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APRIL 2011 | VOLUME 15 | NUMBER 1

CondoLifestyles

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

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Associations Still Struggle with Economic Challenges F E AT U R E S

Running the Perfect Meeting The Importance of Condominium Board Members Maintaining Confidentiality Ask An Attorney Common Questions from Community Associations


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table of contents COVER STORY

03 Associations still struggling with economic issues By David Mack S P E C I A L F E AT U R E

07 Running the Perfect Meeting... How to Keep your Meetings short and your Patience long by Jordan Shifrin M A N A G E M E N T TA L K S

14 the importance of condominium Board Members Maintaining confidentiality By Ted Verner 16 industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 18 editors Message 19 directory Advertising 26 industry Happenings Compiled by Michael C. Davids & Sherri Iandolo BOARD BASICS

28 Ask An Attorney By David Mack BOARD BASICS

33 common Questions from community Associations By David Mack EVENT HIGHLIGHTS

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By David Mack

Editor’s note: This article is part of an ongoing look at the impact of the economic recession on the fortunes of community associations.

Associations Still Struggle with Economic Challenges While many associations, in the view of their managers, appear to be holding their own in this struggle, others are on shaky financial ground. And for even those that appear to be relatively sound now, the future may change their position.

T

ony Briskovic of Chicagoland Community Management is one management agent who is keenly aware of the perils of the situation. “The economic times are having the greatest impact on newer associations, especially those that were converted from some other type of property ownership and/or use to condominium ownership. Unfortunately, for those most affected, it’s very likely going to get worse before it gets better for them,” he said.

Trouble on the Horizon Many associations have a tough road ahead. “The current economic environment has created even more challenges than initially anticipated as the bubble burst in the real estate market,” said Fred Rodriguez of Heil, Heil, Smart & Golee. “Associations are finding themselves in extremely precarious situations combating the issues of deferred maintenance, foreclosures and undervalued real estate.”

HHS&G has over 100 associations in its management portfolio and Rodriguez did note candidly that none are in serious predicaments now but, “they’re looming on the horizon.”

Most Shouldn’t Panic Yet Other managers aren’t panicking yet and that is probably due to good financial planning by their clients. Community Specialists manages over 40 high rise associations, many built in the 1970s but, “none have a problem now,” said Rosemarie Wert, because their successive boards have been setting aside funds in expectation of having to comply with major work such as that required under Chicago’s Life Safety and Façade ordinances. Briskovic added that the older, established hi-rise associations his company manages have been making some adjustments to their budgets for the economic times and have been planning

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for any work that might be required to comply with Chicago ordinances. Wert continued, “We’ve been anticipating that for the last five years,” and as far as other important renovations and improvement work is concerned, “none have had to put off projects that needed to be done.” The only work that has been deferred is cosmetic, none of which is of an emergent nature. The principal properties with which Chicagoland Community Management is concerned with are approximately 20 out of over 80 hi-rises it manages in Chicago, most of which, according to Briskovic, will have to eventually come up with funds in order to be in compliance with the Chicago ordinances mentioned above. But they do have time to accumulate the money or try to get their houses in order to qualify for improvement loans, if foreclosures don’t do them in first financially. An extension for meeting the expensive requirements of the ordinancesmainly for the installation of an annunciator panel and two way communication systemshas been granted until 2015 by the City of

Chicago after associations appealed to the city administration for relief. The work won’t be cheap- according to Briskovic the minimum will be approximately $250,000 and some will have to pay as much as $500,000 to be fully compliant.

Some are Desperate Now Briskovic is aware of two younger associations that his company recently began trying to help with their financial woes. Both associations were buildings converted to condo ownership in last five or so years and are in need of significant money right now for repairs that can’t be deferred any longer. For “roofing, caulking, concrete and more- all the major components that hold a building together,” said Briskovic and they neither have the money on hand and cannot currently qualify for a bank loan (more on that topic later). “They will have no choice but to do a special assessment.” Because many unit owners are facing tough personal financial problems that won’t sit well with them and trying to collect all the money from a special assessment is likely to be from very difficult to

near impossible. One of those two properties needs $4.5 million to complete necessary repairs and improvements.

Delinquent Assessments are Problematic A special assessment will very likely compound an already problematic delinquent assessment situation. Rodriquez noted that in the past associations could feel relatively assured about collecting a special or separate assessment to handle emergency needs when reserves were inadequate to pay for them but those relatively easy times for putting more money in the bank no longer exist for many associations due to financial hardships of unit owners. “Unfortunately many communities find themselves trying to address significant delinquency and foreclosure issues,” he said, and, “a special assessment to raise funds for building operations or critical repairs will further erode the financial picture of a community by substantially increasing the delinquency factor.” Tairre Dever Sutton, of Tairre Management Services, has seven associations under her company’s watch. None are in financial

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difficulty although a number of them needed bank loans to do renovation and improvement work. All qualified under the closer scrutiny that bankers now give applications. “We’ve closed four loans since November (2010) for a total of 1.5 million dollars,” said Sutton, contrary to the experience of the two previously mentioned buildings whose applications were rejected by lenders because they couldn’t meet the stricter standards now imposed.

Looking at the Economic Problems Let’s look at some of the problems/challenges now being faced more regularly by associations. Although the national unemployment rate has recently decreased it only marginally has as it still hovers near nine percent, which obviously affects the ability of those without jobs to pay their assessments as well as their mortgages, especially when unemployment benefits run out. And foreclosures continue to mount. According to the Woodstock Institute, from 2007 through most of 2010, 228,226 properties were placed in foreclosure by mortgage holders in the six county Chicago Metropol-

itan Area. Associations represent about 19 % of those legal actions, which is approximately 53,000. The total for 2010, the latest year for which comprehensive data is now available, was expected to exceed the record for any previous year and there is no indication that this upward trend would stop. Rodriguez estimated that 35 to 40 of the properties in HHS&G’s portfolio have foreclosures underway and the number is, “creeping up.” Most associations, as reported by their managers, seem to have at least a couple of foreclosures in process and when they occur unit owners almost always stop paying assessments too. Such a growing debt for a unit can amount to around $5000 a year, according to Briskovic.

Aggressive Collection Policies To counter such a significant loss of revenue associations have to act promptly. They, “are getting more aggressive with their collection policies,” said Briskovic, “Some are sending cases to their attorneys after only 30 days, although 60 days is more common before legal action is started.” That’s the time frame that Community

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Specialists follows. “All owners are turned over for collection at a 60 day delinquency,” explained Wert and for those few with whom payment plans are entered, “the minute they falter they go to the attorney.” Community Specialists does not normally recommend payment plans to its associations but if one is drawn up with a delinquent owner, the case is usually still sent to an attorney during the plan’s implementation so that legal proceedings can be commenced more quickly if the owner defaults, Wert added.

Zero Tolerance Rodriguez insists that associations take a hard line position on delinquent assessment. They “must adopt a zero tolerance position when it involves collections,” he asserted. “While many individuals can empathize with the plight of owners facing financial hardship, this does not mitigate the fact that (an) association needs to amass adequate funds in order to continue to operate for the benefit of all its members.” Furthermore, he added, “boards not embracing such a posture may find themselves being litigated against by other members of the

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community for failure to fulfill their fiduciary obligations to the association.”

Navigating the Foreclosure Maze Having a good lawyer who can process eviction cases quickly is essential for an association. “It is usually better for an association to evict a unit owner who is delinquent and rent out the unit until assessments are made current,” said Martin Klauber of Popular Association Banking. That’s because associations can only net a maximum of six month’s assessments

from the buyer of a foreclosed unit, although from what some managers have indicated that is not easy to do even when an association is entitled to the money. In any case, foreclosures can take as long as two years to complete, which is four times as long as the eligible recovery period for arrearages. All of that extra debt will have to be written off, as there will be little likelihood of recouping it, especially if the foreclosed owner also files for bankruptcy.

Banks Being Sent to Collections When banks do complete foreclosures and take possession of units, they sometimes are no better than delinquent owners at paying assessments they become obligated for while in direct ownership of those units. “Now it’s getting so bad that (sometimes) banks have to be put in collection,” lamented Briskovic. “That’s the sorry part- when banks are not paying.” The problem “is pretty systemic,” said Rodriguez, as many associations seem to be experiencing it.

Budgeting for Bad Debts Although the associations managed by Community Specialists have so far not run up against this problem, Wert knows that banks have been holding out on others. “The lenders have been very bad in not paying assessments after a foreclosure,” she said, noting that some associations are wisely budgeting for bad debts to offset the loss of direct assessment revenue whether it is due to either banks or regular unit owners not paying. Lenders that have to consider delinquency levels when considering loan requests have noticed this shifting of the burden of delinquencies to good paying owners by prudent associations. “In loan applications we have noticed most associations incorporating a line item in their budgets for bad debt to assist with the increase in delinquencies and help with cash flow,” said Peter Santangelo of Community Advantage of Barrington Bank & Trust Company.

Increased Operating Expenses A further drag on assessment income is an increase in operating expenses that have been near budget busters. One area this year where most associations have gone way over budget is in snow removal. Sutton said she is already working on budget revisions for a couple of her charges. Additionally low interest rates on CDs have adversely affected income streams. “The loss of interest income also causes a problem with budgeting,” said Wert.

