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Report F E AT U R E S

ABOMA Offers Technical Training Decision Making Tools for Community Associations CIC’s Face Continuing Financial Issues

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table of contents COVER STORY

03 Condo Lifestyles  State of the Industry Report By David Mack A S S O C I AT I O N ’ S AV E N U E

07 ABOMA Offers Technical Training By David Mack BOARD BASICS

12 Decision Making Tools for  Community Associations By David Mack 16 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 18 Editors Message 19 Directory Advertising S P E C I A L F E AT U R E

26 CIC’s Face Continuing Financial Issues By Frank Rathbun EVENT HIGHLIGHTS

30 2011 Condo Lifestyles  State of the Industry






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By David Mack

CondoLifestyles State-of-the-Industry Report As it has for a number of years, the Chicago Cultural Center once again served as the venue for the Condo Lifestyles State of the Industry Conference- 2011 being the 16th iteration of this annual event.


ditor & Publisher Michael Davids , with the assistance of Condo Lifestyles Advisory Board members Thomas Skweres of Wolin-Levin and Diane White of the Habitat Company, opened the proceedings by giving recognition to the various people and organizations whose sponsorship made the event possible and identifying the members of the State of the Industry Committee whose efforts brought it from planning to reality. Davids then provided an overview of the program and agenda before presenting two annual awards- for Outstanding Leadership in

the category of Management Executive to Tairre Dever-Sutton, President of Tairre Management Services and in the category of Education and Media to Elana Lugo of WolinLevin.

Shifrin Retirement Jordan Shifrin of Kovitz Shifrin Nesbit and longtime member of the Condo Lifestyles Advisory Board, then took the podium to offer his valedictory to the many colleagues and clients to whom he had provided legal services and counsel over the years. Davids congratulated Shifrin on his recent retirement after more than 3 decades of affiliation with

the condominium industry and authoring numerous articles and books on association issues. Shifrin described how little published information there was on condominium law when he was a student at John Marshall Law School from which he graduated in 1977 and how that basic foundation had grown over the years, an expansion which he had a lot to do with. Now, he said, “I’m putting an end to 35 years of advising clients.” He thanked those in the audience with whom he had been associated for all of their support. “I made a lot of friends, met a lot of nice people,” and to laughter and chuckling from his listeners, added drolly, “and some not so nice.” “What a significant industry this is,” he said, pointing out, “we are the closest thing to


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a unit of government in many people’s lives,” referring to boards that govern associations,” in terms of change affecting their communities and their lives- more than in Springfield.” He closed by noting that running associations either as board members or managers is not getting any easier, in fact, is becoming more trying due to the state of the economy. He encouraged the audience to look on the bright side and to try and stay positive. “As we continue to grow, all you can do is keep smiling. That’s the only way to get through this.”

Act that enables associations to collect up to six months of back assessments from the buyer of a foreclosed unit. She followed by introducing the first speaker, Sugar, who made note of what had been going on in Springfield. “Unlike in past years where there has been a lot of legislative activity focusing on governance issues, this year we didn’t see that,” he said. “The focus has been manager licensing and the CICA Act.”

(From L to R) Phil Pritzker - The Habitat Company, David Sugar - Arnstein & Lehr, and Christine Friend Community Specialists.

Manager Licensing

Legislative Update The first seminar segment was entitled, “Legislative Update and State of the Industry Overview.” The panel discussing this broad subject area was moderated by Tairre Dever-Sutton and consisted of attorney David Sugar of Arnstein &Lehr and managers Christine Friend of Community Specialists

and Phil Pritzker of The Habitat Company. Dever-Sutton provided a general synopsis of the topics to be addressed- manager licensing, the Common Interest Community Association (CICA) Act, an update on Chicago’s scavenger rebate program and possible changes to the provision in the Condo

He pointed out that under the Licensing & Disciplinary Act, managers of associations of 10 or more units must have a license by August 30, 2012. For emphasis on that time frame, he said, “that’s this coming year.” A license is required for anyone collecting or disbursing funds of an association, assisting in the conduct of board meetings, maintaining records and administering contracts. However, many personnel with man-

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agement companies who perform mainly ancillary duties such as bookkeeping, secretarial, administrative assistance, property inspections and customer service will be exempt from the licensing requirement as will attorneys. The initial license fee is $300 and covers 2 years. “The renewal fee will likely be $50,” said Sugar. All licensees must be covered by fidelity and errors and omissions insurance.

if an applicant is already licensed in another state with similar requirements as Illinois, “you can get a free ride,” noted Sugar- there will be no need to meet the experience, education or examination requirements required in following approaches 1 or 2 to licensing. Sugar closed his remarks by stating the on-line application is currently available and applicants should move ahead with the process now.

(From L to R) Fred Rodriguez - Heil Heil Smart & Golee, David Hartwell - Penland & Hartwell, LLC and Sharon Schingoethe - Wolin-Levin, Inc.

Three Ways to Qualify Qualifying for a license can be achieved in three ways. Through the grandfather method, pursuant to which an applicant must have managed for 5 of the last 10 years or by having one of several manager designations – a CMCA, AMS or PCAM from CAI or an ARM, CPM from IREM. An on-line application form of 5 to 6 pages must be submitted before March 31.2012. “Most of you will get it this way,” Sugar said to the audience.

Questions About Licensing

The second alternative is through an examination taken after accumulating 20 hours of classroom education. The exam can be taken through CAI or IREM. “For those of you with a real estate broker or agent’s license, the classroom education is waived,” said Sugar. The “endorsement” method provides that

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The moderator then asked for comments from Friend about her experience with the early stages of formulating the licensing requirements. “You were involved from the beginning in the process of manager licensing so tell us how and why this came about from a manager’s perspective,” said Dever Sutton. “Do you think this beneficial more for managers or associations?”



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Looking to Enhance Profession Friend recalled that back in 2004 the CAI Illinois Chapter had held a forum about manager licensing, the requirements for which were drawn up by management companies in attendance. “I had a seat at the table,” she said. “We put together what we thought made sense for our industry and to serve and protect clients (associations).” There was also the perceived problem amongst managers that they weren’t taken seriously so in addition to protecting clients and serving the industry,” we were looking for ways to enhance our profession.” After management had collected the ideas about licensing and presented them to state legislators, changes were made. “What came out (of the process) is different than what we put in,” Friend explained. She then expressed her expectations for the licensing law. “We will have to get used to something new. Hopefully it will benefit the people and ourselves,” and that, “we will have a modicum of respect coming out of this.” Dever-Sutton asked Pritzker for his opinion about licensing as the manager of one

of the largest associations in the City of Chicago. He emphasized that now being licensed should give managers a heightened status in their relationships with community association board members. “The ability to elevate our profession in the eyes of those we serve will have us be acknowledged as professionals,” he said. “The ability to look our clients in the face and say we are professionals we really can’t stress enough.”

Consider Unwarranted Claims Sugar added some final comments that were based on mild skepticism he felt about the relationship between managers and unit owners, which he thought might be negatively impacted by licensing. “The idea of elevating the industry is great,” he said, with, however, some reservation. “I have a concern that I don’t think anyone has spoken about.” Manager licensing may be a way for unhappy unit owners to, “use their sharp elbows,” to find it easier to make unwarranted complaints against managers to those who are responsible for regulating behavior of managers, which could lead to unjustified disciplinary actions

against some managers.

Common Interest Community Association (CICA) Act Sugar then turned to the subject of the Common Interest Community Association (CICA) Act, noting initially, “what we have now is a bizarre set up,” in which there are, “three statutory governance structures,” for associations in Illinois- the Condo Act, the CICA Act and, “if you aren’t a condo and are not covered by CICA, you are still governed by a section of the Condo Act (18.5) for master associations that is still applicable.” Sugar offered the analogy of taking the CICA statute out of the Condo Act, “to removing one of Adam’s ribs.” He doesn’t believe the governance provisions over noncondos that were written in to CICA, were, “really thought out,” and he encouraged audience members that, “If you are dealing with non-condos, don’t leave here without a copy of the Act (CICA) so you can sit down and read it to figure out what it means because it’s not really clear.” continued on page 28

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A S S O C I AT I O n ’ S   Av E n u E

by David Mack

ABOMA Offers Technical Training Improvement in an employee’s performance is generally achieved in two waysthrough on the job training or by formal instruction in a classroom setting.


he Association of Building Owners and Managers (ABOMA) and Local 1 of the Service Employees International Union (SEIU) are currently providing the latter through a partnership agreement that came about as part of the collective bargaining process. Those eligible to enroll in ABOMA training classes include maintenance staff, janitors, engineers and door personnel. And last year, for the first time, classes were offered to property managers, according to Bob Graf, Executive Vice President with Sudler Property Management and immediate past president of ABOMA. The positions include, “roughly

4500 employees at over 400 ABOMA buildings,” said Thomas Dobry who administers the program. Other than for the property managers, “all students must be Local 1 members.”

