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januaRy 2015 | volume 18 | numbeR 4






Report F E AT U R E S


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03 condo lifestyles state of the industry report By Pamela Dittmer-McKuen S P E C I A L F E AT U R E

08 how to live with palm ii By Pamela Dittmer-McKuen L E G A L U P D AT E

11 legislation and case law Update By Gabriella R. Comstock 17 industry happenings Compiled by Michael C. Davids & Sherri Iandolo 20 from the editor 21 directory advertisements S P E C I A L F E AT U R E

28 fair housing laws are reasonable By David Mack M O N E Y M AT T E R S

32 tis the property tax season By Matt Panush GUEST EDITORIAL

34 a guide for dummies… top 10 Ways to screw up your association By salvatore sciacca M O N E Y M AT T E R S

36 common Questions about property tax appeals By Jim Field EVENT HIGHLIGHTS

39 condo lifestyle state of the industry L E G A L U P D AT E

40 Quinn signs law that establishes ombudsperson on Way out





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By Pamela Dittmer McKuen



The 2014 Condo Lifestyle State of the Industry once again convened at the historic Chicago Cultural Center on Thursday, December 11. This annual luncheon and seminar brings together professionals and homeowners to review the most important issues and trends facing the community association industry.


after a hearty catered lunch, the welcome and opening remarks were delivered by michael C. Davids, president of mCD media. He formally opened the program by thanking the attendees, event organizers and mCD media advisory board members. “legislation and government have always been an important component of this program, and this year is no exception,” he said. “mCD media strives to provide a forum for

resented by mCD media, publisher of Condo lifestyles and Chicagoland buildings & environments magazines and websites, the event commenced late morning with registration and conviviality. Information tables and exhibits included special interests such as: energy purchasing and efficiency, fire and flood restoration, association law, urban landscape ideas and energy benchmarking compliance.

idea and information exchange to take place at our events and in our publications.”

Legislation And Case Law Update leading off the program was association attorney Gabriella Comstock of Keough & moody, P.C., in naperville and Chicago, who presented an update of legislation and new case law. except as noted otherwise, laws go into effect january 1. among the highlights: • Process servers and service. In gated communities, employees are required to allow individuals attempting to serve process for service. The law affects both condominiums and other private communities. “Some of you who may be familiar with communities that have more security out front know it was always challenging for us to get service,” she said. “now it should be somewhat easier whether we as association attorneys are trying to obtain service or outside counsel, maybe mortgage compa-


Hillcrest Property Management 3 Offices in Chicagoland to serve you more conveniently GL ENVIEW






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condo lifestyles

sion that negates that requirement,” she said • Insurance. Several changes and clarifications were made to Section 12 of the Illinois Condominium Property act (ICPa). among them is the requirement that directors and officers insurance now cover nonmonetary actions. In the past, carriers were not required to do so. This law applies to insurance policies that are issued or renewed after june 1, 2015. “This will be interesting for us in the industry to see how it works out,” she said. “Condo associations often are involved in litigation where there is not a monetary demand.” • Leasing units after a forcible. Public act 98-996 details and clarifies requirements and deadlines for leasing units obtained through a Forcible entry and Detainer action. nies, who are suing these owners, for special process services to get in and get service on these people.” • Non-condo owner leases. If the governing documents of a non-condominium provide that owners are not required to provide copies of leases within 10 days of the lease


condo lifestyles

being signed or the date of occupancy, Public act 98-842 allows an exception to the Common Interest Community association act (CICaa) requirement that the owners do provide such information. “you still need to look at the association’s governing document to see if there is a provi-


• Electronic notices and voting. associations may send notices for non-election matters via email, provided the receiving owner has opted in. Condominium associations must adopt rules before sending notices via electronic means. non-condominium associations do not have to adopt such rules.

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both condos and non-condos can allow electronic voting in elections. However, associations must adopt the appropriate rules to do so. Condominiums must adopt their rules at least 120 days before the election. non-condos do not have that time requirement. owners who do not wish to vote electronically or who do not have the means to do so must be given an alternative way to participate at the association’s expense. electronic voting disallows proxy voting; however, electronic votes count toward the quorum. • SB-2664, a bill that would have limited a condominium association’s recovery after a foreclosure to a maximum of 9 months of regular assessments, was vetoed by Gov. Pat Quinn with an amendatory veto. The General assembly neither adopted the governor’s changes nor overrode the veto. Therefore, the original language of the ICPa, which allows associations to get up to six months of common expenses plus costs and attorney fees, remains law. The year’s myriad court cases addressed such issues as bank obligations to pay assessments, association duty to make repairs, doc-