Cost Saving Suggestions Rodriguez offered some advice in the area of utility conservation for associations having to deal with revenue shortfalls in their budgets, noting that because utilities are one of the largest expense items, associations, “need to take an aggressive approach in the conservation of resources.” Some simple cost continued on page 27

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By Jordan I. Shifrin - Kovitz Shifrin Nesbit

Running the Perfect Meeting How to Keep Your Meetings Short and Your Patience Long Most associations get through the day-to-day operations with a dedicated board and a professional property manager, working in tandem to keep the property running. However, sometimes owners find themselves in a situation where the leadership is a dictatorship that is anything but benevolent. What to do with a Runaway Board In those instances, owners are faced with having arbitrary and sometimes extra-legal actions imposed on them that may suppress basic freedoms or adversely impact property values. When this happens the owners must begin to band together and take action. An association is the purest form of democracy. This particular unit of government, at the closest level, has the most impact

on an individual’s day-to-day living and on basic human rights. Owners must stay on top of board business so that when an important decision is made, particularly when it involves spending large sums of money, the board’s action does not come as a total shock. We have seen boards adopt a budget without adequate notice or even the convening of a meeting; adopt special assessments contrary to restrictions in documents, skip elections entirely, meddle in peoples’ day to day

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lives beyond all reason or just bully anyone who attempts to question board operations. Likewise, for boards themselves, we have seen board’s direct enormous amounts of energy in dealing with a single maverick board member or a dissident faction, or a rude owner who tries to monopolize meetings with petty grievances, and instead of being able to deal with the business at hand, they are spending all of their time and energy addressing the outlaw(s). When it is the board that appears to be acting outside the scope of its authority, there are certain steps that can be taken. First, a special meeting of members should be convened. Under the Illinois Condominium Property Act [765 ILCS

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605/18(b)(5)], a special meeting of members can be convened by the president, a majority of the directors or by a petition signed by 20 percent of the membership requesting a special meeting. The agenda for this meeting should be “board accountability.” This should not be set up in an adversarial atmosphere. Rather, a list of specific questions should be submitted in advance to the director or directors in order that they can prepare a response. This can open up a productive dialogue and the board should be able to explain its actions. Personal attacks should be avoided at all cost. Stick to the facts. Often, misunderstandings can be cleared up with a two-way dialogue. If necessary, invite the association attorney to act as a moderator for the format. This is far more productive than the next remedy, which is a last resort; removal of some or all of the directors. The Illinois Condominium Property Act does not address removal of board members. An association must first look to its own bylaws and if they are silent, then the Illinois General Not For Profit Corporation Act (except for cooperatives set up as regular cor-

porations or trusts). Most by-laws provide that the board can be removed by some set percentage of members (often two-thirds), either of the entire community or of those attending a removal meeting. First, the requisite procedure for calling the meeting must be followed. Second, a special meeting of members must be convened by sending proper notice (condos — not less than 10 days nor more than 30 days — Section 18(b)(6) of the Illinois Condominium Property Act; all others, follow their by-laws or if the by-laws are silent, the Illinois General Not For Profit Corporation Act, which is not less than 5 nor more than 60 days — Section 107.15). The notice must state the specific purpose of the meeting. Although proxies do not have to be prepared for a removal meeting, they often are. Again, the attorney should be consulted to review and screen any legal documents, such as petitions, notices, ballots for removal, etc., to make sure that they are valid. A “reverse” election meeting is then held. It is not a court of law and it should not be an accusation session. The business is limited to

voting on removal of directors and those that have done their homework should know why they are voting the way they are. Once the recall election or removal vote is held and the removal is successful, a special election should be then convened immediately thereafter to elect a new board (there should have been notice of this action as well). For a single or limited number of removals, the remaining directors of a condominium board may select a replacement by a two-thirds majority vote (Section 18(a)(13) of the Illinois Condominium Property Act). Homeowner associations must follow the precepts of their by-laws. Note that the Illinois General Not For Profit Corporation Act does require that if an association has cumulative voting, and less than the whole board is to be removed, no director may be removed if the votes cast against their removal would be sufficient to elect them if voted cumulatively at an election of the entire board [Section 108.35(c)(3)]. These types of meetings are extremely divisive and tear at the fabric of an association. However, sometimes one or more directors can

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single handedly destroy the effects of years of good work with a series of senseless acts. Maximum effort should be made to talk out the problems. However, when all else fails, the removal procedure is available.

How to Shorten your Meetings Are you spending your entire life going to meetings? Are you tired, run-down, and fatigued? Try Mother Fletcher’s “Meet Too Much” and you will get fast relief. Ask a veteran member of an association board of directors whether they can have a meeting in about an hour, and most will tell you to keep looking for the pot of gold at the end of the rainbow. The typical association board of directors’ meeting in its current form developed and perpetuated itself during the late 1970s and has evolved into the beast that devours board members (Meetzilla?). Ask any former director why he no longer serves on the board and it usually can be attributed to something stemming from a board meeting. Originally intended to mirror the business meeting of a corporation, many associa-

tion meetings now resemble the atmosphere of the corporate lunchroom instead. Part of the problem can be a lack of education on the part of the directors; dominant owners overwhelming passive directors or the first board’s efforts to create a town meeting open atmosphere that turns into a union hall For associations suffering from depleted volunteerism and board member self-immolation, it is suggested that the board look at its meeting schedule and how meetings are conducted in order to make them more “board member friendly”, as well as “unit owner friendly”. Here are some suggestions on how to have productive and efficient directors’ meetings: • Most associations get through the dayto-day operations with a dedicated board and a professional property manager, working in tandem to keep the property running. However, sometimes owners find themselves in a situation where the leadership is a dictatorship that is anything but benevolent. • Have a homeowners’ open forum before the meeting begins. Limit owners’ questions and comments to a defined length of time. NOTE - the homeowners’ forum is

not the place to report maintenance requests unless the owner is having a problem receiving service. A period of 15 to 30 minutes should be sufficient time to answer most questions, after which you should end the session. Invite the members to stay and listen, but commence the board “business” meeting and limit it to board discussion only. Homeowner interchange should not take place during the board business meeting. If there are significant homeowner issues, a special meeting of members should be scheduled. • Start every meeting on time. Even if a quorum is not present, the homeowners’ forum, announcements and other items can be handled first until a quorum of the board is present and the board can begin conducting business. • Meetings should be scheduled on a night or day when your directors are most readily available. If the meeting begins too late in the evening or runs too long, thinking gets muddled and the irritability factor increases. People get tired and may gloss over important issues after having spent too much time on minor matters. • Prepare an agenda and have it available for all attendees. “Front load” the most important issues so they can be

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addressed while everyone is still fresh. Some boards have a tendency to nit-pick the unimportant things. The management report and minutes do not have to be read verbatim. Copies can be given to directors in advance to the owners who attend. The treasurer’s report is not an action item and does not require a vote. Announcements, committee reports, president’s report, etc. can be saved to the end of the meeting. • Alternate speakers of opposing points of view to avoid redundancy and limit the number of exchanges and the amount of time for discussion. • Set time limits for discussion in advance. This will create an expectation and encourage speakers to get to the point. Sometimes the president has to ask if anyone has something new to add and then move toward a vote. • The president or chairperson must control the agenda with a firm hand. If the president is a competent executive but not good at running the board meeting, select a chairman pro-tem, strictly for running meetings. • Consider scheduling significant issues requiring a more lengthy discussion for

more than one meeting (towns sometimes have a workshop meeting before they go to a vote at an open meeting). For certain topics, an association board can have its workshops in closed session so the lengthy discussion can be disposed of, and the debate and vote at an open meeting will require only a limited amount of time. • The president needs to sense when discussion is either becoming repetitive or everyone is in agreement and call for a vote. (This is known as beating a dead horse syndrome.) • Do not meet just for the sake of meeting. Condominiums and most other types of associations are only required to meet four times per year but have a tendency to “over-meet”. Expenditures already allocated in the budget do not have to be voted on more than once. Once a board reviews bids at a closed session, the vote at the open meeting can be brief. Tentative policy changes and disciplinary proceedings can be handled by the committee of the whole in closed session so long as any votes are conducted at a subsequent open meeting. If you meet monthly, consider canceling the December meeting and maybe one or two during the summer.

Better yet, consider meeting every other month, or even quarterly. • Develop a rhythm for all meetings. Meetings should follow the same organizational structure month in and month out. If the purpose of a meeting is merely to inform, the board should send out a newsletter. If actual business is going to be transacted and a vote will be taken, then the meeting will be productive and move along more swiftly with the help of a good facilitator. The most important thing to remember when scheduling a board meeting is “less is more.”

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4. In a positive voice, politely ask them to “sit down and shut up!”

I. The Demagogue It’s always about them, isn’t it? Everything is about them. They never want to actually do any productive work for the association; they never run for the board or volunteer to serve on a committee. They will typically sit outside the circle criticizing and taking “potshots” at everything and everyone without offering any positive suggestions. You can easily recognize them as the discussion progresses, because they stand and edge closer to the front of the room, as if to take over control of the meeting. Sometimes the demagogue will appeal to a small cadre who do not have the courage to speak up and he or she becomes their voice. (This is how Hitler and the brown shirts got started.) In order to neutralize the effects a demagogue will have at an open meeting, here are some suggestions: 1. The orderly proceeding of the meeting will require firm leadership; 2. The chairman must never raise his voice. (The louder he gets, the quieter you are.)

5. If it continues unabated, be prepared to adjourn the meeting and immediately leave. 6. Consider enacting a policy that, after ample warning, notice and due process, a disruptive owner can lose their meeting privileges for a specified time. 7. Consider hiring uniformed security as a deterrent factor.

II. The Assassin This is a board member lurking in wait for each opportunity to stab another board member in the back. They have their own agenda, although publicly professing to work for the good of the association. They never miss an opportunity to make someone else look bad, usually with a surprise outlandish statement, which is pure conclusion and innuendo, rather than facts. Sometimes they are not a current director but usually have a pipeline to current or old information which they readily convert to “misinformation”.

3. Encourage peer pressure to force them to sit down.

III. Vigilante This individual takes matters into his own hands. Dissatisfied with the democratic process, chain of command or waiting for the next board meeting, this owner/director may choose to disseminate confidential information to other owners, directs and critiques contractors without authority, confronts other owners for alleged rule violations, sends lengthy letters/emails to the board asking 100 questions, many of which are repetitive. (My office keeps these letters in a special place, entitled “nut files”).

IV. The Narcissist This is someone who loves the sound of their own voice (they probably have a karaoke machine at home). They never listen to the answer given to any question they ask, they just keep asking more questions. They are self-deluded into thinking that everyone supports their agenda and are generally insensitive, inconsiderate, egotistical, blah, blah, blah.

V. The Heat Rash This is someone who is really, really

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annoying. They have some very peculiar ideas about things and are always brainstorming how to get them implemented. (Let’s abolish assessments and just charge user fees to everyone who uses something.) Sometimes they are very passive, easy going people, so it is hard to get angry, but they never take no for an answer. They are not disruptive, just time-consuming and personal energy wasting. Even if they are made to look foolish, they are so clueless that sarcasm goes right over their head.

VI. The Anal Chef No answer is ever good enough or complete enough. They are so overly analytical to the point where they constantly are demanding more data, more information, more facts, more graphs, tables, and charts and as a result, can never make a decision. They always worry that some critical point has been overlooked. The analytic is resistive to change, cannot make a decision, paralyzed with fear of making a mistake and questions any decision that is outside the box.