Broad Curriculum The curriculum for the Spring of 2012 is very broad, covering a wide range of subjects. Much of the same is planned for Fall sessions. The course guide lists a 2 year apprenticeship program, the central course of study; a 10 week janitorial program; a set of one or two day classes to enhance maintenance skills; a grouping of continuing education classes for assistant and head engineers and computer and green building (LEED) instruction for

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door staff. Classes are also available in English as a second language and advanced electricity. “All of these courses are covered under the ABOMA contract and available to Local 1 members and all of the classes are funded by the contract arrangement,” explained Dobry, who added that employers contribute .09 cents per work hour or $187.20 per year for each employee. Also about 20% of the cost comes from grants. “The only (costs) to the employee are an administrative fee of $35 (per course) and a $75 book fee which is returned in whole or in part,” at the conclusion of a course, said management executive Tom Skweres of Wolin-Levin and current President of ABOMA. The instruction is provided at the SEIU training center at 120 S. Sangamon, Chicago both during the day and at night.

New Courses Added Over the Decade The curriculum is not static but changes



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or is expanded as new ideas about employee needs are conceived. “Tom Dobry has upgraded and kept the training fresh and relevant over the years,” said Skweres, who noted that the program has been in existence for about a decade. “New courses are being considered all the time and I believe that we are only limited in what we can offer by our teaching space.” Classes are limited to twenty-five students. Participants in the two-year apprenticeship program must receive a seventy percent grade (there are exams) to pass. “On average,” said Dobry, “a course of twenty five students will have three to four (who) fail and need to make up the course the following semester. Most other classes are seminar type and certificates are given for attending.” Added Skweres, “there is a time limit for completing initial courses and there are yearly requirements that must be fulfilled by all Local 1 members.” Those who ultimately finish the two-year regimen receive a Journeyman’s certifications from the U.S. Department of Labor.


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A S S O C I AT I O n ’ S   Av E n u E

Enhanced Job Opportunities

do and want to be the best at it.”

Going to school is optional, at the discretion of employees. However, they do enhance their opportunity for advancement in their jobs or to other higher paying positions by attending. “As an adjunct professor for over twenty years, I cannot stress enough how important continuing education is for the advancement of our union people,” said Skweres. “I believe in promoting from within and having an internal stable of candidates makes our profession’s life easier,” when it comes time to fill vacant positions. Taking the training seriously is the best path for achieving a better future for the union members. Most students take classes with the expectation they will be advancing at their buildings or at another property. It is possible that, “an employee can advance without the classes,” said Dobry,” but more and more buildings are turning to the training programs as a measuring stick for their employees’ skill sets.” Added Skweres, “their (employees) initiative shows their employer (s) that they take pride in what they

Mutually Beneficial Graf has only positive things to say about the benefits the program has to offer all those involved with it. “The union training has proven to be an excellent program for both the union members, to learn additional skills, and for employers, who get better qualified staff,” he said. And the feedback he has heard from participants indicates a high level of satisfaction with especially all aspects of the twoyear apprentice training. “The employees (who) have gone through the two year program have spoken very highly of (it), the instructors and the practical skills that they are able to learn.”

Win-Win Situation While, as Dobry has said, employees are not absolutely assured of advancement as the result of their educational endeavors, Graf echoed Skweres in noting that employers see the initiative taken by technical and maintenance staff in bettering themselves through study as a definite plus on their resumes when

they apply for higher paying positions. “We always like to see employees willing to invest their own time to attend the training classes and improve their skills and job knowledge,” he said. “These are the employees (who) are interested in advancing in their careers and we like to reward them when we can with a promotion and job advancement. It is a winwin situation.”

Jay Abney Example One employee who has taken many of the training classes is Jay Abney, currently the Chief Engineer at 2650 Lakeview Condominium Association, which is managed by Sudler Property Management. He reports directly to his manager Joanne Libfeld, but, because of the importance of his job to the smooth functioning of the building, also sits in on board meetings to offer verbal and written reports. Although Abney has reached the highest level attainable in his job category, he is keenly aware that those who work in lower paying positions must grow their knowledge to be eligible to move up. “For my subordi-

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nates, the training programs offered by Local 1 are the key to their advancement,” he said. Abney came to his present status already in possession of advanced understanding of the know how demanded by the job but enrolled in a class last year to reinforce what he already comprehended. That whetted his interest in furthering his education in other subjects. “It reinstated that yearning for knowledge and I started signing up for everything I could manage in my schedule,” he said. This continued effort is clearly working to his advantage as other potential employers become aware of his increasing qualifications and competence. “As I updated my profile on a popular professional forum with my recent accreditations, it has spurred several job offers from other companies.” Abney related how conditions have changed in his field in terms of what knowledge and skills companies want their employees or candidates for jobs to possess if they aspire to advance. “It was once possible to work into a supervisory status with hands on

knowledge and little or no technical training, at least in the residential sector,” he explained, pointing out that now hiring entities expect a more expansive field of understanding of Facilities Management in such areas as the use of technological resources, energy costs and knowing how various aspects of infra-structure work, separately and together. He couldn’t have achieved that understanding without advanced education, much of it the kind he has received through ABOMA/SEIU classes. “I can say, without a doubt, that without my training I could not and would not hold my present job.”

Licenses & Designations to Help Future He also described some of his favorite classes, including preparation for his Chicago Stationary Engineer’s license, the test for which he passed with 93%, as well as classes on bed bugs and those leading to acquiring additional licenses as a certified pool operator and a lead paint renovator. But the class he enjoyed the most and which set him on the

path of advancement he has followed was the LEED (Leadership in Energy & Environmental Design) energy efficiency training. It, “started me down the trail to where I am, studying to take the LEED associate test. I believe this is the future of our trade and Local 1 offers a class that qualifies me for acceptance by the United States Green Building Council (USGBC) to move towards this designation.” Abney found that the courses he has taken required varying degrees of out of class preparation and homework. Some involve only attendance, classes that teach new trends in fields with which he is already familiar. “Others,” he said, “offer training in an entire trade skill and take weeks of preparation and testing to qualify for a designation.” Preparing for the Stationary Engineer’s license is an example. “It was a lot of time, homework and class participation.” He expects to continue to take classes to improve his job performance to become, as he put it, “one of the best at what he does,” but


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A S S O C I AT I O n ’ S   Av E n u E

not just because there is potential for greater monetary rewards. He believes that should be only one of the incentives, another important one being that as his union peers also continue to study, the capabilities of all members of his occupation will improve and there will be recognition by employers of that growing skill enhancement. “As a union member, I am gratified when I (am in) a classroom and can feel the whole of us becoming increasingly more competent,” Abney said, which lays the groundwork for individual and group advancement.

trusted verb


Fernando Salcedo Example Fernando Salcedo, the Building Engineer at 247 E. Chestnut, also took numerous classes through the training program, completing the bulk of his education about a half-decade ago. He has no doubts that this effort is what got him to where he is now. “If it wasn’t for the training I received at Local #1 school, I would not have gotten this position as fast as I did when I graduated 5 years ago,” he said.. “I could not (have attained) any advanced position unless I could prove that I had the proper school training and certification. I think our training school (provides) the tools that any maintenance person needs for their future.” Salcedo found all the classes he enrolled in to be very informative but there were specific ones that have served him well and helped him attain his position as building engineer. “For the most part all of the classes are very helpful but I found very informative low and high pressure boilers, blue print reading, plumbing, HVAC and electricity,” he said. Salcedo learned his lessons so well that upon completion he became a faculty member. “After I graduated, I found that I wanted to help other co-workers or members of the union succeed in their maintenance jobs so I decided to join the training as an instructor,” he said. “I currently teach Basic and Advanced Electricity, as well as HVAC classes.” He takes pride in his achievements. “I’m very proud of what I do as a building engineer and as an instructor,” he said, noting that he has received a lot of positive feedback from those he taught as they moved up the ladder and improved their working status and this has given him the motivation to continue imparting his knowledge to union members. “After 5 years as an instructor, I have heard a lot of good stories from my ex-students in their success in being promoted to better positions at their buildings. That makes me feel real good with more energy to help others in the future.” Graf, who lauded Dobry for his leadership of the program, has seen educational opportunities for union members grow and improve as conditions have changed, requiring expanded knowledge on the part of a building’s staff. “The training program has been excellent,” he said, and continues to schedule classes in additional subjects to the curriculum as the need arises, including, education for property managers in some subjects. “I would like to see this continue in the future.” Because of the effectiveness of the training so far and the development of new classes to meet changing conditions and times, “I think all of the employers that fund the program will be very happy to continue to make the monthly contribution payments.” Y

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by David Mack

Decision Making Tools for Community Associations In directing and managing the affairs of their associations boards must make many and varied decisions.


hile some decisions can be made intuitively, based primarily on common sense perceptions and feelings, many, if not most, require investigation, the gathering of information and the analysis thereof, as preliminary steps leading to the board of directors reaching a conclusion as to what action to take on any particular matter. Boards do have tools available to them to assist in this decision making process aside from the guidance and advice they may receive from professionals who work with them.



