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JULY 2012 | VOLUME 16 | NUMBER 2





More Legislative Issues Looming for Community Associations F E AT U R E S

Preparation Key to Smooth Election Reserve Study Basics Survey Affirms General HOA Resident Satisfaction Ask an Attorney Chicago Strengthens Life-Safety Ordinance Common Questions for Community Associations

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table of contents COVER STORY

03 More Legislative Issues Looming for Community Associations By David Mack BOARD BASICS

07 Preparation Key to Smooth Election By David Mack 11 Reserve Study Basics By David Mack S P E C I A L F E AT U R E

14 Survey Affirms General HOA Resident Satisfaction 16 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 18 Editors Message 19 Directory Advertising BOARD BASICS

26 Ask an Attorney By David Mack S P E C I A L F E AT U R E

29 Chicago Strengthens Life-Safety Ordinance By Pamela Dittmer McKuen BOARD BASICS

34 Common Questions for Community Associations By David Mack






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By David Mack

More Legislative Issues Looming for Community Associations

successful, it moves to the other house and follows the same procedure except that it goes to the Governor after the 2nd chamber The Illinois General Assembly has been the venue for a lot of legislative activity that will approves it,” said Thapedi. But if impact community associations if and when any of the laws are enacted. there are any amendments in the Senate the bill goes back to the House to be voted on again and if approved is Representative Thapedi thought it necesecently State Representative Andre directed to the Chief Executive for signature. sary to briefly explain the legislative process Thapedi of the 32nd District and


John Carr, head of Illinois Governmental Affairs Management, Inc., and a registered lobbyist who represents ACTHA’s interests at the state level through Social Engineering Associates, Inc., spoke about a recent seminar program on some of these pending bills, explaining their purpose and intent.

Substantial Volume of Legislation “The volume of legislation dealing with associations is substantial,” said Carr.

before offering an analysis of specific laws. “It’s very important to understand it and how it proceeds,” he said. It begins with the introduction of a bill in one of the chambers. “The process is the same in both the House and the Senate.” After being filed, say in the House, a bill is assigned to a pertinent committee where it is analyzed and debated and if voted out of the committee it goes to the floor of the House for further debate and a vote. “If it is

Condominium Ombudsperson Act Thapedi then moved on to the legislation, first commenting on HB5923, the Condominium Ombudsperson Act. “Its primary, purpose is to curb litigation between condominium associations and homeowners,” said Thapedi. “The position of Ombudsperson will be created within the Office of the Attorney General (AG) and will be funded by an annual association fee of $3 to $10 per unit.


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The bill is still in its infancy stage.” Carr presented some additional information on that Act. Passage of such a bill has been attempted before and failed. Apparently only one other State, Florida, has such an office and controversy reportedly recently developed there when the State used excess funds accumulated through the payment of the annual fee for other state purposes. The AG will be authorized to adopt rules under the statute and invite recommendations from an advisory committee on other matters that should be assigned to the Ombudsperson’s jurisdiction. The Ombudsperson will provide training and educational materials to unit owners and maintain a State wide toll free number to answer questions and provide assistance and guidance on the Office’s functions and operation as well as an informational website to accomplish the same essential tasks. All new board members will be required to certify they have familiarized themselves with the content of the Act and provide that certification to the Ombudsperson. The incumbent will be required to respond to a request from any “interested person” to, as noted above, hear

disputes between owners and their associations and resolve them in a way that is mutually acceptable to the parties. The AG will be able to later recommend to the General Assembly an expansion of the Office’s duties as they might arise. The fee, which begins at $3 per unit, can be adjusted annually up to a maximum of $10 but there would be no double taxation, so to speak, meaning that master associations would not also be dunned for the fee when it is paid by the underlying condominium associations.

Bulk High Speed Internet House Bill 3950 authorizes bulk high speed internet service through the expansion of the easement provision for cable television in Sections 14.3 and 18.4 of the Condo Act. For this amendment of the cable easement, “this proposal must be voted on by each association,” said Thapedi and unit owners desiring the service would be charged an equal cost per unit. By April the bill had passed the House Judiciary Committee and was heading for the floor of that chamber.

“This one seems to have legs and is moving forward accordingly.” It passed both houses and was awaiting the governor’s signature at publication time. “This bill was amended to broaden the law to conform with advancements in telecommunications technology and the practice of many condominium associations,” said Howard Dakoff of the law firm of Levenfeld Pearlstein.

Prohibit Day Care Centers House Bills 5312 and 5313 would amend the Common Interest Community Association Act- applying to townhouse and homeowner association communities but not condominiums—prohibiting those associations from denying homeowners the right to set up licensed day care centers in their homes unless it was, “necessary to preserve the health, safety and welfare of the other residents,” for which the burden of proof would rest with the CIC involved. However, “the bill has been stopped,” said Carr. It turned out that the constituent on whose behalf the bill’s sponsor had advanced the legislation had a

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day care center in her CIC unit that was being closed by the association for violations and had actually been sued over related issues twice in the past and lost, Carr explained.

Recovering Assessments on Units Sold at Foreclosure Sale The sponsor of HB 4560 is Representative Thapedi himself. This Act would amend both the Condo and CIC Acts to allow associations to recover assessments, charges and attorney’s fees for the period of 12 months prior to a judicial foreclosure sale or the receipt of a deed in lieu of foreclosure from the purchaser- other than the mortgagee- of a foreclosed unit. This would expand the period for collection of assessment arrearages and legal fees from the current permitted 6 month period on such a unit thus giving affected associations the ability to recover everything owed or to at least cut their revenue losses even more so. “But,” said Thapedi, “we’re getting resistance on this from Realtors because it could impede the sale of property if a prospective purchaser had to come up with that much

more money owed a unit, including those attorney’s fees.” But, Carr added that ACTHA is fully behind the legislation.

Lender Responsible for Unpaid Assessments Another bill currently in the legislature, HB 5760, would amend the Condo Act and require the lender to bear the responsibility for the unpaid assessments on a foreclosed unit but it is faced with intense, organized opposition from lenders, banks, brokers, etc. At this time it does not appear likely to clear that brick wall and is stalled in the legislative process.

More Amendments to Common Interest Community Act

a board if that person independently owns another unit in the CIC and to require an association to officially notify all of its members when total common expenses exceed the total budget and to divulge, before they are imposed, what additional, subsequent assessments will be needed to make up the revenue shortfall. This Act had also passed both houses and was on the governor’s desk at the time of this publication. Regarding SB3572, “there were several areas of the CICA that were in need of amendments for clarification and coverage,” explained Dakoff. “The CICA will now be applied without as many issues of confusion and applicability.”

Manager Licensing Act

SB3572 would amend the CIC Act in a number of ways. Some changes that would occur are: » any action to incorporate a CIC would require approval of 2/3 of the owners » that there would be “routine scheduled” rather than annual elections » to allow a co-owner of a unit to serve on

SB 3202 and HB1265 are reasonably similar in that both would amend the Manager Licensing Act in relation to the annual fee of $50 plus $1 per unit that each incorporated association, greater than 10 units in size and has a paid manager, would have to pay for administration of the licensing program. “The fee would now be capped at $1,000,” said Carr.

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“The way the Act was originally written, large associations with 8 or 9,000 units would have had to pay a fee of 8 or $9,000.” 3202 had been adopted by both houses and was, too, in line for the governor’s endorsement when Condo Lifestyles went to press. “This bill (3202) is logical to protect condominium associations from bearing all the cost of manager licensing,” said Dakoff.

Prohibit Smoking In Units HB 4134 would amend the Condo Act to allow an association to amend its bylaws to prohibit smoking in individual units. This bill would eliminate the possibility of doing this by rule but legal opinion is mixed on whether such an action could survive legal challenge if it is attempted by rule.

Contact Your Legislators

Eliminate Use of Proxies HB 3974 would amend Section 18 of the Condo Act to eliminate the use of proxies in board elections when the alternatives of voting in person or by mail-in ballots are available. This bill, if enacted, would statutorily mandate board elections by direct balloting whereas an asso-

ciation, under current law, would have to amend its governing documents or adopt a rule to void proxy use. The purpose is to eliminate proxy abuses that have occurred at some associations.

