proposed) new law reduces the number of days an association (or its management company) has to respond to a request from a purchaser for information from 30 days to 14 days, if the association is managed. If the association is self-managed it has 21 days. Proponents at the IAR and ISBA say the new (proposed) law provides more timely notice to buyers as to the cost they will incur with the purchase of a foreclosed unit. Opponents contend this reduced timeframe creates an unnecessary burden on community associations and their managing agents. Mennecke offers “Realtors and attorneys already have timely notice under the law. It is hardly the fault of associations and managers if this information is not requested or asked for the day before they need it.” Marcou adds “This reduced time-frame creates an unnecessary burden on community association managers and homeowners that are already required to reply to purchaser requests in a timely fashion.”
Incomplete Legislation Opponents also say that the new (proposed) law is incomplete and impacts community associations by creating a new scheme for collecting under super lien rights in the Illinois Condominium Property Act (which applies only to condos), but it does nothing to impact townhome, homeowner or master associations. Marcou says “this bill will create a double standard forcing condos to play by one set of rules while all other community associations play by another set of rules.”
Outcome Uncertain Opponents of the (proposed) law have made significant efforts to stop SB 2664 from passing and orchestrated a communication
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l e g a l U p d at e
By Howard S. Dakoff and Jennifer L. O’Reilly, Levenfeld Pearlstein, LLC
The Palm II Court Decision Cracks Down on Condominium Boards on March 21, 2014, the illinois appellate court entered a rule 23 order in Palm vs. 2800 Lake Shore Drive Condominium Association (“palm ii”). a rule 23 order may not be cited as precedent in other cases in illinois courts, however, on May 2, 2014, the appellate court published its palm ii opinion and thus, it is now binding all illinois trial courts in the 1st district (i.e., cook county) and is persuasive authority on all other illinois trial courts. effectively, it is now governing law in the land of lincoln. Significant Court Rulings That Every Board Needs to Know the court made numerous rulings in palm ii, some of which were very specific to the particular condominium association and the language in its declaration which may have little bearing on other associations. however, some of the rulings will certainly affect condominium associations throughout illinois (and could one day be looked at as persuasive authority on the same issues in
common interest communities, master associations and residential cooperatives). the noteworthy rulings that every Board member should be aware of are the following: 1. Board Workshops. “all board discussion, investigating by reason or argument, talking about, presenting in detail for examination and consideration of association matters as well as voting thereon must be conducted in a meeting open to all unit owners.”1
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The New Reality – • Boards cannot conduct closed Board workshops or working sessions (closed sessions of the Board) to discuss categories enumerated by section 18(a)(9) of the illinois condominium property act are still allowed, which includes: litigation matters, violation and assessment issues and employment issues). • Where there is a quorum of the Board, any discussion, questioning, investigating or voting must be done in a meeting open to all unit owners (i.e. notice given to unit owners before such discussions and/or voting). • a meeting of a committee that includes less than a quorum of the Board is not a “board meeting” and would not be in violation of the palm ii case ruling. • Management or the Board president may discuss association business with a single board member or less than a quorum of board members.
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2. Email Voting or Canvassing. the Board cannot vote on association business via email, phone poll or any other communicative device that is not open to all unit owners. The New Reality – • emails from management to the Board should remind Board members not to ‘reply all’ to avoid discussion comments. purely administrative questions back to management are not prohibited. • to avoid inadvertent board discussion via email, management should consider blind carbon copying all board members except the board president, which will prevent a board member from accidently starting a discussion thread. 3. Delegation of Powers. “Under the declaration, although the board had authority to allow the management company to enter into contracts on behalf of the association, . . . the board does not have the authority to authorize that contractual action taken by the management company can be approved by less than the entire board.” “the board has to make a decision. it can either (1) delegate the power to enter contracts without board approval or (2) delegate the power to enter contract with full board approval. there is no authority for the board to delegate the power to enter contracts with approval by less than the entire board.”
The New Reality – • Boards and management should review the association declaration and management contract to ensure that the delegation of powers is allowed. 4. An exculpation provision may not save you from liability. “defendant’s breach of fiduciary duties constituted gross negligence” by “failing to strictly comply with the clear requirements of the declaration and/or condominium property act by failing to itemize reserves in the budget, failing to credit unit owners with surpluses, commingling operating and reserve expenses, allowing funds in bank accounts in excess of the f.d.i.c. insured limited, failing to provide written notices of board meeting as required by the declaration and failing to present possible conflicts of interest to the unit owners for approval.” The New Reality – • declarations often include exculpation clauses that protect board members from personal liability for the actions and decisions they make while serving the association. however, the court in palm ii held that a board’s conduct can subject them to liability if their conduct is “grossly negligent in that they intentionally failed to act in the face of a known duty, demonstrating a conscious disregard for their duties.”
• Boards must use due diligence when acting on behalf of the association (i.e., by investigating, asking questions, and discussing issues before making a decision). Boards must always make decisions that are in the best interest of the association. • Boards should seek professional advice (i.e., from an attorney or accountant) when unsure about a legal or accounting issue. the court in palm ii ruled that “if a board seeks legal advice before reaching its decision and relied on that advice in reaching its decision, it will be found to have properly exercised its business judgment.”
The Take Away it is imperative that Boards read and become familiar with the requirements and obligations of its governing documents, the illinois condominium property act and palm ii. the rulings in palm ii undoubtedly will create obstacles in conducting day-to-day association business without calling more Board meetings or delegating decision making authority. however, until new legislation or the illinois supreme court provides differently, condominium Boards must adhere to the rulings rendered in the palm ii case or face judicial scrutiny. Y 1
Unless otherwise noted, all quotations are taken from the palm ii published appellate case.
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l e g a l U p d at e
By Stuart Fullett, Fullett Rosenlund Anderson PC
Best Practices in the Wake of
Palm v. 2800 Lake Shore Drive Condominium Association the illinois appellate court recently decided a case that may change the way association boards do business. the palm decision was initially a rule 23 opinion, which meant it was only applicable to the parties in the palm case and could not be cited as precedent in other cases.
H
owever, on April 24, 2014, the court granted Mr. Palm’s motion to publish the decision. As a result, the Palm decision is now binding on all courts in Cook County. Courts in other counties may also follow the Palm decision, and there is an argument that they must follow the Palm decision. For this reason, it is important for all association board members to be aware of the Court’s decision in Palm and to adhere to the best practices prescribed below.
Board Workshops For twenty years it has been generally accepted by attorneys in the industry that board workshops, in which board members discuss but do not vote on association matters, are permissible. In 1994 the statutory definition of “Meeting of Board of Managers” was revised by the Illinois legislature to mean “any gathering of a quorum of the Board of Managers… held for the purpose of conducting board business.” Prior to 1994, the definition of “Meeting of Board of Managers” was “any
gathering of a majority of a quorum of the members of the Board of Managers… held for the purpose of discussing board business.” Attorneys in the industry viewed this change from “discussing” to “conducting” board business as the legislature’s acknowledgment of the need of association boards to discuss certain matters outside board meetings. Despite this long-held view, the court in Palm has interpreted the definition of “Meeting of Board of Managers” to be far more encompassing. It is the opinion of the Palm court that “not only must all board voting occur at meetings open to unit owners, so must all board discussion or consideration of association matters, except for discussion or consideration of the three specified exceptions.” The three exceptions include portions of meetings held:
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(1) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent; (2) to consider information regarding appointment, employment or dismissal of an employee; or (3) to discuss violations of rules and regulations of the association or a unit owner’s unpaid share of common expenses. To comply with the Palm court’s interpretation of “Meeting of Board of Managers,” the most conservative approach is to stop all workshops and other gatherings of a quorum of the board outside an open board meeting. Unfortunately, this may result in extraordinarily long board meetings or the need to schedule additional meetings throughout the year. Although the Palm case concerned a condominium association, due to the fact that the language of the Illinois Condominium Property Act (“ICPA”) addressed in the Palm decision regarding open meetings is similar to the language regarding open meetings in the Illinois Common Interest Community Association Act (“CICAA”), we recommend that all community associations conduct all board business during open board meetings except when the exceptions listed above apply. CICAA provides common interest community associations with the additional exception “to consider third party contracts.” As with the other exceptions, the portion of any board meeting held to consider third party contracts may be closed to the members, but any votes regarding such matters must be taken at a board meeting open to the members.
Voting or Canvassing by Email In addition to a quorum of the board not being able to meet outside a regular board meeting, the Palm court held that “all board discussion, investigating by reason or argument, talking about, presenting in detail for examination and consideration of association matters as well as voting thereon must be conducted in meetings open to the unit owners.” It further stated that the board “violates section 18(a)(9) [of the ICPA] every time it votes on, discusses or considers any association matters other than in an open meeting.” The court did not address the provision in the Illinois General Not For Profit Corporation Act of 1986 which allows informal action by directors outside of open meetings provided that a consent in writing setting forth such action is approved by all board members. While we believe that this procedure is still generally available to boards, we caution that it needs to be followed meticulously and should be used sparingly in unusual or emergency situations.
Voting on Litigation As addressed above, while matters concerning litigation may be addressed during a portion of a board meeting closed to the members, any votes on such matters must be taken at an open board meeting. This includes a decision of the board whether to defend or initiate litigation. The board does not have to reveal information that is protected by the attorney-client privilege or is otherwise confidential, but it needs to make record in the minutes of an open board meeting regarding the general direction it gives its legal counsel.
Complying with Association Governing Documents The court in the Palm case pointed out that the failure of a board to comply with the association’s declaration and by-laws could constitute a breach of the board members’ fiduciary duties. While the issues addressed in 12
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Palm are case specific, the court’s analysis emphasizes the importance of a board complying with its governing documents. Examples from the case in which the board allegedly breached its fiduciary duties include the following: 1. One of the issues was the ability of the board to delegate authority to the management company to enter into certain contracts without the majority approval of the board. The Palm court reviewed the association’s declaration and found that “under the declaration, the board had the authority to allow the management company to enter into contracts on behalf of the association. However, . . . the board does not have the authority to authorize that contractual action taken by the management company can be approved by less than the entire board.” The court held that the delegation of authority by the board beyond what was provided in the declaration constituted a breach of fiduciary duty. 2. Another issue in Palm was whether the Board breached its fiduciary duty because it transferred surplus assessments to its reserve account instead of crediting the assessments back to the unit owners as directed in its declaration. Again, the court reviewed the association’s declaration and found that it required the board to credit any assessment surplus back to the unit owners. Since the board failed to comply with this requirement, the board was found to have violated its fiduciary duties to the members of the association.
flicted with the ICPA and, therefore, the board could mail or deliver notice. The Palm court disagreed and held that the declaration and ICPA did not conflict and that the board was required to give notice only by mail and its failure to do so constitutes a breach of fiduciary duty. The Palm decision emphasizes the importance of association boards reviewing and understanding the association’s governing documents and following them in all situations (except when there is an actual conflict with the ICPA or other laws). Whenever the association documents appear to be vague or inconsistent, the board should obtain a legal opinion. Courts have held that when an association board acts upon the advice of its attorney, even if that advice is later determined to be faulty, the association board members are generally protected by the “business judgment rule” and will not be found to have breached their fiduciary duties.