Tools Available Let’s go over some of those tools that a community association might be able to rely on for direction. These various resources and repositories of information can help an association be consistent in what it does as new directors take seats on the board and follow on the path set for action previously tread by their predecessors, said Mike Roche of Eagle Rock Management. Aside from state statutes such as the Illinois Condominium and Illinois Not for Profit Acts, a board’s declaration and


by-laws are the highest authoritative source from which to draw for guidance, followed closely by its rules and regulations and administrative policies, the last of which deal with such matters as collections and rentals.

Mission Statement A very good tool that can be used in planning that any board of a new association should ideally develop early on is a mission statement. A mission statement should describe the purpose of the association- why it exists and what it is trying to do, Roche noted. “It should be coherent and concise but broad and distinctive,” covering all areas in which an association must be active. A mission statement should also be an overall philosophy that can be continually followed by future boards. On the other hand, it should be capable of being amended where appropriate and when changing circumstances might justify that remedial action.

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Goals & Priorities A board should also establish goals or priorities on both a short and long-term basis, the former being for up to three years and the latter from three to five years. A far looking board may wish to project its future focus beyond five years but whatever time frame is selected an attempt should be made to identify or quantify what it hopes to achieve at critical points along that spectrum.

Strategic Plan In conjunction with that forecast, a board would be well advised to devise a strategic plan, which gets into specific steps or actions to take, identifying the means to be used in the accomplishment of the various objectives that are identified. This plan for action should be implemented along a continuum projected by a board with oversight given to the action steps as they are taken to assure that planning is more than just a paper exercise. “There should be constant monitoring of where you are with the action plan,” said Roche, who added that a strategic/action plan should not

generally be static. “It’s meant to be fluid and to be updated as you go.”

Prior Legal Opinions Another key tool in the kit of a board is prior legal opinions that either pertains to associations generally or to specific communities but especially when they may have universal or at least wide spread applicability. But boards should confirm with an outside lawyer the pertinence of any opinion to their issue of concern before assuming its relevance and acting on that conjecture.

Budget & Financial Reports A budget is an important financial tool that can determine, among other things, whether assessments must be raised. Roche recommended projecting budgeting beyond the immediate period- that there should be a one year document and one extending out three to five years to give board members some idea of financial decisions that will have to be made in succeeding years. Boards must be kept apprised of their ongoing financial experience through reports

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either prepared by a competent treasurer, outside independent accountant or the management agent. “They should be professionally prepared and easy to understand and a board should receive them on a timely (usually monthly) basis,” said Roche. They should include, at a minimum, such elements as an income/expense statement, an assessment delinquency report and a general ledger reflecting all the financial transactions that took place in the period covered. End of the fiscal year financial statements by an independent auditor are also an important resource to guide boards.

Reserve & Useful Life Study Every board should have a reserve study developed in its early years, generally by a knowledgeable professional in a related technical field, that lays out a plan for the maintenance and/or replacement of all of an association’s critical physical components. Such studies, “are going to determine what (an association) will need to spend in the next five to thirty years and they’ll provide a funding plan,” said Roche. “Typically you’ll want to



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update your reserve plan every three to five years as it may become out of date.” An essential part of a reserve study is a condition analysis of all common elements to determine useful life, their current status and when they are likely to have to be replaced. This analysis, “will tell you how the buildings are holding up (to that point) and give you the schedule of what you must plan to do,” explained Roche.

Team of Experts Lastly, Roche pointed out that where associations are large enough to afford on going professional assistance, they should arrange for the formation of a team of experts to assist them, especially in undertaking large scale renovation projects. The team would ideally include an attorney, architect or engineer, accountant, banker and the property manager. And, he added, “you’re going to want to keep your insurance agent as part of the team to see that you have enough coverage (especially) for all potential (and changing levels of) liability.” Of course not every member of this team has to be involved in allimportant decisions- they should only be called upon for advice when their specific expertise is needed.

Nine Essential Steps According to Katherine Susmilch of the Winston Management Group, there are nine steps that are an essential part of the decision making process. She explained them, noting that she would be referencing many of the tools Roche highlighted and, “when they’ll be applicable.”

Identify the Matter Identify clearly the matter at hand. Then with any specific matter, focus on defining the actual concern within it, the meat of the problem so to speak. Using an example of a complaint of excessive noise in a courtyard, a board must decide if it needs a rule to control it after determining why there are loud noises there and what is causing them. Perhaps the board should stay out of the issue because it has a very limited scope of concern to residents. “Is this something the board should be focusing its energy on?” Susmilch asked. “You’ll be pulled in several directions on various concerns and you may not be able to deal with all of them.” Relevant tools are the mission statement and goals & priorities.

Determine Who Has Authority?

erning body for code violations. Tools would be governing documents, goals and priorities and reserve study.

Break Issue Down The next step in the decision process is to break issues down into the various parts that might comprise them. “You may have complex issues and you need to go step by step in evaluating different components,” said Susmilch. Take, for example, a leaky roof. All components should be evaluated to discover the cause of the problem- is it the membrane, the flashing, the parapet, the masonry wall or some combination thereof causing the leak? Each factor should be considered independently and then collectively to decide the course of action.

Determine Level of Urgency

On any specific issue, a board needs to ascertain whether it actually has the authority to resolve it. “Does the problem and solution fall within the board’s purview,” Susmilch asked. “You may find that it does not,” after reviewing governing documents and consulting management and/or an attorney for advice. Tools are governing documents, legal opinions and the team.

Rank Importance A matter of concern should be ranked in importance by comparing it to the association’s competing goals and priorities and determining their descending order of importance for action. A high priority, for example would be assigned to a significant repair need for which an association may lack the necessary funds to treat while at the same time being at risk of a citation from the local gov-

Identify thereafter the immediacy of an issue. How urgent is it, how quickly must it be given the board’s attention. A scheme for ranking immediacy might look like the following. 1/ life safety, 2/ hazardous, 3/ critical, 4/ urgent, 5/ important, 6/ high priority, 7/ can be put off to future, 8/ a good idea, 9/ moderate and 10/ low. The numbers indicate the degree of importance from 1 through 10. Susmilch recommended anything that is rated 1 through 4 should be corrected immediately, while any matter rated below that level can be considered in the context of the larger picture of an association’s needs and priorities. Tools that would help in this diagnosis are the governing documents, financial reports and condition analysis.

Brainstorm Solutions A board should brainstorm all possible solutions and allow for creative thinking and problem solving while also consulting professionals for advice. “Come up with even the absurd solutions so you can discuss them,” said Susmilch. “Just having that discussion will bring additional information into the conversation.” The relevant tool is the team.

Compare Pros & Cons Moving on, the board should then evaluate the comparative pros and cons of all the potential solutions put on the table, considering each against the others. “Be sure you make an informed decision for each solution,” said Susmilch, in dismissing all but the one ultimately selected. 14



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Consider as Fiduciary Determine whether you as a board are fulfilling your role as a fiduciary for the unit owners in reaching a decision, especially one involving the expenditure of a lot of money. “You need to look as a board at whether you’re being a good steward for the association,” said Susmilch.

Make Decisions and Implement After going through all the previous steps carefully the board has reached the point of decision making, voting and subsequent implementation.

Collection Issue Example Roche then applied those steps in the build up to a decision by an association with a collection issue. Step 1/ Identify the problem- 25 % of unit owners are delinquent in assessments. Step 2/ Board has the authority in governing documents to act in the matter and pursue collection.

Step 4/ Components of problem include the board having a limited amount of money to actively pursue collection through legal action and the various levels of delinquency and how to handle each one.

Step 7/ Considering pros and cons of all possible solutions- After this evaluation it was determined that sending the pre-collection letter would be the most cost effective way to proceed. The delinquency statement would be a drag on the collection process and the statutory demand letter beginning the official legal process would require too much in the way of upfront funds.

