O CTOBER 2009 | VOLUME 13 | NUMBER 3
THE SOURCE FOR INFORMATION ON COMMUNITY ASSOCIATIONS, CONDOS, TOWNHOMES, CO-OPS & HOAS
Economy Impacts Association Volunteers F E AT U R E S
Recessionary Budgeting: Make Sure Your Association Has the Money It Needs in 2010 Common Questions for Community Associations Security Issues for Community Associations
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contents COVER STORY
Lou Lutz Legum & Norman, Mid-West An Associa Member Company
03 Economy Impacts Association Volunteers By David Mack S P E C I A L F E AT U R E
07 Recessionary Budgeting: Make Sure Your Association Has the Money It Needs in 2010 By Pamela Dittmer- McKuen BOARD BASICS
11 Common Questions for Community Associations by David Mack EVENT HIGHLIGHTS
15 MCD Showcases the Races 16 MCD Golf Invitational 17 ABOMA Anchors Away 18 Editor’s Message 19 Professional Directory 26 Industry Happenings 28 Government Briefs 29 Security Issues for Community Associations by David Mack 36 Condo Lifestyles State of the Industry
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COVE R STORY
B Y D AV I D M A C K
Economy Impacts Association Volunteers While assessments may be the lifeblood of associations, volunteers are the backbone. Both are essential to the viability of an association. Don’t collect the money and bills don’t get paid, work doesn’t get done and the property declines.
f residents don’t volunteer, there won’t be an effective board to make decisions or extra hands to help out with special projects or responsible residents for committees. The focus of this article will be on volunteering or, rather, whether these parlous times confronting our economy in general and the dire financial conditions faced by many individuals and families in associations specifically have affected the degree of owner participation in the activities and business of their residential communities. Has it gone up or down or remained essentially unchanged?
Up or Down? Tim Snowden, Deputy Director of Heil, Heil, Smart & Golee has noticed that it has diminished. “I have seen it on the decline,” he said. “There seems to be general apathy from all homeowners these days.” Tairee Dever Sutton of Tairre Management Services, on the other hand, has seen it hold steady, “Most of my buildings have had the same boards and owners involved for many years and they are committed to making sure the associations are as well run as a business,” she said. In fact, Sutton has noted some improvement in people pitching in. “I have actually had a few more owners want to
get involved because they want to make sure that their associations remain as fiscally sound as possible. The more it seems that an association is heading down a rocky financial path the more that owners get involved because it affects their pocketbooks.” In those communities managed by Curtis Walker and Association Partners, Inc., the degree of volunteerism has remained the same, which doesn’t mean that it is necessarily at a desirable level. “The associations that have had success in recruiting and retaining volunteers in the past are maintaining their level of volunteerism,” said Walker. However, he added, “those that had few volunteers still do have challenges getting them.” Mike Timlin of Cagan Management Group, Inc., has found in some cases, as Sutton has, that unit owner involvement has actually
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increased despite or even because of the poor state of the economy. “Homeowners are working together to establish quality operations- from their association’s budget and collection processes to the rules and regulations and general maintenance,” Timlin said. “Now that times are tough, a lot of highly skilled and professional individuals are choosing to participate to help the association get on track.”
Negative Affect But at other associations with which Cagan is affiliated the economic downturn has hit home harder and negatively affected owner participation. In those associations, “getting people to volunteer is not an easy task, especially when you add in the factors of people losing their jobs, homes and other valuable assets.” Economic distress can in some situations boost participation but more out of desperation rather than a good-natured desire to help out. “We have had instances where upticks in crime, linked to harder economic times, have caused a renewed interest and volunteerism in neighborhood watch,” said Walker.
Barry Katz, of Omnibus Management Services, has seen no impact on volunteerism due to economic conditions, “I have not noticed any change,” he said. But his portfolio consists of associations that have not been significantly affected by the economic downturn. “These are unique properties, very exclusive residences.” Residents are affluent and many are retired. Others are leaders of business organizations or philanthropic ventures. The board members function much as a board of directors of a corporation with the president acting as the Chairman of the board and CEO. Management provides the actual operational leadership of the properties, implementing the board’s directives and policies. That’s about the extent of unit owner activity in association affairs. “The overall level of volunteerism in these properties is low (and always has been) and relatively limited to that board participation,” said Katz. “Typically management runs each of the properties with little operational participation from ownership.” Authority is delegated to management to take care of business. There are hardly any economic issues of consequence to deal with
that would necessitate greater board or other unit owner involvement. This arrangement is likely very true at other affluent associations whose residents, while some may be affected in other personal ways by financial matters due to the shaky economy, are able to hold onto their housing and contribute monetarily to the viability of their communities.
No Problems, No Volunteers But this disinterest by unit owners in getting involved is not a characteristic that necessarily has anything to do with the state of the general economy or their personal financial situations as long as no problems surface. Even less affluent associations than those overseen by Katz will let management do almost everything as long as it has or seems to have the operation under control. “Generally, the smoother things are running, the less likely we will see volunteers- good (economic) times or bad,” said Walker.
Lost Jobs, Lost Volunteers A drop off in owner volunteerism or participation can be manifested in different ways.
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COVE R STORY
“Some board members have resigned due to personal issues, as they have lost their jobs or loved ones had lost their jobs,” said Timlin. Sutton has seen the same thing happen in a few cases. “I have had one or two board members resign recently due to job pressures,” but she also noted that others have hung in there despite personal problems. “I have a few boards where board members are in financial trouble and remain on the board,” she added. Finding substitutes for those who have left under such circumstances has not been easy at associations managed by Association Partners and probably at other properties as well, a situation that can at least partly be attributed to the personal worries of unit owners who under better economic conditions would come forward to lend their assistance. “It has been difficult to replace board members who leave because of personal financial issues,” said Walker. Sometimes members of the board are forced out and their decline in participation is involuntary, which aggravates a situation where volunteers are scarce. “We have had several board members in both middle and upper income associations either behind in their assessments or losing their homes through foreclosure and as a result were no longer allowed to be on the board,” added Walker, who noted, however, that more typically unit owners faced with similar personal issues, “simply have stopped participating in association business.” Snowden expects the same condition of a lack of replacements to continue right through the next elections at some of his associations. “I have several buildings where there is a vacancy on the board that cannot be filled.”
Snowden also mentioned an association where no one could be found to organize the annual pool party. One owner had handled these tasks in prior years but he was stepping down and no one has offered to take his place. While this is a very narrow gauge of declining volunteerism, “the case seems to be rather indicative of many associations today,” said Snowden.
Priorities and Participation Snowden summed up the growing apathy
he has seen and why he believes it is becoming more of a problem. “May I dare speculate that when unit owners fear they might get foreclosed on and that they may have to declare bankruptcy, they become uninterested in their community associations,” he said. “Logically this makes sense.” It’s a matter of priorities. Usually the limit of participation by unit owners not on boards is as spectators or occasional commentators- although the numbers are underwhelming-at board meetings or
Specific Situations Snowden also cited a number of specific incidents to evidence a decline in interest or participation by unit owners in association affairs. One building had a meeting to enact a special assessment and only one non-board member showed up. “Usually you get half the association to a meeting when a special assessment is adopted,” he said. Here, “no one seemed to care.” If you can’t pay your bills or you’re going to lose your home, what’s one more expense (the special), seemed to be the attitude that was driving the disinterest. Or as Snowden put it, “if you plan on declaring bankruptcy, would a special assessment bother you?”
other open events such as social gatherings. Timlin hasn’t seen much change in this type of involvement. “It has remained the same for the majority of (our) condominium associations,” he said. The same is generally true for associations managed by others. Katz, for example, said, “I’m not aware of any difference as a result of the economic times.” But there are exceptions. Walker has noted some decline in unit owner presence at such gatherings, especially by those who may have
attended previously but are fearful of being questioned about being behind in assessments. “Owners don’t want to discuss or be reminded of personal financial problems in public,” he said. “They will typically avoid association events.” This has led to more direct personal contact away from public scrutiny between owners and board members to discuss delinquent assessments and payment plans.
Seniors Volunteer More? Associations populated primarily or
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exclusively by seniors are generally able to fare better when it comes to participation by unit owners than in properties where a younger age group predominates. “Our experience is that older residents, specifically retirees, are more likely to volunteer at any time,” said Walker, noting, however, that their motivation can, too, be weakened by economic distress. “At the same time, many of these residents have experienced significant erosion of the value of their retirement assets or have purchased retirement condos only to be unable to sell their large prior homes and as a result have no interest in volunteering.” Age doesn’t make any real difference in the extent of owners serving on boards in the associations managed by Sutton. “I have a mix of young and old on all of my boards and whether or not they have financial issues does not dictate their level of involvement,” she said.
Outlook for Volunteers What is the outlook for volunteerism in the near future as the economy continues to perform in a depressed mode? “I believe that many people feel that the future is uncertain,” said Snowden, “and because of this they do not want to make commitments and are actually hesitant to become too enfranchised in their community associations.” Walker doesn’t see the level of participation declining further but, “staying flat and really depending on the level and type of activity (see his comments about neighborhood crime watch above) in the community. Where critical situations arise, it may increase. Although Sutton, to this point, has seen owner participation hold firm or actually increase somewhat, she is pessimistic about its future for boards if economic conditions don’t start to improve soon. “I think it is going to worsen as owners do not want to put their necks on the line with their neighbors because they may need to raise assessments or pass a special assessment,” she said, pointing to one association that will soon have to do just that or suffer a significant financial setback because of a foreclosure and collection problem. The loss, “needs to be recovered from someone and that would be the rest of the ownership in the building.” That will be a heavy responsibility and it is easy to see why few people would want to have to shoulder it. Y
S P E C I A L F E AT U R E
B Y PA M E L A D I T T M E R M C K U E N
Recessionary Budgeting: Make Sure Your Association Has the Money It Needs in 2010 the swimming pool is shuttered, but the snowplows have yet to arrive. that means, according to the annual calendars of most community associations, we’re smack-dab in the middle of budget season. It’s the time when boards and finance committees lay out their financial programs for the coming year. for 2010, the task is one of the most challenging ever, perhaps in industry history.
umerous factors are at play, all leading to lost income and heftier expenses. Jobless rates are high, causing many an owner to fall behind on assessments and some into foreclosure. Elderly residents took severe hits to their retirement portfolios, with stock market losses and declining interest rates. Builders, too, left their marks but little else when they became insolvent and disappeared. Meanwhile, aging buildings and
infrastructure need increasing amounts of repair and restoration—today and tomorrow. Associations need more and more funding at the same time less and less money is available.