Carr advised association representatives to contact their legislators if they want to have any of these pending bills enacted into law because their advocacy, especially on a group basis, is more effective than his efforts would be. You, “are more important lobbyists than I am on legislation,” he said. Y

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By David Mack

Preparation Key to Smooth Election At the ACTHA Spring conference Ryan Shpritz, an attorney with the firm of Kovitz Shifrin Nesbit, and Keith Hales, President of Hales Property Management, presented a primer on some of the basics of conducting association elections.

it is scheduled, a notice of an election which is normally part of the annual meeting of all of the members of an association. Other documents should be mailed with the notice. “It is critical to send a good agenda,” said Hales and also enclosed can be biographical information

on the candidates. However, according to Section 18(a)(16) of the Condo Act- and this should be the same for CICs- biographical and background information about those vying for seats can only be disseminated if a reasonable effort has been made by the board


hpritz opened with an observation to the audience, consisting in the main of board members that, “the election process comes down to one simple thing- do you like chaos? If not, work with your manager to plan ahead.” Hales concurred when he commented, “preparation is the key when you hold an election.”

Laying Groundwork Laying the groundwork beforehand will assist greatly in preventing conditions surrounding an election from getting out of hand, especially in situations where there may be contention between unit owners or factions competing for fewer vacancies than the number of candidates running. “In an election, you (the board) can control it so it runs as smoothly as possible,” said Shpritz. “You can have a nice calm meeting and then go home.” But failure to be prepared can have disastrous results. “In some cases there is yelling, the police are called and arrests are made.”

Condos vs Common Interest Communities There are differences in how votes are tallied between condominiums and common interest communities- townhome and homeowner associations. “For a condo association, the voting is done by percentage of ownership, which is listed in the declaration,” said Shpritz. “For non-condos, everyone’s vote counts for one.” Thus in tallying up the votes for candidates, condominiums are a little more complicated.

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Shpritz pointed out some additional materials that should accompany the election notice. Along with a form on which owners could nominate themselves or other unit owners, “there are election rules the board can mail out,” he said. They include instructions such as that only unit owners can vote and only one owner per unit can cast a ballot; campaign procedures, which limit what candidates or their supporters can be allowed to do during the run up to the election so the process doesn’t get chaotic and that no nominations will be allowed from the floor at the election. “This is how you can control the election,” Shpritz added.

postal or direct association delivery. “We have all the owners sign a waiver that they will accept notices by e-mail,” he said. Shpritz agreed that this procedure could be used but offered a cautionary note. “There is nothing in the law (Condo and CIC Acts) addressing the fact there are computers in the world,” he said, so if electronic delivery is to be used,” the waiver is a great way to cover yourself,” in the event anyone who signs it complains later about not receiving a hand delivered notice. If this procedure is ever legally challenged, Shpritz added, “Absolutely the law doesn’t provide for it.” So there is some risk that it might later be found in violation of the law. Associations that use electronic mailing of notices must also accommodate those who don’t sign the waiver because they don’t have a computer. Also, as a supporting means of alerting owners to an election, Hales said that notices should also be posted in building lobbies.

Get Waivers if Using Electronic Notice

Soliciting Candidates

Hales has his associations send out election notices electronically rather than via

Prior to the formal notice of an election, Hales does undertake a mailed inquiry to

or management to identify all candidates and the candidates themselves have been afforded the opportunity to prepare their own bios. Additionally, the board cannot express a preference for any candidate(s) in the mailing.

Additional Materials

owners, especially in large associations, soliciting candidates. “Sixty days before, I send out a notice to see if anyone is interested in becoming a board member,” he said, asking anyone so inclined to submit biographical and background information to be attached to the actual election notice. At the election meeting, Shpritz recommends that candidates also be given an opportunity to address unit owners present about their qualifications to be board members. But he cautions those running the meeting to warn and prevent those speaking from offering negative comments about other candidates just as any bio or background information that accompanied the election notice should also not have attacked competitors or sitting board members. Candidates, “should not be disseminating negative type information,” said Shpritz. “They should keep it positive.” Hales added that candidates should be given a specific amount of time to address the assembled owners before the election but they, “should only talk about themselves.”

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Secret Balloting is Rare Shpritz noted different election types in addition to the customary procedure of open voting at the election meeting. To be able to use secret ballots, the purpose of which is to prevent identifying who voted for whom, a board must adopt that procedure by rule according to Section 18(b) of the Condo Act and Section 1-25 of the CIC Act. This approach to voting works through a code placed in a corner of the election form, which conforms to a code on a master sheet that identifies who the code represents, Shpritz explained. Secret balloting, “is rare,” he said. “If there is a smooth running election process, it wouldn’t be necessary.”

Mail-In Ballots Also, the Condo and CIC Acts both provide for the use of mail-in ballots, which if used disallows the use of proxies. (see below). “The board mails out a ballot to each owner and only that owner (or a designated agent) is permitted to return that ballot,” either in person or by mail, with the owner’s signature

thereon. This policy must be adopted by the board 120 days before an election. Shpritz explained the rationale behind mail in balloting by referring to some high rises in the City of Chicago where there was intense competition for seats on the board and multiple types of proxies were utilized. “This made the elections chaotic,” he said, and the “campaign process crazy.” In condo elections, because of the fact that the value of any unit owner’s vote depends on his/her percentage of ownership interest in the common elements, Hales has a spread sheet on his lap top at the election that reflects that ownership level so that votes can be tallied almost immediately. “We can tell right away who won the election,” he said, when there are competing candidates. In situations where there are the same number of, or fewer, candidates as there are board vacancies, an election actually doesn’t have to be held at the meeting. “Board members can be selected by acclamation,” said Shpritz, who also pointed out that the only

absolute restriction against someone running for the board is the aforementioned fact that the person must be a unit owner, although there are gray areas where a board may be able to exercise some discretion.(see below)

Proxy Requirements Shpritz said there are very simple requirements for proxies. The party giving the proxy to the other person who will bring it to the election fills it out, dating and signing it. The proxy giver can assign the absolute right to the proxy holder to vote for anyone the latter selects. Or the proxy giver can express a preference for whom the holder can vote. But this is a preference only, not an absolute direction for the holder to follow. “Is that a command or a recommendation?” Shpritz asked, then answering his own query. “It’s more a recommendation than a command.” Also with respect to proxies, if two or more are received from the same owner, “the later date proxy prevails,” said Shpritz, “which is a little known fact.” Additionally, unless a proxy states otherwise, it is by law good for eleven months and both proxies prepared by

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the association and those crafted by unit owners can be used.

In situations where there are the same number of, or fewer, candidates as there are board vacancies, an election

Non-Participating Some associations have unit owners who would like to run for a board seat but are in a class of residents who are considered “nonparticipating.” That means they might be delinquent in their assessments, be constant rule violators or perhaps in foreclosure. Or they might fall into more than one of those categories. But, in reality, none of these failures disqualifies a unit owner from running for the board. “There is nothing in the law prohibiting it,” said Shpritz, adding, however, “that associations can adopt ‘good standing’ policies which exclude such owners from putting in a bid to become a board member. In my opinion - others think differently - if you have it as a rule, it’s a bit risky and it could be subject to (legal) challenge. We have done amendments to the declaration on good standing policies that, in my opinion, would be upheld.” He noted that some declarations may actually have included good standing

actually doesn’t have to be held at the meeting.

policies when initially prepared so boards should check their governing documents to see. Also, when such a policy is in effect you want to be sure to officially, “notify owners not in good standing that they are ineligible to run.”

The board, in executive session, usually right after the election, votes on who the officers will be. “You can do that in an open session, but you don’t have to,” said Hales.

Filling Vacancies Before Term Expires

Maintain Records For Year

When a vacancy occurs on a board before a member’s term expires, it is not necessary to hold an election to fill it. “But,” said Hales, a board, “can appoint someone to serve until the next annual election by a 2/3 vote of the other board members.”

All ballots and proxies in connection with any election must be maintained and made available to unit owners for review for not less than one year. The electoral forms used in any secret ballot procedure must also be given to unit owners upon request but this will not invalidate the secrecy of the voting because the master sheet with the identifying codes is not included in the package given an owner. Y

Officers As far as board officers- president, treasurer, secretary- are concerned, unit owners do not play any electoral role in their selection.


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trusted Reserve Study Basics verb [truhst·ed] By David Mack

The correct use of reserve funds is an issue that many condominium associations may not have a clear understanding of.


efore going into that topic, let’s go over the requirement for an association to have a reserve. Section 9(c) (2) of the Condominium Act requires that all budgets adopted by boards after July 1 of 1990, “shall provide for reasonable reserves for capital expenditures and deferred maintenance for repairs or replacements of the common elements.” There are a number of factors that should be considered in determining the level of reserves any association should strive to accrue- the repair and replacement cost and estimated useful lives of the common elements, which include, but are not limited to, structural and mechanical components, building surfaces and energy systems and equipment; current and anticipated return on the investment of the reserve and other association funds; the financial impact on unit owners of any assessment increase needed to fund the reserves and the ability of an association to obtain other financing.