Step 5/ Immediacy of problem- It needed immediate attention.

Step 8/ Fiduciary duty- To not act would be a breach thereof.

Step6/ Brainstorming- The most absurd solution was determined to be sending all the owners to an attorney to initiate a Forcible Entry & Detainer action. (could involve a waste of money since some owners might pay up with less formal notice.) Alternative actions included simply sending out a statement to owners reminding them of their delinquency and requesting payment or sending pre-collection letters from the attorney, which is less expensive than commencing the formal full legal process of collection through court.

Step 9/ The board decided to have the attorney send the pre-collection letter, to be followed by the demand letter under Forcible Entry & Detainer procedure to non- respondents to the first letter. Proceeding this way saved the association $15,000 in upfront fees, according to Roche.

Step 3/ Establish priority of the matter- It is of the highest priority because the association can’t function collecting only 75% of assessments.

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Chicago Garbage Rebate Update By Sheli Lulkin, ASCO president Thanks to the efforts of 48th Ward Alderman Harry Osterman and 42nd Ward Alderman Brendan Reilly with the support of Budget Committee Chairman Ed Burke (14), the line item for the condo garbage rebate has been restored to the Chicago City Budget, although in a modified form. The agreement that was hammered out in the Budget Committee includes 

ACTHA The  Association  of  Condominium  Townhouse  and Homeowners Associations – will host its annual Spring Conference and Trade Show on Saturday, April 21, 2012 at the Drury Lane in Oakbrook. This all-day event features nine different educational seminars directed at board members, managers and owners along with an “Ask an Attorney” panel at the end of the day.  Last year there were 100+ exhibitors in attendance – a great way to do that first-impression interview!  For more information  go  to  and  click  on “Education/Spring Conference.”

• Rebate for 2012 of a maximum of $50.00 per each owner occupied unit.

Wolin-Levin, Inc.

• Rebate for 2013, 2014, and 2015 of $25.00 per each owner occupied unit • $1 million allocation to help pay the previous rebates the city owes to the associations.  The Chicago Sun Times reports that $7 million is owed.  •no new condominium associations are eligible for a rebate •rebates would end in 2016   The owner-occupied requirement is new to the rebate program. Alderman Osterman told ASCO that the work is not over.  Funds have to be found to pay off all the past due money owed the Associations.  Osterman pledged that he will continue working in the coming year to restore the rebate which the Chicago Sun-Times insists on calling a “perk”  He said that all the condo owners and organizations that reached out to their Aldermen and the Mayor were of great help.   

Keough & Moody Keough & Moody, P.C. is proud to welcome Attorney Adam A. Price to their legal team.  Adam concentrates his practice on representation of associations in collection of assessments, foreclosures, and bankruptcy actions. Prior to joining the firm, Adam was a Certified Manager of Community Associations and worked as an assistant property manager at one of Chicago’s largest high rise condominium associations. He has handled cases in various stages of litigation, including settlement negotiations, trials, and post-judgment proceedings.  Adam received his J.D. with high honors from Drake university Law School in 2010 and his undergraduate degree in Political Science from Illinois Institute of Technology in 2003, where he graduated with high honors. Adam served as Managing Editor of the Drake Law Review and interned with the Polk County Attorney’s Office and Iowa Workers’ Compensation Commission in Des Moines, Iowa.  He is a member of the Illinois State, Chicago, DuPage County, and Will County Bar Associations. Adam is licensed to practice before all courts in the State of Illinois. Keough & Moody, P.C. is also pleased to announce the addition of Lindsey Daehnke to its staff.  Lindsey will be filling the new role of Marketing Coordinator, responsible for the organization of the firm’s involvement in industry related events and seminars.  Lindsey has a bachelor’s degree in Business Management from DePaul university.  Lindsey is a Certified Manager of Community Associations and worked as a portfolio and onsite manager for 6 years, prior to accepting her role as Marketing Coordinator with the firm.  

Wolin-Levin welcomes the following prestigious properties:  Fairfield Villages, a  community  with  manor homes, condominiums, and town houses totaling to 585 homes. Located in Round Lake Beach, the community is spread over 65 separate buildings, sits on 90 acres and has 22 acres of landscaping. 2700 Club, located in the heart of Lincoln Park, is comprised of 48 residential units, a variety of retail occupants and numerous amenities for its residents. The Emerald, a modern development  in  the  West  Loop,  was  uniquely  built  with environmentally friendly practices and materials. The two 12-story towers include 213 units, a 8000 squarefoot lobby, 24/7 doorman, movie room and private club. Wolin-Levin  is  proud  to  announce  new  hire  Patricia Bialek. Pat has more than 30 years experience in all facets of real estate operations and is a positive, motivated force to work with. She will be overseeing a sophisticated portfolio within the city. 

American Property Management of Illinois American Property Management of Illinois has recently relocated their office.  Their new address is 1251 n. Plum Grove Rd., Suite 140 in Schaumburg.   

Penland & Hartwell, LLC. Kelly Elmore was recently named a partner at Penland & Hartwell, LLC.

Community Advantage Community Advantage of Barrington Bank & Trust has recently moved their office to 110 W. Palatine Rd., Suite 2 in Palatine.  


Interested in Green Building Issues Chicagoland


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630.932.5551 OR VISIT 16



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Community Specialists Community Specialists (CS) recently announced the following awards that were presented in recognition of outstanding performance in 2011.  Nicole Furczyk received the “Excellence in Leadership Award.” The Excellence in Leadership Award is given each year to the professional who most exemplifies C.S. core values of Integrity, Stewardship and Creativity. nicole is property manager at 1111 South Wabash Condominium Association. The building recently completed a very challenging window renovation project and will be undertaking a façade restoration project over the next two years.    Community Specialists also presents a “Director’s Cup” award each year to the employee that has made a significant contribution to the operations of Community Specialists and the servicing of CS clients. It is a rotating award held by the person receiving it in their office for one year. This year the award went to Denise Savino in recognition of her 22 years of dedicated service. As a manager of both large, and now, a smaller building, Ms. Savino has done exceptional work for Community Specialists while serving the Association, the Board and the residents she serves.  And finally, Silvio Brizu received the “Kathy Patton Award” from Community Specialists.  Kathy Patton was the former Controller at C.S. who passed away several years ago. The Kathy Patton award is given to the professional or team of professionals that best represent the attributes of accuracy, being on-time, effective/proactive and persistent communication, anticipating needs and doing their best to meet those needs.  These were the attributes Kathy Patton embodied.  Silvio serves as Property Manager for the 801 South Plymouth Court Apartment, Townhomes, Garage and Master Associations.

IREM Premier Awards

Heil Heil Smart & Golee

The Chicago Chapter of the Institute of Real Estate Management will hold its  8th Annual IREM PREMIER Awards on March 9, 2012 from 6:15 pm - 11:30pm at The Palmer House Hilton in Chicago. "This years event will also feature  musical  entertainment  and  a  casino  night,”  according the event chairperson Kimm Carrone of Draper and Kramer, Inc.

Heil Heil Smart & Golee (HHS&G) is pleased to announce our new Home Owner Services Department Representative Ms. Lana Pisak, Ms. Pisak was previously a Customer  Service  Representative  with  Delta  Airlines  in California and brings with her an excellent understanding and background as it relates to customer service. Al Schroeder will be returning to HHS&G in the Commercial Property Management Division and Daniel Valdes has joined HHS&G in the Residential Property Division. HHS&G  has  undertaken  the  management  of  5510  S. Woodlawn in Hyde Park, at the start of 2012. The community is one of the featured designed communities by the world famous Chicago architects Keck & Keck.

2011 Premier Awards were presented to: CPM of the year – Melanie Phillips, CPM Management Company of the year –  Sudler Property Management ARM of the year – Griselda Tellez, ARM Leasing Agent of the year – Anne-Elizabeth Dwyer Community Service Award – Valley Fire Protection Leadership Award – Draper and Kramer, Inc. Technology & Design / Renovation Award –  Demand Response Program Green Design Award – Parc Huron Apts. / RMK Management Innovative Marketing Campaign – 215 West / Jupiter Communities vendor of the year – Rabine Paving For registration information: (630) 954-4400 For a nomination Packet: 

Olympus Awards At the CAI Illinois Chapter’s Winter Gala and Excellence Awards held on Friday, november 18, 2011, Erica Horndasch from  Wentworth  Property  Management  and Michele Gehrke of Dubois Paving were presented with the 2011 Olympus Service Award.  The award honors the profound influence these volunteers have had in the development of the Illinois Chapter of CAI. Erica Horndasch is currently serving her second threeyear term as a CAI Illinois Board member and also Chairs CAI’s Annual Conference and Exposition being held at Arlington Park Racecourse on February 3-4, 2012. Michele Gehrke currently Chairs the CAI Illinois Chapter Social Committee.