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Summary The Palm decision highlights how important it is for association boards to understand their associations’ governing documents and applicable law, to comply with such in all circumstances and to govern their associations with transparency. Best Practices which are emphasized by the Palm case include the following:
3. A third issue in Palm concerned the giving of notice of board meetings. The association’s governing documents require that notice be mailed. However, the ICPA provides that notice may be mailed or delivered as well as posted and further provides that when there is a conflict between the condominium instruments and the ICPA, the provisions of the ICPA prevail. The board determined that with regard to giving notice, the association’s declaration con-
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• Conduct all association business at an open board meeting (unless it falls within an exception). • Learn, understand and comply with the association’s governing documents and applicable law at all times. • When in doubt about a provision in a governing document or the law, obtain a legal opinion to assist the board’s decision-making process, invoke the business judgment rule’s protections and to protect the association’s interests. Y
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By Michael Elliott, Elliott & Associates
Condominium Association Tax Appeals... Experience Is Key property taxes are a big issue for home owners. and, if not handled properly, they can become a time-consuming and frustrating problem for property managers and board members.
C
ondominium associations have the right to appeal tax assessments on behalf of all unit owners. these are called collective appeals. property managers and attorneys are expected to manage the process and if they do their job well, things will go smoothly and the owners will be happy. if not, the journey can become frustrating for all involved. the attorney is a key participant in the tax appeal process. he will guide the association and the property manager through the process, educate and inform them, provide advice each step of the way and be responsible for obtaining the best results possible. in that mission, the attorney’s
experience is key. it makes all the difference in the world.
Obtaining The Best Results Possible some unit owners have become well versed in property tax issues. they expect top-notch results and want to know their taxes are as low as possible. they expect the property manager and the attorney to make that happen. inexperienced attorneys may believe the process simply involves filing a complaint and presenting evidence of recent sales in the building. that is certainly part of the process, but obtaining top-notch results involves much more than that.
experienced attorneys have encountered many issues, problems and opportunities over the years and have seen it all. they have lived through cycles of inflation and deflation. they understand how the assessing officials think. they know what needs to be done to obtain the best results possible. here are some ways where experience makes a difference: Âť The attorney needs to ask the right questions and learn critical facts to build a strong case. for example, are there many distressed sales in the building; have distressed sales become the market; have views been impeded by new, adjoining buildings; do investors own a large number of units; do parking spaces have their own pins; to what extent do parking spaces inflate sales prices; are there many vacant units in the building; are there many vanilla box units in the building; are there commercial units that need to be valued differently than the residential units; and, are there residential units whose
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M o n e y M at t e r s
assessed values are extraordinarily high requiring them to be appealed separately? » The attorney needs to build rapport and trust with the assessing officials. these relationships are built over many years of working together. this is critical to the negotiation process. » The attorney needs to be an effective advocate. he must present the case simply, clearly and persuasively. he cannot be afraid to try the case. and, if he proves himself to be an effective litigator, he will obtain better settlements in the future. » The attorney needs to be persistent. he must monitor developments in the market and contest whenever the facts warrant, including nonreassessment years and years when the assessment has already been decreased by the assessor, but not enough.
Education, Customer Service And Advice in addition to demanding top-notch assessment reductions, clients want to be guided through the process by a skilled hand. they want their lawyer to educate and inform them, answer their questions, communicate proactively and advise them what actions to take so the process moves smoothly. this is every bit important as obtaining great assessment results.
experienced lawyers learn (the hard way) what the client’s hot buttons are and how to handle delicate issues that come up. here are some of them: » Budget or bill-back. tax appeal costs are a common expense that can be paid from the association budget. When paid from the budget, unit-owner involvement and questions are minimized. But, many associations prefer to bill owners back. the experienced attorney will educate and inform the client, advise of the pros and cons and offer options to minimize impact on the budget. » Senior Citizen Assessment Freeze Issues. seniors freeze recipients often complain about paying tax appeal costs because they believe collective appeals do not benefit them. the experienced attorney will educate the client how collective appeals do benefit seniors, explain to the association the pros and cons of billing back seniors (or not) and present options. this is a key issue that comes up over and over again and must be handled tactfully by the attorney. explaining that assessment appeals do not cause the senior to loose their freeze. seniors often believe that the filing of a collective appeal will cause them to loose their senior freeze exemption and pay more. Unfortunately, the assessing officials often perpetuate this myth. the filing of a tax appeal will never cause the senior to pay more.
the experienced attorney knows this and can effectively educate its clients and assist in communicating this fact to frustrated seniors. » Opt-Outs. Unit owners occasionally ask to optout of collective appeals. the experienced attorney knows opt-outs are not permitted by the condominium property act, are contrary to the concept of providing collective (and not selective) services and create bad precedent. however, the experienced attorney can present an effective option: the homeowner can file an appeal on its own and thereby effectively opt-out of the collective appeal. » Tax Savings. clients often ask how the assessment reduction obtained in a collective appeal results in a tax savings. they often compare their current tax bill to the prior one; however, that is not the savings. the savings is determined by comparing the current year tax bill to the one that would have been issued had no reduction been obtained. the attorney must provide this comparison. » Proactive Communication. proactive communication is essential for the process to work smoothly. experienced attorneys know this well. the attorney must communicate proactively with his client and the association must communicate proactively with its unit owners to keep all informed. the experienced attorney knows the importance of proactive communication and can
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Chicago Property Services inc. Chicago’s #1 Property Management Company
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condo lifestyles
that an appeal would be unsuccessful. But, analysis Board of Review and reduced assess- of individual units indicated some were over-valued and ments resulting in over $500,000 per some under-valued, with the unders and overs averyear in tax savings (over $1.5M for A Real World aging out. Example We presented the the triennial). board an analysis of the fair here is a real world market values placed on example that illustrates each unit by the assessor and what we thought some of the points mentioned in this article. correct market values should be based on recent our firm represents a premier 342 unit condosales of comparable units with adjustments for minium development with 472 deeded parking views and elevations. from this analysis, it became spaces located near chicago’s lakefront. the assoapparent premium units (highest floors, best ciation was faced with an 88% assessment views) were generally under-assessed, least preincrease, largely because the prior assessment mium units were slightly over-assessed and erroneously reflected application of significant parking spaces were substantially over-assessed occupancy factors (but, the building was fully (more than double their value). occupied). the Board was concerned about this We filed appeals to the assessor and Board of big increase. they wanted assessments reduced as review and reduced assessments resulting in over low as possible and needed help communicating $500,000 per year in tax savings (over $1.5M for with their owners who were concerned about the the triennial). impact on their tax bills. our valuation model confirmed that, following the board was proactive and asked our firm to appeal, individual units were valued fair to low, meet with them to develop a plan for contesting that premium units were generally undervalued these increases. We recommended they write their and the parking spaces were substantially overowners to advise of our engagevalued. ment and to outline the actions the assessor and Board were we intended to take. We prounwilling to reduce the parking vided a template letter for their spaces assessments because they use. believed aggregate assessments application of the standard were fair. so, we obtained an valuation metric used by the appraisal of the parking spaces assessor and Board of review, (which confirmed their assessed which values the entire building market values were more than based on recent sales and double true values) and filed an spreads that value among indiappeal to the property tax appeal vidual units according to their Board. We expect to try that case percentage of ownership, sugand obtain substantial tax refunds gested the building was fairly for the triennial period. Y assessed in the aggregate and supply template correspondence to the property manager to make the job of communicating with unit owners easier and more accurate.
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We filed appeals to the Assessor and
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indUstry happenings
Community Advantage Celebrates 15th Anniversary Community Advantage recently announced their 15th anniversary celebration. Various clients and employees gathered to help celebrate the significant milestone at a reception held on thursday, May 1 in rosemont, illinois.
Y Shown here is the Community Advantage team.
Y Pictured here is Ron Foster-Foster/Premier, Linda Schiff, former President of Community Advantage, Steve Silberman Frost, Ruttenberg & Rohtblatt, Kara Cermak-Rowell, Inc., and Sherri Iandolo - MCD Media.
Y From l to r Alex Diaz, Angela Johnson of Community Advantage with Joel Garson, Jennie Jensen and Tracy Fagan of Hillcrest Property Management
Y Shown above (from LtoR) is Michael C. Davids-MCD Media, Ed Wehmer -President & CEO of Wintrust, Brad Stetson -Chairman of Barrington Bank & Trust, Pete Santangelo- President of Community Advantage, and Jon Stickney-President of Barrington Bank & Trust
industry happenings Reatly & Mortgage Co. Harold Rider, co-president of realty & Mortgage co., announced that Lou Lutz has joined their firm as Vice president of community Management. lou’s experience and commitment to the community association management field broadens the services realty & Mortgage co. has offered to chicago residents since 1906. our stable history and reputation of integrity create a platform for lou to offer quality personalized management from our chicago offices in andersonville and lakeview/lincoln park. lou lutz said “illinois ranks fourth in the Us in number of community associations with 10,000 and we know that many of those associations are still looking for the right management. our niche is community association boards that believe the right management company will improve property values and enjoyment of their homes”.
community advantage was established in 1999 and is currently one of the Midwest’s leading providers of financial services to condominium, townhouse, and homeowner associations. after 15 years in business, they still strive to stand up to their tag line - customized financial services provided by trusted industry experts. "We take pride in offering customized financial solutions tailored to meet each customer’s needs and look forward to many celebratory years to come," said president pete santangelo. their current offices are in palatine, il. community advantage is a division of Barrington Bank & trust company, n.a., a Wintrust community Bank. learn more at www.communityadvantage.com
Palm II Legal Update according to Carol Marcou, chairperson of the cai – ilac committee, “With respect to the palm ii case, the law firm of arnstein & lehr filed a petition for leave to file appeal with the illinois supreme court on June 6, 2014 on behalf of the association. if the illinois supreme court decides to accept this case, cai-il may file an amicus brief in support of the association’s position in this matter which would educate the court on the possible broad legal effects of this court decision in illinois as well as on a national level if the illinois supreme court does not reverse the appellate court’s decision.” a further update regarding this important matter will be forthcoming as soon as more information is available.