Fiduciary Responsibility “Board members have the legal obligation to insure the right amount is appropriated for their association’s reserves,” said Dan Haumann, President of Advocate Property Management. “They have a fiduciary responsibility.” Haumann reinforced the notion that reserves are for large, planned replacement or repair activities but can also be used for emergencies, but in whatever way they are expended in those categories it would not only be a violation of a board’s fiduciary duty but also very unwise for a board to not provide for that budget item for reserve funds. Boards, “will have some very large financial surprises to tell their owners about if they don’t maintain a proper reserve,” he said. And it’s easy to predict the adverse reactions from owners such a surprise would engender, difficulty in collecting a special assessment being chief among them. “So don’t get caught with your head in the sandignoring big potential projects is not going to make them go away.”

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Pay As You Go Having reserves on hand to spend when needed, besides helping board members avoid the charge they are not doing their jobs, keeps a property in good shape, helps maintain property values and, in fairness to future owners, accumulates funds to pay for the correction of problems with common elements as they are “consumed” or used by residents, said Haumann, instead of putting the financial burden on later owners who will not have enjoyed their use while they were wearing out.

Reserve Study Several of the factors cited above with reference to Section 9(c) (2) are tied together through the completion of a reserve study. “The purpose of a reserve study is to help a board decide what the appropriate level of funding for its property should be,” said Haumann. Added Grant Ostreko of Waldman Engineering Consultants, Inc., a firm which specializes in reserve studies, they are,” a long term budgeting tool for estimating funds needed for future capital and repair or replacement expenses.”

Components of Reserve Study A reserve study has several components. Part I is the field inspection and assessment of all common elements in the interior and on the exterior of build-

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CONDO LIFESTYLES ings, said Ostreko, including roofs, gutters and downspouts, balconies, elevators, exterior facades, boiler systems, swimming pools, clubhouses and more. The field consultant, working with the assistance of the board, maintenance staff and manager, determines which common elements are to be included in the survey and distinguishes between capital and maintenance expenses, which generally should not come out of the reserve. Painting, for example, is usually a maintenance expense although there may be certain conditions under which it could be a reserve item. Boards would usually be hard pressed to make the correct call on all items being evaluated. “Sometimes a board can’t make a decision by itself if something should be considered a capital item and the consultant can help make that decision,” said Ostreko.

Financial Analysis Part II of the reserve study is the financial analysis. The replacement or repair cost for each common element is calculated along with their remaining useful lives. The basis for the estimates are the costs of similar work done elsewhere about which the consultant has knowledge along with regional indices prepared by firms that specialize in cost evaluation. An inflation factor is applied to project current cost estimates forward to when the



expense of replacement or repair is likely to be incurred. “We’ll also take into account what level a board’s reserves are at, what the association is then contributing to the reserves and how much is being earned on those reserves and then recommend a funding plan,” explained Ostreko.

Report Helps Understand Conclusions The full report on the study is provided to the board for its consideration. Ostreko emphasized the need for board members to actually go through it thoroughly, especially to understand the basis for the financial conclusions at the end. “Sometimes I get questions that indicate the report wasn’t read,” he said, “that people just go directly to the funding needs.” While reviewing the document, board members should take notes and develop questions on issues that aren’t clear, discuss the full report at a board meeting and then present questions to the provider.” Additional clarification or changes can be incorporated into the final version of the study after that board review.”

Plans for Action At that point, the board should develop its plan for putting the recommendations into action. Some may need immediate attention while the implementation of others can be deferred until


some future time when those common elements begin to reach the end of their useful lives. Haumann identified four general areas the action plan should address. Any safety related issues such as potentially falling concrete would need immediate correction followed closely by items that should not be put off- leaky roofs, for example. The third category includes those components that will require near term (3-5 years) attention but still have a few years of useful life in their make up. The fourth group of elements is sturdy enough to not require corrective work until beyond that half decade time frame. A board, “needs to then take a hard look at the existing level of its reserve account and determine what, if any, additional funding will be needed in the operating budget to reach or get close to what the reserve study calls for,” Haumann explained. “If you’re behind and don’t step up funding, you’ll have to find other ways to pay for work that becomes necessary over the short or long term.”

Operating Funds One alternative is to use operating funds, which would likely limit the amount of work that can be done to one project a year with the hope that serious problems beyond that funding capacity do not occur more frequently. ”It’s not the recom-

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BOARD BASICS mended way to do it but a board can go that route,” said Haumann. If there is more than one work item that does need attention in one year, the board will have to prioritize work and keep its fingers crossed that conditions don’t worsen on delayed items.

Special Assessment Another funding approach would be through a special or separate assessment, levied against unit owners, depending on how large it is, by lump sum or through a payment plan over more than one year. The amount of a separate assessment in any one year is limited by law for both condominium and common interest associations to 115% of the sum of all regular and separate assessments paid in the previous year, except in the case of emergencies, as defined in the two Acts. But, “collection would depend on the financial health of unit owners,” said Haumann. (This writer lives in a condo association which specially assessed each of 75 unit owners approximately $3200 in a lump sum payment that the board subsequently had difficulty collecting, to the point where it chose to not raise regular assessments in the following year because, according to the Treasurer, “why increase them since we can’t collect what we’re already owed.”) Haumann added the caveat that a board should keep in mind who ends up bearing a

greater burden in a separate assessment- the “good payers”. “You may have to special assess more than you actually need to make up for the ‘bad payers’.”

Bank Loan The final alternative would be a bank loan but a lender is more than likely to require a reserve study and if a board has one but has not been adhering to its funding projections, the request is generally going to be rejected. “Banks are going to consider the financial health of the association,” said Haumann.

Periodic Updates A reserve study will need periodic updates because physical conditions may worsen more quickly over time than expected or there is some indication that the study on hand may not have been entirely accurate in its estimates or projections, for example, of the quantities of materials determined necessary to complete different work items, Ostreko pointed out. That update may or may not require another visit to the property by the party who had performed the analysis. Sometimes, however, a completely new reserve study by a different consultant may be needed. “It would be a fresh study that doesn’t look at the old one,” said Ostreko, “because the board isn’t confident,” in the previous one’s conclusions.

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.


Tough Choices To Be Made Sometimes a reserve study will dictate that an association significantly increase the assessments to finance future work but achieving that level of funding would be very difficult for the community and its owners. Under those circumstances, “there are tough (money) decisions to be made,” said Haumann. “A board will have to make them then or later,” with the hope that later is not too late. If it is possible, some work may be able to be deferred to hold down any assessment increase but careful consideration must be given to those choices. The board should work with the consultant to see where projections of work can be extended without jeopardizing the physical integrity of the property.

Waiving Reserve Requirement Not Easy Section 9(c) (3) of the Condominium Act does give an association the right to waive the reserve requirement but only by a vote of 2/3 of all association members. To do so is not a good idea unless an association is in a very sound financial position and has accumulated sufficient reserves to cover estimated capital expenses for several years in the future. By the same 2/3 vote, an association can also reinstate the reserve requirement. Y



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Survey Affirms General HOA Resident Satisfaction For the fourth time in seven years, community association residents have told pollsters they are satisfied with their homeowners associations, condominium communities and cooperatives.


has declined steadily in recent years, but that hasn’t happened to community associations.” Conflict and dissention make headlines,” Murphy adds. “That’s become the definition of news. While there are serious issues in some communities, this research affirms that the vast majority of homeowner board members and professional managers are doing good work for the community associations they serve.”

ndependent, national research conducted by IBOPE Zogby International in February 2012 shows that seven in 10 community association residents are satisfied in their communities, with only 8 percent expressing some level of discontent and 22 percent neither satisfied nor unsatisfied. More than 62 million Americans live in an estimated 315,000 association-governed communities, from town home communities and cooperatives to high-rise condominiums and city-sized, master-planned associations. The 2012 research findings, strikingly similar to the results of surveys conducted by Zogby International in 2005, 2007 and 2009, affirm the nationally representative tracking survey as an effective means of measuring the satisfaction of community association residents. The survey was sponsored by the Foundation for Community Association Research, a nonprofit organization affiliated with Community Associations Institute (CAI). “These are reassuring findings given the media’s usual fascination with conflict and tension in all segments of society,” says Foundation President Carole Murphy, CMCA, PCAM, a long-time community manager. “The public’s perception of many institutions

Key Findings The findings are especially positive for the homeowner-volunteer leaders who serve on association boards, with almost 90 percent of residents saying board members “absolutely” or “for the most part” strive to serve the best interests of their communities. Only 10 percent of respondents expressed displeasure with their boards. Almost two million homeowners are elected by their fellow owners to serve on association boards. » 81 percent of association residents say they get a “good” or “great” return on their association assessments; 18 percent say they don’t, and 2 percent aren’t sure. » 73 percent say their professional community managers provide value and support to residents and the association at large;

Maxima Consultants Corporation is a licensed and insured professional firm providing economical, practical, and sound solutions for your building projects. Our licensed professional staff has extensive technical experience in evaluating building systems, preparing repair/replacement drawings, estimating project costs, preparing bid packages, expediting building permits, and monitoring construction repair work for a wide range of building types • Reserve study • Façade inspection • Water infiltration • Transition study • Peer review • Porch, balcony, railing, fire escape, and garage Planter waterproofing and asphalt driveway

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21 percent say they don’t, and 6 percent aren’t sure. » 76 percent say their community association rules protect and enhance property values, while only 3 percent say rules harm property values, and 21 percent say there is no difference. Although the enforcement of community rules can generate discontent and calls for more stringent regulation of associations, only 11 percent of those surveyed want additional government control of association-governed communities. Almost 90 percent oppose more government involvement. While most residents do not want additional regulation of their associations, Murphy readily acknowledges that many community associations are not without issues. “It’s sounds pretty good that only eight of every 100 residents are dissatisfied with their own associations,” she says, “but that percentage represents close to 5 million Americans, so there is a continuing need for education and training.”