Panel Discussion On Hot Topics, Trends And Challenges among the afternoon highlights was the panel discussion on hot topics, trends and challenges facing the industry now and for the coming year. natalie Drapac of Community Specialists introduced Y Howard S. Dakoff Y Gabriella R. Comstock the panelists and served as moderator of the discussion. The panument requests and dangerous dogs. elists were: james Field, founding member and (a complete copy of Comstock’s summary real estate tax attorney, Field and Goldberg, handout, “legislation and Case law update,” can be found on page 11 of this issue.) llC, Chicago; William Demille, president and co-founder, Chicagoland Community manHow To Live With Palm II agement, Chicago; bob meyer, director of association attorney Howard Dakoff of engineering services, FirstService Residential, levenfeld Pearlstein llC in Chicago also was Chicago; and Tairre Dever-Sutton, president, a featured speaker. His address concerned how Tairre management Services, Des Plaines. a boards and managers can and should comply condensation of their remarks follows: with the controversial court decision Palm vs. Q: Should associations appeal their taxes every year or only during the first year of their assess2800 lake Shore Drive Condominium associment periods? ation. (This portion of the program is elaboa: field: it is critical to file during the first year. that’s rated upon in a separate article on page 8 of when the assessor sets the initial assessment for a building. But you want your attorney to check this issue.)

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condo lifestyles

Q: What does the year 2015 mean for managers and their associations? a: field: it will be a very exciting year. the reason is 2015 is both the triennial assessment year for the city of chicago and the quadrennial assessment for all the collar counties. that means virtually every property in this area will be in play for tax appeal. during the triennial or quadrennial, the assessors are making a new value for your property. they are going to be looking at the sales trends for the past three or four years. your property will be newly looked at and reviewed. in a condominium, assessors assess the aggregate market value of the building as a whole. say the building is worth $100 million, then they take each unit owner’s percentage of ownership and multiply against that total to come up with a market value. it is important to appeal for the entire property, not the individual unit. also, be aware of the deadlines, and don’t wait until the last minute to retain your legal counsel.

your file every single year to make sure your assessment is reasonable. there is something we use in the business called a sales ratio. essentially, we take the assessed value and divide by the sales price equals the sales ratio. if the property sold for $100,000, we’re looking for a $10,000 assessed value. if it’s higher than that, the light bulb should go off. there could be an opportu-

nity for tax savings here. one sale in one building doesn’t make a case, but certainly it is evidence. in the second year, there may be new sales we didn’t have the first year. there may be circumstances we didn’t have the year before, maybe a fire or flood. anything distress-related, a tax-savings opportunity is definitely there.

Q: Are common elements ever separately assessed? a: field: common elements should never be separately assessed. the reason is the assessor is valuing your building as a whole. the value of the swimming pool or manager’s office or janitor’s apartment is all included in that value. if you ever get a tax bill for a common element, call your attorney. common elements should be assessed at $1.






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cover story

Q: Can sales at comparable properties be used during tax appeals? a: field: no. the rationale is that the building across the street may have different amenities or a lesser management company. that being said, if you have no sales or very few sales, i may look outside your building to try to build a case, but generally speaking, the assessing authorities frown on comparables. (a complete copy of field’s handout, “commonly asked Questions regarding condominium tax appeals,” is reprinted elsewhere in this issue.) Q: Bill, do you have any predictions on legislation that may affect our industry? a: deMille: everyone needs to be aware of the changes to the manager licensing law. in addition to the community association manager license, there will be a supervising manager license and a company license. these changes were to have gone into effect January 2014, but the illinois department of professional regulation has not yet promulgated the rules pertaining to the new licenses. the process is the Joint committee on administrative rules will publish the rules and put them out for public review before they are adopted. the changes go into effect 12 months after the rules are adopted. “one problem we have in our industry is we are not attracting good candidates who want to manage community associations,” said deMille. “to the extent we can make our industry more professional and lift it up is a good thing.” as for other hot topics, the long-awaited ombudsman act has been passed by both the senate and the house (and was signed into law in late December by Governor Quinn).