THE SOURCE FOR INFORMATION ON INDUSTRY NEWS AND TRENDS
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industry happenings Vanguard Community Management to kick off the first of several free Board Member seminars, on tuesday, april 22, 2014, Vanguard community Management invited all of their Board Members to attend “Board Member Basics”. this seminar featured Don Kekstadt, aMs, pcaM, chief executive officer of Vanguard, speaking to Board Members about the fundamentals of running a successful Board. over 30 Board Members interacted with Mr. Kekstadt, discussing topics including governing documents, Board Member responsibilities, roles of board members, financial reports, and assessments. confidentiality issues and details outlining issues discussed during a Board’s executive session were also topics which Mr. Kekstadt emphasized the importance of. “Board Member Basics” was found to provide useful information to both new and returning Board Members. according to Kekstadt, “Vanguard community Management believes that associations succeed when they cultivate a true sense of community, active homeowner involvement, and a culture of building consensus.” another Board Member seminar on the technology and Vanguard community Management was held on July 16, 2014.
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Water Leak Seminar
ABOMA
on september 9th, aBoMa will be honoring Bob Wiggs for his 50 years of service to aBoMa and the chicagoland high-rise residential community. the event begins at 5pm and will feature a “toast and roast” and is being held at the east Bank club, chicago. for more information and reservations visit www.aboma.com.
VIEW OUR SPECIAL EVENT PHOTOS @ www.Facebook.com/mcdmedia
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Y Pictured above are presenters (from LtoR) Ryan Shpritz- Kovitz Shifrin Nesbit, Frank Coleman – Community Advantage, A Wintrust Company, Mark Waldman – Waldman Engineering, Ken Mariotti Woodland Windows & Doors, Joe Cairo-CSR Roofing, and Walt Laska-Masonry Technologies.
on april 20th, 2014, condo lifestyles co-sponsored a seminar on Managing and preventing Water leaks. seminar presenters were from a group of community association industry companies that have expertise in dealing with various aspects of prevention, maintenance and repairs of water leaks. over 40 managers and board members attended the program which was held in the conference center at the Wintrust office building in rosemont.
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indUstry happenings
Kovitz Shifrin Nesbit Ksn is pleased to announce the launch of KSN Tax, a new department within the firm dedicated to obtaining property tax reductions for condominium, townhome and homeowner associations. Ksn is a law firm focused on the representation of community associations in the chicagoland area. already providing a wide spectrum of services to community associations, Ksn has now broadened its practice even further to include prosecuting property tax assessment appeals on behalf of its association clients. Ksn tax will appeal assessments utilizing a case tracking system that will enable attorneys to monitor and reduce an association’s property taxes. additionally, Ksn will handle initial collection efforts against unit owners who do not pay their share of the legal fee resulting from a successful appeal at no expense to the association. finally, Ksn tax will work on a contingency fee basis meaning that if there is no tax savings, there is no fee.
ACTHA
Ladies Night Out
the association of condominium, townhouse and homeowners associations will hold two events that will offer educational programs for board members, owners and managers, plus a half-day trade show. on saturday, september 13, actha’s south expo will be held at the tinley park convention center. on saturday, october 25, actha’s north expo will be held at the Westin north shore in Wheeling. actha also holds periodic webinars and other seminars. for more information visit www.actha.org.
the third annual event for ladies of the property management industry sponsored by dakota evans restoration, duBois paving co., Keough & Moody, pc, and Mutual of omaha Bank was held on May 9th. over 120 ladies participated in the evening of pampering that offered guests massages, nail treatments, make-up applications, hair styling, eyebrow services, dream interpretation and tarot card readings. cocktails and dinner buffet were enjoyed as well as the exciting hourly raffles prizes and grand prizes of Bruno Mars tickets and a coach purse giveaway. the highlight for sponsors was the annual "Bra donation" to goldies' place in chicago. attending guests contributed gently used bras for donation to the womens shelter.
Y Shown here are (L to R) Sam Maceli & Mike Landry Dakota Evans, Michele DuBois - DuBois Paving, Chuck McCrimmon - Dakota Evans, Lindsey Daehnke & Dawn Moody Keough & Moody, P.C. and Tom Engblom - Mutual of Omaha Bank.
MCD SHOWCASES THE RACES Arlington Park Racecourse AU G U S T 28, 2014
Dickler, Kahn, Slowikowski & Zavell, Ltd. ~ concentrating in ~
Condo & HOA Representation Corporate • Real Estate • Litigation • Wills Personal Injury 85 W. Algonquin Rd., Ste #420, Arlington Heights, IL 60005
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By David Mack
Common Questions for Community Associations always the best attended gathering at an actha conference because of the free (sort of) legal advice given by attorneys, the spring 2014 version of the popular ask an attorney session featured lawyers David Hartwell of penland and hartwell and James Arrigo of tressler, llc., fielding the questions with David Buetow of fuchs and roselli acting as moderator, throwing them at the duo from pre-written submissions by the audience. Q/ Who is responsible for the repair of balconies, the unit owners or the association? a/ Most balconies are limited common elements in association declarations and the responsibility for maintenance falls on unit owners. if they are defective or need repair throughout the property, the association can arrange for the work to be done by seeking bids and likely get a discount from the contractor hired to do the job but unit owners would still have to bear the cost. Where balconies are indicated in the declaration to be common elements, the association would pay for the work. Q/ If at a board meeting a quorum is present but a member leaves so there is no longer a quorum, can the meeting continue? a/ no, if enough board members leave so there is no longer a quorum the meeting should be stopped immediately.
Q/ I live in an HOA covered by the Common Interest Community Association Act. There is no office where the records are kept but owners can inspect the HOA’s records any time on-line but not everyone has a computer to do this. Should there be hard copies of the records kept somewhere? a/ yes, the board should keep hard copies of the records in a central location so they can be reproduced when properly requested by an owner. the board secretary should be responsible for keeping the documents. Q/ Can board members be present at a board meeting through calling in by phone? a/ they can but they have to be on a speaker phone with 2-way communication and should be on the phone for the entire meeting if necessary to maintain a quorum.
Q/ Is it legal for an association to have a list of approved contractors with the provision that only they can submit bids for association work? a/ if the board does pre-vetting of contractors in general it’s possible to limit any work to those approved contractors. a board will be okay if it follows the business judgment rule and makes informed decisions when bidding out and having work done. But any list of contractors should be reviewed every so often to see if those on it are dong the same quality work and also to add others to the pre-approved list. Q/ Does fee simple ownership in an HOA indicate the ownership of a property is from curb to curb? a/ When you purchase a property you will get a plat of survey. look at the plat and the legal description. it doesn’t mean curb to curb unless the description and plat show that. Q/ Can you take us through the process of an association filing for possession of a unit owned by someone delinquent in assessments? a/ a board cannot let a unit owner get too far behind in paying assessments - no more than 60 days. at that point have your attorney begin legal action. thirty days notice should be given to the owner after which a forcible entry and detainer action should be filed. it may take as long as 150 days to get an order of possession then another 60 days before the association can actually take possession. illinois is very liberal in allowing possession for non-payment of assessments but it takes time. filing a lien against the property is an alternative. it all depends on the circumstances- such as a pending foreclosure by the mortgage holder- whether a lien or possession should be pursued. Q/ Do individual condo board members need additional insurance to what the association has to protect them against liability for their decisions and actions as board members? a/ in general condo declarations insulate directors from liability through the association’s insurance if they are sued as board members in the performance of their duties. there’s nothing that says board members can’t get their own insurance but it isn’t really necessary to cover them as board members and such coverage may actually create a conflict with the board’s insurance policies.
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Board Basics
Q/ Our building has an inside garage with limited parking. Can one unit owner buy a space from another owner? a/ Whether an owner can do this depends on what the governing documents of the association allow. if there are no prohibitions against an owner having more than one space, it should be possible, where the spaces are owned fee simple or owned as assigned limited common elements. however, if the spaces are common elements, it can’t be done. Q/ How can an association enforce its rules and regulations against renters? a/ first of all rules should be applied equally against owners and renters. for the latter, the lease should contain a provision that the renter must follow the rules. fines can be assessed. if violations continue, the board has the right to intervene and terminate the lease. the tough part of this is getting the evidence for termination. an association has a lot of power but don’t try to start terminating a lease if you don’t have sufficient proof of violations.
Q/ Can unit owners use a facebook page to complain about the association they live in? a/ the association has the right to ask that they stop doing this but it can only request someone to cease and desist. if an owner doesn’t stop, a board could counter the negative comments on its own facebook page.
Q/ Should an association’s property management company and its attorney occupy the same office space? The management company recommended the attorney to the association. a/ there is no prohibition against that arrangement but the board may want to determine if the attorney is the right legal counsel for the association under those circumstances. Boards have the right to select their own attorney.
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From the Editor
E
conomic conditions continue to improve in most of the chicago metropolitan area. there is a lot more sales activity in the real estate market and most realty experts predict resale home values will con-
tinue to increase and foreclosures will continue to decrease. of course, location
CondoLifestyles
®
s Mike Davids
is still the name of the game in real estate sales. While the worst of our financial woes may be behind us there are still many associations with serious financial challenges still lingering from past problems with delinquent assessments, evictions and mortgage foreclosures. our cover story deals with some new proposed legislation (that is still pending at the time of this writ-
JULY 2014 | VOLUME 18 | NUMBER 2 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis
ation advocacy groups are strongly against the change in regulations and are doing everything they can to stop it. We’ll know soon if these efforts were successful. in any case, many associations continue to struggle financially from the effects of our recent economic crisis. on the bright side, there are also many associations that are faring much better financially. those that are able to are undertaking a wide variety of maintenance and restoration projects that have been put off. the palm ii court case ruling is another very hot topic for community associations and has sent shock
Special Events Coordinator Mary Knoll
waves through the industry. Many associations are making significant changes in the way they conduct their
Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker
ble in these areas in the future. We offer two articles on the issues covered in the palm ii court case ruling in
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 5, 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 8,500. 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 2014. 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.
22
ing) that will change regulations for condominium sales of units after foreclosure. leading community associ-
condo lifestyles
meetings and handle their communication and their business protocol to make sure they don’t run into trouthis issue. Visit www.illinois.gov or ask your management and legal counsel about sB 2664, palm ii and other legal issues. they should be able to provide you with current and more complete information. property taxes are always a big concern and have a significant impact on community association residents. in 2015, properties in chicago and the collar counties will be re-assessed and owners will receive notices indicating their properties’ new assessment. While property taxes are primarily the responsibility of the individual unit owner, a condominium association’s board can file a collective tax appeal on behalf of the residents and most county assessors favor this approach. there are two articles inside this edition on how and why your association can go about handling this issue. our property profile column features the well known lake point tower condominium association in chicago. in addition to providing an overview of their operating structure, lake point tower shared with us their efforts on a wide variety of maintenance, restoration and improvement projects that they have recently undertaken. the most significant project (and most recent) is their $10.5 million hallway remodeling project that was completed in a very short period of time. a variety of common questions for community associations are asked and answered in our Board Basics column in this issue. a special feature article indicating that most people who live in community associations are basically satisfied can also be found in this issue. our regular industry happenings column also appears. Mcd Media’s next special event is a luncheon at arlington international racecourse on august 28. a variety of companies specializing in community associations have sponsored tables at this event. if your association(s) has a special need or challenge, there will be a variety of experts specializing in community association issues including many members of the condo lifestyles advisory Board who will attend. Mcd special events provide a terrific forum for association leaders to get questions answered, meet new vendors, share a story idea, or socialize with other volunteers and professionals. We appreciate all of our readers as well as our sponsors. 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 www.condolifestyles.net. 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 me 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 ANNUAL ACCOUNTING SERVICES:
audits reviews compilations Income Taxes Board of Directors Training Monthly Services: collection of assessments paying of Bills Monthly financial statements consulting for developer turnover and Major projects
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ATTORNEYS
FULL CIRCLE ARCHITECTS, LLC (847) 432-7114
DICKLER, KAHN, SLOWIKOWSKI & ZAVELL, LTD. (847) 593-5595
Daniel Baigelman, AIA dan@fullcirclearchitects.com capital improvements • reserve studies engineering reports www.fullcirclearchitects.com
www.canteycpa.com
J. HERSHEY ARCHITECTURE (847) 549-5900 “Autographed with Excellence” www.jhersheyarchitecture.com
specializing in accounting services for homeowner associations.