VII. The Dictator Usually, the president, but sometimes can be an outspoken board member who overshadows the more passive president. Sometimes it is the president’s enforcer. Their philosophy is “my way or the highway”. The dictator is unwilling to work as a team member (does not play well with others), opinionated, aggressive, loud, sometimes rude and often, ignorant. Not a good representative for association good will and would probably prefer to run the association without the necessity of having to go through the board or the owners for anything. The Dictators usually wind up costing the association a great deal of money for poorly negotiated contracts and unnecessary legal fees.

VIII. The Baby (also see Martyr) Throws a tantrum anytime they do not get their way and tries to evoke sympathy from anyone observing. The Baby may storm out of meetings and then walk back in or even verbally resign and then demand reinstatement. If defeated on a vote, or put down on the point

they are trying to make, they sit and pout. The worse thing you can do with them is to offer sympathy or let them know you feel badly.

IX. The One-Trick Pony These are the most time-consuming and distracting board members. They ran as a single-issue candidate (they didn’t like paying the special assessment or they had their car towed). That is why they ran; for some real or imagined slight. They usually do not have a constituency amongst the owners and they obstruct the conducting of business at every meeting so the time can be spent focusing on their personal issue. When it finally gets resolved, they manage to find another one.

X. The Nattering Nabob of Negativity You say black, they say white. They criticize everything, every decision, yet offer nothing in its stead. They are never placated or satisfied with any policy. They can never be relied upon to support any issue because they will find fault with it and either vote against it or at best, abstain.

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s P e c i A l F e At u R e

XI. Finally, the Number One most Common Species, the Unpredictable, Quixotic and Most Difficult of All... The Lunatic

solutions...

This person is border-line insane and they are sporadically subject to irrational behavior, outbursts, declarations of persecution, interfering with other people’s rights yet, one-on-one they seem passive and cooperative. They will call the association attorney, independent of the board, write letters to all levels of government, send long, run-on letters and emails and make an issue out of everything. If you do not agree with them, you are out to get them and you will be masked as their enemy. Sometimes their lunatic behavior manifests itself in living in squalor and filth, or wearing ratty clothing. These are people who may be psychotic or may have dementia and definitely need psychiatric help. Frequently, their family members are aware of their problems, but feel if they put them in a condominium, the association can now be the caretaker. Y

the last thing an association needs is to have its time monopolized by a difficult director or an out-of-control owner. unruly directors can be suspended or removed from the board, but they remain unruly owners. Techniques that boards can use in dealing with out-of-control directors are: 1. Have a one-on-one, or twoon-one session and try to talk things out. 2. Bring the disruptive director into a closed session, with the entire board.

With regard to the disruptive, uncooperative owner who is not on the board, consider: 1. Appointing a sergeant at arms to keep order. 2. Hire a uniformed security guard as a deterrent. 3. Avoid calling on these people at a meeting until the very end. 4. Call on them only once and ensure in advance that their peers will keep them in line. 5. After fair warning, suspend their right to attend meetings.

3. If all else fails, consider adopting Rules of Conduct for the board and repeat offenders can be suspended.

6. Create a committee and appoint them as chairman (either you’re with us, or you’re against us). 7. Videotape them at meetings.

4. If all else fails, if need be, suspend or remove them from the board and if necessary, seek a restraining order or an injunction.

8. Work diligently to get people to the annual election meeting and collect enough proxies so that they do not get elected to the board. 9. Always thank them for their very valuable point, that the board will take this under advisement and get back to them.

these are all the most common residents of the human zoo and the board members, property manager and the attorney are all the zookeepers.

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mdavids@condolifestyles.net | 04.11

630-932-5551

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By Ted Verner - The Habitat Company

The Importance of Condominium Board M Being a member of a condominium association board of directors is an important role. An association board is the community’s governing body and they can be responsible for every aspect of the association from finances to rules, operations, communications and sometimes even social activities.

A

ssociation board members come with a wide variety of qualifications. Each member brings a different level of skill sets based on their life and work experience. Some members may be quite seasoned in serving on a board, and for others, this may be the first time they have had the opportunity to participate in this type of an organized group. Each member of your board of directors plays a vital role in the success of your association, whatever their experience.

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Privy to a Wealth of Information Since an association’s board of directors is concerned with most everything in, on, or around the building and surrounding property, your board members are privy to a wealth of financial and legal information regarding the association, property owners and more. Maintaining confidentiality is one of the most important obligations that an association board member must adhere to, both legally and morally. And for those of us who serve as professional property managers,

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it is our obligation to educate board members because it will promote a strong board and eliminate any potential legal problems that the board of directors could be culpable- should any confidential information be divulged. When everyone understands their roles and operates within the parameters of the by-laws and rules agreed upon, it bodes well for not only the board, but the association members. Since some board members may be friends or neighbors with the association members they are serving, it is essential that confidentiality is neither breached, nor compromised. Although it may be innocent, a board member might inadvertently talk about what went on at the most recent board meeting. However, it is important to remember that executive sessions, board meeting details, agendas or actions are not for

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011Š.


M A n A g e M e n t tA l K s

Members Maintaining Confidentiality public consumption.

it is important to remember that

Violating By-Laws

allows board members to understand exactly what they are responsible for, leaving no room for ambiguity or interpretation.

executive sessions, board meeting Board members details, agendas or actions are not who share any type of association information for public consumption. • Board Mission and revealing delinquency, Core Values: For a such as foreclosures, fines or warnings, as well better understanding of the association’s as fiduciary can be in direct violation of the goals, including your property management company’s mission statement and by-laws and the board of directors can face core values helps board members act some harsh punishment. In many instances, according to the condominium associanew board members are unaware of the legal tion’s principles. and ethical importance of upholding confi• Board Powers and Duties: Detailing the dentiality and how violating this can result in powers and duties as specified in the costly litigation for the association. association’s by-laws as to their governing authority clarifies how a board operates.

Early Education is Key

To avoid any confusion to board members’ roles, we have found that early education of association board members of their duties and responsibilities by providing new board members with a board member welcome packet has helped create a strong united front, resulting in a healthy condominium association. Information is power and your board members can greatly benefit from knowing their roles from the onset. Remember, this may be a new experience for some of your board members and providing them with the proper tools in the beginning is essential as a contributing member to your association board. The new board member packet can include the most recent version of the Illinois Condominium Act; copies of meeting minutes from the previous year along with a guide detailing how your board of directors operates and their expectations of members. Board of Directors Handbook: This is an effective way to educate your new board members. This handbook serves as a great tool for not only welcoming new board members, but also allows them to fully understand their role and responsibilities. Some of the information that board members may find helpful in the handbook include: • Board Member Responsibilities: A detailed list defining specific duties

• Board Fiduciary Responsibilities: This refers to the obligation that the board members have to handle the association’s financial tasks, which is both a moral and legal responsibility. • Board Officer Responsibilities: This defines each officer’s role and lists the officers’ particular duties. This helps board members understand how each office operates.

understand how they will conduct themselves as an operating unit acting on behalf of the association community and placing special emphasis on these values. • Board Meeting Procedures: For those members who have never served on a board, this is a great tool for letting them know how meetings are to be conducted and the specific rules and procedures that will be followed. The Habitat Company has found it helpful to include Robert’s Rules of Order, a standard in how meetings are to be run. • Appendix: This can include the association’s master deed and condominium by-laws. Your board can decide what should be included in your association board of director’s handbook. Having this available to your board members alleviates any possible misunderstandings and informs each member to their roles, duties and responsibilities that they must follow. Maintaining confidentiality by members will help to create a solid board of directors who are focused on the best interests of the association and its members. Y

• Board Operating Principles: This is a great guide for all board members to

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Dedication

Member - ABOMA, ACTHA, CAA, CAI, BBB

condo liFestyles

15

8/26/10 2:38:44 PM


condo liFestyles

Industry Happenings

Property Specialists, Inc.

Vanguard Community Management vanguard community Management, an Associa company, is pleased to announce the appointment of Patricia A. Bialek, cFM, AMs, cMcA as President and ceo. Bailek is responsible for the oversight of vanguard’s entire chicago suburban portfolio, which consists of more than 260 community associations and a staff of 85 employees.

west, another Associa company, located in chicago. Her long career in property management has afforded her the opportunity to manage not only condominium and homeowner association properties but commercial, retail, industrial and apartment communities in twentyeight states.

“the appointment of Pat Bialek as vanguard’s President and ceo will greatly benefit its communities and homeowners,” said craig Koss, Associa Regional vice President. “Pat is a seasoned professional with proven success in community management. Her integrity, work ethic, commitment to success and focus on establishing quality customer service will serve both our clients and our company well.” Prior to joining vanguard, Bialek was the senior vice President of legum norman Mid-

Bialek has been an active member of the community Associations institute (cAi), ActHA and the institute of Real estate Management. she is an illinois Real estate Broker and holds the designation of certified Financial Manager (cFM) from the national center for Housing Management, designation of certified Manager of community Associations (cMcA) and Association Management specialist (AMs).

MCD Golf Invitational

Property specialists, inc. held a vendor expo on Friday, March 4, 2011 at Meridian Banquets in Rolling Meadows, il. over 70 companies participated in the expo which was kicked off with a luncheon. According to Psi President, tracy Hill, “the program is intended to assist our management personnel in obtaining bids for various projects that are planned at Psi managed properties.” Mary seego of Psi was the event’s coordinator.