When Will Economy Improve? As to whether the economy is improving or not, the opinions and evidence are varied. Perhaps it’s a little of both. Certified public accountant Ike Zunzunia
of Millennium Professional Services Ltd. draws upon two adages to describe his assessment: “May you live in interesting times,” as translated from a Chinese proverb, and “These are the times that try men’s souls,” a 1776 saying by founding father Thomas Paine. “However, looking forward, most of the financial professionals have been expressing the higher level of optimism that the worst of the recession is in the past,” he said. “Based on what I am seeing, the market is improving slowly,” said Brad Schneider, certified public accountant, certified financial planner and certified fraud examiner of CondoCPA. “There are still projects being built. There also are plenty of units going into foreclosure and there are attempts at short sales, which may or may not come to fruition.”
Keep owners in the loop. They’ll be more understanding when the bills come due or they see sacrifices the board has to make.
Any improvements are not going to happen quickly, he predicts. “The environment is very uncertain,” said Joseph Armenio, property manager and president of Sudler Building Services, a division of Sudler Property Management . “We still are not out of the woods yet on foreclosures. People are still not all that sure who is losing jobs and who is getting jobs. And then we’ve lost many of the interest-generating sources of revenue from our various investment funds.” He summarized: “Basically, the unit owners are the money source in a community association. Managing the bottom line is critical.” Timothy Snowden, deputy director of property management for Heil, Heil, Smart & Golee in Evanston, isn’t as positive: “I don’t see any light at the end of the tunnel. I still see units foreclosed on and bankruptcy filings.”
How Are Associations Responding? In the meantime, associations are responding in a variety of ways. They can’t change the recessionary forces at work. What they can do is make sound business decisions that, hopefully, counteract and balance the impact of these forces. An association might not make the forward progress it would like, but it won’t fall behind as fast either. “Most of my associations have gone to bare-bones budgeting,” said Snowden. “They are doing only the most necessary things.” He’s also seeing associations more willing to take out loans to finance major capital projects rather than rely on special assessments. “I had one association that in the past
had no problems passing a $10,000 per person special assessment,” he said. “This time they gave people the option of financing the assessment through a loan.” “Most associations shortened the wait to get an attorney involved in delinquent accounts from 60 to 90 days to 30 to 45 days,” said Schneider. “This helped get delinquent unit owners on track faster unless they were going to drop into foreclosure.”
Advice for 2010 Budgets As for those 2010 association budgets, the professionals offer a treasure trove of advice: » Plan for shortfalls. It’s not realistic to figure every unit will pay every assessment on time, not these days. You’ve got to budget for less money than you’re due. Your attorney should be able to provide input and updates as to what money you can expect or not. Associations have no other choice but to face the declining revenue and be prepared to meet the challenges of expenditures, both operating and long-term, said Zunzunia, who expects delinquencies to be as high as 10 percent to 20 percent, depending on the association. Armenio tells associations to budget more for bad debt and for attorney’s fees. There are no guarantees that an association will recover in the courts all the back assessments or attorney’s fees on an account. In the meantime, lawyers need to be paid. “The money comes out of your pocket until you recoup what you’re going to recoup,” he said.
S P E C I A L F E AT U R E
» Reduce discretionary spending. If you traditionally hire window washers or carpet cleaners to come in several times a year, eliminate one or two visits. Cut down the swimming pool or clubhouse hours of operation. Skip a year on your painting rotation. Armenio suggests buying supplies and services much smarter to reduce costs, such as proportional dispensing systems for chemicals, forms of ice melt that are less expensive than the long-used calcium chloride products, saving energy with load-reduction programs, and modifications to building automation systems such as increasing the air conditioning temperature a couple of degrees or lowering the water temperature at night. Joel Garson, president of Hillcrest Property Management, tells his associations to look at major expenses to determine if any can be put off or spread out over time. “A project that would normally be a oneyear process might now become a three-year process,” he said. Remember that the definition of “discretionary” changes from one association to another. Spending reductions should not sig-
nificantly alter the expectations and lifestyles of the residents, warned Schneider. “If, for instance, they cut security at a complex that relies on security for unit owner safety, they will save dollars immediately, but they will be decreasing the market value and perhaps even the long-term reputation of the building,” he said. “If unit owners cannot sell their units because of lack of services, this will make the foreclosure issue even worse.” “In some cases, volunteers really help,” said Snowden. “We have landscaping parties at some buildings. You have to be careful that everyone is properly insured, but we can save some money that way.” » Keep owners in the loop. They’ll be more understanding when the bills come due or they see sacrifices the board has to make. “Some associations have stepped up their efforts to educate people that they need to pay their assessments or they could be evicted from their condos,” said Snowden. “A lot of people have said they didn’t know. If they did, at least some of them would pay their assessments first, if they weren’t headed for foreclosure.” One suburban association this summer
sent a letter telling owners that their decks would need replacing in four to six years and the cost will be about $5,000. Few can complain about the short notice! » Increase revenues. Associations increasingly are passing on certain expenses to their owners rather than pay them from the common coffer. These include insurance deductibles in event of a claim and the maintenance and replacement of limited common elements. “Some have added an energy surcharge for increased gas and electrical expenses,” said Schneider. “Others have added or increased charges for items they did not charge for before—storage, late fees, clubhouse or party room rental.” “We’re keeping more moving deposits or charging back repair costs when we know who did something, when before if someone broke something, we’d say it’s okay, we were going to replace it anyway,” said Snowden. He prefers charge-backs over fines because fines create greater hostility, he said. » Raise assessments. Budgets should be based on how much money it takes to run the
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association, not a certain percentage of increase the board feels is acceptable. Costs are going up. Your assessments should as well. “Associations are trying to be as sensitive as they can in raising assessments, but there is a point at which deferring maintenance becomes counterproductive,” said Armenio. “Deferring critical repairs, especially to the infrastructure, can wind up costing not 10 percent or 20 percent more, but maybe double or triple the cost.” The deterioration escalates and spreads, he explained. You may start with needing 15 linear feet of caulk and sealing, but if you let it go, then you may have 45 feet or 50 feet and water gets behind it and causes all new problems. “Some board members get caught up in the popularity contest and forget their fiduciary responsibilities,” said Schneider. “They think if they can give the unit owners a budget with no increase or even a reduction, they will look really good.” » Think green. Energy and utility services take a huge chunk out of an association’s
budget. Environmentalism is more than using fluorescent light bulbs, although that’s a great money-saving tip. It’s a philosophy and a culture. Recommendations from Armenio: If you’re replacing a major building component, invest in energy efficiency. Re-evaluate your reserve study, especially if it hasn’t been updated in recent years. Very recently, new technologies have come along that save money and increase longevity. “One of the simplest things any building can do is maximize its recycling program,” he said. “Make it easy for people to give you as much stuff as possible. Put recycling containers on every floor. The cost of hauling recyclable material is a fraction of what it costs to haul away bulk trash.” One Sudler building cut its hauling fees by more than half after embarking on a recycling program, he said. » Keep up with reserves. One thing certain during this time of uncertainty is that there will be a tomorrow. When tomorrow comes, your association will need money. It
might be tempting, but don’t spend down your reserves for operating expenses, said Zunzunia. And continue making contributions to reserves, said Garson. “Associations might not be able to fund their reserves to the fullest amount, but we’re still telling them to put in something,” he said. If you’ve got a capital project that needs doing but not enough money in reserves to pay for it, here’s a low-impact financing technique recommended by Garson: Suppose your monthly reserve contribution is $1,000. Talk to lenders to find out how much money you can borrow and pay back, interest included, at $1,000 a month. That’s the size of the loan you can comfortably afford. You’ll repay it with money that would have gone into reserves. “Basically, you’re switching the line item ‘reserve funding’ to ‘loan repayment,’” he said. “What it does is allow you to do more work now without increasing assessments.” Y
B Y D AV I D M A C K
Common Questions for Community Associations Below are more questions from our readers along with answers and resources that we hope you find useful. Readers are encouraged to submit their queries for response in a future issue. Keep in mind that these are not formal legal opinions.
Developer Turnover Q/ I reside in a new condo building, which is still under the control of the builders. We 24 residents are now ready to assume control of running the association. We have a board selected and approved by the owners. Since we have never done this before, what do we need to know on how to get started? Any suggestions would be greatly appreciated. A/ One of the first things for your board members to do is become familiar with Section 18.2 of the Illinois Condominium Act. It will tell you about turnover and the documentation you are entitled to receive from the developer. Most importantly, you will want to receive all the association
funds accumulated by the developer and which haven’t been used to pay expenses during his oversight of the board. You are also entitled to receive a full accounting of how those funds from assessments were spent. Hopefully, there will be some funds in a reserve. If you have any suspicions or questions that the developer can’t answer about the finances, you should consider hiring a CPA familiar with association accounting to do an audit. If you are not going to self-manage, you will have to consider whether you want to use the developer’s management agent or hire a new one. You can find a list of CPAs, management agents and lawyers (you may need one at this juncture depending on
how cooperative the developer is in providing you with the documents and funds or if there are unresolved physical problems with the common elements) and other vendors at www.condolifestyles.net. Some new associations hire home or building inspectors to do a full inspection of the common elements to determine if there are any deficiencies but this is more common with conversions than with newly constructed buildings. If you feel confident that you received a quality product from the developer, you would not likely need such a review. But be sure to get all the contractor and manufacturer warrantees because some will run for only a year and you want to be sure to know when you have to take any action, if any is needed, before their expiration. Ask the developer to go over their period of effectiveness. Be sure to obtain necessary insurance cov-
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erage as outlined in Section 12 of the Condominium Act. At some point, the first board may want to establish rules and regulations regarding such things as pets, parking, smoking, renters, nuisances, etc. If you hire a management agent, that firm can give you ideas from other associations. If not, you may want to network with other associations already in existence to learn about their experiences. Aside from the Condominium Act, you should also familiarize yourselves with the declaration and by-laws of the association, one purpose of which is to serve as a basis for some of the rules the board may want to adopt.