Education and Training CAI provides three levels of professional education for community managers, as well as a variety of tools and resources for the association board members and other homeowner leaders who play roles in the governance and management of their associations. “The education of managers and homeowner leaders is our primary reason for being,” says CAI Chief Executive Officer Tom Skiba, CAE. “Community association management is an increasingly complex business— and associations are businesses—so it’s more essential than ever that managers and homeowner leaders learn from respected experts in the field.” Skiba urges managers to take full advantage of professional development programs. “It’s the single most important thing managers can do for their client associations and their own careers,” he says. “Homeowners in every community deserve a professional manager who is trained, educated and always current on key issues and best practices that affect the well-being of the communities they serve.” Skiba adds that homeowners need to “step up and play a constructive and positive role” in their associations. “You get out of your

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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 15

photo compliments of Baum Property Services


communities what you put into them,” he says. “There’s no substitute for active and constructive homeowner involvement and no better way to build a strong sense of community.”

Best and Worst Asked to name the best aspects of living in an association, residents most often cite neighborhood attractiveness (24 percent), less

maintenance for individual homeowners (17 percent), community safety (13 percent) and property values (12 percent). Asked to name the worst aspects of their associations, 34 percent say there is nothing bad. That is followed by restrictions on exterior improvements (15 percent), dealing with neighbors (10 percent) and paying assessments (9 percent). Association homeowners

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pay assessments for services and amenities provided by the association. Services can include landscaping, building maintenance, garbage pickup, snow removal and street lighting. Amenities can include pools, clubhouses, tennis courts, playgrounds and association-sponsored social functions. Y

Serving Community Associations throughout Chicagoland Area:

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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 16


industry happenings Property Specialists, Inc. Longtime residential property management leader and founder of PSI, Tracy Hill, announced today that he will formally step down as President and CEO, citing a desire to spend more time with his family. “For nearly 40 years, the main focus of each day of my life was to provide excellent services for our clients. Morning, noon, and nights were dedicated to growing PSI, building better customer services, and shaping an emerging residential management industry,” said Mr. Hill. “It’s time to take a step back and truly enjoy my golden years with my children and grandchildren. I am very proud of the company and what it has become, and have full trust and faith that our employees will continue to serve our clients to the high standards we’ve set over the years.” As founder and President of PSI, Tracy Hill has established the firm as a strong regionally based company, competing with technology offered through larger national firms while maintaining the personal attention of a local entity. Under Mr. Hill’s leadership, PSI has grown from 10 communities to over 250 throughout the counties of Cook, DeKalb, DuPage, Kane, Kendall, Lake, McHenry, Will and Winnebago. The firm is currently one of only five Illinois firms to have obtained the coveted Accredited Association Management Company (AAMC), the highest designation awarded by Community Association Institute. In 2011, Mr. Hill expanded PSI to include maintenance and insurance partnerships, to reduce costs and establish higher standards for its clients.

munities throughout northern Illinois. Mr. Hill’s father, Kimball Hill, was the Founder and President of Kimball Hill Homes, and the developer responsible for establishing Rolling Meadows. Kimball Hill and Tracy’s brother David Hill are one of the only father son members of the National Association of Home Builders Hall of Honor. All three Hill men are members of the Home Builders Association of Greater Chicago Hall of Honor, an organization in which Tracy Hill served as President for two separate terms. Tracy Hill received the Condo Lifestyles Lifetime Achievement award in 2007 and has been a member of the Condo Lifestyles Advisory Board since 1996.

Landscape Concepts Management Landscape Concepts Management recently held an open house celebration at their corprate offices in Grayslake, IL to celebrate over 30 years in business. More than 200 guests enjoyed live music, chef stations, cocktails and raffles. Raffle sponsors that provided fun prizes included CBMT, Clesen Greenhouse, Conserv FS, Kfish Color, Russo Power Equipment, NexTraq, and Zylestra.

Mr. Hill named current Chief Operating Officer, Cathy Ryan, as the firm’s new President. Ms. Ryan has been an employee of PSI for 30 years. Mr. Hill will remain the Chairman of the Board of Directors, focusing on the macro aspects of the firm, while Ms. Ryan handles the day to day management and finances.

Mr. Hill founded PSI in 1975, continuing his family’s commitment to Chicagoland housing industry, and the people of Illinois. For almost 100 years, the Hill Family has worked diligently to build and maintain vibrant com-

“As a veritable legend in the housing industry, Mr. Hill has left some rather large shoes to fill,” said Ms. Ryan. “It is our goal to continue to grow PSI with the needs of the ever changing market, while maintaining the close family aspects that have made this firm great.”

Chicagoland Management

Community Specialists

Chicagoland Community Management recently announced that Brian Kelly has been named property manager at Carl Sandburg Village # 1, Carol Piper is the new property manager at Sheridan Pointe Condominiums, Anthony Jackson is the new property manager at River City Condominiums. Ron Goddini has been named portfolio manager/supervisor and Javier Parada has been named supervisor.

Community Specialists recently hired Kevin Horwitz as property manager at The Transportation Building, a 294 unit condominium building located at 600 S Dearborn in the heart of the Printer's Row neighborhood. Monica Melchiori is the new property manager for The Tower Residences, a 276 unit luxury condominium association in the Chicago Museum Park Complex , located at 1235 S Prairie Avenue in Chicago.

ACTHA ACTHA’s North Expo is Saturday, September 8, 2012 at the Westin Chicago North Shore in Wheeling and ACTHA's South Expo is Saturday, September 29, 2012 at the Tinley Park Convention Center –located at I-80 at Harlem Ave. The price to attend the educational programs for each of the events is $ 30 for ACTHA members. The nonmember rate is $ 45 per person. Register by August 10 for 30% discount. Registration opens at 8 a.m. Parking is free and there is no charge for attending the Expo which is open from 8:00 a.m. - 11:30 a.m. or any of the “Showcase Exhibitor Presentations.” For more information visit or call (312) 987-1906.

MCD Showcases the Races

The 2012 MCD Showcases the Races luncheon will be held on September 13, 2012. Visit for more information.




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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 17


industry happenings ABOMA Diamond Jubliee Celebration The Apartment Building Owners & Mangers Association will hold its 75th Anniversary Diamond Jubliee celebration on December 7th at the University Club Cathedral

room in Chicago. For more information on ABOMA call 312-902-2266 or Below are a few photos from over the years featuring current ABOMA leaders.

▲ ABOMA 1998 Holiday Luncheon

▲ ABOMA 1997 Holiday Luncheon

▲ 1998 Food Depository Benefit

▲ 1998 MCD Golf Invitational



▲ 1998 CondoLifestyles State-of-the-Industry

Professional Community Management

▲ 1997 ABOMA Manager’s Night Out


Michael D. Baum, CPM, PCAM


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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 18


From the Editor


ummertime typically brings warmer temperatures and lots of outdoor activities, but this summer’s extreme heat and related drought are challenging in many ways. Well being checks should be con-


ducted when heat warnings occur. In addition to the serious danger that hot ®

▲ Mike Davids

weather poses to the elderly and young, tempers sometimes flare when people are uncomfortable and cause neighbors to act badly toward volunteers, neighbors and management. Intense heat can turn a walk or any outdoor activity into a burden. Hot and dry weather also causes brown grass, dead plants, and crowded pools

JULY 2012 | VOLUME 16 | NUMBER 2 Editor & Publisher Michael C. Davids

– all of which can be a source of resident irritation. Our cover story provides a summary of recent legislation primarily affecting community associations that has been proposed and considered. Several bills have been sent to Governor Quinn and are pending his

Vice President Sherri Iandolo

signature. Several informed sources we talked to anticipate that SB 3202 and SB 3275 will likely be signed in

Art Director Rick Dykhuis

face again down the road. If you have an opinion and would like to share your feelings on these or other sub-

Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold Administration Cindy Jacob and Carol Iandolo Condo Lifestyles Magazine is published quarterly by MCD Media, a wholly owned subsidiary MCD Marketing Associates, Inc. For editorial, advertising and subscription information contact: 935 Curtiss Street, Suite 5, Downers Grove, IL 60515. 630/663-0333.