Legum & Norman Mid-West legum and norman (l&n), Mid-West, an Associa company, is pleased to announce the appointment of William c. earle, iii as President and ceo and Matthew Hohl as Assistant vice President. "the appointment of William c. earle as legum and norman, Mid-West's President and ceo will greatly benefit both the company's communities and homeowners," said christine evans, Associa Regional vice President. "Bill is a seasoned professional with proven success in community management and his integrity, work ethic and commitment to success will serve both our clients and our company well." earle will be responsible for the oversight of the entire chicago portfolio of more than 50 community associations with a staff of 25 employees.

the annual Mcd golf invitational will be held on July 15th at eaglewood Resort. Bocce games are also offered. An awards luncheon and reception will be held immediately following golf and bocce games. A putting contest will be held to for the benefit of special olympics. For more information visit www.condolifestyles.net.

earle has been a leader in the real estate management industry for more than 30 years. He has extensive experience in the supervision of large scale residential property management/leasing activities with a proven track record of high productivity. Additionally, he has experience in the administration of employees and has developed operational procedures and policies while successfully managing multiple locations. earle, who attended southeast Missouri state college, has a strong background in preparing and managing budgets in excess of $50 million. He also maintains a steadfast focus on cost containment, development of inventory controls, labor saving options and strategic planning. Hohl has been a Property supervisor for legum & norman since 2009, overseeing a portfolio of managers and properties, while also maintaining a portfolio of his own. Working in the real estate industry for 20 years, Hohl has more than 12 years of experience specifically in the association management industry and has managed several multi-million dollar capital improvement projects ranging from elevator modernization, facade projects, roof replacement projects and garage renovation. Hohl is a graduate of indiana university and holds his certified Manager of community Associations (cMcA) designation. "Additionally, the appointment of Matthew Hohl as Assistant vice President will also greatly benefit l & n's overall operational efforts," added evans. "He brings a wealth of knowledge and expertise, while his leadership and dedication will be a valuable asset."

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industRy HAPPenings

Sav-A-Tree & Autumn Tree in January 2011, Matthew and veronica dziedzic – the founder and director of Autumn tree care experts, respectively – chose to merge Autumn tree care experts with savAtree, a leading provider of tree and shrub care services. the decision results from their desire to expand Autumn tree care experts’ service offerings while maintaining the company’s commitment to customer satisfaction. savAtree has been serving the northeast and Mid-Atlantic regions for over 25 years. they hold the prestigious accreditation from the tree care industry Association (tciA). the tciA accreditation program is a stringent and documented company analysis built on the foundation of ethics, quality and consumer confidence, designed to protect consumers. “What attracted me to savAtree was their excellent reputation,” said Matthew dziedzic. dan Klindera, President of Autumn tree care experts, added, “We share many similarities in culture, in particular our dedication to providing exceptional customer service and expertise. it’s a natural fit.”

Founded by Matthew and veronica dziedzic in 1979, Autumn tree care experts is acomprehensive arboricultural firm building relationships in every season. the company's services include tree pruning and fertilization, disease diagnosis and treatment, pest management, cabling/bracing, and pre/post construction consultations. “We are thrilled to partner with a company who, like us, strives to sustain the environment. Both organizations have been at the forefront of environmental awareness for over two decades. Further, both organizations have adopted Fsc [Forest stewardship council] standards,” said daniel van starrenburg, President of savAtree. He went on to say, “i personally look forward to working alongside Matthew, veronica, dan and the rest of the Autumn tree care experts team. We are very happy to have them all on board.” this merger will also allow the company – now doing business as Autumn tree – to offer a more comprehensive tree care program. deeper resources will permit the firm to tackle any arboricultural need while still providing customers with personalized attention.

Heil Heil Smart & Golee

ASCO Elects 2011 Board

Heil Heil smart & golee has named Fred J. Rodriguez to the position of director of Property Management. Mr. Rodriguez has over 28 years of property management experience with both national and local community management companies. He has an extensive background in administration of budgets, asset management, construction, project management and restoration/rehabilitation projects.

At its annual meeting on March 1st, Asco representatives unanimously elected a slate of officers for a two year term. President sheli lulkin expressed the appreciation of the organization to outgoing vice-president Belle Mest of Malibu. sheli thanked her for her many years of service. Belle, who has served both Asco and as a board member of her own association, opted not to run for re-election. sheli told the group that having Belle at her side was a benefit both to her and the association.

He is a graduate of the university of Pennsylvania (B.s.), a certified Hotel Administrator, holds a community Association Manager license (cAM) in Florida and is a licensed Real estate Broker. Mr. Rodriguez serves on the Advisory Board for condo lifestyles and chicagoland Buidlings & environments and is active in a wide variety of industry groups. Heil Heil smart & golee serves as managing agent for over 100 condo associations in chicago, evanston & skokie. the company is also involved with management of 15 commercial & retail properties.

the following persons were elected: President - sheli A. lulkin, east Point c.A. vice-president - sandy chaet, Malibu east c.A.

THE SOURCE FOR INFORMATION ON INDUSTRY NEWS & TRENDS

secretary - Jerry goodman, east Point c.A. treasurer - linda Jackson, Beach Point c.A. directors who have another year in their term are: chris simpler, shoreline towers c.A. Hazel garnett, granville tower c.A. lorraine Meyers, Park tower c.A. Ron Mendelblatt, 5757 n. sheridan c.A.

Interested in Green Building Issues… Chicagoland

&

Buildings Environments FOR MORE INFORMATION CALL OR VISIT

630.932.5551

www.chicagolandbuidlingsandenvrionments.com

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04.11

condo liFestyles

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condo liFestyles

From the Editor

W

ith the return of spring, many types of maintenance and restoration projects are planned at community associations across the chicago area. Although most associa-

CondoLifestyles

tions are facing financial challenges at some level, it is important to do the best

▲ Mike Davids

®

you can to keep up with your building maintenance. Many are struggling with how to pay for necessary capital improvement projects ranging from building restoration and renovation to life safety and fire protection. it’s not easy to set priorities and make decisions on what to do when, and for how much. But in the end, you have

APRIL 2011 | VOLUME 15 | NUMBER 1 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold

to do what is in the best interest of the association. our cover story deals with the harsh reality that the shortage of money from unpaid assessments and legal costs from foreclosures are throwing a wrench in the budgets of many associations right now. Budgeting is really a very difficult task in today’s uncertain real estate market. As a result of good financial planning and other factors, there are some associations that already have funding for various projects. However, there are instances where associations have budget problems, yet may have no choice but to find the funding for certain capital improvement projects that must be completed for one reason or another. While bank loans are typically a viable option to secure capital funds, banks are not much interested in lending to associations with delinquent assessments of over 5-7%. special Assessments are another funding option but may push more owners into deeper financial problems, if not foreclosure. unfortunately there is no easy answer for some troubled associations. one special feature inside this issue is an overview on how to “Run the Perfect Meeting”. everyone in-

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. 630/663-0333. Circulation: Condo Lifestyles is available for a single issue price of $8.95 or at a $30.00 annual subscription. Distribution is direct mailing and delivery direct through authorized distributors to over 5,000 officers and directors of Common Interest Communities, 500 property managers, 400 realtors, 400 developers and 400 public officials. Total Circulation is 7,000.

volved with associations knows how much time can be spent on meetings so we hope you find this information helpful. our Management talks column includes an article on the importance of condominium board members maintaining confidentiality. since board members are privy to a lot of sensitive information about their neighbors, this is an important part of community management. in our board basics offerings, we revisit the topics of commonly asked questions for community associations. An “Ask An Attorney” article also appears in this edition. Also inside this issue you will find our regular industry Happenings column along with highlights from a variety of special events. A special thank you to everyone who attended our condo lifestyles’ condolympics event on March 11th. the donations we raised benefit special olympics illinois. upcoming Mcd special events include our

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.

annual golf outing, which will be held on July 15 at eaglewood Resort in itasca and a luncheon in the Million

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

members of the condo lifestyles advisory board who attend these events. Mcd special events provide a ter-

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.

Room at Arlington international Racecourse on september 15. if your association(s) has a special need or challenge, there will be a variety of experts specializing in community association issues including many

rific forum for association leaders to get questions answered, meet new vendors, share a story idea, or socialize with other volunteers and professionals. thanks to the many new subscribers that have found our publication useful and informative. special thanks to the organizations and associations that are Authorized distributors of condo lifestyles. We encourage you to take the opportunity to help your association and your community be the best it can be. if you have an idea to share that would benefit other community associations, a story to tell, or some

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

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advice on how to meet a problem or challenge, please call our office at 630-932-5551. you can also send an email (mdavids@condolifestyles.net). Y

Michael C. Davids Editor and publisher

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seRvice diRectoRy

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

ARCHITECTS/ENGINEERS

ATTORNEYS

FULL CIRCLE ARCHITECTS, LLC (847) 564-0884

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

(847) 564-3880 FAX

specializing in Accounting services for Homeowner Associations.

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

www.frapc.com

Daniel Baigelman, AIA dan@fullcirclearchitects.com capital improvements • Reserve studies engineering Reports

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

www.fullcirclearchitects.com

CHICAGO OFFICE: 312-899-9989

85 ReveRe dRive, suite B, noRtHBRooK, il 60062

30 North LaSalle, Suite 2340, Chicago, IL 60602

630-832-2222 EXT 113

NAPERVILLE OFFICE: 630-369-2700

CONTACT BRAD SCHNEIDER Brad@CondoCPA.com

1250 E. Diehl Rd., Suite 405, Naperville, IL 60540

Accounting solutions for Management companies & self-Managed Associations Audit & Accounting services income tax Reduction & Planning

SELDEN FOX, LTD. CERTIFIED PUBLIC ACCOUNTANTS

www.kmlegal.com

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

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

investigations and Repair documents for: exterior Walls, Windows, Roofs, and Parking garages condition surveys and Reserve studies www.kghpc.com

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KLEIN AND HOFFMAN, INC.

www.ksnlaw.com covenant drafting & enforcement Advising & consulting with Boards construction defect litigation collecting delinquent Assessments

structural and Restoration engineers

MILLENNIUM PROFESSIONAL SERVICES - CPAS (847) 419-1120 Monthly & year-end Accounting services Contact Ike Zunzunia – BSBA, MSA, CPA Ike@Millenniumcpa.com

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ORUM & ROTH, LTD. (312) 922-6262

ARCHITECTS/ENGINEERS WALDMAN ENGINEERING CONSULTANTS (630) 922-3000

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(847) 382-4100 “We Specialize in Emergency Repairs” Architects • Research • engineering specifications • Reserve studies

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IFD INC. ASSOCIATED ENVIRONMENTAL LLC 847-364-6800

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For more information, visit our website at

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BUILDING RESTORATIONS

CARPET CLEANING

DRYER VENT CLEANING

BRAL RESTORATION, LLC. (847) 839-1100

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Masonry and concrete Restoration www.bralrestoration.com

DESIGN INSTALLATION SYSTEMS (847) 470-8100

"We specialize in cleaning High Rise Buildings" garbage chute cleaning tile & grout • Pressure Washing Move out/detail cleaning serving chicagoland Area for over 10 years