Renting Unsold Units Q/ My daughter is approaching the closing date on a condo conversion unit. We suspect the developer is renting as well as selling units because of a glut of unsold condos or owner financial problems or a shortage of buyers with prime credit ratings. What options does my daughter have in a situation in which she thinks she is buying a unit in a building in which the
developer is also seeking renters for the unsold units? A/ About the only option is not to buy. The developer is still in control of the association until 60 days after closing occurs on 75 percent of the units, at which time the first owner controlled board should by law be elected, and generally he can lease units that are not sold, however, he does not have an absolute right to do so. If the governing documents prohibit leasing, he can’t do so. But, frankly, it is hard to imagine that a developer would restrict his right to rent out units, especially when the market for condos is softening and sales are harder to consummate. Have your daughter check the declaration and by-laws to determine if leasing is permitted. Even if the documents were completely silent on renting it still would be allowable because there is no clear prohibition against it stated therein. Often times, once the unit owners take control, where leasing has been permitted, they seek to amend the governing documents to eliminate or restrict it.
Vote on Special Assessment Q/ Our declaration calls for a vote of all owners to enact a special assessment, but our legal counsel tells us that the Illinois Condo Act supersedes our declaration and the board does not have to have the vote of the owners to do a special assessment. Do you agree with this interpretation? Also if the board does not need the approval of the owners, does it need a super majority vote of board members to enact a special assessment or is a simple majority sufficient? Our declaration is silent on this. A/ The attorney is correct in his opinion. Boards do not have to take votes of the unit owners to enact separate- also called “special assessments.” However, there is a provision in Section 18(a)(8) of the Condo Act and somewhere in your by-laws for 20 percent of unit owners to petition for a vote on a separate assessment that, together with the regular assessments in the budget, will result in exceeding the sum of the previous year’s combined regular and separate assessments by 15 percent. That petition must be filed within 14 days of the board’s action in approving the special. If that timetable is met, then a majority of the unit owners can
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vote down the special at a meeting called for that purpose. Also, in Section 18.4(a) of the Act you will find an explanation of how unit owners can disapprove an improvement to the common elements if the expenditure exceeds five percent of the annual budget as long as that improvement is not mandated by ordinance or is not an emergency. A super majority of board members is not needed to enact a separate assessment- a simple majority is sufficient.
Presidential Proxy? Q/ My partner and co-owner of my unit has been board president for the past few years but is going to resign immediately because of stress-related problems caused by certain uncooperative board members. My question is “could he give me something like a proxy or power of attorney to act as president for the remainder of his term. I didn’t see our by-laws addressing this issue.” A/ The matter of filling unexpired terms of board members should be in your by-laws according to Section 18(a)(13) of the Illinois Condo Act. Only the remaining board members have the power to select a president or any other board officer, for that matter, so your coowner can’t give you that authority by the means you suggested. The remaining board members also have the power to fill the vacancy created by your partner until the next annual meeting when a new election would have to be held to fill that spot. However, twenty percent of the owners can petition for an interim election to select a new board member, but not necessarily as president, for the balance of your partner’s term. Of course, if you were elected by the unit owners, you could fill the position but, again, it would be the board members acting together who would select the president.
Written Resignation Q/ Must a board member hand in a written resignation before his/her successor can be appointed or elected or is it ok to just give an oral resignation? A/The Illinois Not for Profit Act, which applies to all condo associations even if they are not incorporated, states, in Section 108.10)g), that a director may resign at any time by written notice to the board president (or chairman) or the secretary and is effective on the date delivered unless the notice specifies a later date.
Nuisance & Noise Q/ We have a unit that is owned by an elderly woman who allows her twenty something daughter and the daughter’s boyfriend to stay with her as renters. The woman works the evening shift so she is not home when all hell breaks loose in the unit. I mean drinking, loud talking, etc. The owner of the unit under these folks wants the board to take some type of action. What kind of action can we take on private property? A/ It’s a matter of what’s in your by-laws or rules and regulations about nuisances. Nuisances are a catch all term that covers a lot of problems that can be caused by residents. If you have a rule or by-law against nuisances, then it would seem that this couple is creating one if they are annoying neighbors on a consistent basis. Nuisance violations can be dealt with as any other rule violations, initially with a letter informing the owner of the problem with the warning that further action, including a fine for continued violations, will follow if the behavior causing the nuisance finding is not abated. If you are not sure about the credibility of the person bringing the charge or the circumstances can’t be easily substantiated by any statements of excessive noise provided, it may have to be arranged for someone on the board No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2009©.
to be called to the unit below when a disturbance is being created to verify its intensity. Before imposing any fine you are required by law to hold a hearing to air out the matter, providing both parties to the dispute the opportunity to present their side. Ultimately the board could move to evict the couple if a fine does not lead to moderation of their behavior to a reasonable standard. That procedure would, of course, require an attorney. If the noise and related problems are illegal, you can always call the local police.
Cigar Smoke Q/ A cigar smoker lives in the unit below mine. I know I cannot make him stop smoking but the smell is entering my unit if I open my patio door or my bedroom window. It is a worse smell than cigarette smoke. I don’t smoke and do not even allow anyone to enter my unit who does. Is there anything I can do other than talk to the man who is a senior and probably has no intention of giving it up? A/ Some associations have banned smoking in common areas and a few have even gone so far as to prohibit it in the units also. The former action it is generally agreed is a reasonable exercise of board authority but the
latter is questionable and has never been contested in court in Illinois. Probably the best first step would be to speak to the man directly and perhaps he will be understanding and find a way to prevent the odors he generates from filtering out of his unit to affect you. You should check to see if other unit owners are similarly affected and if they are, approach him in a group and appeal to him diplomatically, which may be more effective at causing him to relent and take some mitigating action. If that fails, a second step would be to seek the board’s intervention with the smoker. While some may consider it a stretch, noxious fumes or smoke could probably be considered a nuisance and most by-laws or rules contain a provision against creating nuisances. Armed with that prohibition, the board, after confirming that indeed the cigar smoking is adversely affecting some unit owners and is truly a nuisance, could compel the offending party to suppress the fumes from his cigars. There are devices on the market that dissipate the smoke and odors from the burning of tobacco and the use of one may be an acceptable compromise to the problem. If the person refuses to cooperate, a fine could be imposed until compliance is achieved.
How do you increase your property values while saving money?
Management Q/ Do all Management companies charge 10% of assessments as their fee? If yes, what is their incentive for containing costs? A/ Not all management companies set their fee at 10% of assessments. In fact a management company generally will not charge the same percentage for all the associations it manages. Fee is determined by a number of factors including such things as type (condo, HOA or townhouse) of association, size (no. of units) of association, type of buildings (low vs high rise), expected degree of difficulty in managing, various time requirements and more. So fees will vary. There a great difference between Chicago and suburban properties, especially if the property is a High Rise. As to your second question, containing and controlling costs is one of the primary functions of a management company and one on which the renewal of its contract with an association often depends. Obviously this can be a tricky area as there are many ways to compare costs and each property is different in terms of their requirements, needs and desires. Y
ASSOCIATION INSURANCE with Personal Service
Coder taylor aSSoCiateS. iNC. LICENSED ARCHITECTS & ENGINEERS CODER TAYLOR ASSOCIATES, INC.
337 W. MAIN ST. BARRINGTON ILIINOIS 60010
Helps you prepare for future maintenance expenses by preparing a reserve study that lets you know when repairs will be needed. Saves you money by designing proper speciﬁcations. through research and engineering, we assist you in hiring qualiﬁed contractors & ensuring that their performance is up to the associations’ expectations. Helps you take a proactive approach in protecting the value of your property from your pavement to your roof tops.
• Comprehensive, Cost-Effective Coverage for Condominium, Townhome & Homeowner Associations • Expertise on the Illinois Condominium Property Act • Risk Management Services
740 Waukegan Road • Deerfield, IL 60015-0700 Phone: 847.940.4300 • Fax: 847.940.4315 www.rosenthalbros.com 14
MCD Showcases the Races
Arlington International Racecourse | September 11, 2009
▲ Shown above from Comcast are (Front,LtoR) Denise Corbin and Dawn Reynolds and (Back, LtoR) Rick Neufeld, Dave Butler Tom Silvasy, Jack Christie, Bob Novak, Greg Larsen.
▲ Karen Corral - Harris Bank, Shannon Schwarzwalder, Dawn Moody - Moody & Keough and Debbie Mateos - McGill Management,
▲ Pictured above are Tairre Dever-Sutton -Tairre Management, Amy Knyaston -Community Specialists, Sherri Iandolo-MCD Media, Carol Piper -Wolin-Levin, Inc. Jesse Bowman -Landscape Concepts Management, Pete Santangelo -Community Advantage of Barrington Bank & Trust, Cathy Ryan -Property Specialists, Inc., Tim Snowden -Heil Heil Smart & Golee, Tracy Hill -Property Specialists, Inc., Tom Wykle -B.T. Lakeside Roofing and Dick Fink -Coder-Taylor Associates. C O R P O R AT E TA B L E SPONSORS
▲ Shown above are (Front LtoR) Larry Atkins, Colleen Atkins, and Bob Krohn. (Back LtoR) Crystal Riggio, Amanda Derby, John Derby, and Steven Riggio Riggio-Boron, Ltd.
▲ Pictured above (LtoR) are Cherie Martel , Keith Walker -Harris Bank, Sam Martel - -S&D Roofing, Mike Skulstab - Nu Trend Services, and Doris Martel - S&D Roofing.
B.t. Lakeside Rooﬁng CertaPro Painters Community Advantage of Barrington Bank & trust Community Specialists CSR Rooﬁng Elliott & Associates tax Attorneys EMCOR Services team Mechanical Keough & Moody P.C. Lakeshore Waste Services Smart Elevator Co. tairre Management Waldman Engineering Consultants Wolin-Levin, Inc.
MA JOR SPONSORS
Comcast Landscape Concepts Management Riggio/Boron, LTD. RAFFLE SPONSORS
Edwards Engineering tairre Management Services
Dickler, Kahn, Slowikowski & Zavell, Ltd. ~ concentrating in ~
Condo & HOA Representation Corporate • Real Estate • Litigation • Wills Personal Injury 85 W. Algonquin Rd., Ste #420, Arlington Heights, IL 60005
847-593-5595 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2009©.
MCD Golf Invitational
Eaglewood Resort | July 11, 2009
▲ Shown above are (LtoR) Tony Dister -Community Advantage of Barrington Bank with First Place Golf Tournament foursome Stan Niketic, Tony Briskovic, Rudy Karastanovic, Mitch Vucic - Chicagoland Management & Realty.
▲ The Care of Trees
▲ Shown here is 2nd place foursome Matt Serna, Keith Johns, Rick Dubois, Dave Titus -DuBois Paving.
▲ (LtoR) George Markoutsas, Terry Holum and Dominic O'Hara -Landscape Concepts Management, John Bieg -Draper and Kramer, Molly Anderson and Jesse Bozman - Landscape Concepts Management.