KELLERMEYER GODFRYT & HART, P.C. (847) 318-0033
CONDO CPA (630) 832-2222 EXT 113
investigations and repair documents for: exterior Walls, Windows, roofs, and parking garages condition surveys and reserve studies www.kghpc.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
MAXIMA CONSULTANTS CORPORATION (312) 223-8414
CUKIERSKI & KOWAL, LLC (847) 496-7180 a full-service accounting firm speacilizing in the unique needs of homeowners associations.
www.ckwcpa.com
FROST, RUTTENBERG & ROTHBLATT, P.C. (847) 282-6340
FULLETT ROSENLUND ANDERSON, P.C. (847) 259-5100 www.frapc.com
MICHAEL J. COCHRANE, CPA (847) 301-0377
CERTIFIED PUBLIC ACCOUNTANTS
www.dicklerlaw.com
reserve studies & transition and condition assessment reports facade/ roofing / Windows garage evaluations, Water infiltration investigations fire escape/Balcony/porch evaluations, life safety evaluations www.maximaconsultants.com
SUPERIOR RESERVE ENGINEERING AND CONSULTANTS
CERTIFIED PUBLIC ACCOUNTANTS
(888) 688-4560
contact: steve silberman, cpa
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CODER TAYLOR ASSOCIATES
WALDMAN ENGINEERING CONSULTANTS (630) 922-3000
coder@codertaylor.com
www.waldmaneng.com
ARCHITECTS/ENGINEERS
KEOUGH & MOODY, P.C. (630) 369-2700 legal representation for community associations www.kmlegal.com
LAW OFFICES OF KEAY & COSTELLO (630) 690-6446 pcostello@keaycostello.com www.keaycostello.com
KOVITZ SHIFRIN NESBIT (847) 537-0500 www.ksnlaw.com covenant drafting & enforcement advising & consulting with Boards construction defect litigation collecting delinquent assessments
LEVENFELD PEARLSTEIN, LLC 312-476-7556 howard dakoff / hdakoff@lplegal.com www.lplegal.com
BANKING ALLIANCE ASSOCIATION BANK (815) 342-4228 / (888) 734-4567 full service banking and lending solutions for management companies and associations. cfinck@AllianceAssociationBank.com www.AllianceAssociationBank.com
(847) 382-4100 “We Specialize in Emergency Repairs” architects • research • engineering specifications • reserve studies
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 2014©.
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BANKING ITASCA BANK & TRUST (630) 773-0350 “together We’ll shape the future” www.itascabank.com
COMMUNITY ADVANTAGE, A WINTRUST COMPANY (847) 304-5940 loans, reserve investments & lock Box services www.communityadvantage.com
BUILDING RESTORATIONS
CONCRETE
HOLTON BROTHERS, INC.
SUNDEK OF ILLINOIS (847) 392-3939
Masonry repair services, tuckpointing, caulking and concrete restoration
(847) 253-3886 TEL / (847) 253-3255 FAX John@holtonbrothers.com www.holtonbrothers.com
LS CONTRACTING GROUP, INC. T (773) 279-1122 f (773) 279-1133
CONCRETE RAISING
contact: tom laird tlaird@lscontrtacting.com www.lscontracting.com
MUTUAL OF OMAHA BANK (866) 800-4656
VIKING CONCRETE RAISING & REPAIR (847) 808-7400
hoa Banking • internet cash Management hoa loans • online payment services www.mutualofomahabank.com
BUILDING RESTORATIONS ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com
QUALITY RESTORATIONS (630) 595-0990
DAKOTA EVANS RESTORATION, INC. (847) 439-5367 tuckpointing ~ Masonry repairs Waterproofing ~ terra cotta repairs caulking & sealants ~ structual repairs cleaning ~ Balcony restoration concrete restoration www.dakotaevans.com
FORUM GROUP, INC. (773) 732-3051 www.ForumGroupInc.com
raising settled concrete throughout chicagoland wwwWeCanRaiseIt.com
DESIGN CONSULTANT
SITE MAINTENANCE, INC. (847) 697-1077 www.sitemaintinc.com
WEA DESIGN, INC. (312) 423-7895
CONCRETE
www.wea-design.com
FM&J ASPHALT PAVING, INC. (708) 544-6700 / (630) 279-0303
DOORS
BRAL RESTORATION, LLC. (847) 839-1100 Masonry and concrete restoration www.bralrestoration.com
We resurface concrete We remove & pour concrete Waterproof Membranes pool decks • Balconies • rooftops shower & locker rooms “The Only 1 Stop Service since 1967” JaykZ33@yahoo.com www.Sundek.com
concrete & asphalt paving pavers & color stamping drainage systems & sewer repairs sealcoating, crack filling & striping www.fmjasphalt.com
WOODLAND WINDOWS & DOORS 630-529-DOOR (3667)
HARD SURFACE SOLUTIONS (630) 916-8005 / (847) 838-6610 concrete flatwork specialists | asphalt paving curbs & driveways | sidewalks footings & foundations colored concrete | stamped concrete aggregate finish concrete Parking Structure Maintenance & Repair Contact Tom Frye
www.hsshardsurfacesolutions.com
GOLF CONSTRUCTION (219) 933-3420
Window and related Masonry interior & exterior doors | siding & gutters www.woodlandwindows.com
ELEVATORS/CONSULTANTS SMART ELEVATORS CO. (630) 544-6829 www.smartelevatorsco.com smartin@smartelevatorsco.com
SUBURBAN ELEVATOR CO. 847-743-6200
www.golfconstruction.net
simplifying Vertical transportation Contact: Max Molinaro www.suburbanelevator.com
View our Special Event Photos @ www.Facebook.com/mcdmedia
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No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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ENERGY GAS & ELECTRIC
FIRE SAFETY & PROTECTION
GROUP BENEFITS
OCEANS ENERGY (312) 870-0580
EMCOR SERVICES TEAM MECHANICAL fire protection diVision (847) 229-7600
OCEANS ADVISORS (312) 508-3032
info@oceanscc.com www.oceanscc.com
www.emcortmi.com
info@oceansadvisors.com www.oceansadvisors.com
ENERGY USE/BENCHMARKING
FIRE/FLOOD RESTORATION
HVAC
WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690
BROUWER BROS. SERVICES (800) CLEAN54
ALTHOFF INDUSTRIES (312) 332-5700
all types of environmental cleaning. (708) 396-1477 | www.bbsteamatic.com
Mechanical - Plumbing - Electrical - Building Automation www.althoffind.com
GENESIS CONSTRUCTION, INC. (847) 895-4422
AMS MECHANICAL SYSTEMS, INC. (800) 794-5033
serving the tri-state area since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com
FHA/FANNIE MAE CONDOMINIUM PROJECT APPROVALS
www.genesisconstruction.com
CONDO APPROVAL PROFESSIONALS LLC (847) 293-2962 contact: Steve Stenger
QCI RESTORATION (847) 891-2929 (866) 832-6724
www.condo-approval.com
www.QCIrestoration.com
24 Hour Service hVac • industrial refrigeration service/Maintenance • systems integration energy Management • electrical process piping • plumbing www.amsmechanicalsystems.com
THE RESTORATION GROUP, LLC (630) 870-0658
EMCOR SERVICES TEAM MECHANICAL (847) 229-7600
CONTECH MSI CO. (847) 483-3803
www.trgrestore.com
www.emcortmi.com
fire detection & signaling systems fire alarm systems chicago life safety evaluation solutions security systems/cctV card access systems www.contechco.com
FITNESS SOLUTIONS
FIRE SAFETY & PROTECTION
DIRECT FITNESS SOLUTIONS (847) 680-9300 cgallagher@directfitnesssolutions.com www.directfitnesssolutions.com
NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) (866) 2NIFSAB (866-264-3722) 708-403-4468 www.firesprinklerassoc.org
SIMPLEX GRINNELL (630) 948-1235 fire alarm / sprinkler systems fire pumps / extinguishers fire panel Monitoring installation / testing / Maintenance 24/7 Service: (630) 948-1200 www.simplexgrinnell.com
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690 serving the tri-state area since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com
H V A C CLEANING GARBAGE CHUTE CLEANING BROUWER BROS. SERVICES (800) CLEAN54 (708) 396-1477 www.bbsteamatic.com
BROUWER BROS. SERVICES (800) CLEAN54 (708) 396-1477 www.bbsteamatic.com
INSURANCE GREEN SUSTAINABILITY SOLUTIONS HOLLINGER SERVICES, INC. (847) 437-2184
OCEANS ENERGY (312) 870-0580
property casualty • employee Benefits Workers compensation www.HollingerInsurance.com
info@oceansenergy.com www.oceansenergy.com
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INSURANCE
LANDSCAPE CONTRACTORS
MOLD REMEDIATION
MESIROW FINANCIAL (312) 595-8135
CHRISTY WEBBER LANDSCAPES & KINSELLA LANDSCAPE (773) 533-0477
QCI RESTORATION (847) 891-2929 (866) 832-6724
ILT VIGNOCCHI (847) 487-5200
NON PROFIT/EDUCATION
nancy ayers
OCEANS ADVISORS (312) 508-3032 info@oceansadvisors.com www.oceansadvisors.com
ABOMA (312) 902-2266
www.iltvignocchi.com
JANITORIAL SERVICES
LANDSCAPE CONCEPTS MANAGEMENT, INC. (847) 223-3800
DJR CLEANING ENTERPRISES (630) 893-0757
www.landscapeconcepts.com
“green” Janitorial & sanitizing services for hospitality businesses, health care providers and commercial, industrial and multi-unit residential buildings. www.djrcleaning.com
SEBERT LANDSCAPING, INC. (630) 497-1000
ABOMA1@aol.com www.aboma.com
ACTHA (312) 987-1906 Association of Condominium, Townhouse and Homeowners Associations
actha@actha.org | www.actha.org
COMMUNITY ASSOCIATION INSTITUTE OF ILLINOIS (847) 301-7505
www.sebert.com
info@cai-illinois.org | www.cai-illinois.org
LAUNDRY SERVICES & EQUIPMENT
LAKE & POND MANAGEMENT
FAMILY PRIDE LLC (630) 827-6362
ACRES GROUP (888) 231-1300 / (847) 526-4554 ceritfied aquatic applicator department of agriculture www.acresgroup.com
LANDSCAPE CONTRACTORS ACRES GROUP (888) 231-1300 / (847) 526-4554
PAINTERS
contact paul anzell paula@hughesenterprises.net www.familypridelaundries.com
AAA PAINTING CONTRACTORS, INC. (630) 231-8350
LAWN CARE
www.aaapaintco.com
SPRING-GREEN LAWN CARE (800) 830-5914
ABBOTT PAINTING, INC. (312) 636-8400 (773) 725-9800
www.spring-green.com
professional landscaping and snow removal www.acresgroup.com
Quality painting & decorating since 1973 Our Mission: Guaranteed Committment to Quality now offering parking lot painting www.Abbottpainting.com
MAILBOXES ALAN HORTICULTURAL ENTERPRISES, INC. (630) 739-0205
MAILBOX WORKS (630) 355-9989 (773) 528-3111
www.alanhorticultural.com
BALANCED ENVIRONMENTS, INC. (847) 395-7120 | (630) 916-8830
large Variety of commercial and residential Mailboxes intercoms and tele-entry address signage & engraved nameplates installation services www.MailboxWorks.com
View our Special Event Photos @ www.Facebook.com/mcdmedia
condo lifestyles
ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com
since 1989
www.BalancedEnvironmentsInc.com
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www.qcirestoration.com
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PRECISION PAINTING AND DECORATING CORP. (630) 688-9423 www.ppdpainting.com
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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PAINTERS
PEST CONTROL
PROPERTY MANAGEMENT
CERTAPRO PAINTERS OF THE NORTH SHORE (847) 287-2642
SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500
CARUSO MANAGEMENT GROUP, INC.