Contact Rob Busam: rob@disrestoration.com

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CONCRETE RESTORATION

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SELECT ENERGY PARTNERS LLC (312) 593-6412

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We resurface concrete We remove & pour concrete Waterproof Membranes “Ask about our wall coatings” Pool decks • Balconies • Rooftops shower & locker Rooms “The Only 1 Stop Service since 1967”

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FIRE SAFETY & PROTECTION

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FIRE SAFETY & PROTECTION

FORECLOSURE & EVICTION RELATED SERVICES

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

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(312) 621-2320

GARBAGE CHUTE CLEANING EMCOR TEAM MECHANICAL FiRe PRotection division (847) 229-7600

I N T E R I O R D ES I G N

BROUWER BROS. STEAMATIC (800) CLEAN54

www.emcortmi.com

INTERIOR PROJECT MANAGEMENT

REFIND INTERIORS (773) 348-7796

(708) 396-1477 www.bbsteamatic.com

FIRE/FLOOD RESTORATION

single - souRce ResouRce

HVAC BROUWER BROS. STEAMATIC (800) CLEAN54

Corridors • Elevators • Lobbies Hospitality/Meeting Rooms • Lighting

HAYES MECHANICAL (773) 784-0000

All types of environmental cleaning. (708) 396-1477

Expert Project Management www.refindinteriors.com Style - Function - Service

2007 iReM vendor of the year www.hayesmechanical.com

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

EMCOR SERVICES TEAM MECHANICAL (847) 229-7600

www.QCIrestoration.com

www.emcortmi.com

JANITORIAL SERVICES TOWER BUILDING SERVICES 312-404-3943 www.towerservices.net

INSULATION (PIPE & HVAC)

THE RESTORATION GROUP, LLC (630) 580-5584

Cost efficient Janitorial & Maintenance services for homeowners associations. carpet cleaning, pressure washing, snow removal, etc.

ALL THERMAL INSULATION CO. (847) 698-7543

www.trgrestore.com

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

serving chicago over 50 years We NEVER charge for estimates All Pipe & HvAc insulation all_thermal@sbcglobal.net

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

For more information, visit our website at

www.4universal.com

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.

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

LAUNDRY SERVICES & EQUIPMENT LAUNDRYLAND ROUTE, LLC. (847) 998-4050 contact Andrew neuman

LANDSCAPE CONTRACTORS

LAWN CARE

ACRES GROUP (888) 231-1300 / (847) 526-4554

SPRING-GREEN LAWN CARE (800) 830-5914

Professional landscaping and snow Removal www.acresgroup.com

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

BROUWER BROS. STEAMATIC (800) CLEAN54 “All types of environmental cleaning” www.bbsteamatic.com

IFD, INC. ASSOCIATED ENVIRONMENTAL LLC

(847) 364-6800 environmental Remediation www.ifd-associated.com

LIGHTING/ENERGY EFFICIENT SKP SUPPLY LLC (847) 239-7249

www.alanhorticultural.com

BALANCED ENVIRONMENTS, INC. (847) 395-7120

MOLD REMEDIATION

ENERGY EFFICEINT GREEN LIGHTING green lighting, electrical supplies & Appliances

www.BalancedEnvironmentsInc.com

ILT VIGNOCCHI (847) 487-5200

UNIVERSAL RESTORATION SERVICES 877-864-8266 P 888-596-4966 F Water, Fire and disaster Restoration

energy efficient lighting with simple Payback Programs

Joe Lamotte, General Manager Commercial Division

jasonk@skpsupply.com

www.4universal.com

PAINTERS

MAILBOXES

www.iltvignocchi.com

KINSELLA LANDSCAPE, INC. (708) 371-0830 creating lifestyles From the outside in…™ www.kinsellalandscape.com

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

www.aaapaintco.com

large variety of commercial and Residential Mailboxes intercoms and tele-entry Address signage & engraved nameplates installation services since 1989

www.MailboxWorks.com

www.landscapeconcepts.com

MOLD CONSULTANTS

SEBERT LANDSCAPING, INC. 630-497-1000

CLEAN AIR SCIENCE (847) 344-0607

www.sebert.com

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

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

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

Mold & Water damage experts RESIDENTIAL-COMMERCIAL-INDUSTRIAL Asisstance with insuance claims Post Remediation Assessments & occupancy studies

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

CERTAPRO PAINTERS (866) 441-8259 interior & exterior Painting • Wallcoverings stucco, Masonry & eFis Repair • drywall Repair www.certapro.com bkurschner@certapro.com

Quality landscaping since 1947 www.thornapplelandscapes.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 2011©.


seRvice diRectoRy

PAINTERS

PROPERTY MANAGEMENT

PROPERTY MANAGEMENT

THE INSIDE OUT COMPANY 630-406-3000

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

LEGUM & NORMAN MIDWEST (312) 944-2611

Painting, construction & Maintenance www.insideoutcompany.com

PAVING

www.BaumProp.com

www.lnchicago.com

CARUSO MANAGEMENT GROUP, INC.

MCGILL MANAGEMENT, INC. (847) 259-1331

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

ResidentiAl & coMMeRciAl www.carusomg.com

www.mcgillmanagement.com

www.duboispaving.com

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

NIMROD REALTY GROUP (847) 724-7850

(630) 717-7188

FM&J ASPHALT PAVING, INC. 708-544-6700 / 630-279-0303 concrete & Asphalt Paving Pavers & color stamping drainage systems & sewer Repairs sealcoating, crack Filling & striping www.fmjasphalt.com

www.chicagopropertyservices.com

“Premier Community Management”

PARAGON PROPERTY MANAGEMENT (847) 465-1483

CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300

HARD SURFACE SOLUTIONS (630) 674-4520

www.chicagoland-inc.com

www.hsshardsurfacesolutions.com

COMMUNITY SPECIALISTS (312) 337-8691

MAUL ASPHALT & SEALCOATING (630) 420-8765

www.communityspecialists.net

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

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

THE HABITAT COMPANY (312) 527-5400

sealcoating / crack-sealing / striping Asphalt installation www.maulasphalt.com

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

www.habitat.com

PEST CONTROL

WOODRIDGE OFFICE

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

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

www.psimanagement.net

SUDLER PROPERTY MANAGEMENT (312) 751-0900

www.hhsg.net

www.smithereen.com

PROPERTY MANAGEMENT

www.sudlerpropertymanagement.com

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

TAIRRE MANAGEMENT SERVICES (847) 299-5740

www.hillcrestmgmt.com

AEGIS PROPERTIES CORPORATION (773) 667-8900

tsutton@tairremgmt.com

www.aegisproperties.com

For more information, visit our website at

www.condolifestyles.net No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.

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PROPERTY MANAGEMENT

ROOFING

SIDING / RENOVATIONS

VANGUARD COMMUNITY MANAGEMENT

CSR ROOFING CONTRACTORS (708) 848-9119

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

www.csr-roofing.com see our ad on page 5.

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

www.vanguardcommunity.com

WOLIN-LEVIN INC. (312) 335-1950

SNOW REMOVAL PRO★TOP ROOFING (847) 559-9119

Contact Tom Skweres

HARD SURFACE SOLUTIONS (630) 674-4520

www.wolin-levin.com

REAL ESTATE TAX ATTORNEY

S&D ROOFING SERVICE (630) 279-6600

ELLIOTT & ASSOCIATES (847) 298-8300

50,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS our experience & technical know-how gets the job done right the first time! Serving the area since 1963 www.sdroofing.com sales@sdroofing.com

www.elliottlaw.com

REMODELING CONTRACTORS ABC DECO INC. 773-701-1143

SUAREZ ROOFING, INC. 773-235-5455

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

established 1965 Maintenance & Repairs Roofing/sheet Metal/tuckpointing www.activeroofing.com

Heaters Pumps • Repairs • chemicals Pool Maintenance • complete Water Analysis Pool guards, inc. ross@spmspools.com

your complete Roofing solutions www.suarezroofing.com

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

SECURITY SERVICES

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

KRAMER TREE SPECIALISTS, INC. 630-293-5444

www.arsecurity.com

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

SPMS 630-692-1500

TREE CARE

A&R SECURITY (630) 366-4103

ROOFING

SWIMMING POOLS

tree Pruning, tree Removal, cable Bracing, Plant Health care, tree Planting & transplanting www.kramertree.com

ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888 www.admiralsecuritychicago.com

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

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

THE CARE OF TREES (847) 394-3903 certified Arborists, Accredited, 5-time “company that cares” Honor Roll Member www.thecareoftrees.com

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

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 24

condo liFestyles

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No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.


seRvice diRectoRy

TV-BULK CABLE & SATELLITE

WINDOWS/REPLACEMENTS

WINDOW RESTORATION

COMCAST (866) 594-1234

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

WINDOW WALL SERVICES, INC. THE CAULKING COMPANY (708) 361-9333

Window and Patio door Replacement Aluminum and Wood clad steel ul Rated Windows Aluminum store Fronts www.cwins10@yahoo.com

www.windowwallservices.com

www.comcast.com

RCN (312) 955-2322 rcnchicagoapts@rcn.net www.rcn.com

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

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

WASTE SERVICES LAKESHORE WASTE SERVICES (773) 685-8811

www.woodlandwindows.com

For more information, visit our website at

www.condolifestyles.net

Industry Happenings Property Specialists, Inc.