Kinsella Landscape, Inc. & Landscape Concepts Management HOLE-IN-ONE & CONTEST SPONSORS the Care of trees ~ Hole in One Community Advantage of Barrington Bank & trust ~ Hole in One Property Specialists, Inc. ~ Hole in One B.t. Lakeside Roofing ~ Hole in One DuBois Paving ~ Putting Contest to benefit Special Olympics Landscape Concepts Management ~ Grill at the turn Kinsella Landscape, Inc. ~ Bocce tourney Baum Property Services ~ Beverage Sponsor Central Sod farm ~ Raffle Sponsor A&R Security ~ Raffle Sponsor Painters touch Services/PtS Construction, Inc. ~ Closest to Hole Hard Surface Solutions ~ Closest to the Hole HOLE SPONSORS AAA Painting Contractors Alan Horticultural Enterprises, Inc. Autumn tree Care Experts Brouwer Bros. CertaPro Painters Community Specialists CSR Roofing Downes Pool Company Harris Bank Kovitz Shifrin & Nesbit Levenfeld Pearlstein, LLC Lakeshore Waste Services Quality Restoration the Restoration Group Smart Elevators Smithereen Pest Management Services tairre Management Services EMCOR Services team Mechanical Vanguard Community Management Wolin-Levin, Inc. 2009 M C D G O L F CO M M I T T E E tim Conway –Golub &Co & Greg Semmer –Kinsella Landscape, Inc. Co –Chairs tom Wykle –B.t. Lakeside Roofing, tony Briskovic – Chicagoland Management & Realty, tracy Davis – Property Specialists, Inc., tairre Dever-Sutton – tairre Management Services., tony Dister –Community Advantage of Barrington Bank & trust N.A., Mike forsell - Heil Heil Smart & Golee, Cathy Ryan Property Specialists, Inc., tom Skweres –WolinLevin, Inc.,
ABOMA Anchors Away
Columbia Yacht Club | September 3, 2009
▼ Kathleen Schomburg, Catherine McCarty, Jenna Barnes and John Leanse -Draper and Kramer, Inc. ▲ Shown above are (LtoR) Elena Lugo Wolin-Levin, Inc., Sherri Iandolo -MCD Media, David Shaw -Legum & Norman Mid-West, Jeff Hoosin -Lieberman Management and Debbie Galassi -Draper and Kramer, Inc.
▲ Shown above is the ABOMA Anchors Away Committee
SPONSORS Abbott Painting, Inc. ABM-Window Cleaning Access Media 3 ACR Admiral Security Services Door Staﬀ Solutions American Door & Dock Brower Brothers Steamatic Chicagoland Management & Realty, Inc. Clarence Davids & Co. Community Advantage, Barrington Bank & trust Community Specialists Contech fire Detection CSR Rooﬁng Contractors, Inc. EMCOR Services team Mechanical facility Supply Systems, Inc. faithful+Gould Invsco Management Company Johnson Controls Jones & Cleary Lakeshore Waste Services Laundryland Route, Inc.
Lieberman Management Services MCD Media Condo Lifestyles & the Landscape Buyer Mesirow financial Northern Weathermakers HVAC Otis Elevator Company Penland & Hartwell QCi Restoration RCN telecom Reliable Building Systems, Inc. Riggio/Boron, Ltd. Rogers Park florists Smart Elevators Company Smithereen Pest Management Standard Parking Suburban Elevator Sudler Property Management t&C tiling the Building Group top Notch Painting Universal Laundries Wolin-Levin
E D I t O R ’ S M E S S A G E
he challenges of 2009 have been very trying for most of us. financial concerns seem to dominate our lives even more
than past years of economic hardship. Although, there have
been some recent gains in the stock market, our economy continues to struggle on many fronts. Many experts predict that things will get slowly
better but this change cannot come fast enough for many of us.
▲ Mike Davids
Some of the most visible ways that the current financial crisis is impacting community associations are foreclosures, evictions, delinquent assessments, and declining home values. One of the few bright spots has been low interest rates. We continue to offer resources and advice on these
OCTOBER 2009 | VOLUME 13 | NUMBER 3 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold Administration Cindy Jacob and Carol Iandolo Condo Lifestyles Magazine is published quarterly by MCD Media, a wholly owned subsidiary MCD Marketing Associates, Inc. For editorial, advertising and subscription information contact: 935 Curtiss Street, Suite 5, Downers Grove, IL 60515. 630/663-0333.
challenges in an effort to help you find the best way for your association (s) to manage it’s finances. Our cover story deals with how the economy is impacting Association volunteers. this article offers insight on the views of a variety of managers on how their residents are responding to the current state of affairs in terms of their time and participation. Our second story is on the topic of budgeting during a time of economic recession and provides some tips and suggestions on how you and your association can manage your budget effectively for 2010. We also offer a story in our Board Basics column that provides answers to a variety of common questions on issues that many community associations contend with. We welcome your questions and will do our best to provide a response in our next issue. Sorry, we cannot provide personal replies. “Security Issues for Community Associations” is a special feature that covers important aspects of security from performing a security assessment to providing security personnel and resources to best suit your association’s needs. Our Government Briefs and Industry Happenings column along with Event Highlights also appear in this issue. Of particular note is that manager licensing has now become law for community associations in Illinois. We will discuss the details and impact of this new law and others in future
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.
publications and programs.
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.
ics facing CA’s will be discussed at our upcoming Condo Lifestyles State of the Industry program,
All material herein is copyrighted 2009©. No part of the publication may be reproduced whatsoever without written consent from the publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought.
State of the Industry Program December 10 Some of the most pressing topics for community leaders include government regulations such as manager licensing and financial issues related to budgeting, banking, foreclosures, evictions, collections and controlling expenses for your community association (s). these and other current topwhich will be held on December 10th at the Chicago Cultural Center. You can find more information and a registration form on page 36 of this issue. thanks to the many new subscribers that have found our publication useful and informative. We are very pleased to be celebrating MCD Media’s 20th anniversary this fall and wish to extend special thanks to the firms, associations and groups that participate in and support Chicagoland Buildings and Environments, the Landscape Buyer and Condo Lifestyles. As we get ready to welcome in another new year, 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
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.
or failure, please call us at 630-932-5551 or send us an e-mail (email@example.com). Y Michael C. Davids Editor and publisher
S E RVICE DI R E CTORY
ACCOUNTANTS MICHAEL J. COCHRANE, CPA (847) 301-0377
FULL CIRCLE ARCHITECTS, LLC (847) 564-0884 (847) 564-3880 FAX
FOSCO, FULLETT & ROSENLUND, P.C. (847) 259-5100
Daniel Baigelman, AIA firstname.lastname@example.org Capital Improvements • Reserve Studies Engineering Reports
KEOUGH & MOODY, P.C. (630) 369-2700
Specializing in Accounting Services for Homeowner Associations.
CONDO CPA A Division of Schneider, Cupuro & Associates, LTD.
www.fullcirclearchitects.com 85 REVERE DRIVE, SUItE B, NORtHBROOK, IL 60062
630-832-2222 EXT 113 CONTACT BRAD SCHNEIDER Brad@CondoCPA.com
KELLERMEYER GODFRYT & HART, P.C. (847) 318-0033
CERTIFIED PUBLIC ACCOUNTANTS
Accounting Solutions for Management Companies & Self-Managed Associations Audit & Accounting Services Income tax Reduction & Planning
SELDEN FOX, LTD. CERTIFIED PUBLIC ACCOUNTANTS
Investigations and Repair Documents for: Exterior Walls, Windows, Roofs, and Parking Garages Condition Surveys and Reserve Studies www.kghpc.com
Contact: Michael C. Majewski, CPA
WALDMAN ENGINEERING CONSULTANTS (630) 922-3000
MILLENNIUM PROFESSIONAL SERVICES - CPAS (847) 419-1120 Monthly & Year-end Accounting Services Contact Ike Zunzunia – BSBA, MSA, CPA Ike@Millenniumcpa.com
CODER TAYLOR ASSOCIATES email@example.com
KOVITZ SHIFRIN & NESBIT (847) 537-0500 www.ksnlaw.com Covenant Drafting & Enforcement Advising & Consulting with Boards Construction Defect Litigation Collecting Delinquent Assessments
ORUM & ROTH, LTD. (312) 922-6262
ASBESTOS/LEAD ABATEMENT IFD INC. ASSOCIATED ENVIRONMENTAL LLC 847-364-6800
CHICAGO OFFICE 30 North LaSalle, Suite 2340 Chicago, IL 60602 (312) 899-9989 www.kmlegal.com
Intellectual Property Law trademarks • Patents Condominium Law General Litigation Contact Mark D. Roth
Asbestos Abatement • Lead Paint Mitigation www.ifd-associated.com
Architects • Research • Engineering Specifications • Reserve Studies
K2N CREST P.C. (630) 990-9595 Architectural & Interior Design Investigation & Condition Surveys Repair Design & Specification Construction Administration Reserve Studies Ordinance & Code Compliance Reports
for more information, visit our website at
AMERICAN CHARTERED BANK (847) 540-5210
DESIGN INSTALLATION SYSTEMS (847) 470-8100
CONCRETE BY SENNSTROM (630) 406-1200
Contact Rob Busam: firstname.lastname@example.org
Install New Concrete Remove Old Concrete Stamped & Colored Concrete Repair Concrete • Seal Concrete Walks • Pool Decks • Balconies Professional Service Since 1970 www.concretebysennstrom.com
BLOOMINGDALE • DOWNERS GROVE PALAtINE • LAKE zURICH • MUNDELEIN NORtHBROOK • tINLEY PARK SCHAUMBURG • Mt. PROSPECt • CHICAGO ELK GROVE VILLAGE • BARtLEtt • SOUtH BARRINGtON VERNON HILLS • WARRENVILLE
Innovative financing and Cash Management for Associations John Mangan, Group Senior VP
FORUM GROUP, INC. (773) 732-3051 Peter.Maneyski@forumGroupInc.com
L E A K R E PA I R S
COMMUNITY ADVANTAGE OF BARRINGTON BANK & TRUST (847) 304-5940 Loans, Reserve Investments & Lock Box Services www.communityadvantage.com
MASONRY, CONCREtE, tUCKPOINtING, CAULKING See our ad on page 33, for more details or visit our website at: www.ForumGroupInc.com
ITASCA BANK & TRUST (630) 773-0350
GOLF CONSTRUCTION (219) 933-3420
Contact Mark Stelter www.itascabank.com
NEW CENTURY BANK
HOLTON BROTHERS, INC.