Q: Howard, are any buildings that you know of preparing a case for when they do get cited or face fines?

a: dakoff: no. i think most associations have complied in good faith, or they are so oblivious or are disregarding the law and think they are immune. the room filled with laughter. Y

State-of-the-Industry Committee Tony Briskovic chicagoland Management & realty

Elena Lugo firstservice residential

Micky Tierney and Natalie Drapac community specialists

Mydraine Janvier alMa property Management

Tairre Dever-Sutton tairre Management

Diane White the habitat company

Q: How are your properties faring with the Chicago energy benchmarking requirement? a: dever-sutton: i have several buildings over 50,000 square feet that need to be monitoring. luckily, they all have third-party contracts, and those contractors are doing it for us. i’m not sure, however, that all boards know what benchmarking is about and that reports have to be sent to the city in regard to energy moderation and usage. Meyer said firstservice residential has hired a certified consultant to monitor its client associations and will not pass on the costs to the associations. Q: How are your associations coming along with meeting the deadline for Chicago’s Life Safety Evaluation ordinance? a: Meyer: We are dealing with many levels of financial flushness. some of those that are very flush have taken it upon themselves to hire consultants to give them directives to make whatever changes to their property are necessary. others that may be not so flush are struggling. they have gotten on the bandwagon, in our opinion, a little too late. as managers, we have had to convey the message that there is a timeline and that buildings not in compliance by the deadline will be taken to court.

Tom Skweres acM community Management

Making a Difference. Every Day.

Be Genuinely Helpful. Helpful and responsive service is one of our core values – one we live by every day. We take pride in providing personalized service to each of our communities in Chicago and surrounding suburban neighborhoods. From opening a door with a friendly smile at Lake Point Tower to supporting a neighborhood family event at Lakewood Falls – and everything in between – we strive to deliver the kind of service that makes a difference, every day, for every resident in our care. We are proud that our unmatched service, along with our best-in-class solutions and commitment to enhancing value and lifestyles, have helped make us the leading property management company in North America. How can we serve you? Contact us at 312.335.5621 Chicago | 847.807.5860 Illinois suburbs 303 East Wacker Drive, Suite 1900, Chicago, IL 60601 |

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condo lifestyles

By Pamela Dittmer McKuen

How To Live With Palm II perhaps the most controversial court case in recent industry history has been the palm vs. 2800 lake shore drive condominium association, also known as palm ii. in its ruling, the illinois appellate court addressed several matters concerning how boards conduct business. at the recent condo lifestyles state of the industry program, community association attorney howard dakoff of levenfeld pearlstein llc discussed a number of basic principles gleaned from this case and offered practical solutions for both boards and managers: 1. No more board workshops. What does that mean? When a board or a quorum of the board meets in between meetings to discuss meetings or long term projects or anything about the property—you can’t do it anymore. that’s the rule. you could argue that it was the rule before the palm case, but the palm case makes clear you cannot do it anymore. Before the palm case, the nuanced answer was if you didn’t make a decision in between board meetings, you were okay. But ultimately the court said you can’t do it. plain and simple. 2. No more email voting or canvassing by board members. What’s that? it’s been a common practice to send an email from the manager to all board members: “We need to renew the landscaping contract. can i go ahead and do it?” everyone says yes, or almost everyone says yes,

and the manager does it. can we do that anymore? no. how about an email from the board president to fellow board members: “do you have any objection to my doing X, y or Z?” it’s a canvass. can you do it? no. the court tells us you can’t discuss board business between meetings. 3. A Board can delegate Authority. the court realized it can be quite onerous if boards can’t make decisions between board meetings, so it allows boards to delegate authority. they can, at a properly called meeting, adopt a resolution that authorizes the manager or president to enter into certain contracts. you can set whatever parameters you want, such as contracts for between this amount and that amount, or contracts for renewals.

4. When in doubt, ask for a legal opinion. Most board members serve under the premise that they are donating their time, they are doing their best and if there is a lawsuit they will be covered by the association. the palm case said maybe not. if you act in good faith, yes, if you comply with the law, yes, but if you violate the law, maybe no. each case is fact-driven. What does this mean? Be diligent. if you’re not sure of the law or what your governing documents say, ask for a legal opinion. and if your counsel gives an opinion that is proved to be wrong, you will not be found in breach of your fiduciary duty because you relied on legal counsel. 5. Does Palm II apply outside Cook County? one question dakoff said he often is asked is whether palm ii applies to condominiums outside cook county. his answer is yes, it applies to every condominium in all of illinois. “if you live outside cook county and if an appellate court makes a different decision than palm ii, those counties would not have to follow palm ii,” he said. “But in the absence of a different decision, and we don’t have any, the palm ii case is the law for every other county. as of today, every association in illinois has to comply.”