interior & exterior painting Wallcoverings • decorating • remodeling drywall repair • decks & staining tile installation • Metal & iron painting www.certacommercial.com tivanov@certapro.com
www.smithereen.com
www.carusomanagementgroup.com
PLUMBING
CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300
DDI DECORATING & DESIGN INSTALLATIONS 773-790-6669 professional commercial grade custom Quality painting–decorating–Wallcovering interior -exterior / fully insured 25 years experience Contact Mike: ddimidwest@gmail.com
AMS MECHANICAL SYSTEMS, INC. (800) 794-5033
EXTREME POWER CLEANING INC. (630) 532-0345
PAVING DUBOIS PAVING (847) 634-6089 (800) 884-4728 www.duboispaving.com
CHICAGO PROPERTY SERVICES, INC. (312) 455-0107 X102 www.chicagopropertyservices.com
MORE LIVING. LESS WORRYING.
LIFELINE PLUMBING 847-468-0069
COMMUNITY SPECIALISTS (312) 337-8691
plumbing - heating & air conditioning Water heaters - sewer cleaning & repair hot Water drain Jetting www.INEEDLIFELINE.com
www.communityspecialists.net
PROPERTY MANAGEMENT
www.ExtremePowerCleaning.com info@extremepowercleaning.com
(630) 717-7188
www.chicagoland-inc.com
24 Hour Service hVac • industrial refrigeration service/Maintenance • systems integration energy Management • electrical process piping • plumbing www.amsmechanicalsystems.com
PARKING GARAGE CLEANING
residential & coMMercial
DK CONDO (312) 346-8600 Contact Tom Taylor
www.dkcondo.com
A PLUS PROPERTY MANAGERS, INC. (847) 315-0222 professionals helping volunteers. info@aplusmanagers.com / www.aplusmanagers.com
THE HABITAT COMPANY (312) 527-5400 www.habitat.com
ACM COMMUNITY MANAGEMENT (630) 620-1133
FM&J ASPHALT PAVING, INC. (708) 544-6700 / (630) 279-0303
www.acmweb.com
concrete & asphalt paving pavers & color stamping drainage systems & sewer repairs sealcoating, crack filling & striping www.fmjasphalt.com
ALMA PROPERTY MANAGEMENT (847) 517-4400
Contact Tom Skweres
www.condomanagement.com
www.almapropertymanagement.com
HARD SURFACE SOLUTIONS (630) 916-8005 / (847) 838-6610 Contact Tom Frye
www.hsshardsurfacesolutions.com
FIRST COMMUNITY MANAGEMENT (312) 829-8900
G&D PROPERTY MANAGEMENT (630) 812-6400 www.gd-pm.com
BAUM PROPERTY MANAGEMENT, LTD. (630) 897-0500 www.BaumProp.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 2014©.
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PROPERTY MANAGEMENT
PROPERTY MANAGEMENT
FIRSTSERVICE RESIDENTIAL (312) 335-1950
TAIRRE MANAGEMENT SERVICES (847) 299-5740
Contact Asa Sherwood or Elena Lugo
RESERVE STUDIES RESERVE ADVISORS, INC. reserve studies & transition defect studies
1 (800) 221-9882
tsutton@tairremgmt.com
Elena.Lugo@fsresidential.com www.fsresidential.com
conducted by professional engineers enhanced report / Most customized studies www.reserveadvisors.com long-term thinking. everyday commitment.
WERK MANAGEMENT (630) 241-0001 HILLCREST MANAGEMENT (630) 627-3303 / (312) 379-0692
for all your property needs www.werkmanagement.com
ROOFING
www.hillcrestmgmt.com
REAL ESTATE TAX ATTORNEY LEGUM & NORMAN MIDWEST (312) 944-2611
ELLIOTT & ASSOCIATES (847) 298-8300
www.lnchicago.com
www.elliottlaw.com
LIEBERMAN MANAGEMENT SERVICES (847) 459-0000
WORSEK & VIHON LLP (312) 368-0091
www.liebermanmanagement.com
www.wvproptax.com
MCGILL MANAGEMENT, INC. (847) 259-1331
REMODELING/REPAIRS
773-989-8000 1509 W Berwyn chicago il 60640 contact: lou lutz LLutz@RealtyMortgageCo.Com
SUDLER PROPERTY MANAGEMENT (312) 751-0900
B.T. LAKESIDE ROOFING (630) 628-0093 www.lakeroof.com
general Maintenance & handyman services general carpentry, flooring, painting, concrete & tuckpointing parking lot Maintenance, striping, sealcoating catch Basin & sewer repairs custom chimney caps, flashing, gutters & Metal roofs Waterproofing & pressure Washing www.fmj-services.com
CSR ROOFING CONTRACTORS (708) 848-9119
RESERVE STUDIES
We’re here When you need Us! www.protoproofing.com
(630) 633-5450
COMMUNITY ASSOCIATION MANAGEMENT
established 1965 Maintenance & repairs roofing/sheet Metal/tuckpointing www.activeroofing.com
FM&J SERVICES, INC. (708) 544-2219
ROLLING MEADOWS OFFICE
REALTY & MORTGAGE CO.
ACTIVE ROOFING CO., INC. (773) 238-0338 (708) 430-8080
www.mancioneinc.com
PROPERTY SPECIALISTS INC. (847) 806-6121 WOODRIDGE OFFICE
www.atjshomeimprovement.com
MI MAINTENANCE AND CONSTRUCTION (630) 241-0001
www.mcgillmanagement.com
www.psimanagement.net
ATJ'S HOME IMPROVEMENTS (630) 432-3238
www.csr-roofing.com see our ad on page 8.
PROHTOP ROOFING (847) 559-9119
SUPERIOR RESERVE ENGINEERING AND CONSULTANTS
2014 IREM Management Company of the Year
(888) 688-4560
SITE MAINTENANCE, INC. (847) 697-1077
www.superiorreserve.com
www.sitemaintinc.com
www.sudlerchicago.com
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No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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ROOFING
SIDING / RENOVATIONS
S&D ROOFING SERVICE (630) 279-6600
B.T. LAKESIDE ROOFING (630) 628-0093
100,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS our experience & technical know-how gets the job done right the first time! Serving the area since 1963 www.sdroofing.com sales@sdroofing.com
www.lakeroof.com
rcnchicagoapts@rcn.net www.rcn.com
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667)
XFINITY 1 (800) XFINITY
Window and related Masonry interior & exterior doors | siding & gutters www.woodlandwindows.com
SECURITY SERVICES ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888 www.admiralsecuritychicago.com
GUARDIAN SECURITY SERVICES (708) 385-3300 providing chicagoland’s finest door staff and security officers since 1975 www.guardiansecurityinc.com
SNOW REMOVAL ATJ'S HOME IMPROVEMENTS (630) 432-3238
TV-BULK CABLE & SATELLITE RCN (312) 955-2322
www.comcast.com
WASTE SERVICES LAKESHORE RECYCLING SYSTEMS (773) 685-8811 www.LakeshoreRecyclingSystems.com
www.atjshomeimprovement.com
WINDOWS/REPLACEMENTS HARD SURFACE SOLUTIONS (630) 916-8005 / (847) 838-6610 Contact Tom Frye
www.hsshardsurfacesolutions.com
PREMIER SECURITY (773) 867-8813
THE WINTER WERKS (630) 241-0001
www.premiersecuritycorp.com
www.mancioneinc.com
Window and related Masonry interior & exterior doors | siding & gutters www.woodlandwindows.com
WINDOW RESTORATION WINDOW WALL SERVICES, INC. THE CAULKING COMPANY (708) 361-9333
SECURATEX (630) 317-8980
SWIMMING POOLS
”Keeping tenants happy” www.securatex.com
SPMS (630) 692-1500
SIDING / RENOVATIONS
heaters pumps • repairs • chemicals pool Maintenance • complete Water analysis pool guards, inc. ross@spmspools.com
ACCURATE EXTERIORS (630) 830-9191
TREE CARE
www.windowwallservices.com All Types of Window Restoration
KRAMER TREE SPECIALISTS, INC. (630) 293-5444 ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667)
tree pruning, tree removal, cable Bracing, plant health care, tree planting & transplanting www.kramertree.com
Weather stripping / hinges handles and adjustments Curtain Wall Repair Specialists
WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667) Window and related Masonry interior & exterior doors | siding & gutters www.woodlandwindows.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 2014©.
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By Frank Rathbun, Community Associations Institute
Community Association Residents Are Basically Satisfied americans who make their homes in homeowners associations and condominiums are overwhelmingly satisfied with their communities, according to national survey conducted by public opinion strategies for the foundation for community association research.