Contact Len Mayersky at
Masonry Reapir Services, tuckpointing, Caulking and Concrete Restoration
888-3HOLTON (888) 346-5866 www.holton brothers.com
THE PRIVATE BANK (847) 482-8118 Contact Marty Klauber email@example.com
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 www.hsshardsurfacesolutions.com
THE LORUSSO COMPANIES (630) 231-9009 CONCREtE & ASPHALt Install New • Remove Old • Repair • Footings Foundations • Sidewalk • Parking Lots • Driveways www.lorussocompanies.com
DOORS QUALITY RESTORATIONS (630) 595-0990
FRAMA BUILDING PRODUCTS Doors/frames/Hardware/Installation
BUILDING RESTORATIONS ABEL BUILDING & RESTORATION (847) 543-9800 www.abelrestoration.com
630-543-8493 RIGGIO/BORON, LTD. (847) 531-5700
A total Exterior facade Restoration Company www.RiggioBoron.net
MCGINTY BROTHERS PROfESSIONAL LAWN & tREE CARE
CARPET CLEANING CENTRAL BUILDING & PRESERVATION L.P. (312) 666-4040 Since 1924 tuckpointing Masonry Repairs & Reconstruction Concrete Restoration facade Inspections Sealant & Caulking Application
(847) 438-5161 www.McGintyBros.com
R & S CARPET & UPHOLSTERY CLEANING, INC. 708-243-0635 "We specialize in cleaning High Rise Buildings" tile & Grout • Pressure Washing Move Out/Detail Cleaning Serving Chicagoland Area for Over 10 Years
S E RVICE DI R E CTORY
ELEVATORS/CONSULTANTS OTIS ELEVATOR CO. (312) 575-1629
SMART ELEVATORS CO. (630) 544-6829
SUBURBAN ELEVATORS CO. (847) 783-6200
FIRE/FLOOD RESTORATION THE RESTORATION GROUP, LLC (630) 580-5584 www.trgrestore.com
BROUWER BROS. STEAMATIC (800) CLEAN54 Photo Inventory, Moving, Storage or Disposal www.bbsteamatic.com
E.L. JOHNSON INVESTIGATIONS, INC. (312) 583-1167
ENERGY GAS & ELECTRIC
Contact: Ryan Anthony www.selectenergypartners.com
TOWER BUILDING SERVICES 312-404-3943 www.towerservices.net Cost efficient Janitorial & Maintenance services for homeowners associations. Carpet cleaning, pressure washing, snow removal, etc.
State Licensed Private Detectives All types of Investigations Specialization in foreclosure Process Service and Eviction Notices on foreclosed Property firstname.lastname@example.org
DEWITT STERN 312-252-2157
GARBAGE CHUTE CLEANING
NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) 866-2NIFSAB (866-264-3722)
BROUWER BROS. STEAMATIC (800) CLEAN54 (708) 396-1477 www.bbsteamatic.com
BROUWER BROS. STEAMATIC (800) CLEAN54
www.nu-trendservices.com Commercial Painting & Cleaning Steam Cleaning • Power Washing
(312) 583-1169 FAX
FIRE SAFETY & PROTECTION
NU-TREND SERVICES, INC. (847) 534-2548
FORECLOSURE & EVICTION RELATED SERVICES
SELECT ENERGY PARTNERS LLC (312) 593-6412
MESIROW FINANCIAL www.condorisk.com
HOLLINGER SERVICES, INC. (847) 437-2184
HOLIDAY DECORATIONS KINSELLA LANDSCAPE, INC. (708) 371-0830
All types of environmental cleaning. (708) 396-1477
contact: Lori Pastore, CIC,AIS www.dewittstern.com
Property Casualty • Employee Benefits Workers Compensation www.HollingerInsurance.com
ROCKWOOD COMPANY Myrna Ordower
TEAM FIRE PROTECTION OF ILLINOIS (847) 875-1128
HAYES MECHANICAL (773) 784-0000
Contact Carl Stocking www.TMI.com
2007 IREM Vendor of the Year www.hayesmechanical.com
(312) 621-2320 ROSENTHAL BROS. INC. INSURANCE Karyl Dicker foray www.rosenthalbros.com
(708) 560-1248 GENESIS CONSTRUCTION 847-895-4422
for more information, visit our website at
ACRES GROUP (888) 237-1800 / (847) 526-4554
Professional Landscaping and Snow Removal www.acresgroup.com
Professional Lawn & tree Care
CLEAN AIR SCIENCE (847) 344-0607
ALAN HORTICULTURAL ENTERPRISES, INC. (630) 739-0205
Mold & Water Damage Experts RESIDENTIAL-COMMERCIAL-INDUSTRIAL Asisstance with Insuance Claims Post Remediation Assessments & Occupancy Studies
SPRING-GREEN LAWN CARE (800) 830-5914
BALANCED ENVIRONMENTS, INC. (847) 395-7120 www.BalancedEnvironmentsInc.com
MAILBOX WORKS (630) 355-9989 (773) 528-3111
BROUWER BROS. STEAMATIC (800) CLEAN54
Large Variety of Commercial and Residential Mailboxes Intercoms and tele-Entry Address Signage & Engraved Nameplates Installation Services
ILT VIGNOCCHI (847) 487-5200 www.iltvignocchi.com
KINSELLA LANDSCAPE, INC. (708) 371-0830
ASSOCIATED ENVIRONMENTAL LLC
Environmental Remediation www.ifd-associated.com
MARION RESTORATION, INC. (773) 286-4100
30 Years of experience in Masonry & Concrete Restoration tuckpointing • Masonry Cleaning Lintel Replacement • terra Cotta Repair Critical Inspections
AAA PAINTING CONTRACTORS, INC. (630) 231-8350
LANDSCAPE CONCEPTS MANAGEMENT, INC. (847) 223-3800 www.landscapeconcepts.com
SEBERT LANDSCAPING, INC. 630-497-1000 www.sebert.com
“All types of Environmental Cleaning” www.bbsteamatic.com
MECHANICAL EQUIPMENT & SERVICE
THORNAPPLE LANDSCAPES, INC. 630-232 2076 / 800-464-3443
Quality Landscaping Since 1947 www.thornapplelandscapes.com
CERTA PRO PAINTERS (866) 441-8259 Interior & Exterior Painting • Wallcoverings Stucco, Masonry & EfIS Repair • Drywall Repair www.certapro.com email@example.com
An Emcor Company
COMPLEX PAINTING & CARPETING 847-895-4422
for more information, visit our website at
PAINTERS TOUCH SERVICES/ PTS CONSTRUCTION, INC. (630) 372-8400 www.painterstouchservices.com
S E RVICE DI R E CTORY
DUBOIS PAVING (847) 634-6089 (800) 884-4728
COMMUNITY SPECIALISTS (312) 337-8691
PROPERTY SPECIALISTS INC. (847) 806-6121
SUDLER PROPERTY MANAGEMENT (312) 751-0900
HARD SURFACE SOLUTIONS (630) 674-4520
THE HABITAT COMPANY (312) 527-5400
THE LORUSSO COMPANIES (630) 231-9009
HEIL, HEIL, SMART & GOLEE (847) 866-7400
TAIRRE MANAGEMENT SERVICES (847) 299-5740
HILLCREST MANAGEMENT (630) 627-3303 / (312) 379-0692
VANGUARD COMMUNITY MANAGEMENT
CONCREtE & ASPHALt Install New • Remove Old • Repair • Footings Foundations • Sidewalk • Parking Lots • Driveways www.lorussocompanies.com
PEST CONTROL SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500
WOLIN-LEVIN INC. (312) 335-1950
JONES & JONES, INC. (630) 963-9000
Contact Tom Skweres
PROPERTY MANAGEMENT KANE PROPERTY MANAGEMENT CORP. (773) 472-2300
AEGIS PROPERTIES CORPORATION (773) 667-8900
REAL ESTATE TAX ATTORNEY ELLIOTT & ASSOCIATES (847) 298-8300
BAUM PROPERTY SERVICES, LTD., AAMC (630) 897-0500
LEGUM & NORMAN MIDWEST (312) 944-2611 www.lnchicago.com
RESIDENtIAL & COMMERCIAL
MCGILL MANAGEMENT, INC. (847) 259-1331
CARUSO MANAGEMENT GROUP, INC.
ABC DECO INC. 773-701-1143
NIMROD REALTY GROUP (847) 724-7850
Painting & Wall Repairs Hardwood floors/ tile Installation Kitchen cabinetry sale & installation "Serving Community Association's for over 10 Years" Contact: Mike Chinte firstname.lastname@example.org
For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2009©.
ROOFING ACTIVE ROOFING CO., INC. (773) 238-0338 (708) 430-8080
ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888
DOWNES POOL COMPANY (800) 939-9309 Build Commercial/Residential Weekly Service, Open/Close Renovations, VGB Compliance Leak Detection, Largest Staff of Experienced technicians & Pool Attendants 40 Years in Business www.downespool.com
Established 1965 Maintenance & Repairs Roofing/Sheet Metal/tuckpointing www.activeroofing.com
A&R SECURITY (630) 366-4103 www.arsecurity.com
B.T. LAKESIDE ROOFING (630) 628-0093 See our ad on page 5. www.lakeroof.com
SEAL-TIGHT PROTECTIVE SERVICES, INC. (847) 640-2210 www.stpsguards.net
CSR ROOFING CONTRACTORS (708) 848-9119 www.csr-roofing.com See our ad on page 35.
PRO★TOP ROOFING (847) 559-9119
S&D ROOFING SERVICE (630) 279-6600 50,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS Our experience & technical know-how gets the job done right the first time! Serving the area since 1963
SUAREZ ROOFING, INC. 773-235-5455 Your Complete Roofing Solutions www.suarezroofing.com
SPMS 630-692-1500 Heaters Pumps • Repairs • Chemicals Pool Maintenance • Complete Water Analysis Pool Guards, Inc. email@example.com
SNOW REMOVAL TREE CARE HARD SURFACE SOLUTIONS (630) 674-4520
AUTUMN TREE CARE EXPERTS, INC. (847) 729-1963
SIDING / RENOVATIONS KRAMER TREE SPECIALISTS, INC. 630-293-5444
B.T. LAKESIDE ROOFING (630) 628-0093
tree Pruning, tree Removal, Cable Bracing, Plant Health Care, tree Planting & transplanting www.kramertree.com
www.lakeroof.com See our ad on page 5.