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s p e c i a l f e at U r e

6. Managers concerned about non-compliance with Palm II by a Board. another issue related to palm ii is one that is impacting many association managers. Managers are talking about boards not following the palm ii rulings and some boards do not intend to. Managers are concerned because their own licenses require them to follow the law or face disciplinary action. their fears are not unfounded. some managers are found defending themselves against complaints and, in some cases, being fined for innocent infractions. “if a board is violating the statutes, a common misconception is it only matters if we get sued,” he said. “is it only theft if you get caught? do you drive well if you are drunk but don’t get pulled over? the answer is no.” his advice to managers whose boards refuse to comply with the law: speak to your company and to your supervisor. advise the board in writing at some point. if they still won’t comply, get that association’s attorney involved. call in the appropriate resources to help them understand. you need to protect yourselves. 7. Consider tele-conference and/or video-conference. dakoff also offered advice to boards that may find the requirements of the ruling burdensome. how do you conduct your business without conducting numerous and lengthy meetings? through very good planning and del-

egating authority. if you can’t do that, you may need to call a board meeting. if you do, here’s a little latitude—does it have to be at night in the party room? no. can it be via teleconference or videoconference? yes, but there is a caveat. you need the software or technology, so owners can call in and listen. schedule a conference call. there are conference lines that are free. you call an 800number with a passcode. the board has a different passcode, so they can talk among themselves. you can even put a speaker phone in the party room, so those who want to sit in and listen can. 8. Disseminating Information is OK. also, he said, there is a difference between disseminating information and discussing it. it is not a violation of palm ii for information to be disseminated to the board. When sending email, use the “blind carbon copy” function because individual board members cannot hit “reply” and communicate

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among themselves. that would be considered “discussion.” 9. Understand the spirit of the law. as a practical matter, there is the spirit of the law and then there is the law. a board president who speaks to individual board members is not violating palm ii. But if the president routinely shuttles between each one to carry comments and opinions to gain consensus before every meeting,

condo lifestyles


condo lifestyles

the spirit of the law is violated. “if that action comes out in litigation, it probably won’t be well received,” he said.

10. Dakoff’s closing words: Be creative. notice cures all. send notice for committee meetings (which do not require notice) because you’re not limited by how many board members can show up. every board member can show up. delegate authority for contracts. Use technology to do what you have to do. set up a teleconference, give notice, and make the meeting just long enough to do your business, which is just a few minutes. you can find ways to make the ruling work for you. Mr. dakoff also took a few questions from the audience:

although the likelihood of litigation is small, it does happen. Boards that attempt to comply with the law in good faith, especially if they are receiving and following professional advice, are not likely to be found in breach of their fiduciary duty.

Q: How should minutes be handled for a meeting that is held via telephone or video conference? a: Just the same as you would at an in-person meeting. telephone and video conference meetings are the same as an in-person meeting and are handled the same way. call the meeting to order, confirm the quorum, vote on X, vote on y, and adjourn the meeting. Minutes should be



condo lifestyles

taken and approved at the next properly called board meeting. if you are required to hold four meetings a year, a telephone or video conference meeting qualify. “you can conduct any board business you want or need,” he said. “technology is allowing you to do what you used to do at night in the party room, legally and conveniently.” Q: Are boards still allowed to meet in closed session for certain purposes? a: yes. section 18.5 (c) (4) authorizes executive session, which is different from a board workshop. a workshop is when the board gets together between meetings. executive session is a portion of an open meeting for which notice has been given to the owners. Boards may meet in executive session for only three purposes of discussion: litigation or impending litigation, employment or personnel, and violations of the governing documents. if one of these three categories triggers an executive session, this is the procedure: the board calls an open meeting and then recesses for executive session. they reconvene in open session to vote. “owners are dismissed for the executive session, but they get to hear what the decision is relative to the closed session,” he said. Y

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l e g a l U p d at e

By Gabriella R Comstock, Keough & Moody, P.C. Hand out Prepared for Condo lifestyles State of the Industry seminar on 12/11/14

legislation and Case law update New Laws: Process Servers and Service - The Governor signed a new law that affects gated communities. In those communities, employees are required to allow individuals attempting to serve process into the community for service. The law affects both condominiums and other private communities such as gated homeowners associations. The law is Public act 98966. effective as of january 1, 2015. Non-Condo Owner Leases - until recently, there was certainty that owners leasing a home in an association that is governed by the Common Interest Community association act was automatically required to provide a copy of a lease to the association within 10 days of the lease being signed or the

date of occupancy, whichever occurs first. Public act 98-842 creates an exception to the blanket rule if an association’s governing documents provide otherwise. effective as of january 1, 2015. Condo Insurance - Public act 98-762 has modified the insurance requirements for condominium associations. Property Insurance - The association must still have full replacement insurance for the property and increased costs of rebuilding in compliance with building codes and the costs of demolition. D&O Coverage - The association is still required to obtain D&o coverage. However, the law states which coverages must be included in the insurance policy, including non-monetary actions (injunction or declaratory judgment actions), defense of

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breach of contract claims (association does not pay its bills) and defense of decisions related to insurance. It also states that past, present and future board members must be covered while acting in their capacity as board members, property management company and employees of the board and the property management company. Covering Improvements and Betterments The law is clarified that there is no obligation to cover additions, alterations and upgrades installed or purchased by an owner. Unit Owner’s Coverage - The association no longer has the expressed power to obtain an insurance policy when an owner fails to do so. associations had trouble obtaining coverage anyway, so this provision does not change much.