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From the Editor


lack of snow and cold has been one of the top stories at

the time of this writing late in the first week of January 2012. However a streak of cold weather typical of Chicago



▲ Mike Davids

winter is predicted in mid January. Our troubled economy including poor housing market conditions and a host of other financial issues continue to challenge many of us. Despite our challenges, we hope that you and your association(s) are off to a good start in 2012. 

JANUARY 2012 | VOLUME 15 | NUMBER 4 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis

Our cover story is a report on our  “Condo Lifestyles State of the Industry” program held in December at The Chicago Cultural Center. Attorneys David Hartwell and David Sugar provided their insight on current trends and recent legislative and government activity concerning community associations.  Both attorneys were supported by a panel of leading property managers who shared their perspectives on current trends and issues as well.  One session’s lead topic was the relatively new Community Manager Licensing law in Illinois. Manager Licensing is a topic that provokes a lot of discussion and undoubtedly there is more to come

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

on this important issue. The other session’s lead topic was the apparent widespread use of condominium units in Chicago as short-term rentals (similar to hotels) and what this means to the Community Association and its board of directors. Additional coverage of this special event is also featured in this edition including highlights and background on our Outstanding Leadership Award winners, Tairre Dever-Sutton and Elana Lugo. Our Board Basics column features a discussion of decision-making tools and steps that can be very helpful in community association management. A special feature that includes some revealing re-

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.

search statistics recently compiled on the impact that poor economic conditions are having on community associations can also be found in this issue. Our regular Industry Happenings column appears in this edition as is customary. MCD Pool Party to feature Condolympics Games

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.

Tournaments will be held for 8-ball (billiards) and darts. Other events for Condolympics competition

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.

Eaglewood Resort in Itasca, and a luncheon at Arlington International Racecourse in late summer. We

All material herein is copyrighted 2012©. No part of the publication may be reproduced whatsoever without written consent from the publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought. Advertisers assume liability for all content of advertisements printed, and also assume personal liability for any claims arising therefrom against the publisher relating to advertising content. The publisher and editors reserve the right to reject advertising or editorial deemed inappropriate for the publication.



The 16th annual MCD Pool Party will be held on March 16, 2012 at The Pyramid Club in Addison.

will also be held at the MCD Pool Party.  The Condo Lifestyles Condolympics donations will benefit Special Olympics. Other upcoming MCD special events include our annual golf outing, which will be held in July at

will provide more information on these events as you request and as details are available. Thanks to the many new subscribers that have found our publication useful and informative. Special thanks to the firms, associations and groups that are Authorized Distributors of Condo Lifestyles. Those of you who are not current subscribers can obtain subscription information on our website or by contacting our office. As we welcome in another new year, we encourage you to make your association and your community all it can be. If you have an idea that would benefit other Community Associations, a story to share, or some advice on how to avoid a problem or failure, please call our office at 630-932-5551 or send us an e-mail ( Y Michael C. Davids Editor and publisher


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1111.5293 CL[0112]40_FNL_Layout 1 1/11/12 4:37 PM Page 19





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


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

Specializing in Accounting Services for Homeowner Associations.

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

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





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

Building Envelope Structural Renovation/Adaptive Reuse Curtainwall/Windows Capital Maintenance Planning new Structural Design, Civil/Environmental Marine/Waterfront Structures Transportation Facilities



Contact:  Steve Silberman, CPA

SELDEN FOX, LTD. Contact: Michael C. Majewski, CPA


(630) 954-1400



(847) 382-4100

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

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



Loans, Reserve Investments & Lock Box Services



(847) 564-3880 FAX





Asbestos Abatement • Lead Paint Mitigation

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

Daniel Baigelman, AIA Capital Improvements • Reserve Studies Engineering Reports

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

Structural and Restoration Engineers



CHICAGO OFFICE: 312-899-9989 30 North LaSalle, Suite 2340, Chicago, IL 60602





The Pyramid Club, Addison , IL For more informatio n vi www.condolifestyle sit

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BRAL RESTORATION, LLC. (847) 839-1100


SMART ELEVATORS CO. (630) 544-6829

Masonry and Concrete Restoration

FORUM GROUP, INC. (773) 732-3051 

"We specialize in cleaning High Rise Buildings" Garbage Chute Cleaning Tile & Grout  •  Pressure Washing Move Out/Detail Cleaning Serving Chicagoland Area for Over 10 years


FM&J ASPHALT PAVING, INC. 708-544-6700 / 630-279-0303

GOLF CONSTRUCTION (219) 933-3420

Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack Filling & Striping


(847) 253-3886 TEL / (847) 253-3255 FAX

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


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



, IL Club, Addison The Pyramid n visit For more www.condolifesty




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





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



contact: Steve Stenger


A Total Exterior Facade Restoration Company



(847) 531-5700


Contact: Ryan Anthony

Masonry Repair Services, Tuckpointing, Caulking and Concrete Restoration


Contact: Hans Herrmann

MASOnRy, COnCRETE,  TuCKPOInTInG, CAuLKInG See our ad on page 9 for more details  or visit our website at:


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



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FIRE SAFETY & PROTECTION SIMPLEX GRINNELL (630) 948-1235 Fire Alarm / Sprinkler Systems Fire Pumps / Extinguishers Fire Panel Monitoring Installation / Testing / Maintenance 24/7 Service: (630) 948-1200



MESIROW FINANCIAL (312) 595-8135

Photo Inventory, Moving, Storage or Disposal

nancy Ayers


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

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FIRE/FLOOD RESTORATION BELFOR PROPERTY RESTORATION 847-205-0580 Fire, Water & Storm Restoration Mold Remediation


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




Bulk and Retail Internet  Service Provider for Residential Towers Fastest Internet in Chicago Contact Ashkan Marsh

(708) 396-1477

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

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



ALTHOFF INDUSTRIES 312.332.5700 Mechanical - Plumbing - Electrical - Building Automation

KINGSBURY CLEAN (847) 768-1200


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





Water, Fire and Disaster Restoration Cost efficient Janitorial & Maintenance services for homeowners associations. Carpet cleaning, pressure washing,  snow removal, etc.

Serving Chicago Over 50 years

Joe Lamotte, General Manager Commercial Division

We NEVER Charge for Estimates All Pipe & HvAC Insulation

For more information, visit our website at No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.




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



LAUNDRYLAND ROUTE, LLC. (847) 998-4050


Contact Andrew neuman



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


Professional Landscaping and Snow Removal



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


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

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

ABC DECO INC. 773-701-1143

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

ILT VIGNOCCHI (847) 487-5200



KINSELLA LANDSCAPE, INC. (708) 371-0830 Creating Lifestyles From The Outside In…™


BROUWER BROS. STEAMATIC (800) CLEAN54 “All types of Environmental Cleaning”

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



Painting, Construction & Maintenance

(847) 364-6800 Environmental Remediation

UNIVERSAL RESTORATION SERVICES 877-864-8266 P 888-596-4966 F Water, Fire and Disaster Restoration Joe Lamotte, General Manager Commercial Division

Quality Landscaping Since 1947


Interior & Exterior Painting • Wallcoverings Stucco, Masonry & EFIS Repair • Drywall Repair



Painting & Wall Repairs Hardwood Floors/ Tile Installation Kitchen cabinetry sale & installation "Serving Community Association's for over 10 Years" Contact: Mike Chinte


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

FM&J ASPHALT PAVING, INC. 708-544-6700 / 630-279-0303 Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack Filling & Striping No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.

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THE HABITAT COMPANY (312) 527-5400

Sealcoating / Crack-sealing / Striping Asphalt Installation


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

Contact Jennifer Feldman, Tom Skweres

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


ELLIOTT & ASSOCIATES (847) 298-8300


WOLIN-LEVIN INC. (312) 335-1950



LEGUM & NORMAN MIDWEST (312) 944-2611



MCGILL MANAGEMENT, INC. (847) 259-1331


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contact: Tracy Davis



“Premier Community Management”


“A Management Company with values” contact: James Krech

REMODELING CONTRACTORS ABC DECO INC. 773-701-1143 Painting & Wall Repairs Hardwood Floors/ Tile Installation Kitchen cabinetry sale & installation "Serving Community Association's for over 10 Years" Contact: Mike Chinte

PROPERTY SPECIALISTS INC. (847) 806-6121 (630) 633-5450 WOODRIDGE OFFICE No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2012©.