MCGINTY BROTHERS PROfESSIONAL LAWN & tREE CARE
ESKENAZI, FARRELL & FODOR, P.C. (312) 939-1664
Investigation & Condition Surveys Repair Design & Specification Construction Administration Reserve Studies Ordinance & Code Compliance Reports
THE CARE OF TREES Certified Arborists, Accredited, 5-time “Company that Cares” Honor Roll Member www.thecareoftrees.com
For Display or Professional Services Directory Advertising Info, Call (630) 202-3006
for more information, visit our website at
TV-BULK CABLE & SATELLITE
COMCAST (866) 594-1234
LAKESHORE WASTE SERVICES (773) 685-8811
WINDOWS/REPLACEMENTS WOODLAND WINDOWS & DOORS 630-529-DOOR (3667) www.woodlandwindows.com
ONSHORE NETWORKS 312-850-5200 Ext. 131
Bulk or Retail, Internet & Satellite tV www.onshore.com
ASSOCIATED ENVIRONMENTAL LLC
RCN (312) 955-2322
www.ifd-associated.com Renovation • New Construction Window Systems • Noise Abatement Curtain Wall Systems Aluminum Windows: Wausau,Winstrom, fulton, Alumitech Wood Windows: Andersen, Kolbe& Kolbe Steel Windows: Crittall, Steelite
IFD, INC. (847) 364-6800
WINDOW WALL SERVICES, INC. THE CAULKING COMPANY (708) 361-9333 www.windowwallservices.com All Types of Window Restoration Weather Stripping / Hinges Handles and Adjustments Curtain Wall Repair Specialists
For Display or Professional Services Directory Advertising Info, Call (630) 202-3006
Property Services, AAMC
Professional Community Management CELEBRATING OU
Contact: Michael D. Baum, CPM, PCAM
630-897-0500 6 3 0.9 9 0 .9 5 9 5 K 2 N
K2 N.C O M
P. C .
Pulte Homes Names New President Steve Atchison
the Habitat Company recently announced the appointment of Diane White as director of condominium management. In this role, which she began on September 8, White will lead the group's revitalization as part of the Habitat Company's commitment to the condominium management market. "We are thrilled to bring Diane on board. the outstanding quality of our condominium management business has been one of the best kept secrets in Chicago and we expect Diane to change that. With her broad management experience and service focus she will drive excellence across our condominium management portfolio, helping us take this business to the next level," said Mark Segal, president and CEO of the Habitat Company. Prior to joining the Habitat Company, White served as vice president of operations for the field Museum, where she oversaw the management of all aspects of
Community Specialists Community Specialists recently announced that the Aqua at Lakeshore East Condominium Association has joined the roster of prestigious, Chicago condominium high-rises managed by Community Specialists. As the newest addition to the spectacular new community called “Lakeshore East”, Aqua boasts more amenities than ever found in a single building. the Shore Club, as the recreational facilities are called, consists of an indoor pool, an outdoor pool, a basketball court, cardiovascular equipment room, aerobics room, massage and therapy rooms, a theatre, club rooms and a running track. there are 268 new condominium homes on floors 53 through 80 of this new, striking addition to Chicago’s skyline. It is located at 225 N. Columbus Drive and offers phenomenal views of the Chicago’s lake, parks and skyline. Occupancy at the Aqua condominiums was scheduled to begin on September 10, 2009. Community Specialists principals Ron L. Hickman and
the visitor experience, reorganizing the museum around a customer-first approach. She held two other positions at the field Museum, director of public services and human resources representative, as well.
Steve Atchison, 40, was named president of Illinois/Michigan for Pulte Homes last month when Bloomfield Hills, Mich.-based Pulte bought Centex in a $1.3-billion deal that created the nation’s biggest homebuilder. the acquisition also makes Pulte the market leader in Chicago, based on number of sales, and Mr. Atchison says the firm is in growth mode. “We are in the market for new opportunities, and we want to be aggressive,” says Mr. Atchison, who took over the job last week after relocating here from Detroit. “Our outlook for the Chicago market is optimistic.”
White has a bachelor's degree in management from Northeastern Illinois University and an MBA from Benedictine University.
Mr. Atchison oversees about 135 people here in the combined companies operating out of offices in Elgin and Schaumburg. He says the offices will be combined, but it hasn’t been decided where yet, and that some additional layoffs are likely because of overlap even as field operations are poised to expand.
founded in 1971, the Habitat Company LLC is a full-service real estate company with more than 1,000 team members operating in metropolitan areas throughout the country.
Rosemarie Wert have appointed Andrew Warner, a seasoned veteran of residential real estate management, marketing and development, as Property Manager for the condominiums at Aqua. Mr. Warner has many years of involvement with some of Chicago’s finest condominium developments as well as extensive experience in ▲ The Aqua at Lakeshore East Condominium several east coast cities as well. Community Specialists also manages the Chandler at Lakeshore East. Ms. terry Dixon, Chandler Property Manager, previously supervised a number of Chicago area condominium and cooperative developments. the Chandler at Lakeshore East consists of 300 units.
Mr. Atchison replaces Pulte’s Brian Brunhofer and Centex’s tim Stapleton, who both left when the merger was completed Aug. 18. Mr. Brunhofer, who spent 11 years with Pulte, including six heading Chicago-area operations, says he’s looking for a position locally with another large builder or a smaller firm eyeing opportunistic buys in hopes the market has bottomed out. photo: Eric Hausman
The Habitat Company
A Detroit-area native who grew up in a home his father built has been tapped to head the Chicago operations of the newly combined Pulte Homes Inc. and Centex Corp.
“there might be more opportunities on the entrepreneurial side,” Mr. Brunhofer says. Efforts to reach Mr. Stapleton were unsuccessful. Last year, Pulte was the Chicago area’s top-selling homebuilder, with 582 sales, including its active-senior targeted Del Webb subdivisions, according to tracy Cross & Associates Inc., a Schaumburg-based real estate consulting firm. D. R. Horton Inc.’s Cambridge Homes was second, with 433 sales, while Dallas-based Centex ranked fourth, with 323, so the combined Pulte/Centex would have had more than twice as many sales as the area’s No. 2 homebuilder. In the first half of this year, however, Cambridge was No. 1, with 285 sales, while Pulte ranked second, with 183. Centex ranked fourth, with 107, so again the combined Pulte/Centex would have claimed the top spot with 290 sales, according to tracy Cross data. the merger is a good fit here because Centex has developments in areas where Pulte hadn’t gone, such as around far southwest suburban Joliet, says Erik Doersching, an executive vice-president and managing partner with tracy Cross. Mr. Doersching also says Centex, whose name is to remain as a Pulte brand, focuses more on entry-level homes while Pulte has more expensive, move-up housing and the senior-oriented Del Webb brand. “they’re doubling marketshare here,” Mr. Doersching says. “their combination also provides a much stronger continuum of product, from the entry-level sector up to the mature adult.”
Keough & Moody, P.C Keough & Moody, P.C. recently announced the opening of their Chicago office located at 30 North LaSalle, Suite 2340, Chicago, IL 60602.
J.D. Power and Associates Homebuilder Survey Rankings Pulte Homes ranks highest in customer satisfaction with new-home builders in the Chicago, Ill., market, according to the J.D. Power and Associates 2009 New-Home Builder Customer Satisfaction StudySM recently released on September 15, 2009. In addition, Del Webb ranks highest in the New-Home Quality Study also released. “the tough new-home market has created a fiercely competitive environment in which only the strongest companies have survived,” said Paula Sonkin, vice president of the real estate and construction industries practice at J.D. Power and Associates. “fortunately for buyers, this has resulted in notable improvements in customer satisfaction with home builders and new-home quality overall. this is great news for new-home buyers—particularly first-time buyers—since builders are offering unprecedented high levels of quality, value and service at relatively low prices.” Overall Customer Satisfaction the New-Home Builder Customer Satisfaction Study, now in its 13th year, includes satisfaction rankings for builders in 24 markets. Nine factors drive overall customer satisfaction with home builders: builder’s sales staff; builder’s warranty/customer service staff; workmanship/materials; price/value; home readiness; construction manager; recreational facilities provided by the builder; builder’s design center; and location. Pulte Homes achieves a score of 847 on a 1,000-point scale in 2009—an increase of 24 points from 823 in 2008—and performs particularly well in the Chicago market in six of nine factors: builder’s sales staff; construction manager; workmanship/materials; builder’s warranty/customer service staff; price/value; and location. following Pulte Homes in the market rankings are Lakewood Homes (827) and town & Country (822). Lakewood Homes performs particularly well in the builder’s design center; construction manager; and home readiness factors. the average customer satisfaction index score in the Chicago market is 814—three points above the 24-market average of 811. In addition, satisfaction has improved substantially in the Chicago market in 2009—up 20 points from 2008. the study finds that the median customer-reported home size in the Chicago market has decreased in 2009 to 2,000 square feet—down from 2,015 square feet in 2008. “Mindful of current economic conditions, home builders are making an effort to build smaller, more affordable homes,” said Sonkin. “Since builders have more time to complete homes due to reduced demand, owners are reporting higher satisfaction and fewer problems with their homes than in years past.” 2009 New-Home Quality Study the J.D. Power and Associates New-Home Quality Study,SM now in its third year, measures the occurrence
Wolin-Levin, Inc. Erika A. Villarreal has joined Wolin-Levin as a Property Supervisor. Erika comes to Wolin-Levin with 15 years of real estate experience including leasing, appraisal, Internet advertising and property management in the Chicagoland market.
and impact of construction problems experienced by new-home owners in 24 markets. the study utilizes an index that examines the number of problems that occur, the severity of problems and the size of the home, and covers 41 different problem categories for the following areas: bathroom; drywall; electrical/appliances; flooring/stairs; home exterior; interior paint; kitchen; windows/doors; and other significant problems. Del Webb ranks highest in new-home quality in the Chicago market, followed by Pulte Homes and town & Country, respectively. Home quality in the Chicago market has improved from 2008, averaging 796 in 2009—up by 16 points from the previous year. the rate of customer-reported problems in the Chicago market has improved to an average of 10.3 problems per home in 2009—down by nearly two problems per home from 2008. the problems reported most often in the market include nail pops/exposed nails; landscaping issues; sidewalk, driveway and foundation cracks; and kitchen cabinet quality and finish. “Green” Home Findings Approximately 24 percent of new-home owners in the Chicago market perceive their home to be environmentally friendly, but a majority of these owners—86 percent—say that their home builder did not identify the home as “green.” “Builders that neglect to point out environmentally friendly home features to buyers are missing out on a very important opportunity,” said Sonkin. “New-home buyers are increasingly seeking out green home features and the benefits they bring in terms of energy and cost savings.” Home owners in the Chicago market indicate that the top five features a green home should have are:
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» Energy efficient home appliances » Energy efficient insulation » Water-saving systems (such as faucets, dual flush toilets, and sprinklers) » Energy-saving lighting such as compact fluorescent bulbs to be included in the studies, Chicago-area builders must have closed 150 or more homes in the market in 2008. the new homes are located in the following counties: Cook, Ill.; DeKalb, Ill.; Dupage, Ill.; Grundy, Ill.; Kane, Ill.; Kendall, Ill.; Kenosha, Wis.; Lake, Ill.; McHenry, Ill.; Will, Ill. these two studies are based on responses from 26,231 buyers of newly built single-family homes who provided feedback after living in their homes from four to 18 months, on average. there were 696 respondents in the Chicago market.