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condo lifestyles

This bill becomes effective on june 1, 2015 and only applies to policies issued or renewed after that date. Leasing of Units - When an association takes possession of a unit pursuant to the Forcible entry and Detainer act, it has the right but not the obligation to lease the unit to a tenant. Public act 98-996 provides guidance on when it can enter into those leases. The association has to enter into the lease within 8 months after expiration of the stay. The lease can still be for a term of up to 13 months. If the board desires to lease the unit for additional time, it can file a motion to do so. The law becomes effective on january 1, 2015. Enforcement and Litigation - Some declarations contain a provision that a specified percentage of the membership must approve litigation prior to taking an action. Public act 98-1068 nullifies those provisions, except arbitration provisions against owners. Thus, the board does not have to obtain the approval of the membership to take enforcement actions against developers or anyone else. However, the membership can adopt restrictions


condo lifestyles

requiring approval of the membership after turnover if it so desires if approved by 75% of the owners. The law only applies to condominium associations and is effective on january 1, 2015. Adopting Rules on Electronic Notices Public act 98-735 gives the board of a condominium association the power to adopt rules allowing the board to send electronic notices to members and the members to submit an email address or postal address that would be placed on the members list that is subject to inspection by the members. This law is effective on january 1, 2015. Electronic Notices and Voting - The passage of Public act 98-1042 permits formal communications between an association and its members to be sent using technology. Notices - For condominiums, provided that an owner has opted in, notices can be sent via electronic means for all non-election matters. In order to send notices by electronic means for election matters, the association has to adopt rules or have authority in its declaration and by-laws to send notices by electronic means. For non-condominiums,


there is no rule requirement for sending notices but owners still have to opt-in. Voting - both condos and common interest community associations can allow electronic voting in non-elections. To vote electronically in elections, associations must adopt rules and regulations concerning electronic votes, which in the case of a condo must be adopted at least 120 days before the election. If owners can vote electronically in an election, voting by proxy is prohibited. Instructions on how to e-vote must be sent 10 to 30 days in advance of the meeting.

Legislation: UPDATE - SB2664 – one of the most closely watched pieces of legislation this year in the industry was Sb2664. as originally approved by the General assembly, this bill would have limited a condominium association’s recovery after a foreclosure to a maximum of 9 months of regular assessments. Currently, associations can get up to 6 months of common expenses, plus costs and attorneys’ fees if they file a lawsuit to collect assessments. The Governor vetoed the bill with an amenda-

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l e g a l U p d at e

tory veto, which allowed him to propose changes to the General assembly. In this case, the Governor’s amendatory veto still required the purchaser of a unit to pay up to 9 months of regular assessments, but it also made the bank responsible for everything else due to the association on the lien. When the bill went back to the General assembly, the General assembly chose to do nothing with the bill. Specifically, it did not adopt the Governor’s changes or override his veto. Instead, the bill simply died because no action was taken. Therefore, the original language of the Illinois Condominium Property act remains law. HB4204 – a bill was recently passed by both houses of the General assembly that will create an ombudsperson program for Illinois. If signed into law, the bill will be called the Condominium and Common Interest Community ombudsperson act. The ombudsperson act is intended to give unit owners and board members a resource for information related to the operation and management of a condominium or common interest community associations through the creation of the office of the Condominium and Common Interest Community ombudsperson. With the exception of common interest community associations exempt under the Common Interest Community association act, all associations will be required to adopt a written policy for resolving any complaints made by unit owners. The written policies must conform to the guidelines contained in the bill. Editor’s Note: HB4204 was signed into law by Governor Quinn on 12/27/14 and goes into effect on July 1,2016.