August this year. Of course some of the legislative issues considered are ripe with controversy and may resur-

jects of concern, please send us your comments and we’ll include your views in a future issue. Visit or ask your management and legal counsel about these issues. They should be able to provide you with current information. We have several articles that appear in our Board Basics column this issue. Two of these articles have to do with common questions that many community associations contend with. We believe that articles on basic topics for community association boards can provide insight and perspective that can assist in effective decision making. Typically if one community association has a question or issue, there are many others that are facing or have faced the same issue. Another Board Basics topic covered in this issue is an overview of a reserve study. A reserve study is a critical tool in good decision making for all community associations. Yet another basic issue you can learn about inside this edition is on elections. Elections involve a wide variety of topics ranging from voting procedures to filling vacancies to owner apathy and quorums. In the end, your elections determine who will be the

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.

leaders of your community and represent the association’s interests.

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.

variety of companies specializing in community associations have sponsored tables at this event. If your asso-

All material herein is copyrighted 2012©. No part of the publication may be reproduced whatsoever without written consent from the publisher.

events provide a terrific forum for association leaders to get questions answered, meet new vendors, share a

We also offer an update on the Life Safety and Fire Protection in this issue. Chicago recently strengthened its Life Safety Ordinance and some high rise buildings continue to wrestle with this sensitive and often costly issue. Our regular Industry Happenings column can also be found in this issue. MCD Media’s next special event is a luncheon at Arlington International Racecourse on September 13. A

ciation(s) has a special need or challenge, there will be a variety of experts specializing in community association issues including many members of the Condo Lifestyles advisory board who will attend. MCD special

story idea, or socialize with other volunteers and professionals. Thanks to the many new subscribers that have found our publication useful and informative. Special

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought. Advertisers assume liability for all content of advertisements printed, and also assume personal liability for any claims arising therefrom against the publisher relating to advertising content. The publisher and editors reserve the right to reject advertising or editorial deemed inappropriate for the publication.



thanks to the companies, associations and groups that are Authorized Distributors of Condo Lifestyles. Those of you who are not current subscribers can find subscription information on our website We encourage you to take this opportunity to make your association and your community all it can be. If you have an idea that would benefit other Community Associations, a success story to share, or some advice on how to avoid a problem or failure, please send us an e-mail ( Y

Michael C. Davids Editor and publisher


No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.

0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 19








(847) 564-3880 FAX


Audits Reviews Compilations Income Taxes Board of Directors Training Monthly Services: Collection of Assessments Paying of Bills Monthly Financial Statements Consulting for Developer Turnover and Major projects

Daniel Baigelman, AIA Capital Improvements • Reserve Studies Engineering Reports 85 REVERE DRIVE, SUITE B, NORTHBROOK, IL 60062

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

ECS MIDWEST, LLC Facilities-Geotechnical-Environmental Construction Materials Testing

(847) 279-0366 Reserve Studies Mold/Asbestos/Lead Evaluations Forensic Evaluations Curtainwall Window Assessments Façade/Garage/Roof Waterproofing Consulting Fall Protection





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



Contact: Steve Silberman, CPA


Contact: Michael C. Majewski, CPA

(630) 954-1400

Reserve Studies & Transition and Condition Assessment Reports Facade/ Roofing / Windows Garage Evaluations, Water Infiltration Investigations Fire Escape/Balcony/Porch Evaluations, Life Safety Evaluations



(847) 382-4100


THE HODDER LAW GROUP 206-909-2462 Gregory R. Hodder, Atty

630-832-2222 EXT 113

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


MICHAEL J. COCHRANE, CPA (847) 301-0377 Specializing in Accounting Services for Homeowner Associations.

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

Community Association Governing Documents, Vendor Contracts, Collections & Litigation

KEOUGH & MOODY, P.C. (630) 369-2700 CHICAGO OFFICE: 312-899-9989 30 North LaSalle, Suite 2340, Chicago, IL 60602

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


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

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

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.




0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 20


BUILDING RESTORATIONS BRAL RESTORATION, LLC. (847) 839-1100 Masonry and Concrete Restoration

FORUM GROUP, INC. (773) 732-3051

L E A K R E PA I R S MASONRY, CONCRETE, TUCKPOINTING, CAULKING See our ad on page 9 for more details or visit our website at:

GOLF CONSTRUCTION (219) 933-3420

HOLTON BROTHERS, INC. Masonry Repair Services, Tuckpointing, Caulking and Concrete Restoration



SUPER STEAM, INC. (847) 568-1440

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

Call Ed or Sam for a free quote.

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

CONCRETE 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


HARD SURFACE SOLUTIONS (847) 228-7230 / (630) 674-4520

Concrete Flatwork Specialists Asphalt Paving Curbs & Driveways | Sidewalks Footings & Foundations Colored Concrete Stamped Concrete Aggregate Finish Concrete


SUNDEK OF ILLINOIS (847) 392-3939


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”

Contact: Ryan Anthony


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

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Window and Related Masonry Interior & Exterior Doors | Siding & Gutters

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

Racetrack Arlington Park n visit For more www.condolifesty CONDO LIFESTYLES

contact: Steve Stenger






A Total Exterior Facade Restoration Company




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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 21








(312) 583-1169 FAX

Janitorial and Light Maintenance Services "Pass the white glove test!"


SIMPLEX GRINNELL (630) 948-1235

State Licensed Private Detectives All Types of Investigations Specialization in Foreclosure Process Service and Eviction Notices on Foreclosed Property


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



ALTHOFF INDUSTRIES 312.332.5700 Cost efficient Janitorial & Maintenance services for homeowners associations. Carpet cleaning, pressure washing, snow removal, etc.

Mechanical - Plumbing - Electrical - Building Automation


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




MESIROW FINANCIAL (312) 595-8135

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



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

KINGSBURY CLEAN (847) 768-1200

ACRES GROUP (888) 231-1300 / (847) 526-4554 Ceritfied Aquatic Applicator Department of Agriculture


Nancy Ayers

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


ACRES GROUP (888) 231-1300 / (847) 526-4554 Professional Landscaping and Snow Removal

SUPER STEAM, INC. (847) 568-1440

For more information, visit our website at

Call Ed or Sam for a free quote. No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©. 07.12



0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 22






LAUNDRYLAND ROUTE, LLC. (847) 998-4050

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

Contact Andrew Neuman



ILT VIGNOCCHI (847) 487-5200



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

Creating Lifestyles From The Outside In…™


CERTAPRO PAINTERS 630-742-5119 Interior & Exterior Painting • Wallcoverings Stucco, Masonry & EFIS Repair • Drywall Repair

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


(847) 364-6800 Environmental Remediation


Painting, Construction & Maintenance





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

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

FAMILY PRIDE LLC (630) 827-6362

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

Contact Paul Anzell




try State-of-the-Indus 12 December 2C0enter

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


ral Chicago Cultu n visit For more ty es lif www.condo




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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 23






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


Sealcoating / Crack-sealing / Striping Asphalt Installation


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

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

LEGUM & NORMAN MIDWEST (312) 944-2611

WERK MANAGEMENT (630) 241-0001 For All Your Property Needs

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




(630) 717-7188


contact: Tracy Davis






ELLIOTT & ASSOCIATES (847) 298-8300

“Premier Community Management”


“A Management Company with Values” contact: James Krech


S&S CUSTOM BUILDERS AND RESTORATION SERVICES (847) 568-1440 Call Ed or Sam for a free quote.

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





Reserve Studies & Transition Defect Studies


THE HABITAT COMPANY (312) 527-5400

1-800-221-9882 Conducted by Professional Engineers Enhanced Report / Most Customized Studies Long-term Thinking. Everyday Commitment.

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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 24





SPMS 630-692-1500

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

Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing


B.T. LAKESIDE ROOFING (630) 628-0093 See our ad on page 30.

See our ad on page 30.


HARRIS EXTERIORS & MORE, INC. (630) 372-7050 Serving Community Associations throughout Chicagoland Quality Service at the Right Price Roofing • Siding • Windows Doors • Soffit• Facia • Gutters Repairs • Carpentry • Maintenance See our ad on page 8.

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

PRO★TOP ROOFING (847) 559-9119 We’re Here When You Need Us!