A
lmost two-thirds of the 65 million owners and renters in commoninterest communities rate their overall association experience as positive, while only 10 percent express some level of dissatisfaction. Twenty-six percent are neutral on the question. “I’d like to meet a local, state or national politician who wouldn’t want such approval ratings,” says Thomas Skiba, CAE, chief executive officer of the Foundation and Community Associations Institute (CAI). “All institutions have issues—our schools, businesses, government and the entertainment industry— but I think it’s safe to say community associations fare very well in comparison.” The March-April 2014 survey also revealed that: » 90 percent of residents say association board members serve the best interests of their communities. » 83 percent say they get along well with the immediate neighbors.
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» 92 percent say they are on friendly terms with their association board members (the homeowners who are elected by their neighbors to govern the community), » 83 percent say their community managers provide value and support to residents and their associations. » 70 percent of residents say their association rules protect and enhance property values; only 4 percent say the rules harm property values. “This affirms four previous national surveys showing that the people who live in condominiums and homeowners associations are overwhelmingly pleased with their communities,” says Skiba, whose nonprofit organization provides information, education and resources to help association leaders. “More than anything else, this survey affirms the dedication of homeowner leaders and community association managers who work to build and sustain successful communities.” The typical community association— whether a condominium, cooperative or homeowners association—is governed by homeowner volunteers who are elected by their fellow owners to set policy for the community. Smaller associations with limited 07.14
budgets may rely on resident volunteers for various management responsibilities, such as accounting functions and assessment collection, while larger associations contract for the services of a professional community manager or association management company. More than two million Americans serve as volunteers on community association boards and committees. “Not all associations operate as well as they should, and we’re never happy when we see a community in the news for the wrong reasons,” Skiba says, “but at least we know struggling communities are the exception to the rule. CAI says discontent in associations can be caused by a number of factors, including unreasonable association boards, residents who disregard rules they have agreed to follow and difficult financial circumstances, which became especially critical for many homeowners and associations during the housing and economic downturn. “Any number of dissatisfied people is too many, but that’s an ongoing challenge for any organization, business or enterprise,” says Skiba. “Disagreements and conflict are inevitable, but it’s important to remember that issues in community associations cut both ways. Just as there are some poorly governed communities, many associations must contend with very difficult and intransigent residents, including some owners who refuse to follow established rules or pay their fair share for utilities, services and amenities provided by the association.” Skiba says the keys to successful associations are open communication between residents and association leaders, a commitment to transparency in governance, dedicated volunteers and adherence to best practices for association governance and management. Many time-tested best practices are delineated in From Good to Great, a free, downloadable document that includes CAI’s initiative, Rights and Responsibilities for Better Communities. For more information visit www.caionline.org Y
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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2014 CONDOLIFESTYLES STATE OF THE INDUSTRY SEMINAR »
11:00AM - 3:00PM December 11, 2014 For more information Call 630-202-3006 Visit our website at www.condolifestyles.net ...Or e-mail us at mdavids@condolifestyles.net
TOPICS INCLUDE:
Luncheon & Keynote Speaker
• State of the Industry Panel Discussion, Q & A • Legal and Case Law Updates (including manager licensing, regulations on condo sales after foreclosure, and more) by Gabriella Comstock -Keough & Moody, P.C.
Followed by Seminar Sessions
CondoLifestyles Buildings Environments
®
Chicagoland
&
• Impact of Palm II Court Case • Property Tax Appeals • Chicago Ordinance Update (Life Safety, Bed Bugs & more) • Environmental issues including Energy Benchmarking and Bulk Purchasing of Natural Gas & Electric • Managing Renters & Advice for Landlords
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
07.14
2014 Committee: Tony BriskovicChicagoland Community Management Elena Lugo First Service Residential Tairre Dever-Sutton -Tairre Management Micky Tierney -Community Specialists Diane White & Natalie Drapac The Habitat Company Tom Skweres ACM Community Management
CONDO LIFESTYLES
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by Michael Jacobs, Kovitz Shifrin Nesbit
The ABC’s Of Condominium Association Property Tax Assessment Appeal in 2015, property owners in chicago and the collar counties will be re-assessed and receive notices indicating their property’s new assessment. Many property owners will appeal this new assessment to achieve a tax savings. illinois law allows a condominium association’s Board to file a single appeal on behalf of all unit owners. 765 ilcs 605/10(c), 765 ilcs 605/18.4(p). additionally, the county assessors prefer one appeal from condominiums.
F
irst, there is less administrative work involved in processing one appeal as opposed to a multitude that would result if each unit filed on their own. second, the county assessors place a single value on the entire condominium building and contesting that value is facilitated by an appeal inclusive of all units. this article will discuss the what, why, how and where of condominium assessment appeals, as well as provide some words of caution.
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» What: the assessment is a reflection of the assessor’s fair market value opinion of a property debased by a proscribed percentage. in cook county, residences, including condominium units, are assessed at 10% of fair market value. in simple terms, this means that a condominium unit worth $300,000 should be assessed at $30,000. in the collar counties, all property is assessed at 33.33% of fair market value. therefore, a $300,000 condominium unit in the collar counties would carry an assessment of $100,000.
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» Why: a successful assessment appeal reduces the property taxes paid in the future. the assessment constitutes the main figure utilized to calculate the property tax bill. to calculate the tax bill, the county treasurer multiplies the assessment, the equalizer(s) and the local tax rate by each other (taxes = assessment x equalizers x local tax rate). By reducing an assessment through an appeal, simple arithmetic indicates the end result will be lower as well. » Caution: not all successful assessment appeals cause a tax bill to be lower than the prior year. the local tax rate and equalizers might be higher than the year before, which could cause a tax bill to rise even if the assessment is lowered. additionally, an assessment might be lowered in an appeal, but still remain at an amount greater than the year prior to the reassessment. in this case as well, the end tax bill might still be larger. nevertheless, an assessment reduction causes a reduction in the upcoming tax bill because the tax bill is still calculated utilizing an assessment that is lower than what was originally proposed. » How: When valuing condominiums, the county assessors places a single value on the entire condominium building. an analysis of the recent unit sales within the association can rebut this value.
No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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M o n e y M at t e r s
let’s say the cook county assessor values a particular condominium building at $10,000,000. Unit a, which has 5% common ownership, is valued at $500,000. the condominium association files an appeal and submits Unit a’s recent sale price of $450,000 as evidence of overvaluation. assuming Unit a was the only recent sale in the condominium building, its value will be reduced to $450,000 as a result of the appeal. additionally, the condominium building’s overall fair market value will be reduced to $9,000,000. since Unit a has 5% common ownership, it is worth 5% of the entire condominium building. therefore, the condominium building is worth $9,000,000, or $450,000 divided by 5%. additionally, every unit’s assessment will be re-calculated by applying their common ownership percentage to this reduced overall value. therefore, based on Unit a’s favorable sale, every unit in the association will have their assessment lowered and realize a tax savings. other arguments exist to justify an assessment reduction, but their discussion is beyond the scope of this article. Moreover, the unit sales analysis is the most commonly utilized argument in condominium assessment appeals. » Where: assessment appeals begin at the local assessor’s office. in cook county, taxpayers can file a formal complaint within a designated time frame objecting to the assessment. the process is
more informal in the collar counties at the assessor level. the local township assessors will entertain a discussion about lowering the assessment at the taxpayer’s request when the assessments are released. next, the taxpayer can appeal the assessment to the county Board of review. the Board of review appeal is more formal both in cook and the collar counties. the Board of review has stricter appeal rules and conducts actual hearings on assessment appeals. When the Board of review issues a decision, the taxpayer can file a subsequent, and usually final appeal, to either the illinois property tax appeal Board (ptaB) or the circuit court of the county. a discussion of filing either to ptaB or court is beyond the scope of this article as each venue has a myriad of “costs and benefits” for assessment appeals. Please Note: the Board of review, ptaB and court require condominium associations to be represented by licensed attorneys in an assessment appeal before their offices. these agencies follow illinois supreme court precedent stating that tax assessment appeals constitute the practice of law. in re yamaguchi, 118 ill.2d. 417, 515 n.e.2d 1235, 113 ill.dec. 928, (1987). further, condominium associations are not considered “persons” under illi-
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nois law and thus need a licensed attorney to represent them in any legal proceeding, including assessment appeals. therefore, do not hire a tax consultant or have one of the members file an appeal on behalf of the entire association. such an action would be voided if filed to these agencies and might cost the association the ability to re-file with legal counsel if the deadline has expired. condominium assessment appeals require careful analysis and preparation. they should be filed collectively on behalf of all units to streamline the process and provide benefits to all unit owners. there are numerous agencies in which to appeal. each one comes with its own caveats and pitfalls. condominium associations therefore need skilled legal counsel to navigate them through this process. When your association members receive an assessment notice, hire a competent attorney in this field to ensure your association’s assessments are properly appealed. Y
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by Michael C. Davids
Lake Point Tower Looks Toward the Future L the list of words used to describe lake point tower (lpt) is as long as the building is tall. Breathtaking, elegant, unique, spectacular, sleek, shiny, modern, gem, classy, landmark, masterpiece and world class are just a few of the terms that have been used to describe lpt.
ake Point Tower is an iconic building on chicago’s lakefront and was conceived and developed by William f. hartnett, Jr. and his partner, charles shaw, Jr. the design professionals consisted of lead architect george d. schipporeit; John heinrich, architect and co-designer; William schmidt, the structural engineer and senior professional associated with lake point tower; and alfred caldwell, landscape architect of the building’s celebrated park. the building features a three-wing design and a 120-degree angle between the wings so that the apartments do not face each other. the design also provides that less surface area is exposed to direct wind loads in comparison to conventional rectangular designs. it is possible to view the bronze curtain walls of lake point tower from all sides. the plan to construct two other similarly shaped towers on both sides was never realized. it is the only skyscraper east of lake shore drive and offers unobstructed views of lake Michigan and is situated directly west of navy pier, chicago’s number one tourist attraction. ground was broken in 1965 for lake point tower and it was completed in 1968. at the time, lpt was the highest apartment building in the world, reaching a height of 645 feet, with 70 stories (3 commercial; 1 park, 65 residential, and 1 machinery). lpt was converted to condominiums in 1988 and the owners’ association took control from the developer in september, 1989. there were originally 879 units as studio, 1 Br, 2Br, 3 Br, penthouses. there are now 758 owner resident units, with 127 combined units. the count changes from time to time, as it does not require a structural change to combine or un-combine units.