New Cases: Bank’s Obligation to Pay Assessments last year, a Second District Court of appeals case came out that created issues for associations trying to collect assessments after a foreclosure if they were not properly named as a defendant, with the court stating that it did not matter if the condominium association was named if the bank paid the assessments coming due after the foreclosure sale. In an opinion issued by the First District of the Court of appeals, a bank was obligated to pay the entirety of the assessments that were due even if the association was properly named in the foreclosure, if the bank did not pay the amounts coming due after the sheriff sale. In that case, the bank failed to pay approximately 23 months of assessments after the sheriff sale. because of this failure, the court made the bank responsible for more than $40,000 in assessments that came due prior to the sheriff ’s sale. It is not clear at what point the bank has to pay the assessments coming due after the sheriff sale to avoid having to pay the assessments that should have been extinguished in the foreclosure case. 9(g)(3) of the Condo act only makes the bank responsible for assessments that come due after the sale provided that the sheriff ’s sale has been confirmed by the court. If the bank does not pay assessments coming due after the sale in some reasonable time after the order confirming the sheriff ’s sale, the association should strongly consider pursuing collections. The case is 1010 lake Shore association v. Deutsche bank national Trust Company, 2014 Il app (1st) 130692.

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Professional Community Management C O N TA C T

Michael D. Baum, CPM, PCAM


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condo lifestyles

Association’s Duty to Repair and Take Action - a recent case serves as a good reminder to boards about the importance of taking action and following a process when owners complain of damage to their units by the common elements. The case is Schuh v. Plaza Des Plaines Condominium association, 2014 Il app (1st) 131999-u and is an unpublished opinion. In that case, the association ignored numerous requests and did not remedy the issues for at least 8 months after they were reported. The owner paid to remedy the issues in the unit and sought reimbursement from the association, which it denied. The case was filed as a small claims breach of fiduciary duty case. The court awarded under $5,500 in compensatory damages and $22,000 in punitive damages against the association. Insurance Broker Does Not Have Duty to Secure Proper Insurance Coverage Under the Illinois Condo Act - It is not unusual to hear of instances where an association’s board thought that its insurance policy covered more than it did. In an opinion filed on Sep-

tember 2, the Second District of the appellate Court addressed an issue that had not previously been considered by a court: whether an insurance broker is responsible for making sure that an association’s insurance policy complies with the law and the declaration. In the case, the association obtained insurance coverage that included coverage with ordinance and law endorsements covering $1 million. one of the buildings within the association burned down and in order to rebuild it, the association had to comply with a local ordinance which required the installation of sprinklers. The cost to rebuild the building to code was $1.3 million. The association sued the broker for failing to exercise ordinary care in securing an insurance policy that covered the full replacement cost of the building as is required by Section 12 of the Condo act. The court found that the insurance broker does not have a statutory duty under Section 12 of the Condo act to obtain the required coverage. The case is Royal Glen Condominium association v. S.T. neswold & associates, Inc., 2014 Il app (2d) 131311.

All Requests for Documents Are Not Created Equal - The Condo act allows owners to submit a records request to see an array of documents. If a request seeks contracts, leases, and other agreements, a list of names, addresses and weighted vote of all members entitled to vote, ballots and proxies and the books and records of account, the owner must submit the request in writing stating with particularity the records requested as well as a proper purpose. In oviedo v. 1270 S. blue Island Condominium association, 2014 Il app (1st) 133460, an owner sent in a request for records to be sent to his office within 15 days and stated that it was being requested due to a series of unauthorized expenses without giving many examples. The request also did not cite any statute that requires an association to produce records, which could include the Condo act, the General not-For-Profit Corporation act and, because the association is located in Chicago, the Chicago municipal Code. additionally, four days before the “request” the owner received a demand notice for failure to


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pay assessments. The appellate court deemed the request improper for a number of reasons. First, the court stated that it did not reference any of the statutes and also demanded production of records in a time frame (15 days) that does not appear in any of those laws. additionally, nothing requires an association to mail documents to the owner. Instead, the association must make them available for inspection. Finally, the court stated that the request was sent in an effort to retaliate against the association considering that he never had an issue with the financial management of the association. His vague assertions of mismanagement were not enough. What makes the case even better is that the association did send some of the requested records via email and informed the owner that he could inspect the remainder of the records. There was no evidence that the owner ever sought to set up an appointment. This case serves as a good reminder of an association’s rights when records requests are submitted to it. It should analyze the request to make sure that it contains the required information. most importantly, the board should exercise its rights to have owners come in and inspect records rather than sending them to the owner.


Dangerous Dogs - many associations have restrictions that prohibit certain breeds of dogs and those weighing in excess of 30 or 35 pounds. In Tyrka v. Glenview Ridge Condominium association, 2014 Il app (1st) 132762, a condominium association was named as a defendant in a lawsuit related to a dog bite case. The plaintiff in the case alleged that the association exercised control over the common areas where the attack occurred. The court stated that in order to find that an association could be liable for a dog attack, it must be shown that the association has knowledge of the dog’s viciousness prior to the attack. In this case, vague allegations that there were three previous complaints about a dog attack without an explanation of what was attacked was deemed insufficient. accordingly, the court found that the association was not liable. However, the case serves as a warning to associations - if you know a dog is vicious, violent or has attacked people or animals, then the board should take action to remove the dog from the property. Y

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indUstry happenings

Baum Property Management

industry happenings

The Apartment Building Owners and Managers Association of Chicago held their Annual Meeting & Holiday Party at the University Club of Chicago on December 5th 2014. At the meeting, the group announced their 2015 Officers & Directors. ABOMA 2015 Officers are: ABOMA President Christine Friend  Community Specialists  

ABOMA 2nd Vice President Sheila Byrne The Habitat Company

ABOMA 1st Vice President Tony Briskovic Chicagoland Community Management, Inc.