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

KRAMER TREE SPECIALISTS, INC. 630-293-5444 Tree Pruning, Tree Removal, Cable Bracing, Plant Health Care, Tree Planting & Transplanting


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

THE CARE OF TREES (847) 394-3903

Window and Related Masonry Interior & Exterior Doors | Siding & Gutters

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




S&D ROOFING SERVICE (630) 279-6600

THE WINTER WERKS (630) 241-0001

100,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS Our experience & technical know-how gets the job done right the first time! Serving the area since 1963

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By David Mack

Ask An Attorney

Forcible Entry

A panel of attorneys answered questions submitted by a gathering of managers, board members and others with an interest in community associations. The panel was led and moderated by attorney Chuck VanderVennet with a supporting cast of lawyers Stuart Fullett of Fullett Rosenlund and Anderson, P.C. and Dawn Moody representing the firm of Keough & Moody. Not Official Legal Advice

Who Sends Delinquent Notices?

VanderVennet, in opening the session, offered his customary caveat to the audience that what its members were about to hear was not official legal advice or legal guidance to take home and follow but general information that related to the questions raised. More definitive answers for an Association’s particular situation should be obtained from lawyers representing your organization.

Q/ When a foreclosure is about to happen on an association property and there are delinquent assessments owed by the party involved, who is responsible for sending the delinquent notices demanding payment- the attorney or the property manager? A/ Any notice of any kind should be coming from the association’s attorney, especially under those circumstances.

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Q/ Would you explain the ins and outs of a forcible entry lawsuit. A/ A notice of amount due is sent by the association or management to the unit owner and, if he doesn’t pay, the association’s attorney should file a court action. You’ll eventually get control of the unit, but not title, if payment is not made and hopefully be able to rent it out until you receive what the unit owner had owed you. If you can’t find a renter, you will still be able to recover past due assessments up to six months under the law and, of course, you will have the non-payer evicted and not using the common elements.

Written Input From Owners Q/ Can the board ask for written comments from owners before a board meeting rather than let them raise them orally at the meeting? A/ With condo meetings this can be done because there is no requirement in the Condo Act for boards to allow unit owners to speak. If a condo board does permit owner input, it can do so via written comments. (But preventing owners from speaking out in an orderly fashion may not be a desirable approach to take if open communication and internal harmony are goals of the board.) Boards of common interest communities can also ask for questions and comments in written form but must allow time for the spoken word by unit owners under Section 1-40(b)(6) of the CIC Act, an obligation not imposed on condo boards.

Can Board Limit Speaking Time? Q/ Can a board limit the amount of time for homeowners to speak at a board meeting? A/ Again, the Condo Act does not mandate that a board allow speaking time for owners but, as previously said, it is a good idea to do so. CICs must allow that open period for oral comments by owners but boards should be able to set a time limit for any presentation, especially where there may be a lot of speakers waiting to comment. Three to Five minutes is an acceptable limit. That’s normally enough time for an owner to get a point across.

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Can Board Limit Rental of Units?

Process of Updating Rules

Q/ If a condominium association permits leasing, can the board decide to eliminate it or limit the percentage of rentals to 30% of the total?

Q/ We have to update rules. What is the process for doing that? Can a board do this without homeowner participation?

A/ It depends on the association’s governing documents. If they permit unlimited leasing, then a board can’t by rule either disallow it or arbitrarily limit the percentage. The board would have to amend the governing documents to take either action- eliminating it altogether or reducing it to a specific percentage. (But there are differing legal opinions on whether a rule can do this.)

A/ A board can prepare the rules and then make sure they are consistent with the law and the association’s governing documents. They should then be sent to counsel to confirm that compliance. After that, copies should be sent to homeowners and then a meeting held with them to get their input and feedback. Then the board can either make changes or adopt the rules as written. The rules do not have to reflect owner comments or suggestions if they are not appropriate. (See Section 18.4 of the Condo Act on rules.)

Spending Reserve Funds on New Common Element Q/ Reserve funds are earmarked for replacing or repairing existing common elements. Our governing documents require that we have a 2/3 approval by unit owners to install a new common element with reserve funds but can a board itself decide to put in a new common element?

Modernizing Declaration Q/ Is it expensive for a 12 unit condo association to modernize an old declaration? A/ It’s as expensive for a 12 unit association as for one of 200 or more units. The amount of the work is the same. But it’s worth while to do so. It can cost as much as several thousand dollars. Another panelist joked, “it depends on how complicated a board is during the process.”

A/ When it comes to brand new amenities (“additions” per the Condo Act), you do need 2/3 approval of the unit owners per Section 18 (a) (8) of the Act. A board does not have the discretion to take such an action unilaterally.

Different Color Door Q/ We live in a townhome association and a homeowner installed a new door of a different color than all the others which are the same color. What can be done?

E-Mail Only? Q/ In a single family homeowner’s association, can a self-managed board require all communications with it to go through a single e-mail address? They don’t answer phone calls.

A/ As long as the CIC has the proper rules and regulations in place and the governing documents support the action, the CIC can require the owner to return the door color to that of the others. And if the board declines to take action, a homeowner can file a derivative lawsuit on the association’s behalf to force the change.

A/ No, they must be open to all means of communication.

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Not Registered

Request to Review Records

Banning Smoking in Units

Q/ I don’t think our association is registered (incorporated) with the State. What should we do?

Q/ Our HOA is not a CIC. I want to review certain records of our association but if a particular record is not on a list our association attorney has I can’t look at it. Do I have to go to court to get it?

Q/ Can smoking be eliminated from the dwelling units in a condo building and, if so, how?

A/ Go to the Secretary of State’s website and initiate action. An association should be incorporated.

Providing Association Financial Summary Q/ In a common interest community, the board must provide all owners with a detailed summary of the receipts and expenses for the previous year but our property manager only wants to provide it to owners who request it.


A/ According to Section 1-45 (b) of the CIC Act, a reasonably detailed summary of receipts, expenses and reserves shall be provided to all owners. That should not be contingent on a request being made.

Steps to File CIC Violation Q/ If a board violates the CIC Act, what are the steps for a homeowner to file a lawsuit? A/ Consult an attorney versed in the law to see if you actually have a cause of action and go from there.

A/ Since you are not a CIC, you should be governed by the Condominium Act. The records you are permitted to review are listed in Section 19 of the Act even if they are not on the attorney’s list. See Section 19 for how to go about applying to review records. In some cases, you will have to state a proper purpose.



A/ The only effective way to ban smoking in units is through an amendment to the declaration. I wouldn’t try to do it with a rule.

Special Arrangement for Delinquent Assessment Q/ Our board has allowed a special dispensation in paying assessments to a delinquent homeowner. Must the board continue to honor the arrangement or can it rescind it?


probably best to consult your association’s FA/ It’s attorney on this but if it is a payment plan (that

Just A Legal Opinion?


Q/ When a homeowner calls an attorney’s opinion just an opinion, how do you respond? A/ An opinion is a very educated conclusion based on looking at the law and an association’s governing documents and applying them to the specific circumstances at issue. Sometimes there may be varying opinions from different attorneys but tell the unit owner you’re going to accept the opinion of your lawyer over the homeowner’s any day. If Fthat owner chooses to doDso, he can sue, claiming the opinion is wrong F and see what happens.

provides for eventual full payment of the delinquency) it should stay in effect until it is completed or the person defaults on its terms and conditions. Remember if you offer such an arrangement to one person you have to offer it to every other unit owner if they have the financial capability to meet payment terms. But keep in mind that such an arrangement does not excuse total eventual payment. Section 18 (o) of the Condo Act states that an association shall not forbear the payment of assessments by any owner.




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By Pamela Dittmer McKuen

Chicago Strengthens Life-Safety Ordinance After the 2003 fire that took the lives of six people trapped in a stairwell at the downtown Cook County Administration Building, the Chicago City Council passed an ordinance designed to thwart further such tragedy. The Life Safety and High-Rise Ordinance has been on the books for nearly a decade, but little has changed. Or has it?

tenants of apartment buildings at the execution of a new lease or the renewal of a lease. The deadline for completing the disclosure statements was June 15, 2012. The statement must be kept current until January 1, 2015, the deadline for full compliance. The revised ordinance also increases the

penalties for building owners who do not comply by increasing the fines for violations from $200 to $500 per day to $1,000 to $2,500 per day. Information on the LSE status of targeted high-rises is available online at The information is updated


he original ordinance, which addresses about 1,100 residential and 200 commercial pre-1975 buildings 80 feet and higher, requires owners to submit a Life Safety Evaluation (LSE) report and to meet minimum prescribed safety standards by January 1, 2012. The reports must be prepared by a licensed architect or professional engineer. Last year a Chicago Tribune investigation found that roughly half the residential high-rises had not submitted their plans, let alone made the needed improvements. In response, the City Council extended the compliance deadline by three years, to January 1, 2015. On January 8, 2012, a high-rise fire at 3130 N. Lake Shore Drive took a life and injured nine others including two firefighters. According to records, that building had yet to comply with the ordinance. Once again the City Council took action. In March, it strengthened the ordinance to increase transparency and accountability of building owners, which includes condo associations. The revisions mandate the additional task of maintaining a written disclosure statement as to the progress they have made in complying with the ordinance.