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SPMS 630-692-1500

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

Quality Security for Windows and Doors

Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing


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

KRAMER TREE SPECIALISTS, INC. 630-293-5444 See our ad on page 31. See our ad on page 4.

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

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

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S&D ROOFING SERVICE (630) 279-6600


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For more information, visit our website at COnDO LIFESTyLES

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See our ad on page 31.

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



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

Heaters Pumps • Repairs • Chemicals Pool Maintenance • Complete Water Analysis    Pool Guards, Inc.



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1111.5293 CL[0112]40_FNL_Layout 1 1/11/12 4:37 PM Page 25






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


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

WINDOWS/REPLACEMENTS CHICAGO WINDOW SYSTEMS, INC. (312) 915-0591 Window and Patio Door Replacement Aluminum and Wood Clad Steel uL Rated Windows Aluminum Store Fronts All Types of Window Restoration Weather Stripping / Hinges Handles and Adjustments Curtain Wall Repair Specialists



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1111.5293 CL[0112]40_FNL_Layout 1 1/11/12 4:38 PM Page 26


by Frank Rathbun, Community Associations Institute

CICs Face Continuing Financial Issues Tens of thousands of community associations continue to struggle with financial issues associated with the mortgage foreclosure crisis and economic downturn, according to a national survey conducted in late 2011 by Community Associations Institute (CAI).


orty-six percent of community managers say their client associations face “serious” problems as a result of the housing and economic downturn, while 10 percent describe the impact as severe. The results are similar to those of an identical survey conducted in Sept. 2010. About a quarter of community managers say more than 5 percent of their units are vacant. This is largely due to foreclosures, the inability of nonresident owners to sell or rent their properties or owners simply walking away from their mortgages—and homes. Another 30 percent of managers report vacancy rates of 3 to 5 percent. Associations rarely collect assessments on vacant homes, placing an added financial strain on the communities and their homeowners. Associations rely on homeowner assessments to fund services such as utilities,

trash pickup, snow removal, landscaping and road and building maintenance. Assessments also fund a wide variety of amenities like swimming pools and playgrounds. Assessment delinquency rates have almost tripled since 2005. Today, 63 percent of associations have delinquency rates exceeding 5 percent, up from 22 percent of associations in 2005. One in three associations has a delinquency rate exceeding 10 percent, and for almost one in 10—or close to 30,000 associations nationally— the rate is more than 20 percent. “High delinquency rates place tremendous pressure on associations to meet their obligations to the homeowners who are paying their fair share,” says CAI Chief Executive Officer Thomas M. Skiba, CAE. “When some owners—including lenders that have foreclosed on homes and now own them— don’t pay their share, other homeowners often

must make up the difference in higher regular assessments or special assessments. Associations must still pay their bills.” According to a separate CAI survey, more than 70 percent of bank-owned properties are not making timely assessment payments to their associations. “These findings affirm what we’ve known anecdotally for several years—that many associations face severe financial hardships,” says Skiba. “Association boards, community managers and other professional service providers are being put to the quintessential test: how to sustain communities and meet homeowner expectations with far fewer resources.” These difficult times are when association leaders really deserve not only the support and cooperation of their homeowners, but also recognition and appreciation for their efforts, Skiba says. “Anyone who doubts the challenges and commitment of association boards and community managers should try to govern and manage in today’s environment.” Unfortunately, only 7 percent of managers say their owners are “strongly” sympathetic to the issues faced by association

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1111.5293 CL[0112]40_FNL_Layout 1 1/11/12 4:38 PM Page 27


leaders, while 71 percent say their owners are either “somewhat” or “slightly” sympathetic— and 22 percent say “not at all.” There is positive news: 88 percent of managers say their board member clients accept “a lot” or “some” of their advice before taking specific actions . The survey showed that associations are taking a variety of steps to address budgetary shortfalls: » 50 percent have increased homeowner assessments » 40 percent have reduced contributions to reserve accounts that are set aside for major maintenance and repairs » 39 percent have reduced landscaping services » 38 percent have deferred maintenance of common elements » 38 percent have postponed planned capital improvement projects

Financial issues facing many associations add urgency to CAI’s persistent efforts to modify Federal Housing Administration (FHA) policies that are causing frustration and confusion in the home mortgage marketplace. “Many owners need to sell their condominiums, and there are buyers. But recent FHA actions are getting in the way,” Skiba says. “We can’t afford FHA policies that prevent many potential buyers from obtaining FHA-backed loans. This just worsens an already-depressed housing market. Not only does it affect potential buyers and sellers, it has an adverse impact on many struggling communities.” Nationally, more than 60 million Americans live in an estimated 315,000 homeowners associations, condominium communities and residential cooperatives. Almost 600 CAI member community managers responded to the survey. Y

» 28 percent have reduced professional costs or management fees » 22 percent have borrowed from their reserve accounts » 20 percent have levied special assessments

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1111.5293 CL[0112]40_FNL_Layout 1 1/11/12 4:38 PM Page 28


from page 6

State-of-the-Industry Chicago Refuse Rebate Regarding the Chicago scavenger rebate program, Sugar said that the City budget had initially called for elimination of the full rebate now. It has been $75 per unit in an association but the City has always been three years behind in payments. “Mayor Emmanuel had proposed abolishing the rebate to fill a hole in the budget,” explained Sugar but aldermen serving the wards in which there are a lot of condo associations objected to the abrupt cut off funds. The rebate will temporarily stay in effect but reduced to $50 per unit in 2012, to $25 from 2013 through 2015 after which it will no longer be paid in any amount. This distressing financial fact appeared in a letter the Mayor recently sent to condo associations in the City.” I have not seen the letter,” said Sugar, following the SOTI gathering,” but I have confirmed this information with others who received the letter and I believe this is accurate.” Consistent with its past practices, Sugar added, “the City will not pay on time but when they get around to it,” noting, too, “there are $3,000,000 of unpaid scavenger rebates from past years,” still owed to individual unit owners who have applied for the money but which is accumulated on the receivables books of associations. When The Habitat Company heard about the initial cancellation of the rebate program, Pritzker went to work with the board and residents of 400 E.Randolph whose 955 units he manages. “We started a letter writing campaign,” he said, noting that, “one of the residents got a letter back saying the rebate would be cut to $50 in 2012,” which confirms what Sugar also learned. That will be a drop of approximately $23,000 in income for the 400 E. Randolph Association. Many other associations will suffer a severe shortfall in funds in coming years. Pritzker encouraged managers in the audience to educate their boards on the subject of the rebate so they anticipate the future loss of income, pointing out, too, that after 2015 associations will effectively be paying twice for garbage pick up- first to the waste disposal company and second is that they pay



for refuse pickup as part of their Chicago property taxes. He thought this might be grounds for a class action law suit on this issue against Chicago. Closing his comments, he emphasized his concern for the coming elimination of an important source of income for local associations. “Going forward, we’re going to have to be cognizant of this and prepare (in budgets) for loss.” Friend added a point of clarification. ” We can only apply for the owner occupied units.” Rentals can’t be included in the unit count and submission to the City. She also noted that ABOMA was looking into the matter to see what could be done to salvage the rebate program in some form.

Impact of Chicago Water Rates Sugar briefly mentioned in another area of association expense that Chicago is raising its water rates and will be increasing the charges it passes on to all suburban communities that purchase this commodity from them. “The increase will affect almost all associations in the area,” he said.

Chicago Condominium Ordinance Sugar turned his focus to the Chicago Condominium Ordinance and its requirements, which apply to the development of condos rather than their operation under the auspices of boards of directors. It makes some substantial changes to the existing law but, “since the market is pretty much on life support, this won’t have an immediate impact but it will in the future.” Under the revised ordinance, buyers must be provided with a,”summary in plain English,” regarding a variety of issues such as unit owner parking and the provision of utilities. “The summary is supposed to help buyers make an informed decision,” about whether to purchase any unit they consider. Other requirements include giving to buyers the names of individuals who are responsible for the development of the property whereas before they could hide behind the corporate veil of the company. Additionally, the buyers will have to be given a property report on the condition of the physical plant, which will be very important for projects converted from rentals, especially those of an aged vintage. Also, “an architect will have to certify that the plans of the building comply with the City’s building code,” said Sugar,


adding that tenants who can’t or elect not to purchase a unit in a conversion project must be provided with relocation assistance. There are other provisions, too, one being the amount of time an association will have when a request is made to see financial records. The required response time has been cut significantly. “Hopefully this will make a difference to buyers down the road,” said Sugar.