ABOMA Treasurer John Bieg Draper & Kramer, Inc.

Upcoming events for ABOMA are: March 5 Manager's Night Out at Marcello’s Father and Son Restaurant June 11 (Tentative) ABOMA Seminar - East Bank Club

ABOMA Secretary Robert C. Wiggs ABOMA Counsel Steve Adelman Locke Lord LLP

September 10 Anchors Away - at the Crystal Gardens at Navy Pier December 4 Annual Meeting and Holiday Party  at the University Club of Chicago

photo credit: The Voice newspaper

ABOMA Annual Meeting & Holiday Party

Y Shown here is Michael D. Baum & Aurora Mayor Tom Weisner. On September 23 of 2014, Michael D. Baum PCAM, of Baum Property Management, was honored by Mayor Tom Weisner and the Aurora City Council with a Proclamation for his company’s 30th anniversary and contributions to the community. The Proclamation recognized “through solid work ethics, business integrity, and superior customer service Baum Property Management has been molded into a proud institution specializing in condominium, town home and homeowner association management” and that “it is fitting that we join in this expression of pride and appreciation for the many civic and economic benefits our community has enjoyed over the years because of growth and prosperity of such locally owned and managed businesses as Baum Property Management.”

For more information visit


CondoCPA is pleased to welcome Kathy Mazzoni, CPA as the newest member of our team. Kathy has over eighteen years of experience serving condominiums, townhomes, homeowner associations and cooperatives. Prior to joining CondoCPA, Kathy worked as an auditor for a variety of local, national and international CPA firms.  Her work included performing and reviewing audits, reviews and compilations. She also spearheaded several research projects including audit risk assessment and compliance with new accounting and auditing standards.

Y Shown above from L to R: Bob Wiggs, Bill O'Leary, & Christine Friend


Interested in Green Building Issues Chicagoland


Buildings Environments FOR MORE INFORMATION CALL



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industry happenings Associa Chicagoland

Associa, North America’s largest community management firm, recently introduced Associa Chicagoland. This new enterprise unites two former Associa branches; Vanguard and L & N Mid-West. Associa Chicagoland will continue to provide local expertise and service while providing clients with access to corporate resources, services and offerings unmatched by the competition. Taking on the Associa name assures communities of the affiliation with the largest firm in the business and the unsurpassed service that has come to represent the Associa name. “The Chicago metro area extends well beyond downtown and this new name ensures our customers that we cover the entire Chicagoland area,” says Associa Chicagoland President and CEO Don Kekstadt. “Both of these Associa branches have been successful on their own and now that they are united we will be able to serve our communities with even greater effectiveness.” The name change will not affect customers, associations, vendors or communities managed by Vanguard or L&N Mid-West. Associa Chicagoland brings Erica Horndasch on-board to serve as its director of business development. Horndasch started in her new role just before the new year and is responsible for all new business development, sales and marketing for Associa Chicagoland. “Erica has been in the community management industry


condo lifestyles

for many years and brings with her a wealth of knowledge and experience. We are pleased to welcome her to the Associa family,” says Kekstadt. “Her knowledge of this market and the interpersonal skills she brings will be invaluable as we continue to grow as a company.” Horndasch has more than 15 years of experience as a community manager, is an Illinois-licensed Community Association Manager (CAM) and has been awarded the designations of Certified Manager of Community Associations (CMCA®) and Association Management Specialist (AMS®). She is a member of the Illinois Chapter of the Community Associations Institute (CAI) where she has served on the Board of Directors from 2007-2014 and as president in 2013-2014. Horndasch is involved with the Association of Condominium, Townhouse and Homeowners Associations (ACTHA), the Institute of Real Estate Management (IREM) and the Apartment Building Owners and Managers Association (ABOMA). Associa Chicagoland, AAMC provides community association management and developer services to the greater Chicago area and surrounding suburbs. Since 1976, its sole focus has been to deliver performance that enriches communities and enhances the lives of the people it serves. AAMC is the highest designation awarded to management firms from CAI. Building and managing successful communities for more than 35 years, Associa is the world’s largest community association management provider. Based in Dallas, Texas, Associa and its 9,000 employees operate more than 170 branch offices in the United States, Mexico, Canada and the United Arab Emirates.