Sudler

in an effort to better address the needs of our client associations and the individual homeowners they represent, Property specialists, inc. (Psi) is proud to announce the formation of three distinct new facets of the company: dedicated customer service center, trace insurance Agency llc and Property Maintenance & construction.

sudler Property Management received the Management company of the year award at the chicago chapter institute of Real estate Management's (iReM) Premier Awards that were held on March 4, 2011. in addition to the 2011 award, the company was also recognized with iReM's management company of the year award in 2006 and 2007. sudler is the only company to have accomplished this. some of the factors that are considered in the awards nomination for this award are client service record, high retention level of client properties, low corporate personnel turnover, accredited training programs, community service and progressive cost savings programs.

earlier this year Psi utilized a soft rollout of our dedicated customer service center on select properties as a beta test. our friendly customer service representatives are specifically trained to receive homeowner calls, diagnose the problem and dispatch a work order to the Association’s preferred vendor to solve the issue. the customer service center has allowed the Property Managers increased time to visit their properties, and address onsite issues while providing rapid responses to service requests. Following positive feedback during the initial trial run, Psi expanded the model to all associations at the beginning of March. trace insurance Agency llc is a joint partnership entered into by Psi to allow our property managers to obtain competitive bids for property insurance for each Association. this new venture is designed to provide several quotes from reliable insurance providers allowing the Association’s Board of directors to choose the best policy for the Association’s individual needs. trace will work with the property managers and Board of directors to help determine the types of coverage needed, as well as the appropriate level of coverage to meet state statute. As part of this agreement, Psi will now have a fully licensed insurance agent in-house to assist property managers. Psi has also entered into a second joint venture to establish Property Maintenance & construction llc, a full service maintenance division. Property Maintenance & construction llc (PMc) will provide low cost quality workmanship on routine handyman services for Psi clients. our goal is to provide our homeowners to receive faster service, at more reasonable costs to the Association.

sudler Property Management recently announced that effective January 1, 2011, the company began managing Museum Park tower 1 (221 units), located at 1322 s. Prairie, and the Residences at Randolph Place condominium (345 units), located at 165 n. canal. the Board of directors at the Fulton court townhome Association has executed a Management Agreement with sudler Property Management. the firm began this assignment on April 1, 2011. the following are new employees at sudler managed properties; William southall, Assistant Manager - 1700 e. 56th Association , sarah sterling, Property Manager - streeterville center, 233 e. erie, Alina Kobzarev, Administrative Assistant - Plaza 440, 440 n. Wabash and Pamela sochor, Assistant Manager -the Fordham, 25 e. superior. the following promotions at sudler’s corporate office were recently announced: Marsha Williams, from corporate controller to chief Financial officer,Jacob Ruder - from Assistant corporate controller to corporate controller and leticia Almazan -from Accounts Receivable Administrator to senior Accountant.

Psi does not require that an Association utilize either trace or PMc services. the use of these services is solely at the discretion of the Association’s Board of directors.

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.

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Industry Happenings Wolin-Levin Open House

Shown above are some of the guests that attended an open house event held on March 3rd for the community association board members at properties managed by Wolin-Levin, Inc.

Wolin-Levin Inc. Wolin-levin announced the promotion of deanna Hicks from director of Portfolio Management to vice President of operations. deanna has been a part of the Wolinlevin family for 22 years and has proven to be an invaluable asset. throughout her tenure with our organization she has held a myriad of positions beginning her career with us as a Receptionist through becoming a Property supervisor and a director. deanna

will support the directors in their daily operations and work closely with the executive team to evaluate and streamline Wolin-levin’s processes and procedures. deanna brings a wealth of knowledge and experience to this role and we are confident she will add to our continued success with her analytical thinking and thorough understanding of the industry.

Chicago Police CAPS Seminars the chicago Police cAPs program is holding seminars for interested community associations. the goal of their bimonthly workshops is to assist the managers and owners of residential properties to increase their personal level of safety and learn how to work with the chicago Police and other partners to improve the level of safety surrounding their properties. to accommodate the varying schedules of the owners and property managers, identical morning and evening sessions at different locations will be offered. these events are free to attend. to register for any location, please send an e-mail to william.townsell@chicagopolice.org or call (312) 745-

5900 extension 85131. Please note that registrations will be cut off once the respective room capacities are filled. Morning session city Hall 121 north lasalle street Room 1103 time: 11 a.m.-12:30 p.m. May 12, 2011 July 14, 2011 september 15, 2011 november 10, 2011

evening session 10th Police district 3317 West ogden time: 5:00 -6:30 p.m. May 17, 2011 July 19, 2011 september 20, 2011 november 15, 2011

Lakeside CDC More than 70 community association leaders attended a one-day training conference organized by lakeside community development corporation and co-sponsored by chase Bank and Freddie Mac. the conference was held at illinois institute of technology in chicago on March 12, 2011. the event featured comprehensive seminars, networking, and information resources. other sponsors included Frost, Ruttenberg, and Rothblatt; taylor insurance group; connelly law Firm; and, the Association of condominium, townhouse, and Homeowners Associations (ActHA) and condo lifestyles Magazine. As might be expected, much of the day’s workshops focused on weathering the current economic crisis and developing best practices that reduce the strain many associations are feeling. topics included collections, liens, and foreclosures; navigating the FHA approval process; funding strategies for capital improvements; and the 4 c’s: Best Practices for community Associations. given the success of the event and the strong interest from community associations in the city and surrounding region, lakeside has begun planning a similar event, which will be held on the north side of chicago in the fall. lakeside community development corporation, a chicago-based nonprofit housing organization, has led efforts to increase the capacity of volunteer community association leaders since 2006. it exists as one of the only Hud-approved counseling agencies in the nation offering education services to community associations and their residents. lakeside also offers oneon-one counseling and education programs for homeowners, renters, property managers and others. in 2010, the agency assisted more than 700 people, including more than 200 homeowners at risk of foreclosure and nearly 300 condominium association residents. Additional information on lakeside community development corporation can be found at www.lakesidecdc.org.

Reserve Advisors Reserve Advisors has hired Jacob Bolda an Architectural engineer and david Krahn a civil engineer. Bolda will graduate from the Milwaukee school of engineering with a masters degree in Architectural engineering and a specialty in structural engineering. Krahn is a graduate of the university of Wisconsin-Madison with a degree in civil engineering. He previously worked for the department of defense in Rock island, illinois. Bolda and Krahn will work in Reserve Advisors’ corporate office in downtown Milwaukee. Reserve Advisors provides reserve studies and insurance appraisals to more than 6,000 homeowner associations and property managers throughout the country.

For more information, visit our website at

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No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2009©. 2011©.


...one area where some applications do fail to pass muster is assessment delinquencies being in excess of 10% of the annual budget income or 10% of the number of units, which, in the case of the latter criterion, appears to be a tougher standard than that used by the federally supported agencies.

from page 6

Economic Challenges saving suggestions include: performing landscape watering more judiciously by limiting it to one half hour before sunrise. LED fixtures, which can reduce lighting expense by 25% or more, should be substituted for more costly incandescent bulbs. Thermostats should be managed better for common areas in the winter and summer as a ten-degree adjustment can save 15% or so in the cost of heating and cooling over a year. And trash collection should be reviewed to determine if the frequency could be cut back without creating an unsightly condition, thus generating more savings.

Mixed Results on Lending As indicated previously, associations are

coveR stoRy

profile of the community, banks cannot underwrite the note as the association doesn’t meet the specified criteria or may be viewed as a high risk,” he said.

Increased Rejection of Loan Applications

having mixed results in trying to qualify for bank loans to handle major repair and improvement work. Is it tougher to get a loan now than before the housing crisis and the economic recession turned the boom to a bust? Wert feels it is. Lenders, “are requiring more paperwork and demanding more in the way of keeping association funds at their bank,” she said, although associations she manages have been able to obtain loans for work such as the façade repairs deemed necessary by the City of Chicago. In the view of Rodriguez, while bank loans may be more difficult to get now, that may be as much a problem with the poor resource accumulation and management by associations that are denied funding as it is a matter of stricter eligibility standards now imposed by banks. “Often times, because of the less than sterling

Santangelo conceded that there may have been more denials in recent times. “We saw a rejection increase in 2009 when the unemployment rate began to escalate (causing) an increase in delinquencies but (the situation) has gotten better towards the end of 2010 and eligibility guidelines at Community Advantage Bank of Barrington haven’t changed.” Community Associations have also been impacted by new standards imposed by the Federal Housing Administration, Fannie Mae and Freddie Mac in the secondary mortgage market. They include: • no more than 15% of the units being delinquent in assessments more than 30 days; • 10% of annual revenues must go into reserves; • a minimum of 50% of units must be owner occupied; • no single entity can own more than 10% of the units and • additional fidelity and property insurance requirements for associations over 20 units. “The majority of the applications we see do not have difficulty meeting these requirements,” and, “I want to stress that Community

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

847-593-5595 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.

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condo liFestyles

Fannie Mae Chicago Mortgage Help Center Boards faced with the problem of mortgage foreclosures and assessment delinquencies in their associations may want to suggest to those owners affected by the former problem to appeal to the Fannie Mae chicago Mortgage Help center for assistance. the agency offers counseling for those whose loans are owned by Fannie, which is partnering with neighborhood Housing services of chicago in this effort, as well as with major mortgage servicers. counselors will provide a full range of services, which includes reviewing a borrower’s loan, discussing foreclosure alternatives, collecting the required documents for the federal Making Homes Affordable Program and helping finalize any pending loan workout efforts. unit owners can determine if Fannie Mae owns their loans by going to www.fanniemae.com/loanlookups or by calling the agency at 1-800-7FAnnie. those who determine that Fannie does not own their loans can contact the Homeowner’s HoPe Hotline at 1-888-995-HoPe. to schedule an appointment at the Mortgage Help center, borrowers should call 1-866-442-8572.

Baum Property Services, AAMC

P R O F E S SIONAL C O M M UNITY M A N A G EMENT

Advantage is lending to associations despite the changes in the economy and has plenty of funds for association loans. We will continue to be a resource for associations.” Klauber said that most applications do get approved because collateral for the loans are the assessments, which the lender has recourse to in the event of default. But he pointed out that one area where some applications do fail to pass muster is assessment delinquencies being in excess of 10% of the annual budget income or 10% of the number of units, which, in the case of the latter criterion, appears to be a tougher standard than that used by the federally supported agencies. (Briskovic noted that in terms of assessment dollars, 7% is borderline, between 7 and 10% is shaky ground and if you are over 10%, “they don’t want to talk to you.”) But, added Klauber, aside from that one issue, which has resulted in some denials, “we have not changed our underwriting policies at all during the economic downturn.” All of Popular Association Banking’s loans are performing at this point. “Of the $350 million in condo loans, none are past due over 30 days.”

Resubmissions Permitted

Contact Michael D. Baum, CPM, PCAM

630-897-0500 www.BaumProp.com

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condo liFestyles

Both institutions will consider resubmissions when applications are rejected initially if the associations can show they have overcome the previous shortcomings. “We work with all our clients and make suggestions on cleaning up any (deficiencies),” said Santangelo, especially in the area of cash flow and delinquencies. “The suggestions have been well received and implemented, which has allowed (some) to come back and qualify for a loan.” The same holds true for Popular Bank. If

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applicants are turned down because of excessive delinquencies, they, “can reapply but must show 90 days of delinquencies under 10%,” said Klauber. “This has taken place with our bank on several occasions.”