Structurally Speaking the building’s structure consists of curtain wall (bronze aluminum); double-paned glass windows (11,310 total) of 44” x 60”, 3/16” bronze sheet outside and 3/16” clear sheet inside; and concrete. lpt’s architecture notables include: » World’s tallest all-residential building, 1968-1993 » World’s tallest reinforced concrete building, 1968-1971 » chicago’s tallest all-residential building, 1968-2003 presently is the 7th tallest building in chicago (in terms of # of floors—70); while it is the 31st tallest in chicago, in terms of actual footage (685 feet)
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LPT Standing Commissions: » Finance – reviews monthly financial statement, prepared budget, reviews investment options » Communications – oversees the publication of the monthly newsletter; posts messages on the electronic bulletin boards and LPT web site (www.LakePointTower.org), and manages the LPTCA Facebook, Twitter, Flickr, and other social media accounts » Events – oversees community events such as Memorial BBQ, Ice Cream Social, Halloween Party and Annual Holiday Party
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» Health and Wellness – suggests improvements to the Health Club » Safety and Security – attend community events, CAPS Meetings, evaluate safety and security systems and suggest improvements from time-to-time; oversees the major video and access system upgrades » Skyline Park – was involved with the major park renovation; oversees maintenance » Valet Parking – reviews operations and finances of the Valet Parking
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AdHoc Commissions: » Elevator – reviewed the current maintenance agreements and helped to select a new firm to maintain LPT’s 11 passenger and freight elevators on an ongoing basis » Grocery Store – reviews and find ways to improve the services provided » Hallway Remodeling – formed in early 2013 to select and implement a new modern design for the look-and-feel of LPT’s 65 Residential floor lobbies and the 195 individual hallways on those same 65 floors; this $10.5 million project is nearly completed, fol-
lowing a 100-day construction process. The commission is scheduled to terminate at the end of this fiscal year (30th June 2014). » Package Room – formed in 2014 to review the current system and find ways to efficiently handle the growing need due to increased online purchasing by residents » Technology – formed in 2013 to focus on how to move the “1990s” technology deployed in the building up to modern times.
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the structural design for lake point tower utilized innovative engineering with these features: » Use of a dual wind-carrying system; » omission of core walls for the top 12 floors; » Use of high strength materials to reduce the sizes of columns, core walls and the foundation; and » Use of a grade beam and caisson system that provides an efficient transfer of wind base shear for a tall building with no basement. a unique automatic window washing machine affixed to the building is used to provide monthly window cleaning. each unit has individual heating and air conditioning units. common areas are heated and cooled by chillers and boilers. there are seven high-speed passenger elevators and two high speed service elevators.
Outstanding Amenities Without leaving the building, residents can access a 2.5 acre private outdoor park, barbecue area, state-of-the-art fitness facility, indoor and outdoor pools, restaurant, grocery store, personalbusiness center, dry-cleaner, hair salon, laundry room, tailor and parking garage. 24-hour doormen and security are provided. two dramatic waterfalls (recently renovated) and seating areas greet resi-
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dents and guests upon entry to the lobby. residents also enjoy the use of a second floor activity/meeting room with free Wi fi as well as a large indoor promenade located on the third floor. cite, a restaurant and bar on the top floor of the 70-floor residential tower, boasts spectacular views of the city and lake and serves gourmet french/american cuisine. the restaurant and lounge are open to the public.. its prime urban location offers easy access to navy pier, Millennium park, grant park, ohio street beach and a host of cultural activities. the condominium building is next to a lakefront path – extending 15 miles north and 15 miles south – for walking, running and biking.
Governance lake point tower condominium association was incorporated in 1988. the lpt Board consists of 9 members, four of which hold officer positions: president, Vice-president, treasurer, and secretary. Keith powell is the current president. the terms are staggered: 3 board positions are elected for 2-year terms on any odd numbered calendar year, and 6 positions are elected for 2-year terms on even numbered calendar years. lpt has seven standing committees and currently has five adhoc committees.
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Just like any other condo association, lpt’s volunteerism tends to be directly proportional to the number and extent of controversial issues. in recent years, “we have witnessed a notable increase in the number of candidates for the Board due to a major hallway renovation project. otherwise, when things are running smoothly, volunteers seem to dwindle,” says Jhoanna cochico who is lpt’s general Manager. on average, approximately 1,200 residents call lake point tower home and the association is made up of a very diverse group of people in terms of age, ethnicity or background. “one thing they have in common is their passion about the building in maintaining and keeping up with the advances of technology, preserving the architecture, amenities and common areas,” says cochico.
Finances the total budget for fy2015 (July 1, 2014 to June 30, 2015) is $7,750,673, of which $4,862,953 is for operating, $2,277,000 is for reserves and $610,720 are cable and internet pass-through’s. assessments range from $330 - $2,500 per month and delinquencies have been kept under 1%. there has not been a special assessment since 2002 (paid in 2003). lpt obtained a $10.5 million loan to fund the spring 2014 hallway remodeling
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photo credit: Bob Elmore & Assoc. Photography
[ Shown here is one of the newly remodeled hallway and floor lobby areas.
Summary of Recent Projects at Lake Point Tower » HVAC - upgrades have been done from 2005-2014 including air handlers, controls, heating units, and chiller replacement ($2.26mil). » Plumbing - Several plumbing related upgrades were done in 2011 including Waste Pipe Replacement ($1.85mil), Fire Pump Replacement ($400,000), and outdoor pool boiler conversion ($127,000). In the past two years, additional plumbing work included men’s steam room repairs, women’s steam room repairs and jockey pump replacement. » Skyline Park - From 2011-2013, Skyline Park work included repairs to the BBQ area, duck pond waterfall, drainage and irrigation, stonework, flashing and membrane, and replanting of trees, bushes, and flowers; ($1.5mil) » Roof - In 2013, tower roof repairs (metal flashing, membrane, inspection) were completed, ($47,500)
» Lobby Renovation - In 2009, various lobby improvements included terrazzo refinishing, new doorman station, renovation of 2 water walls, new furniture, and upgrades to mailroom lobby, ($1.05mil) » Health Club Upgrade - In 2013, the LPT health club exercise equipment was upgraded by Direct Fitness Solutions, ($150,000) » Cable Wiring Infrastructure Upgrade - In 2013, home-run wiring was installed by Comcast, ($2mil builtin the contract) » Laundry Room Purchase & Renovation - In 2013, the Board purchased one previously privately owned (and extremely run down) commercial laundry room, which we enhanced greatly in many ways. It now has all new machines—32 washers & 33 dryers; updated seating area with 72-inch flat screen TV with Comcast cable and free WiFi for Internet. This new laundry room provides the association with about $45,000 in income annually.
» Hallway Renovation – In 2014; Hallway renovations included LED lights, carpet, paint, cable/fire alarm molding, artwork $10.8mil; Designer: WEA Design; General Contractor: Bulley & Andrews » Technology Enhancements (~$100,000 total) - In 2014, Technology enhancements completed included: Build-out of a formal Server Room with modern technical infrastructure (computer racks, UPS batteries & backup systems, special air conditioning, extra power, etc.) to ensure that
all of our new systems and servers are properly supported. This project included the installation of 10-gigabite switches and routers, along with new CAT-6 wiring throughout the building (from the server room to the Doorpersons’ lobby desk, to the Laundry Room, to the Health Club, to the 2½ acre park (for Residents’ WiFi Internet access and to support our new video systems, to the Security Guard station, to the Loading Dock, etc.).
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photo credit: Bob Elmore & Assoc. Photography
[ Shown here is the Fitness Facility
project and this loan is scheduled to be paid back over a 10-year commitment, which started in March 2014. With the capital reserve budgets projections planned at a high-level for the next 20 years, including the Hallway loan repayments, lpt is not anticipating (nor planning) any special assessments in the foreseeable future. » studios usually sell in the $250,000 - $300,000 range
Board president Keith powell adds on the subject of management, “the lptcA Board of directors believes that the working relations and experiences of the current lpt Management team are very good. the Board is pleased with the work ethics and additional efforts put forth by the Management team, and has been equally pleased with the professionalism of the Man-
agement team in place. there are no replacements anticipated in the foreseeable future of our current excellent fsr Management team led by Jhoanna cochico and Marguerite Batau.”
Resident Services lake point tower has an on-site property management office as well as a full-time staff of 43 on site. lpt’s chief Building engineer, Mike Brown, was the recipient of two firstservice residential (our Management firm) awards in december: the first for the “Best Maintained High rise Building” in their very large portfolio of buildings; and the
» 1 Bedroom usually sells in the $300,000 - $400,000 range » 2 Bedrooms usually sell in the $500,000 - $650,000 range » 3+ Bedrooms usually sell in the $650,000+ range
Property Management firstservice residential (fsr) has been the property management agent for lake point tower since August, 2011. firstservice residential’s president Asa sherwood, commented on their affiliation with lpt, “lake point tower is a jewel in chicago’s vast skyline and also has a special place within our portfolio of communities. lake point tower is a great example of a well-run business, asset, and landmark. their success lies in the fact that the Board and Management work together cohesively for the betterment of each resident and the community as a whole. i can’t thank our Management team enough for bringing a higher level of service to the lake point tower residents every day.” dan chalifoux who is director of portfolio Management for firstservice also commented, “the unique location of lake point tower attracts a clientele that is looking for a high value quality of life experience. for me, the greatest satisfaction of managing lake point tower has been participating in the execution and continual refinement of long term capital investment programs. the Association’s goals are to not only properly maintain the physical asset but to continually look for ways to refine the quality of life of its residents, keeping lake point tower a leader in high-rise living. in my 20 + years of experience, i have learned it is paramount that we help our Board of directors and owners define how they want their future to look. We are there to help make that future happen.” No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.
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second for being the firstservice residential “chief engineer of the year”. Maintenance, security, safety and resident convenience are some of the primary areas of focus for the building’s staff. the doormen, security and maintenance staff are all on duty 24 hours as is the valet parking staff. lake point tower has a state of the art alarm/voice communication system. “lptca takes matters of life safety and protection with great urgency,” says cochico. as soon as the chicago life safety ordinance passed in 2005, “the association immediately hired professionals to evaluate and effectuate changes for compliance.” the fire alarm notification system was upgraded, including new speakers in stairways, in all elevator cabs, and some commercial tenant spaces. a fire department 2-way voice system with headsets was installed in emergency stairs at every 5th floor landing. Board and Management made sure that all common area doors, as well as individual unit doors are compliant with the closure, fire-rating and other requirements. common area doors are secured by electronic entry control with key fobs while a closed circuit tV system offers security and also allows board meeting to be televised. Monthly rental parking is available and there is also a separate garage association that residents can purchase garage space in. the garage associa-
tion is somewhat unique in that it has a separate board of directors. one particular owner in the garage association has a unique display of collectable automobiles displayed in 6 garage units (that were combined) and are now decorated as a shrine to vintage cars. to accommodate many bicyclists in the buildings, lpt has a free secure bike storage room for residents and additional fee based up-scale bike storage is also offered. a loading dock and receiving room serve resident needs Monday to saturday.