Delinquent Assessments on Foreclosed Units Sugar moved on to the subject of the provision in the Condo Act that allows associations to collect six months of delinquent assessments on a foreclosed unit from the buyer of such a unit at the foreclosure sale. Some changes are being considered, especially in connection with the six month figure, which has been viewed as unacceptable by many in the industry. Proposed changes include giving associations a super lien on a unit ahead of the first mortgage, the right to collect those six months of assessments without having to file a law-suit and lengthening the period of recovery to twelve months. What will the likely outcome be as these alternatives are debated by the Illinois legislature? It will probably be a question of, “what will the banking community want to support,” said Sugar. “I don’t think our friends in Springfield will want to buck the banking community too much.” Again, in a follow up to the seminar on December 8th, Sugar provided clarification regarding those possible changes on the six month assessment issue. Competing proposals are being generated by the Illinois State Bar Association (ISBA) and the Chicago Bar Association’s CBA) Condominium Law Subcommittee. ”Neither proposal has been fully developed and neither seems to have been formally introduced in Springfield,” he said. “The ISBA proposal seeks to better protect persons who purchase foreclosed properties while the CBA proposal seeks better protection for condominium associations.” Which changes to the law, if any, are eventually enacted is anyone’s guess at this point.

Disclosures Disclosures were next on the agenda, both those required to be made under

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1111.5293 CL[0112]40_FNL_Layout 1 1/12/12 11:30 AM Page 29


Sec.22.1 of the Condo Act when requested by unit owners and in response to inquiries from lenders who are considering a mortgage application submitted by a prospective buyer. Dever-Sutton asked both Pritzker and Friend to comment on how having to complete all the paperwork connected with these requests impacts timing in their offices and do their boards understand the amount of paperwork that is now necessary before a sale can take place. And do their boards review the 22.1 answers before they are sent to attorneys? Pritzker noted humorously that one of the advantages of managing a large project is that he has a lot of staff working for him, one of whom deals with 22.1 requests so he is saved the ordeal of direct compliance himself. Typically, in the past, a form was filled out and sent to the inquirer. “That’s all that was necessary previously but now we’re getting repeated calls for more and more information,” he said. Often the staff person refers callers to other sources such as insurance providers. “From a time standpoint, there has been a great increase for us,” but in response to the calls for more information, as I said, “we just usually

reiterate the information we are required to provide or refer callers to our professional support.” Friend said the best way to deal with the process is to have a standardized 22.1 response form. With regard to lender requests, “We also have a standard form of mortgage questionnaire, but if a lender wants their own filled out, we charge them.” Sugar interjected, “it’s very heartening to hear that. I know how much time management spends with those ridiculous forms (from lenders). Some legal questions even I can’t answer.”

warned the audience to not always trust lawyers in providing them with information. “Attorneys representing buyers can really be scumbags. Only answer questions required by section 22.1. Have your own standard form and stick to what’s required.” In support of what Friend said, Sugar stated that in terms of lender requests, “again, prepare your own standard mortgage disclosure sheets and if your standard disclosure isn’t good enough for lenders, charge them, for anything that goes beyond what you normally provide.”

Questions & Answers

Caution on Extent of Information Provided

A couple of questions from the audience followed.

Sugar cautioned managers about the extent of information it can provide. For example, managers may not know about planned capital expenditures because board members may discuss them in informal, nonboard meeting, settings at which management is not present. “That must be answered by boards,” he said, to assure complete accuracy. And Sugar, while being one himself,

Q/ Can we say out and out, no we’re not going to give you that information? (to lenders beyond what’s standard). A/ “The only reason we do those mortgage questionnaires is to allow owners to sell their units and buyers to get financing,” said Sugar. Providing the information will facilitate completion of the transaction.

continued on page 32

i n r e m e m br a nc e of

Amy Kynaston MAY 31, 1966 – DECEMBER 4, 2011

A Total Building Maintenance Company BUILDING FACADES, PARKING GARAGES & P L A Z A R E N O VAT I O N S Malibu East Condominium Association


ur colleague and friend Amy Kynaston passed away suddenly on December 4, 2011. She died from injuries sustained in an equestrian show jumping accident. Amy was a property manager for Community Specialists and has managed Chicago community associations for over seven years. Amy did a great job as the property manager of the Transportation Building. She was a hard working and conscientious person who took pride in performing her duties. She enjoyed the Boards confidence in the performance of her duties as property manager. Amy showed great proficiency as both a project and crises manager. She managed her budget to a surplus, and was well liked by both residents and her staff. She demonstrated a strong sense of diplomacy and negotiation when dealing with outside entities, and a strong sense of loyalty to the Association. Amy took the initiative to expand her contacts in the condominium industry to better help her Association including negotiating contracts and resolving issues. She excelled at capital projects. Amy was a great team player and manager and will be missed by everyone she knew and worked with. John Nordquist

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Amy always had a big smile and took everything in with those big eyes of hers. She had a sense of mischief but was always very serious when it came to her job. She loved to go to places with singing and piano playing – maybe in another life she was a cabaret singer! I think she felt free on her horse, jumping and running. She brought out the best in people around her. She lit up the room --- we will truly miss her! Laurie Leli I introduced Amy to property management in 2005 at the Transportation Building. The Board interviewed so many managers and liked none of them. I was then told to "think outside the box" and Amy came to mind. They interviewed her and a love story was born between building and manager! Amy was a natural in the property management field and brought her vast education and work experience to the Transportation Building. Just before Amy passed we had a conversation about how truly blessed she was to be given the opportunity to be in property management and to work with such amazing people both in her building and throughout the industry. She was looking for ways to expand on her career. Amy was always seeking more knowledge and information to make sure her building was run in the best manner possible. Tairre Dever Sutton - TAIRRE Management Services, Inc.

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Office & Warehouse Facility

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Management Executive: Tairre Dever-Sutton, Tairre Management Tairre Dever-Sutton is president of Tairre Management Services based in Des plaines, Il. Tairre has over 25 years of community association management experience. She founded Tairre Management in 2007 and currently is responsible for management of over 750 condominium units in ten buildings. prior to opening Tairre Management, Tairre served as property supervisor and property manager for two of Chicago's largest condominium management companies. Ms. Dever-Sutton's education is from the university of Wisconsin Whitewater.

Education & Media: Elana Lugo, Wolin-Levin, Inc. Ms. Lugo began her property management experience in Kihei, Hawaii seven years ago. She has a BA with a concentration in Marketing from Truman State university and is a lEED Ap. She has been with Wolin-levin for over 5 years and is responsible for evaluating current processes and procedures, identifying best practices and employing those practices as company standards. As the company's Green Team leader, Elena fosters relationships in the green industry and champions Wolin-levin for environmentally safe practices within the workplace. She is a uSGBC member and has served on several committees. Ms. lugo also serves on the Advisory Board for Chicagoland Buildings & Environments magazine. 2012 Condo Lifestyles Adivisory Board

State-of-the-Industry Committee

*Michael Baum Baum Property Services

*Diane White & Marla Jackson The Habitat Company

*Rosemarie Wert Community Specialists

*Tom Skweres, Jennifer Feldman Wolin-Levin, Inc.

Tony Briskovic Chicagoland Management & Realty

Chicagoland Buildings & Environments Advisory Board

*Fred Rodriguez & Mydraine Janvier Heil, Heil, Heil, Smart & Golee Joel Garson Hillcrest Management Barry S. Katz Omnibus Services William C. Earle Legum & Norman Mid-West Jordan Shifrin & Ryan Shpritz Kovitz Shifrin Nesbit

Harvey Alter The Alter Group Rick Brouwer Brouwer Bros. Steamatic Greg Semmer & George Kinsella Kinsella Landscape, Inc. Howard Dakoff Levenfeld Pearlstein

Tony Briskovic Chicagoland Management & Realty Mydraine Janvier, Fred Rodriguez Heil Heil Smart & Golee Tairre Dever-Sutton Tairre Management Marla Jackson and Diane White The Habitat Company Micky Tierney Community Specialists Tom Skweres and Natalie Drapac Wolin Levin, Inc.

Sheila Malchiodi & Amy Edwards QCI Restoration

Tracy Hill & Cathy Ryan Property Specialists, Inc.

Andy McCormack & Steve Seifert Smithereen Pest Management Services

*Tairre Dever-Sutton Tairre Management Services

Elena Lugo Wolin-Levin

* also serves on Advisory Board for Chicagoland Buildings & Environments


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Buildings Environments CondoLifestyles


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from page 29

their mortgages. This has led many of those financially distressed owners to look for ways to augment their incomes to pay their mortgages and assessments. “One of the things we’re starting to see is a lot of short term vacation rentals,” said Hartwell, generally for a period of two weeks or less. As to the availability of such arrangements, he added, “there is virtually no high rise building in downtown (Chicago) in which you couldn’t rent a unit this weekend. I guarantee this is going on in your (manager’s) buildings even if you don’t know about it.”