Judy Pierson has recently joined Wolin-Levin, Inc. as property supervisor serving a diverse portfolio of condominium associations, cooperatives, and rental properties. Judy brings over seven years of property management experience to Wolin-Levin and looks forward to partnering with her clients and helping each one achieve a high level of operating efficiency.
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COMMUNITY ASSOCIATION MANAGER ACT BECOMES ILLINOIS LAW Levenfeld Pearlstein LLC is pleased to announce that thanks, in large part, to the efforts of partner Mark D. Pearlstein, the Illinois Community Association Manager Act was formally approved recently by Gov. Patrick Quinn and signed into law. for the last five years, Mr. Pearlstein, chairman of the Illinois Legislative Action Committee of the Community Associations Institute (CAI), has led CAI’s effort to protect Illinois condominium owners and create a level of professionalism for the community association management industry by requiring licensing to regulate Community Association Managers. When the Community Association Manager Act (Public Act 96-0726) takes effect on January 1, 2011, no person may provide services as a Community Association Manager unless he or she holds a current and valid manager license. Like other licensing statutes, the Community Association Manager Act will create minimum qualifications for licensure, provide financial security to associations, impose discipline for manager misconduct and require continuing education to renew the license “With more than 30,000 community associations in the State of Illinois, managers control millions of dollars". noted Mr. Pearlstein. “It is essential that the State regulate persons who manage the most valuable asset of association members.”
the Act will also recognize existing service and experience by providing that persons who have been working in the Community Association management field for five years will be exempt from the initial license requirement to pass an examination. the Act also recognizes continuing education credits for those persons who take courses to maintain their professional real estate license. Mr. Pearlstein also noted that, “the efforts of the members of the Illinois Legislative Action Committee of the Community Associations Institute were critical in promoting this legislation, as was the key legislative sponsorship by State Representative Elaine Nekritz and Senator A.J. Wilhelmi.” Mr. Pearlstein is a partner in the Community Associations Service Group at Levenfeld Pearlstein, specializing in representing community associations and developers, particularly in relation to mixed -use developments. He is a member of the Charter Class of the CAI College of Community Association Lawyers, former Chairman of the Chicago Bar Association Condominium Subcommittee, and a former member of the CAI Illinois Chapter Board of Directors. Mr. Pearlstein also writes and lectures extensively on matters related to condominium law.
RIGHT OF FIRST REFUSAL
CHICAGO ELEVATOR ORDINANCE
Source: the Levenfeld Pearlstein Edge, Fall 2009
by Gene Fisher, Diversey Harbor Lakeview Association
Developers and members of community associations should be aware of two recent legislative and policy changes pertaining to the controversial “right of first refusal.”
Elevator Retrofits the Originally Proposed Ordinance, would have required all existing elevators to be retrofitted to needlessly demanding new standards within just one year, at costs that were conservatively estimated to range from $10,000 to $20,000 per elevator car. the Substitute Ordinance will not mandate such retrofits of existing elevators.
first, House Bill 155 was introduced in the 96th General Assembly. the Bill provides that a condominium association cannot exercise a right of refusal or an option to purchase a unit because the purchaser’s financing is guaranteed by the federal Housing Authority. House Bill 155 was signed into law in August as Public Act 96-0228. Second, on June 12, 2009, the U.S. Department of Housing and Urban Development issued it’s Mortgagee Letter 2009-19. this Letter also revised government policy on the right of first refusal. the new HUD policy is that a right of first refusal is permitted unless it violates discriminatory conduct under the fair Housing Act. the fair Housing Act prohibits discrimination in housing on the basis of certain protected classifications such as race, color, religion, sex, familial status, national origin or handicap.
Elevator Inspections the Originally Proposed Ordinance could have increased the cost of inspections to verify that elevators are up to code from the current $150 per elevator car, to as much as $1,000 per car; and increase the required frequency of such inspections to two of every three years. the Substitute Ordinance will not change the current inspection requirements.
the end result of these two legal developments is twofold: it may not be necessary for associations to amend their declarations and by-laws to eliminate the right of first refusal, since the mere presence of that option will not prevent a prospective buyer from obtaining fHA insured financing.
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B Y D AV I D M A C K
Security Issues for Community Associations Board members, do your residents feel safe and secure where they live?
nowing that the police can’t be everywhere all the time, is your association providing adequate protection on the grounds and in the buildings of your properties so owners don’t have to worry about their physical safety or the loss of their possessions? Ensuring the safety and security of unit owners is one of the major responsibilities of a board of directors. Oftentimes, security concerns are not given satisfactory emphasis until a breach occurs. Boards should be proactive and take steps before an incident happens. A security expert should probably be retained to offer advice on what to do, although there is disagreement on this point as
indicated further on in this article. “To determine the appropriate security measures, you need a professional to inspect your building(s) to determine the most efficient and cost effective way to provide security,” says Sam Ekstein of Ekstein Asset Management.
Location & Desire Generally the level of security services required in any association depends, for the most part, on where the property is located along with the desire and financial means of the residents. In or near an area of high crime the need can be significant. In places of minimal criminal activity the necessity of providing protection against lawbreakers may be
next to non-existent. But, as we all know, perpetrators of misdeeds are very mobile, able to range far and wide in cheap vehicular transportation. No one can ever feel completely secure unless occupying a near impregnable fortress such as the White House. The extent of security services by an association is not necessarily related to need. Wealth may be the greater consideration. The attitude at the high end of the economic spectrum may be “we’ve got the dough so let’s spend whatever is necessary to prevent the entry of any non-residents whether they are possessed of evil intent or not”. That generally means access is controlled either at a gate or the door. Security personnel deny admission to those who don’t live on the property unless they can prove they are authorized visitorfriends, deliverymen, etc. In the case of
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garden style associations, they may also patrol the community’s streets looking for anyone cunning enough to have slipped by their perimeter defenses. While that degree of protection may be unnecessary most of the time, it is usually very effective at keeping crooks at bay and will likely send them elsewhere in search of easier pickings.
Security & Safety Plans When management company WolinLevin is asked to evaluate safety and security at a condo building, the first thing it ascertains is whether the association has a plan in place for handling emergencies, including evacuations. “In high rises, there are many associations that lack some kind of effective evacuation plan in case of fire or disaster,” said Thomas Skweres of Wolin-Levin. (Although Chicago high rises of over 80 feet in height have had to file an evacuation plan with the City, many apparently are delinquent in actually implementing theirs.) Access technology is reviewed by Wolin-Levin. While they can be safe if not lost or mishandled, most types of keys or key card devices can be duplicated so many high rise condo communities are using or considering biometric means of access- thumbs, fingers or hands, which can’t be copied. “There’s not a lot of difference in cost between biometric and key related systems,” said Skweres.
Trained Personnel Wolin-Levin also looks at personnel on duty in a building and determines what their responsibilities are, especially staff in the lobby such as doormen who come into the most frequent contact with and know most of the residents. They’re not typically licensed or trained for security so a board must be careful in assigning duties to them in this area. “You may have (liability) exposure if something happens,” said Skweres, “and untrained personnel try to deal with a situation but botch the effort.” Gene Weisskopf of Admiral Security Services echoed Skweres’ concern about potential liability. He advises associations that staff at the front desk should be instructed to only carry out basic procedures in case of emergencies such as calling 911, contacting residents or assisting seniors or people with disabilities who have mobility limitations.
Aside from perhaps limited use of Automatic Electronic Defibrillators (AEDs), front line employees should leave more serious treatment to professionals such as paramedics. On the subject of AEDs, which can be used to jump start a failing heart, associations can buy one for somewhere between $1000 and $2000. Skweres suggested that associations might want to obtain one for emergencies and train staff to use it. “If the device can save someone’s life, it’s worth it,” he said. But some attorneys counsel against training staff to use one. If something goes wrong in the process of applying an AED, the association might be held liable for a trained person’s actions. Good Samaritan laws only apply to untrained people, according to lawyer Charles VanderVennet.
Needs Vary In less affluent settings there are associations of different shapes and sizes where security needs vary. Typically, small associations in safer areas of the city and suburbs get along quite well with properly locking doors, functioning intercoms systems and a sense by residents that they should know whom they are admitting when they buzz someone into their buildings. My son owns a condominium in Indian Head Park and that’s the only security the association offers and all that is needed except in extreme situations.
Guards & Technology
Roving Patrols Roving patrols are more likely to be found in suburban communities that are not protected by a manned entrance and where potential perps have ease of access. Mike Baum of Baum Property Management, oversees the management operations of numerous suburban associations, two of the larger of which are non-gated but employ security personnel who drive the streets of the properties all day and all night on the lookout for suspicious characters and situations. Baum noted that because of the obvious differences in their physical layouts, suburban and downtown Chicago associations utilize sharply different security methods. “In the ‘burbs’ our condos and HOAs tend to be horizontal and not vertical, therefore, where there is security the mobile form is more prevalent,” he said, adding that those two HOAs, which are upscale and surrounded by similar quality housing, both have moving patrols 24/7 with the guards being provided under contract with a security company. Residents can call them directly on their car phones when their services are needed. The guards serve several purposes. “Not only do they deter crime and vandalism, but they also create a sense of peace of mind,” said Baum. “A resident knows that the security is never more than a few minutes away. In addition, they are pro-active in spotting potential problems.” The expense of this degree of watchfulness- unarmed guards are generally instructed
to not apprehend anyone but just to call the police and assist them- is significant and only very large, well to do associations can afford it.