Staying on the Same Page Wert pointed out that sometimes boards fail to be on the same page with their managers and this lack of harmony and cooperativeness can be an additional impediment to a financially successful operation. “They hire us for our professional expertise but sometimes they don’t take our advice,” she said. Rodriguez echoed this view of Wert. At times, association boards and their management seem out of step with each other and may even work at cross-purposes. “Boards and managers need to stand together and relay a common message and sentiment on the financial future and course of action for the community,” he said. And that unified position, along with other important maters, must be regularly conveyed to unit owners. They have a vested interest and, “accordingly need to be educated and constantly informed as to the challenges and circumstances faced in the administration and management of the community,” and at the same time, “provided with a forum for expressing their views and opinions.” Only through this two-way communication will unit owners be willing to accept the tough measures that may be necessary to keep an association on a sound financial track or bring a wayward one back under control. Y

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.


BoARd BAsics

By David Mack

Ask An Attorney A panel of lawyers obliged questioners with their sage counsel during the concluding session of a recent ActHA program known as Ask an Attorney. unfortunately, though, the advice is tempered with the warning that it is usually general in nature and may not apply to all associations with reasonably similar circumstances so you should contact your own legal representatives for advice before taking any action in their own situations. Mike Kim of Michael c. Kim & Associates and Stepfon Smith of smith Amunden, llc. fielded the questions at an ActHA seminar program as they were directed to them by Gabriella Comstock of Keough & Moody who moderated the session. in some instances, condo lifestyles has added comments in parentheses for clarification Missing Minutes Q/ The required minutes of our board meetings for 2005 and 2006 are missing. What can owners do when this occurs? A/ Associations must keep their minutes for seven years and unit owners do have a right to inspect them along with other records. They contain the institutional history of the association and are important and should be treated with respect and stored properly. About all that can be done if they

are missing is to try to reconstruct them. There should be some old board members around from that period.

Limited Common Element Q/ Our association is 20 years old. Our decks which are limited common elements need replacement. The decks have always been maintained by the association. Who is responsible for complete replacement?

A/ The governing documents should be reviewed to see who is responsible for replacement. If they only require that the association maintain them and that owners must replace them, then that is what should be done. If the association is responsible for both maintenance and replacement then it should take care of the work. (But remember that the cost will be passed on to the owners through assessments if the board must arrange for the job to be done.)

111 E. Wacker Drive • Suite 1412 Chicago, Illinois 60601-4501

312-729-1300

www.Chicagoland-inc.com

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condo liFestyles

trusted verb

Past Amendments Q/ We are a 30 year old self-managed building. How do we go about finding out which amendments have been made to our declaration and by-laws?

[truhst·ed]

A/ Go to your County Recorder’s Office. Amendments are not effective until they are recorded.

Availability of Records Q/ How can we get our board to comply with Section 19 (availability of records for examination) of the Condo Act without having to file a lawsuit? A/ Responsible boards should be willing to comply with the law. If the board can’t be persuaded to follow the law or tries to intimidate those who submit a proper request into withdrawing it or issues a wrongful denial of a request, this stonewalling can only be surmounted now by filing a suit. Attorney’s fees can be recovered by the party filing the suit. (An effort could also be made to oust the recalcitrant directors at the next election.)

Records Question for HOA Q/ Would the answer to the previous question be different for non-condo associations? A/ No, there is similar language in Section 18.5 regarding the right to inspect records.

Master Association

persons worthy of reliance; confidence

Q/ Our master association has adopted rules and regulations but one of the buildings says that their association doesn’t have to follow them. Is that true? A/ The rules must be followed by all the underlining associations.

Back Assessments Q/ Can a unit owner be sued for back assessments if there was an accounting error and he was not charged when they were due? No one noticed the error for some time and then it was discovered.

Trusted by Illinois Community Associations Since 1983

A/ The owner should have to pay when the error is found. Paying the assessments is a form of contract between association and owners. But there may be a statute of limitations issue and the association’s attorney should check this. (also if the back assessments constitute a large amount, a payment plan spread over a reasonable period would be a good idea.)

Leasing Hardship Q/ A unit owner is threatening to go to foreclosure if we don’t allow her to rent out her unit. The association does not permit leasing. Can the board consider this a hardship to allow unit to be non-owner occupied? A/ A board has reasonable latitude in characterizing what a hardship is. If the board has discretion in this area, it could look at general economic conditions as being a hardship. The question is how long will that be. If it is a reasonable period and will result in a financial recovery (the board being paid back assessments), it should be OK. But a problem may occur if this becomes too wide spread and other unit owners want to do the same thing.

More on Leasing Hardship Q/ Does the decision to allow unit owners to rent their units under a financial hardship have to be made at an open board meeting? Also must the identity of the owners be made public at an open meeting?

1 . 8 55.537.0500

A/ Yes the decision should be made at an open meeting. The attorneys agreed that the identity of any persons granted a financial hardship should be disclosed at the same time, although the specific circumstances need not be revealed.

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BoARd BAsics

Proxy to Rules Hearing?

Meeting Notices

Recording of an Open Meeting

Q/ Can a homeowner who is sent a notice of a rule violation send a proxy to represent him (at a hearing)?

Q/ Our board meets before its regular meetings to consider the agenda for the meeting to follow. Or sometimes it holds workshops or informal meetings for other reasons. Do notices of these meetings have to be sent and owners allowed to attend?

Q/ Can a unit owner record an open board meeting? What about an executive session?

A/ No! (emphatically stated)

Research at Board Meeting? Q/ Can a unit owner send an attorney to board meeting to gather information for a possible lawsuit against the association? A/ An owner does have the legal right to appoint someone in his/her place but the person has no more rights than the appointer. So the attorney has the right to be there but is only allowed to get information from the meeting that the owner would have been able to.

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A/ Look at the definition of a meeting in the Illinois Condo Act. A meeting is a quorum of the board to conduct business, which means having votes. A Board can have these so called workshops- or call them anything you want but preferably not meetings. A board cannot make decisions at these “workshops.” Notice of a workshop can be provided but it is required. Some owners may feel there is something fishy going on at a workshop but as long as there are no votes taken, a board can hold them. Also, minutes should not be taken. Editor’s Note - There is a difference among attorneys on this point and it has not been decided one way or the other in court. Some believe that any gathering of board members, even if no voting is done, must be noticed and owners permitted to attend. Note, too, that the Illinois Condo Act does permit closed meetings for a few limited reasons under Section 18(a)(9).

A/ A unit owner has the right by law to record a meeting (see Sections 18.4(a)(9) and 18.5 (c)(4) of the Condo Act) but the board has the right to set rules for doing so. As was said in the answer to the previous question, boards can hold closed meetings (so called executive sessions) for only limited reasons and unit owners are not invited so recording wouldn’t be possible. It was also noted that for meetings of the homeowners there is not a similar provision for recording them and unanimous consent of the owners present should be given to film or tape such a session.

Mandate Work on Limited Common Elements? Q/ Can a board mandate that work be done on limited common elements? A/ Yes it can in many, if not most situations, but whether it can and to what extent will be in the governing documents.

12:57:28 PM

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Handicap Parking Spaces

Entering Resident Unit

Paying for Vacant Unit

Q/ Are handicapped parking spaces required in a condominium association and must ramps, lifts or automatic door openers be installed for handicapped persons if the declaration precedes the Fair Housing and Americans with Disabilities Acts?

Q/ Can a condo board enter a unit if conditions are bad, work needs to be done, do it and then charge costs back to the owner?

Q/ If a unit is vacant and the association has the right of possession, who must pay the taxes and insurance for it?

A/ Boards have the authority to enter units under Section 18.4(j) of the Act. This is usually most often necessary because of bad housekeeping but there can be other things such as infestation and nauseatingly bad smells. There is a nuisance factor. To improve the conditions, most governing documents contain clear authority for the board (of a condominium but not necessarily non-condos) to request the situation be rectified. If the owner doesn’t respond, the board can try to use self-help if it won’t cause trouble. However, that’s not recommended. Otherwise you need to go to court and get an order giving the board the authority to have the unit cleaned up. The cost of the work can be charged back to the unit owner.

A/ The board is not required to pay the mortgage, taxes or insurance if it takes possession (usually done through an eviction action for non payment of assessments) but it might want to pay the utilities (especially for something like heating gas to avoid a shut off as winter approaches).

A/ Handicapped parking is required. A ramp would be necessary if that is the most reasonable and effective way to accommodate handicapped owners. If a ramp is not feasible, you have to determine what is. As a general rule, the homeowner should pay the cost but sometimes the owner can’t afford it and will appeal to an administrative body such as HUD which oversees the Fair Housing Act and that agency will strongly suggest that the association settle the matter by bearing the cost. Regarding automatic door openers, some associations pay for them because a lot of able bodied people will hit the button also.

The right of possession doesn’t mean the association has the obligations of ownership. (Remember that possession in situations like this does not mean that the association has title to the unit. It only controls it and can lease it to others until the back assessment debt is completely paid.) Y

Fine for Denying Access? Q/ Can the board fine a unit owner for failing to give access to a unit to inspect the electrical outlets? A/ As just noted, condo boards have the right of entry to a unit by law. However to levy a fine for denial of access it would have to have the authority to do so in its governing documents or rules.

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BoARd BAsics

By David Mack

Common Questions from Community Associations Below are a number of questions that were sent in by readers. We’ve supplied corresponding answers based on our experience. our answers are general and not intended as legal advice. We encourage you to consult your attorney for advice on your specific circumstances.

limited common elements (LCEs). More often than not unit owners are financially responsible, although boards usually have the authority to see that the work of maintenance or replacement is done. A board is also capable of bidding work on the LCEs on a property wide scale and should,

Satellite Dish Installation Q/ There is an owner in our association who is selling his unit and said that someone is interested in buying as long as he could install a satellite dish to receive some Russian service for his mother that I assume is not available from Comcast. There are currently no dishes anywhere in the association but I told the owner that as far as I know we can’t prohibit the installation of a dish but could restrict the location to the balcony only. Our declaration specifies that no radio or television antenna can be affixed to or placed on the exterior walls or roof. But what I have been reading is that we cannot prevent an owner from installing on property that is within the exclusive use and control of the unit owner. I think the balcony is the only spot that should be allowed. Do you agree?