New Disclosure Regs The statement includes three components: Whether the building has filed a life safety compliance plan with the City; whether the life safety compliance plan was approved in writing by the City; and whether the modifications identified in the approved life safety compliance plan have been implemented. The disclosure must be made available to owners of condominiums and cooperatives and to

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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 30


monthly. Search “life safety.” The January fire and Chicago City Council’s response “definitely caught the attention” of the high-rise community, said Thomas Skweres, president and chief operations officer for Wolin-Levin management company and president of the Apartment Building Owners and Managers Association. “Not that anybody was ignoring it,” he said. “Some buildings have been working rather diligently. Some buildings have been concerned about the money. In these tough

economic times, any extra money that needs to be spent puts a burden on associations that are dealing with foreclosures and people not paying on time.” Overall, Skweres believes the ordinance and the new disclosure requirement are beneficial for associations, their residents and the public. “It gives them confidence in high-rise living,” he said. “We know that high-rise living is very safe and very fire-resistant, but this gives them another level of security.”

Tony Briskovic, vice president of Chicagoland Community Management, agrees about the safety factor of high-rise living. “High-rise buildings are specifically designed and built to withstand fires, even if the fire is in an adjacent unit,” he said.

The Sprinkler Controversy High-rises could be a whole lot safer than they are, said Tom Lia, executive director of the Northern Illinois Fire Sprinkler Advisory Board (NIFSAB) in Orland Park. He points out that the national standard for safety is the National Fire Protection Association’s 101: Life Safety Code, and Chicago’s ordinance falls well short. It is essentially a “watered down” version that does not address all of the key issues in high-rise fire safety. “These issues have been addressed, and are being addressed” says Bob Meyer who is Director of Engineering of Wolin-Levin, Inc. “Building codes in the City of Chicago are usually much more stringent than the State of Illinois. Hence the high rises built even before 1975 were built to contain the fire within the unit, thus making them safer than most any other residences.” The most controversial issue is fire sprinklers. NFPA 101 requires sprinklers in all buildings standing in excess of 75 feet, regardless of age. Illinois State Fire Marshall has adopted this code, but Chicago has not. Meyer notes that “because Chicago is a city with a population over 25,000 and they have enacted “Home Rule” much like other cities with populations giving them that privilege in the State of Illinois. The Chicago ordinance gives owners of pre-1975 high-rises a choice: They can retrofit their buildings with sprinkler systems or install alternative safety features. (One or two way communication systems, elevator recall, and a fire panel/annunciator panel) High-rises built since 1975, however, must be equipped with sprinkler systems. States and municipalities that require sprinklers throughout existing high-rise buildings include California, Florida, Massachusetts, Nevada, Atlanta, Philadelphia and Louisville, Ky.

3130 N. Lakeshore Drive “If the high-rise building at 3130 N. Lake Shore Drive would have been retrofit with a fire sprinkler system, the fire would have been




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controlled or put out in the room of origin,” Lia said. “The 32-year-old woman who died would still be alive, the nine others would not have been injured, and people who now have to find a new place to live until the fire, smoke and water damage is prepared would still be in their apartments.” Meyer explains further about the tragic fire event at 3130 Lake Shore Drive. “What is said above is true, but had the door to the unit not been propped open, the fire would have been contained within the confines of the unit itself. This woman died in the elevator when the door opened on the active floor and the fire had spread into the common hallway creating an 1800 degree environment. Had the building been equipped with smoke detectors, a fire panel and elevator recall the woman would not have been able to access the elevator and proceed to any floor - let alone the floor where the fire was active.”

Alternative Safety Features The ordinance’s alternative safety features include fire-rated stairway doors and frames,

and one- and two-way voice communication systems. A one-way communication system serves as a public address system connecting the fire control panel in the building lobby to speakers located in the elevators, elevator lobbies, corridors at internals of 75 feet, doors to the exit stairs and every fifth floor of the exit stairwells. This system allows a fire incident commander to broadcast instructions and status updates to building residents. A twoway voice communication system is a hardwired telephone located in the exit stairwells at intervals of every five floors. It allows firefighters to speak with the incident commander. Residential buildings less than 15 stories and 60 units require only a one-way voice communication system. The alternative safety features are not enough, said Lia. He pointed to the December 10, 2009, fire at 260 E. Chestnut St. that claimed the life of an elderly woman. Prior to the fire, the building passed the Life Safety Evaluation, although it is sprinklered only in the basement. Meyer contends, “Since the Chicago Building Code mandated that high rise build-

ings be constructed in a fire resistant manor, the overall death rate in high rise fires is extremely small when compared to fires in other dwelling structures like single family homes and four flats. The data is the data when you compare the loss of life from a high rise residential building to any other structural fire, the raw numbers are very small. ABOMA has over 400 associations and apartment or condominium buildings representing approximately 200,000 units and 400,000 occupants. We feel residential High Rise buildings in the City of Chicago are safe.” Sprinklers are the safest route, said Ira Norooz, structural engineer, professional engineer and principal of Maxima Consultants in Chicago. However, there are no guarantees. Human error and equipment malfunction can result in disastrous consequences. “A building’s life safety features must always be maintained, serviced and tested to make sure they are working properly,” he said.

Cost Concerns Meyer goes on, “Sprinklers are the safest

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0512.5391 CL[0712]40_Layout 1 7/12/12 1:43 PM Page 32


route, albeit costly for associations and building owners. The City of Chicago would like to see all buildings sprinkled but realize that in some cases it is just not possible in the current financial climate. The maintenance to the system is also an added cost for the associations and building owners. A mandatory annual fire pump test along with city fees and Chicago Fire Department witness costs thousands of dollars per year. An annual Fire Panel/Smoke Detector test is also mandatory and will cost thousands of dollars as well.” Few of the targeted high-rises have installed or plan to install sprinkler systems for reasons of both cost and invasiveness. Just the communications systems, far less expensive than sprinklers, is astronomical for most owners, said Sheli Lulkin, president of the Association of Sheridan Condominium and Cooperative Owners. “Some of these associations just can’t afford it,” she said. “I don’t know what they will do.” Since this is or has been an ongoing and evolving process since the Chicago Life Safety Ordinance was adopted in 2003, associations

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should have been budgeting for the needed upgrades to their buildings. Some fire protection companies are helping associations with special financing or a lease option to own for the electronic portions of the alternative safety features (smoke detection/fire panels/annunciators/elevator recall systems). Cost estimates are difficult to pinpoint because of the wide variation in building size

and architecture. Ira Norooz ballparks the starting price of the communications system at $100,000. The cost of a sprinkler retrofit is generally estimated at $3 to $5 per square foot. A sprinkler retrofit is not as expensive as many people might think, according to NIFSAB. The estimate often given is between $3 and $5 per square foot. All of Chicago’s

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high-rise buildings that do not have sprinklers all ready have the infrastructure in place. When retrofitting, the sprinkler system is connected to the standpipe system. All high-rise buildings are equipped with a fire standpipe system and water supply fire pump, which is typically located in the basement levels. The standpipe, usually found in the building’s stairwell, provides the water for firefighters’ hoses on each floor as well as for the sprinkler retrofit. Meyer adds his view on cost estimates, “a typical 30 story residential building with 200 units and an average unit size of 1000 sq. ft. of living space equates to a $600.000.00 to $ expense. This does not take into consideration the cost to each owner to repair and repaint/decorate, and clean their homes after the retro fit.”

Insurance Issues Yet another cost consideration is the building’s insurance premiums. Especially after a few high-profile fires at the beginning of 2012, insurance companies recently have become more interested in determining which buildings they insure that are in compliance

with the ordinance, said Nancy Ayers, senior managing director of the Insurance Division for Mesirow Financial in Chicago. “Some buildings that are not in compliance have been non-renewed, and have had to replace their insurance coverage,” she said. “The non-sprinklered buildings have come under more scrutiny.”