Proactive Maintenance & Restoration according to cochico, “the building construction held up very well in the last 45 plus years. this is partly due to proper maintenance and proactive approach with capital improvements and repairs.” lpt has done a variety of maintenance and restoration projects in recent years including hVac, plumbing, roofing, tuckpointing, landscaping as well as common area improvements to the lobby, skyline park, health club, maintenance shop, packing room, laundry room, grocery store and hallways. other recent technology enhancements were the addition of 2 large screen monitor devices for projecting documents and presentations at Board
and other Management meetings and replacement of all Management office computers with the latest in laptop hardware and software technologies (e.g., Windows surface pc devices, Microsoft office 2013, project 2013, Visio 2013, etc.) the architects of the technology enhancements were headed by a very technical Board member (Mark skoog; he also works for Microsoft corporation), whose public technology commission (one of the established Board commissions) worked out the details.
Hallway Renovation Project one of the biggest undertakings in recent times was the renovation of the hallways of 65 residential floors at lpt (195 hallways that are 3.125 miles in total length). the project scope included the installation of led lights, carpet, paint, cable/fire alarm molding, artwork in the lobby area on each floor and hallways on those same floors. new hardware for all resident and stairwell doors was also installed. “this really required a huge amount of teamwork and outstanding efforts by the lpt board, hallway remodeling commission, property management and maintenance team, our designer and general contractor,” states powell. “and no small measure of patience and understanding by our residents.”
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the project started in March with the removal of the asbestos from the freight elevator area of each floor. next was the demolition work on each floor (again starting at the top of the building and working (down) at a rate of 2 floors per day; this work was done in early april. two “test” floors were completed so that the board and management could view and evaluate various design aspects of the project. several key adjustments were made to the design at this point including the artistic elements of the project. the actual reconstruction of each floor also began in april, with approximately 10 floors in process at anytime. the reconstruction work including the led lights, carpet, paint, molding and artwork was completed by the end of May. it was a very intensive project with as many as 182 fte’s (workers) in the building at the same time at the project’s peak. the next phase was the complete replacement of all door hardware—doorknobs, locks, knocker, peephole, and the installation of a new electronic component as well. lpt residents can now enter their units with use of key fobs, key cards, or wrist bands in addition to traditional key type entry. at this point, the project is in the final “punch list” stage and the goal of having this massive project completed before summer begins was met. “this project is really a highlight of 2014 for
the lpt board, adds powell. “in addition to the modernization and visual improvements, the installation of the led lights has thus far resulted in a $9,000 per month savings on average in our electricity costs.” national cooperative Bank (ncB) provided $10.5 million in financing for lake point tower condominium to fund a large hallway repair/replacement project. Jared tunnell, a Vice president with the division at ncB that focuses on loans and cash management solutions for housing communities, arranged the loan for the condominium community. “We are thrilled we were able to work closely with the community, board of directors and its property management team to secure a loan that will help lake point maintain its status as one of chicago’s premier residences,” said Mr. tunnell.
Special Challenges When asked about special challenges facing lpt powell related, “the past few years have been difficult ones with the city of chicago, as the city faces extreme budget issues of its own due to poor civic planning. as such, large condominium associations such as lake point tower are viewed as “great places to raise income for the city” and city policies often reflect this attitude. he continues. “We are experiencing this quite a bit in
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terms of the repeated inspections that often result in nonsensical “findings” that clearly would generate extra revenues without adding any value to the safety of our building. We see this as well with the state fire Marshall’s long-running push to try to get sprinkler systems installed in every residence and all of the hallways and lobbies within the high-rise condos throughout the state of illinois.” additional legal fees have been accumulated fighting this issue (which has since been resolved).
Awards & Media Notoriety lpt has received numerous awards for its architecture, including the chicago chapter aia distinguished Building award (1969), honor award (1970), the american institute of architects national honor award (1970), chicago chapter aia 25 year award (1994), and the american institute of architects ranked #73 of 150 favorite buildings in the United states. at least 8 movies have been filmed at lpt including straight talk (1992), While you Were sleeping (1995), and Meet the parents (2000). famous residents include a host of chicago sports and tV celebrities as well as movie stars and famous businesspersons. in conjunction with lpt’s 40th anniversary, the chicago architecture foundation published a
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Shaping the future!
book on the building, lake point tower: a design history, authored by architect edward Windhorst and architectural historian Kevin harrington. the condo association also produced a 40th anniversary webpage on their site, an anniversary Blog, a youtube video entitled lake point tower: condos with spectacular Views and an 8page, full color brochure, “lake point tower: a chicago landmark.” according to powell, “another media high point for the lpt Board, was getting lake point tower as the focus of a 3½-minute spotlight on aBc 7 eyewitness news’ Judy hsu “top of the
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Morning” program that aired on april 29th. her show has been highlighting many of the iconic buildings around the chicago area, so of course lpt was an obvious selection (in our humble opinion). Bob Mack (Board Vp) and i represented lpt on the show, which included short interviews and aBc filming from multiple locations inside the building and out.”
Look Toward the Future looking toward the future, powell contends, “the board has perhaps a few major issues facing it—the largest of which are the rapidly rising costs
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due to chicago’s union-created pension struggles.” this year alone lpt was hit with a 100% increase in pension-related charges for one of the unions whose members work in the building, along with a 50+% increase for another one. “We expect labor costs to continue to out-pace normal cola increases for several of the coming years.” he added that other issues in terms of rising costs are likely going to be in the utilities (gas, electricity, and phone) and use taxes areas (for example, the current illinois governor just proposed a 56% increase on cell phone usage). Beyond immediate cost increases, “the largest issue that we have is age—parts of our building infrastructure are nearing 50 years old, so the next worries will be on “what breaks next”? though we have a great management team in place and the Board is extremely proactive on maintenance projects, there is always the wonder of ‘could there be an unforeseen problem lurking just around the corner.’” Y
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condo lifestyles
Photos compliments of Lake Point Tower Condominium Association
MEMBER
Keith enjoys spending time with his 10½ year old twins— biking along the lakefront path, as well as trying out the latest science experiments. He also likes long distance running for relaxation and plans to run in the Chicago Marathon again this Fall (his 2nd time).
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IS YOUR FITNESS CENTER LIVING UP TO YOUR RESIDENTS’ EXPECTATIONS? 6IWIEVGL WLS[W XLI QSWX ETTVIGMEXIH EWTIGXW SJ E TSTYPEV EQIRMX] MW ]SYV MR LSYWI ½XRIWW JEGMPMX] 'VIEXMRK E ±½XRIWW GPYF² I\TIVMIRGI JSV ]SYV VIWMHIRXW [MPP LIPT EXXVEGX ERH VIXEMR XLIQ ERH HIZIPST XLI WSGMEP GSQQYRMX] SJ ]SYV TVSTIVX] 6IWMHIRXW EVI [MPPMRK XS TE] QSVI MR VIRX ERH KIX VMH SJ XLIMV K]Q QIQFIVWLMT ;I TVSZMHI GYWXSQM^IH ½XRIWW WSPYXMSRW XS ]SYV TVSTIVX] STRIBUTE WE PROUDLY DI ERH VIWMHIRXW´ RIIHW ION PRECOR ˆ FREEMOT INN HW SC ˆ ER AST STAIRM SS ˆ TAG INTERACTIVE FITNE ON REQUEST EVERLAST ˆ FITNESS
8S[IV 6SEH ø 1YRHIPIMR ø -0 ø 3J½GI ø 7IVZMGI ø *E\ 7SYVGI 1,2 1EVGL
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Fire Sprinklers: A Cost-Effective Solution to Passing Chicago’s High-Rise Life Safety Evaluation The City of Chicago has extended its Life Safety Evaluation (LSE) compliance deadline for residential high-rises to January 1, 2015. Did you know that fire sprinklers are a cost-effective and less intrusive solution to meet compliance? Fire sprinklers are important for life safety in residential high-rises and they are easier to install in existing high-rises than most people think. The infrastructure is already in place since all high-rises have a standpipe, which is usually in a stairwell so that firefighters can access it for their hoses, and a pump for municipal water supply. Fire sprinkler systems can easily be retrofitted into a building by connecting them to the standpipe. To comply with the City’s LSE, buildings must have one-or twoway communications systems and doors/corridors that are fire-rated for one hour. But to fully comply, additional measures may need to be taken, many of which are disruptive to occupants. By installing fire sprinklers, however, buildings can bypass those additional measures entirely. Fire sprinkler installations in individual living units usually can be scheduled around occupants’ work schedules so there is minimal disruption with daily living.
TYPICAL HIGH-RISE INFRASTRUCTURE WITH FIRE SPRINKLER RETROFIT
■ = Existing High-Rise Infrastructure ■ = Fire Sprinkler System
For additional resources, please visit the National Fire Protection Association (www.nfpa.org/safety-information/for-consumers/occupancies/high-rise-buildings), the United States Fire Administration (www.usfa.fema.gov/citizens/home_fire_prev/high-rise.shtm), and www.HighRiseLifeSafety.com.
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Fire Sprinklers are the Single Most Effective Way to Protect High-Rise Occupants in a Fire
New Fire Sprinkler Designs Modern fire sprinklers are inconspicuous and can be mounted flush with walls or ceilings.
According to the National Fire Protection Association, 85% of all recorded fire deaths in 2010 occurred where people live. When fire sprinklers are combined with smoke alarms, the risk of dying in a fire is cut by at least 82% when compared to having neither. Fire sprinklers provide the ultimate protection for high-rise occupants.
Only the Fire Sprinkler Closest to the Fire Will Activate
Each sprinkler protects an area below, and when heated by fire, activates.
Fire sprinklers are individually heat-activated and connected to a network of copper or steel pipe under pressure. When the heat of a fire rises to a sprinkler’s operating temperature, usually between 135°-175°F, a fusible link or glass bulb will activate only that sprinkler over the fire, thereby releasing water only over the source of heat. The fire sprinkler will control or extinguish the fire in its place of origin.
Fire Sprinklers are Important for High-Rise Life Safety, Allowing Occupants Time to Escape
Only the sprinkler closest to the fire will activate, spraying water directly on the fire.
Fire sprinklers do not rely upon human factors such as familiarity with escape routes or emergency assistance. They go to work immediately to reduce the danger of fires. Sprinklers prevent the fast-developing fires of intense heat (flashover), which are capable of trapping and killing occupants.
Fire Sprinklers Provide Insurance Benefits Installing fire sprinklers in a residential high-rise building creates insurance savings for the building owner(s) when common areas are sprinklered. Also, occupants’ fire insurance rates can be reduced by 5% to 20%, making a building more attractive to prospective occupants.
“Use this time to put in place a sprinkler system and the safety and security systems you need… I don’t expect you to use the time all the way to the end.” – Mayor Rahm Emanuel, January 9, 2012
For additional resources, please visit the National Fire Protection Association (www.nfpa.org/safety-information/for-consumers/occupancies/high-rise-buildings), the United States Fire Administration (www.usfa.fema.gov/citizens/home_fire_prev/high-rise.shtm), and www.HighRiseLifeSafety.com.
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