The art of great living requires a property management team that sees the big picture.

A/ You’ve got it right. Dishes or other antenna can only be installed in the areas you described, which means also a patio in addition to a balcony. You seem to have read up on the rule established some years ago by the Federal Communications Commission but if you want more information you can surely find it at that Agency’s website.

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Budgeting for Limited Common Elements Q/ If our decks are limited common elements and we want to have them maintained every 3 years, can we include this in our budget or do we have to issue a special assessment every 3 years? If we include it in the budget, do we have to calculate everyone’s portion based on the percentage owned? Also, regarding an owner’s right to hang a flag, is there any instance in which the flag could be hung by a common entrance? Can the board only allow a flag to be hung inside the unit’s window? Do we have to allow them to hang a pole on the exterior of the building? The board is concerned with damage to the face brick.

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A/ The first thing to do is check your governing documents- declaration or by-laws- to determine who is financially responsible to care for and maintain No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2011©.

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therefore, be able to get a better individual price for the unit owners. The unit owners could pay the cost directly to contractors or the association could include the cost in the annual budget, which would be preferable to special assessing to cover it. If the board is, however, financially responsible, it can still include the cost in the annual budget. And since the assessments needed to cover expenses in the annual budget are already determined according to the percent of ownership of the common elements for each unit, there would be no need to apportion the cost any further.

Displaying American Flag Check Section 18.6 of the Illinois Condominium Act regarding placement of the American Flag or military flags. Putting a flag at a common entrance or anywhere else on the common elements is a board decision. However, a board can’t prevent a unit owner from placing a flag – as long as it is of the American or military variety-within the limited common elements or facilities of the unit owners nor can it prevent a flag pole from being installed in those same areas as well as on the immediately adjacent exterior of a building, which I assume means on the exterior walls although that is not clearly stated. So a unit owner is entitled by Illinois law to place a flag or flag pole on a balcony, patio, deck, in a window or on the outside wall adjacent to his unit. However boards may adopt reasonable rules regarding the location and size of flags and poles. Reasonable is not defined in the law but possible damage to face brick should probably allow you to limit size to something that wouldn’t degrade the brick or mortar. You may have to consult a bricklayer or other knowledgeable person to determine the issue of potential damage. If placing flags is a controversial issue at your association, then you may want to consult an attorney to ascertain how far you can go in setting restrictions and still be within the law.

Changing By-Laws Q/ My wife and I have lived in our condo since 1974 and have not had problems until a new owner moved into one of the 6 units that make up our association. This person is always trying to change by-laws with a simple majority at a regular meeting. I believe this is not legal. I was told that in order to change by-laws the vote has to be 100 percent of all unit owners and that you need the advice or approval of an attorney to insure that there is no conflict with other provisions of the by-laws or federal, state or local laws. Can you give me some advice on this? A/ The percentage of the owners required to amend your by-laws should be in the by-laws according to Section 18(m) of the Illinois Condominium Act. I’ve never heard of a simple majority of owners being able to amend by-laws (or the declaration). Typically the percentage was no more than ¾ or 75 percent but your by-laws might have provided for 100 percent because there are only 6 units in the association. In any case, if 100 percent is specified in the by-laws, such a provision is actually no longer legally acceptable since the Condo Act was amended in 2007 to limit the percentage required to no more than 75 percent. When the Act and the governing documents of an association are in conflict, the Illinois Condominium Act always prevails. It’s always a good idea for an attorney to review any proposed amendments to by-laws or declarations to ensure that the wording is proper and that the changes do not violate any existing laws. If they do, they can’t be implemented.

Percentage of Renters Q/ My daughter’s condo is considering going from a rule that permits 25 percent of the units to be rented to a rule that would stick with the 25 percent but permit the renting to occur only after the owner occupies the unit for 2 years and then for only one- two year lease with exceptions for spouse, children, siblings, parents and grandparents. My daughter would like up to 49 percent of the units to be able to be rented. Are you aware of any facts that would support the position that further restricting rentals would hurt market value or that in going up to 49 percent market value would be enhanced? A/ Your daughter should first check the association’s by-laws to see if there is any reference in them to renting. By-laws are tougher to amend than rules, usually requiring a 2/3 or ¾ approval by unit owners. Rules, on the other hand, can be changed by a majority vote of the board alone, after submitting any modifications to the ownership and holding a meeting to discuss them. But only the board votes on them.

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When by-laws (or declarations) are silent on renting a board can adopt or amend a rule with almost any restrictions on leasing as long as they do not result in discrimination against any of the protected classes under federal, state or local antidiscrimination laws- based on minority status, disability or handicap, religious orientation, sexual preference, etc. However, if there is reference to renting in the by-laws, whatever that stated policy is, it can’t be tightened by a rule, which has less legal priority than a by-law provision. The by-laws must be amended themselves to place restrictions on leasing that previously did not exist. Whether by a change to a rule or by-law, associations usually exempt existing lease arrangements – so called grand fathering- from the modification, at least for the term of the existing lease if not continuously. But this is at the option of the association. Associations generally want to limit or totally exclude renters because it is believed, whether true or not, that tenants do not have the same interest in the preservation and upkeep of the property as owners, which might affect overall values of the units in the eyes of prospective buyers if there are no limitations on leasing. Likewise it is believed that renters have less respect for rules and such a lack of concern might contribute to a less harmonious living environment. There is no evidence that I am aware of regarding a direct relationship between an increasing number of tenants and higher property values.

Renters Impact on Lending Perhaps more importantly in terms of large numbers of renters, potential mortgage lenders are more reluctant to make loans for the purchase of units in associations where the percentage exceeds a certain level, the tipping point falling somewhere between 20 and 25 percent. Where the percentage of renters exceeds that range, buyers will often have difficulty finding financing for their acquisitions, which will obviously make units more difficult to sell.

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BoARd BAsics

Committees Q/ I’ve been through our declaration and by-laws and the Illinois Condominium Act and find no reference to committees. Our president inherited a standing committee that had been in existence for at least 2 years but overstepped the bounds of its authority. Exasperated, the president cancelled that committee but the chairman refused to stand down and was able to convince the majority of the board members that the president was wrong and to retain the committee. Where is there something written about committees, how they are formed and how they operate?

explains how and when it will invest and in what kinds of instruments. The more that can be safely invested at one time the better for an association as far as maximizing return but a board should relate the timing of maturity of its investments with any projected need for the funds so as to avoid penalties for early withdrawal.

atic. Boards have a fiduciary responsibility toward the unit owners and must safeguard the assets of their associations. Investments with risk such as stocks might invite scrutiny by unit owners who have a right to know how a board is investing the money paid as assessments. Some might object, especially if the market goes down and the association is holding stocks that decline in value. So a board should stick with what is safe even if the earnings potential is not as great as competing forms of investment. A board should establish an investment policy that

A/ The Illinois Condominium Act makes no explicit reference to committees. The only place in applicable law that there is any mention of committees is in Section 108.40 or the Illinois Not for Profit Corporation Act. This Act governs associations whether or not they are officially incorporated. In the first paragraph of 108.40 it is stated that if an association’s articles of incorporation or by-laws provide for them, a majority of the board of directors of the association may form committees.

Our recent window upgrade project was completed, but at twice the initial estimate...

You have indicated that there is nothing in your by-laws about committees so, assuming you are incorporated as most associations seem to be, check the articles of incorporation for authorization to set them up. However, even if your association is not incorporated, it still can form committees, according to Howard Dakoff and attorney with the Chicago law firm of Levenfeld Pearlstein. “Since committees are advisory only- they merely make recommendations to the board- it is our opinion that the board has the authority to create committees per the general language of Section 18.4 of the Illinois Condominium Property Act to administer the property,” he said. Under the right circumstances and the control of the board, committees can be a valuable resource to assist the directors and relieve them of some of their workload. But their authority is limited, as Dakoff indicated, and except for committees involved with the election process must have directors of the board as the majority of their members.

Every association must file an annual return with the IRS. Tax is paid on non-assessment income such as investment earnings or user fees, etc. There are a couple of ways to file that an association’s accountant or tax preparer can explain. Y

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Investing Association Funds Q/ Our condo board has invested our assessments in one $10,000 CD and wants to invest more as the directors see fit? Is there any state regulation governing investment of associations? I believe they have to submit a federal tax return on earnings, am I right? A/ There is no state law governing associations investing funds on hand. Any investing should be in safe instruments such as CDs where the principal is insured by a federal or other agency such as the FDIC. Riskier investments are more problem-

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MCD Pool Party featuring Condolympics over 200 guests joined Mcd Media at the 15th annual Mcd Pool Party on March 11th,2011 at the Pyramid club located at 236 West lake street in Addison, il. Major sponsors of this year’s event were: Kinsella Landscape, Inc., Hard Surface Solutions and Balanced Environments. Committee Members & Event Judges Cathy Ryan, chairperson

Kevin Block, Head scorekeeper

Tairre Dever-Sutton, lead Judge

Stephan Gourdouze, lead Judge

Eva Fiala, Lidia Guzman, Sheila Malchiodi, Tracy Davis, Tony Dister, James Krech, Gregg Rithmiller, Tom Skweres, Mary Seego, Larry Lolli, Elizabeth Soracich, Michelle Courtney, and Laurie Velasquez

Winners of the various 2011 Condolympics events are as follows: Ping Pong

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Buck Hunting (video)

Dart tourney

Pool Tourney

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event HigHligHts

For more information on mcd media special events visit www.condolifestyles.net

Bean Bags/Cornhole

Best Dressed – Mardis Gras Theme

Beads Game

Special Olympics Donations

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2nd . . . Alan Horticultural enterprises

3rd. . . . R.J. Mariotti

3rd. . . . James Krech, Property Management specialists

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Running the Perfect Meeting The Importance of Condominium Board Members Maintaining Confidentiality Ask An Attorney Common Questions from Co...

0311.5129 CL[0411]40_web  

Running the Perfect Meeting The Importance of Condominium Board Members Maintaining Confidentiality Ask An Attorney Common Questions from Co...

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