Large associations, especially high-rise condos in Chicago, may require security personnel of one kind or another in addition to the latest technology offered by the security industry. Much of the time a doorman may suffice, but not always. “Many high-rises we manage provide guards for some period over the course of the day,” Skweres said. Some of his clients are also looking into electronic surveillance systems for added protection. The functions that security guards perform depends on the type of building and an association’s philosophy on their use. But they generally are not armed or licensed and they do not have the authority of policemen. They
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are limited in what they can do. Don’t get lulled into a false sense of security,” warned Ekstein, who also cautioned boards about security cameras. They’re great, he noted, as long as they are monitored. And associations should not set up dummy cameras without tape in them. “You wouldn’t believe how many law suits have been filed against organizations that use non taping cameras.” Someone who is attacked may find some comfort in that the incident was caught on camera. When they find out it wasn’t, they sue. Buyers have not been showing any greater concern about security in high rises; rather it’s an issue about which they have always asked, according to Realtor Nancy Claussen. But she has noted more diligence on the part of building gatekeepers. “I have seen an increased awareness from the doormen in all buildings (that she visits). Many used to be very lax. Now I would not go to a building without my business card or advance notice if I hope to get in.”
Determining Security Needs How should an association, especially one
in a high-rise urban environment, determine what their security needs are? A board has the overall responsibility to ascertain this but may want to appoint a security committee to do the work of investigating all aspects of the issue before taking action to match the association’s needs with improved hardware, software and/or bodies. Most associations have the capability to do their own evaluations. “I think they are able to assess their own requirements, although some may need outside guidance,” said John Coleman of A & R Security. “Consultants are great but can be very costly and a community’s risk may be very low.” A security company might be willing to do a security assessment at no cost if they believe they will have a fair crack at getting the contract when bids are let. Weisskopf also feels many associations are up to the task of self-diagnosis. “In general I believe most boards or their committees can evaluate their own needs based on prior experience at the property, with the assistance of experienced management,” he explained. However, “if an association is brand new, the board should probably seek suggestions and assis-
tance from experts.” More on consultants later. Skweres believes that experienced high rise building managers can guide condo associations through the process of determining their level of security. “Along with the Association’s financial position and willingness to pay, much depends on the desires and perceptions of the residents and board members,” said Skweres. He is a big proponent of having the Chicago Police Department provide an evaluation for high-rise properties. Sometimes, though, special circumstances may dictate bringing in skilled advisers to assist in making this appraisal. “Should there be problems within the neighborhood or within the building, there are times when consultants are brought in to discuss specific actions that can be taken to minimize those problems and provide greater assurance for building residents.”
Local Law Enforcement A board can usually call upon local law enforcement officials for assistance, primarily in the form of statistics regarding the patterns of criminal activity in their neighborhoods but also to evaluate their buildings as well as
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provide speakers on various security issues. “In Chicago requests for inspections or consultations can be directed through the local CAPs representative,” said Weisskopf. Skweres offered, “The Chicago Police Department’s Crime Prevention Bureau is a tremendous resource.” High-rise associations can contact Dr. Ron Rufo at the Chicago Police Department 312-745-5838 ext 84652. Many other municipalities and counties have similar agencies that will lend a hand when asked. Weisskopf also added “contractors who have served the property in the past and know its layout, as well as insurance agents who are proficient in risk analysis as resources to use to ascertain security needs.”
Key Areas of Exposure There are many areas that associations should review in assessing their security needs. The overall task is principally one of determining their exposure to the intrusion of villains from outside and even the inside where that possibility exists. They should ask themselves, “where could serious problems occur- lobbies, elevators, parking garages, hall-
ways, fitness centers, laundry rooms, etc.” said Coleman. “Do all doors lock properly, are all lights working, do laundry rooms have at least two ways out- I could go on and on.” Weisskopf has numerous suggestions for a comprehensive security analysis by an association that should be made before concluding what needs are not being met by current practices and procedures. In addition to evaluating the effectiveness of door hardware, lighting, intercoms etc., he recommends determining whether: » Updated, clearly written basic emergency instructions are readily accessible. » Employees know the association’s policies for dealing with visitors, deliverymen and packages, keys, parking, outside service personnel, etc. » Staff knows about and can provide information on residents with special needs to first responders in emergencies. » All policies are equally applied to everyone with no special treatment for certain individuals. » Employees are preparing written shift reports on hour-by-hour activity, noting even mundane things or routine comings and goings rather than just saying, “all ok”.
» Residents are encouraged to report any strange or unusual activities they witness or hear such as other residents having an abnormal number of visitors or deliveries. » Bushes and hedges should be trimmed back to prevent their being used as hiding places by those with malicious intent.
Newer or Inexperienced Associations If an association is new and inexperienced, or where, as Skweres noted, there are problems in the neighborhood or building, it may want to consider bringing in a security consultant to prepare an evaluation of its needs. Ultimately that will help determine such issues as whether any or additional security staff are required, whether they should be employees or provided by a contractor, etc. But associations should be careful about who they hire for the job. “Security consultants can be helpful in guiding associations in the assessment of their needs,” said Weisskopf, “however they should be aware that anyone could claim to be a
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security consultant. There is currently no regulation or registration of such persons in Illinois.” When considering a consulting firm, an association should investigate its reputation by getting references and checking them out. It may find, too, that there are not many to choose from that specialize in security matters and specifically with regard to residential complexes. Skweres helps his association clients select consultants in several ways. Board members may have their own individual knowledge and are asked for suggestions. Additionally, “we also speak to firms that provide security guards for their input,” he said. “And through other contacts in the industry, we obtain recommendations for consultants who have performed well at other buildings.”
▼ High-rise associations can contact Dr. Ron Rufo at the Chicago Police Department 312-745-5838 ext 84652. Many other municipalities and counties have similar agencies that will lend a hand when asked.
In-House Personnel or Security Contractor? Once needs have been identified, an association must decide whether it wants to hire its own staff or contract with a security company vendor. There are pros and cons for
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you might expect. “Unless an association is both options. With its own personnel, an prepared to spend substantial time, money association has direct control over them and and effort in organizing, training and supercan pay them an industry wage without vising employees on a having the added expense 24/7 basis, I think it’s far of the contractor’s overbetter for most to retain head and profit. They Although a formal and expertly an experienced conshould find, too, that staff tractor,” he explained, security employees are drafted specification may not adding that he has found more likely to demonthat associations tend to strate a stronger commitbe essential, bidders should be tolerate their own subment to the property than standard security guards provided by a required to propose the same employees because retenvendor. The added tion, despite poor peradministrative burden, range of security services so formance, is much simhowever, may not be pler than disciplining or worth those advantages. their offerings can be fairly terminating them. “In “With a contractor contrast, a contractor’s you do not have to evaluated against the same staff is held to a much manage staff, worry about higher standard.” A call ongoing training or standards. from a dissatisfied assohiring replacements,” said ciation to the owner or Coleman. “If you want an manager of the security company can quickly officer replaced, it can be done much easier by result in the replacement of under performing a contractor.” or otherwise unacceptable employees. Weisskopf takes the same position, as
But with proper employee screening and training by a reputable contractor, that should seldom be necessary. “We thoroughly background check all employees through state and national criminal record data bases, screen against drug use, train and supervise them,” said Weisskopf. None of Skweres’ clients hire their own security personnel. “Our high rise buildings hire security vendors,” he said. “This is done both for economic and liability purposes.” When conditions are employee friendly, private security companies generally have little difficulty recruiting new employees who can stand up to rigorous personal evaluation. “You can always find qualified personnel if the wages are good, the environment is right and the work hours allow for most employees to be full time,” explained Coleman.
Going Out for Bids When an association has decided that it wants to go with a security vendor, it should solicit competitive bids from several companies. First, though, the board should decide
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what it can spend, which should determine the scope of services sought. An association may need 24 hours of daily service but may only be able to afford 10 hours. Although a formal and expertly drafted specification may not be essential, bidders should be required to propose the same range of security services so their offerings can be fairly evaluated against the same standards. “You have to have all security companies propose on the same specific topics or their responses will be all over the board, making evaluation difficult,” said Coleman. Wolin-Levin goes about selecting a security provider in much the same way it seeks other services for its clients. “The typical vendor selection process consists of our firm soliciting three or four proposals,” said Skweres, after which, all of the companies are interviewed by the board to see which company most accurately matches the association’s needs. “Some boards like the larger, national security firms, while others feel they will get better service from the local, smaller firms.” Some security contractors may be out of
their depths and unqualified for large residential work. “Any bidder should be prepared to show successful experience in several similar residential associations as well as the ability to organize and supervise at various levels of service,” said Weisskopf. A proposal from an unqualified company should be rejected unless the bidder can offer ironclad assurances that it has the capability to upgrade its performance to the level required by the association. Only then should it be given consideration. It takes a large association to afford human security services- note Baum’s earlier observation that to have 24 hour protection by roving patrols be financially feasible would require at least 1000 units. And costs do not remain static even though inflation has been minimal in recent years. Some of Skweres’ clients have had to bite the financial bullet to provide the coverage they need. “Security expenses have definitely been rising over the past several years,” he said. And on top of that, “some boards have added more hours of manned security.”
Electronic Options As an alternative, associations can shift the emphasis to more sophisticated electronic gadgetry from uniformed personnel as a way of coping with escalating costs. We are attempting to focus boards on spending their money most efficiently,” Skweres said. “With the upgrades in security cameras and recording systems, over the long run investment in such hardware should enable boards to reduce costs for human security.” Boards bear some responsibility for seeing that their constituents are reasonably secure where they dwell and should be proactive in determining how they can facilitate the creation of a safe environment when personal and public efforts fall short of the mark. But they shouldn’t go overboard and waste association funds where not necessary. Certainly there are boogeymen and criminals around to be wary of but they are not everywhere. Y
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11:00AM - 3:00PM December 10, 2009 Chicago Cultural Center For more information Call 708.822.8256 Visit our website at www.condolifestyles.net ...Or e-mail us at email@example.com
• Legal Update (including Manager Licensing) & State of the Industry Update by Mark Pearlstein, Levenfeld Pearlstein, LLC.
Luncheon & Keynote Speaker Chicago Alderman Bernie Stone (50th Ward) Followed by Seminar Sessions
• Budgeting & Banking in Financial Crisis • Gas, Electric & Utilities • Chicago Ordinance Update: Facade Inspections, Life Safety and Elevators • Bulk TV/Satellite Issues
• Environmental Concerns for Buildings
• Insurance Issues • Impact of Mortgage Crisis and Current Money Trends
Fall 2009 Issue of CondoLifestyles