State-of-the-Industry Q/ Will a manager licensed in Florida be able to use the endorsement process to get licensed in Illinois? A/ “So far there is no available list of states whose licenses will be accepted here,” said Sugar. “Call the State (Illinois) and ask.”

Economic Trends & Challenges The second seminar on the schedule dealt with “Economic Trends & Challenges,” with a major focus on condominium short term rentals. Panelists were David Hartwell of Penland & Hartwell LLC., Fred Rodriguez of Heil Heil Smart & Golee and Sharon Schingoethe, manager of Shoreline Towers. The moderator was Natalie Drapec of WolinLevin, Inc.

Violation of Associations Covenants Short Term Vacation Rentals Hartwell opened his remarks by noting that while in the past condo owners generally had a real financial stake in their units, in these dire economic times many don’t have a lot of equity or, worse yet, are underwater on

In engaging in this activity, unit owners are violating the association’s covenants because, “units are being used for a business purpose, which is prohibited,” explained Hartwell. “Associations that discover this practice taking place in their buildings must take

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immediate action to abate the problem,” because of the negative consequences they may suffer if they do not. That’s because City Officials, “are sniffing around,” to look for certain kinds of rentals, which when done below board, “cheat” the City out of tax and licensing rentals. “The City is able to identify short term rentals by going online and searching for vacation rentals. Not only that but some owners angry over the presence of the changing faces of people living in their midst may turn in other owners who are breaking the law. “I represented one building in which the problem was so pervasive, unit owners called the City directly,” to report the situation.

ADA & Fair Housing Act Implications

What’s the Big Deal

Furthermore, where there are short-term vacation rentals, associations may be subject to additional requirements under the federal Americans with Disabilities Act (ADA) and the Fair Housing Act and other local building and fire safety codes. Summing up,” Hartwell said, “these are some of the problems and they are significant.”

Hartwell noted that some boards may take a laissez faire attitude toward short-term rentals by thinking, we have a lot of arrearages and foreclosure but people renting out their units for weekends or vacations are at least paying their assessments. “What’s the big deal?” is their viewpoint but Hartwell underscored the danger of testing the ability of local officials to apprehend code breakers. “The City will find you and find you soon. They

Violate Lease Law In addition to being covenant violations, short term rentals usually violate lease law regarding one year terms; security in the building is vitiated; there is unauthorized use of common facilities; the effectiveness of front desk personnel is reduced by the additional burden of dealing with renters and short term rentals are regulated by municipal code, which requires licenses, insurance and compliance with certain operational standards. An association may be considered a violating party if city codes are transgressed even if the association was unaware of the rental arrangements in its building. As I said previously, “the City is going to websites which advertize these rentals and is fining both associations and individuals for violations,” said Hartwell. However, the success rate of Chicago in detecting illegal rentals is dependent on manpower, which is reduced at this time because of budget cutbacks but they will not let up in these efforts.

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notices to all owners that this type of rental practice is prohibited, discipline any on-site staff that cooperates with the practice without reporting it and take legal action, where necessary, to get a court order to restrain any party that continues short term rentals despite warning(s) to cease and desist.

will figure out how to detect various violations.”

Hotel Arrangement Where an investor or group of investors purchase a lot of units for the purpose of renting them out on a short-term basis, that constitutes a hotel arrangement, according to Hartwell. Some of the issues involved are similar to those affecting short-term vacation rentals by unit owners. They are also covenant violations because units are being used for a business purpose. Also there may be security problems and these arrangements are subject to both the ADA and the Fair Housing Act as well as local fire codes and restrictions, additional insurance requirements and the local entertainment tax. Chicago will be diligently searching for these quasi hotel accommodations to recover lost tax revenues.


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Managing Permitted Rentals

Identify & Notify Hartwell urged boards to identify individuals or groups involved with short-term or hotel rentals and notify them of the covenant violations with a follow up to make sure the practice has ceased. Also, preemptively, send


At this point, Schingoethe spoke about the general subject of associations permitting valid rentals in their properties. “When a good number of units become rentals, one of the main things you have to keep in mind is that you are a rental building and not only a condo association,” she said, meaning that where there are rentals, other laws and codes come into play. For example, if an association decides it wants to review and approve prospective renters, “the only thing you can deny a lease

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for is the economic uncertainty of prospective renters,” Schingoethe said, adding that by using some other basis for denial, “you can leave the association open to a lawsuit,” for some form of discrimination. To be consistent in its handling of rentals by unit owners, a board, “should have a written established rental procedure on file,” and always follow it.

Association as Landlord Other considerations apply when an association takes possession of a unit after eviction of an owner and it becomes the landlord. Schingoethe recommended that associations outsource the task of leasing out the unit, “Give it to a rental agent,” she urged. “The cost of renting out a unit can be charged back to the unit owner,” along with any previously delinquent assessments. “What’s nice about an outside source is that the party knows all the steps necessary to lease the unit.”

their assessments. “I remember a decade ago associations used to call us and say almost apologetically, can you handle this collection for us,” he said. It was a rare occurrence. “Now we have almost a full time department that handles collection issues.” Collecting assessments from renters in units owned by associations is much less of a problem. Turning his focus to associations as landlords, Hartwell laid out some limitations on their activity in this sphere of operation. A unit can’t be rented out until the association

has legal possession even if the owner has abandoned the premises. “You don’t have any rights over such a unit until the eviction is done,” he said. Also, as a landlord, the association can’t rent out a unit that is not livable. It must have all appliances. Paint must not be peeling, furnace must be working, etc. “If you try to lease a unit that is unprepared, you’ll be called slumlord.

About Leases & Requirements Hartwell noted that the ABOMA condo-

Rules & Regulations Once a unit is rented out by the association, before the tenant moves in, the board or management should sit down with him/her and go over the rules and regulations. The lease should contain a clause that stipulates the tenant will abide by all the R&Rs, Schingoeth added. Rodriguez cautioned associations to know what they’re getting into when permitting or undertaking rentals. Speaking generally, he said, “there are so many things that come up in rentals or short-term rental arrangements the association must comply with to cover their backsides,” and, “ignorance (of them) is not a plausible defense.”

Collections Still on the Rise Hartwell noted the growing collection problem with unit owners who fall behind in

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minium lease is preferred and the association must attach a copy of the Residential Landlord Tenant Ordinance to leases with their renters. Among other things, this document requires the premises to be adequately maintained, specifies how any security deposit must be handled and establishes significant penalties for violations. A lease must include a 30 day termination provision because there may be a foreclosure action pending, on a unit an association has possession of, which if completed may

necessitate a quick move out by the association’s tenant. The question arises, who will rent a unit knowing they may have to move out upon 30 days notice? Hartwell suggested renting it at a below market rate to make it attractive enough to overcome the 30 day provision.

Screen Prospective Tenants Hartwell recommended that associations screen prospective tenants carefully but not take security deposits. If associations do, they

are likely to be sued by tenants to recover it because of conditions attached to processing its use. “There is a growth industry of attorneys representing tenants, waiting for you to mess up,” he said. Hartwell concluded his presentation by stating that the rental issue is becoming, “a really big problem in this industry, both known and unknown rentals.”

Questions & Answers A few questions were posed by the audience: Q/ Why can’t I have a propane tank on my balcony in Chicago? A/ “You can’t,” said Hartwell, because it is very dangerous in the event of a fire. “The City needs the revenue (from the fines) and will figure out how to find you. I walk by condo associations on my way to the office in the morning and I see at least 70% of the balconies with propane tanks,” Q/ How can we find out whether units are being used for short-term rentals?

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A/ “If you want to find out whether units in your building are being rented for that purpose, go to a site like Expedia and put in your address- not the name of your association,” said Hartwell. Q/ If we want to allow rentals of our garage space for, say, six months, do we need to be as uptight on those rentals as with unit rentals? A/ Hartwell advised,” take a look at what your declaration states about rentals and whether it includes anything on garage spaces. If your declaration doesn’t address the issue, your board has great latitude in addressing the issue.” Y

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In The Midst Of Choas, We Have What You Need Most - CHOICES.

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CondoLifestyles - January 12, 2012  

CondoLifestyles - January 12, 2012

CondoLifestyles - January 12, 2012  

CondoLifestyles - January 12, 2012