Fire Safety Not Cheap Regardless of how a building owner chooses to comply with the ordinance, fire safety does not come cheap. Discounts are hard to come by. “Shop around,” said Norooz. “Some companies do design-build. You might be able to save some money on the upfront charges when they draw up the plans and do the installation.” Another suggestion he offered is to combine the life safety work with other capital projects, such as elevator modernization. “The best thing is to look at financing instead of going to unit owners and have them pay out of pocket all at one time,” said Skweres. “Interest rates are not bad now. If you can

stretch out the payments for five to seven years, that can make the cost more palatable.” Briskovic said most of its client associations have made solid progress toward their compliance plans. About half are finished and the rest are working on them. “We have been budgeting for this for five years,” he said. “Most of our buildings have all ready collected the money. They have been putting money aside.” But Lia’s view is that sprinklers should be mandated, and now is a good time to do it. “Especially now that the City extended the compliance deadline, they should require building owners to follow the NFPA 101: Life Safety Code,” he said Meyer concludes “The best advice I can give to any association or building is when you complete any stage of the life safety evaluation call for an inspection and have the work recorded with the city, this will increase your overall score and show that you are complying with the LSE code. Don’t wait until you complete the entire list of necessary upgrades, if the work is to be done in stages then have the city approve each stage as it is completed.” Y


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CONDO LIFESTYLES are on private property and not normally within the jurisdiction of local law enforcement.

By David Mack

Common Questions for Community Associations

Q/ I have two questions. Can the condo board approve and put cell phone towers on top of our building without any other resident input? And what can be done by residents if a board member misrepresents a proposed amendment to the declaration?

Editor’s note: Below are some questions that have been sent in by our readers. The answers provided are of a general nature and should not be construed or used as legal advice for any specific association or situation. You should seek the advice of a qualified attorney that is familiar with community associations for specific situations at your association. Q/ I live in a condominium townhome. Recently the board put up stop and speed limit signs on our streets. Since these were not put up by the Village or the law enforcement where I live, are these legally enforceable? A/ Whether the signs’ restrictions are legally enforceable would depend on what the village’s role is with respect to the streets within the townhome community. If the streets are dedicated to the village and the village cleans, plows and maintains them, then the local police would enforce the limits. However, if the streets are not dedicated, which is usually the case if interior streets are not designed and built to the village construction standards, and they are only common areas of the association, then the board could establish reasonable restrictions for safety purposes. The board has the authority to enact rules and regulations as controls over the use



of common areas, which should be spelled out in the governing documents of the association. It could also impose fines for the violation of those rules and regulations, in this case the traffic signs. The board should issue a list of rules and regulations to the homeowners, among which is listed the policy regarding the signs. I would suggest that you check with the association and then the village to confirm which body has responsibility for care, maintenance and control of the use of the streets. And if they are the obligation of the association, do the local police have any role in enforcing the signs? It may be that these signs are like those placed in parking lots of shopping centers whose interior streets are privately owned and maintained. Such signs are placed in the hope that drivers will honor them for safety purposes but there is no fining for violating them because, again, they


A/ A board does have the authority to make decisions about the common elements and their use without input from the unit owners. That being said, however, there may be issues in connection with the common elements that it would make sense to discuss with the owners, especially if they are controversial. It would appear from your question that the issue of placement of the tower is controversial. Prior discussion with the owners wouldn’t be mandatory but it would be a matter of maintaining good relations with the owners and of being transparent in the board’s actions. The board should have had an attorney review the contract with the cell phone company to assure that the association’s interests are protected. There is also the matter of whether placing a tower on the building roof would violate any roof warrantee in effect. As a unit owner you do have the right to request to see the contract under Section 19(a) (6) of the Illinois Condominium Act by submitting a proper request to the board or management.

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BOARD BASICS In response to your second question, if the residents feel the proposed amendment is misrepresented, they can vote against it. Passage probably requires a 75% vote in favor of it. That should be in your declaration. The Condo Act and your by-laws also provide that unit owners can request a special meeting of the owners by submitting a petition signed by 20% of them. They could ask for such a meeting with the board to discuss any ambiguities that may exist in the amendment. Q/ At my condo we have a five member board with a president, treasurer, secretary and two members without titles. The president and treasurer say the two members without titles don’t have a vote when it comes to projects and contracts. Is this true? A/ (This answer was provided by Howard Dakoff of the law firm of Levenfeld Pearlstein, LLD. “The situation you describe is quite odd. I never heard of a board taking such an unreasonable position. Nonetheless, Section 18(a) (1) of the Condo Act states the board of managers shall be elected by the unit owners. Section 18.4 of the Act states that, ‘the board of managers shall exercise for the association all powers, duties and authority vested in the association by law…’. Nowhere does it state that only officers are entitled to vote. The (Illinois) Not for Profit Act has similar provisions- board members are elected by shareholders and the board administers the corporation. The interpretation being taken by the board is

a secret ballot. Why would a board want to do this unless they had something to hide? What do I need to do now to see how votes were made? We just had an amendment change that I didn’t agree with and to be honest I don’t trust our board.

blatantly inconsistent with the law. All board members have equal votes.” Q/ It was explained to me that the Illinois Condo Act prohibits the board president from voting on any matter before the board except in tiebreaker situations. Also I was told that it is improper for the board president to vote on a matter even if it were in a tiebreaker situation if the outcome would or could directly or indirectly monetarily benefit him/her in any way- such as awarding a contract to a friend or relative- as this would be considered a conflict of interest.

A/ The use of the secret ballot, traditional in all our political elections, is generally intended to allow voters to cast ballots so no one knows how they voted. According to Section 18(b) (10) of the Condo Act, and this should also be in your by-laws, a board of directors can adopt appropriate rules that enable the conduct of elections by secret ballot. When that procedure is put in place, the ballot is only marked with the percentage interest of ownership for the unit and the vote itself.

A/ The president of the board is not limited to voting only on tiebreaker situations. He can vote just as all board members on all matters that come before the board for consideration. However, no board member, whether president or not, should generally vote on matters in which they have any kind of interest, even if only apparent, because such an interest could be construed as or might actually be a conflict. Specifically on contracts, Section 18(a) (16) of the Condo Act essentially states that a board may not enter into any contract with a current board member or member of the board’s immediate family unless the relationship is disclosed to the unit owners who then have 20 days to petition for a unit owner vote on the contract. So the board could enter such a contract if the above conditions are met and the unit owners do not reject the contract.

The board may have gone to a secret ballot because some of the unit owners had indicated they would prefer not to have their identities known in voting, especially in associations where there were factions of unit owners campaigning and competing for control of the board and the association or controversial issues were to be voted upon. Section 19 of the Condo Act gives unit owners the right to review ballots and proxies on all matters voted on by unit owners during the 12 months following a vote by submitting a proper request to do so. However, in reviewing ballots where secret ballot voting was used, the party doing so would not be able to identify which specific unit owners voted which way but only whether the vote count was correct.

Q/ My association is looking to change our voting to

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1801 S. Michigan Did Not Burn Single Fire Sprinkler Stops Apartment Fire in High-Rise Building COMPLETE YOUR LIFE SAFETY EVALUATION NOW! A single fire sprinkler extinguished a fire caused by a candle that was left unattended in a tenant’s apartment.

of fire sprinklers and are choosing to retrofit buildings like 625 N. Michigan,1 E. Wacker Drive and 333 N. Ontario.

Instead of headline news about a major tragedy, the fire sprinkler limited damage to just $2,000 and did not displace the tenants for even a single day.

Tenants and condo owners can receive a discount of 5% to 20% on their fire insurance policies, and they also can receive common area insurance discounts for the associations. Fire sprinklerprotected buildings also allow owners to market their buildings as safer than non-sprinklered buildings.

“Follow Mayor Emanuel’s recommendation to “...use this time to put in place a sprinkler system and the safety and security systems you need.”

Chicago residential building owners and managers are recognizing the life-saving and property-protecting benefits

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or call NIFSAB toll-free at 866-264-3722 ©2012, Northern Illinois Fire Sprinkler Advisory Board. All rights reserved. A not-for-profit organization.

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If you are looking at a high-rise apartment or condo in Chicago, take a close look. Make sure it is protected by a fire sprinkler system. Why? Because fire sprinklers will save your life if there’s a fire. Sprinklers are the single most effective way to protect you in a fire. They control deadly heat, smoke and flames, and they protect your property. Only the sprinkler closest to the fire activates, not the entire system. Unfortunately, there are hundreds of high-rise buildings in Chicago that are NOT protected with fire sprinklers, many have not complied with the city fire safety codes. Imagine being in a high-rise that catches fire, but doesn’t have fire sprinklers to automatically put it out……. Would firefighters be able to reach the upper floors? Would you be able to survive? When you are ready to make a move, take a close look and choose the high-rise that makes sense—one protected by a fire sprinkler system. ©2012, Northern Illinois Fire Sprinkler Advisory Board. All rights reserved. A not-for-profit organization.

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