XFINITY Communities

Comcast recently unveiled a new suite of fiber-based products and services- Xfinity's Advanced Communities Network (ACN)- tailored specifically for multi-family properties within its residential footprint. To help multi-family owners, managers and builders compete today and into the future, ACN provides movein ready gigabit-capable solutions over fiber or coax in existing buildings, greenfields, high-rises or single-family home communities; virtually eliminating the hassle of retrofitting current wiring. In addition to fast Internet speeds, CAN powers the full portfolio of XFINITY products including the innovative X1 platform, the fastest inhome Wi-Fi, XFINITY Home security and automation and digital voice. The services will be sold and delivered to customers by a newly branded sales team within Comcast CableXFINITY Communities- dedicated to providing XFINITY services to the multi-family industry. The group currently has more than 1,000 sales and support personnel and serves approximately 14 million homes. XFINITY Communities also offers XFINITY Amenity Services, giving owners and developers the opportunity to provide customized XFINITY services as a differentiating feature for their residents. Current amenity services include XFINITY TV, Internet, X1, XFINITY Wi-Fi for lobbies, event rooms, fitness centers, pools and more.

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indUstry happenings

The Habitat Company

The Habitat Company, a leading property manager and developer, is pleased to announce that Matt Fiascone has been promoted to president of the organization. As president, Fiascone is charged with providing strategic leadership to guide the direction of the organization, and lead the daily operations and opportunities for expansion through development and acquisition. He also will oversee all property management and asset management services. For the past three years, Fiascone has excelled in the role of senior vice president of Finance and Investment at The Habitat Company. His direction and expertise have paved the way for new partnerships and investment opportunities, ushering in new business that enabled considerable growth for the company. Since joining Habitat in 2011, Fiascone has been instrumental in strategizing, executing, and managing more than $500 million of capital events. His work has included $140 million in development with joint venture equity, $160 million recapitalization of existing venture, and identifying new capital partners. He has led the negotiation and structured the acquisition of 1,200 apartment units, worth $115 million in new markets, which has allowed Habitat to increase its footprint. He also established new relationships for both debt and equity, and was the lead creator of Habitat’s dedicated asset management platform. In addition, Fiascone refinanced more than $150 million in portfolio assets with GSE's, HUD and bank debt. “Matt’s proven professional expertise and dedication have been instrumental to Habitat’s exceptional leadership, growth and success,” said Daniel Levin, founder and chairman of The Habitat Company. “Habitat prides itself on holding the highest standards, values and spirit to maintain its position as a leader in the industry. I am confident that Matt will build on the company’s current momentum and continue to develop new business opportunities, and manage and deliver the best products and services for our clients.” “The Habitat Company has earned a reputation that is respected in the industry, and I’m thrilled to provide strategic leadership to a team that constantly works to improve that stellar reputation,” said Matt Fiascone, president of The Habitat Company. “Our history continues to prove that when we combine those two assets, reputation and team members, we are a company that is poised for a bright future.”

Prior to joining The Habitat Company in 2011, Fiascone was senior vice president for Inland Real Estate Development Corporation, where he principally was involved in more than 35 large-scale developments of over 10,000 acres of property, and negotiated and managed in excess of $250 million in joint ventures. A member of the Board of Directors of Inland Bank and Trust, Lambda Alpha (a Land Economics Honorary Society), the Urban Land Institute, and the National Multi Housing Council, Fiascone also is a licensed real estate broker in Illinois and Florida. Fiascone, 51, earned a Bachelor's degree in Business and Economics from Bradley University. A Hinsdale resident, he and his wife, Karen, have two adult children. Managing Agent at Quadrangle House The Habitat Company also announced that they have assumed management responsibilities for The Quadrangle House Condominium Association, a 261-unit condominium located at 6700 South Shore Drive. The partnership was effective October 1, 2014. Quadrangle House was built by The Habitat Company in 1968 and converted to condominiums in 2002. The building offers convertible, one and two bedroom units with floor plans that provide 591 to 1,081 square feet of living space. Quadrangle House is the gateway to the South Shore neighborhood offering residents walking distance access to Lake Michigan, its parks, bike paths and two golf courses. “We are thrilled to reestablish our relationship with board members and unit owners at Quadrangle House. We look forward to enhancing the quality of life experience for residents, cultivating and strengthening our partnership through our Stewardship Program which is designed to foster open communication and achieve the board’s goals,” said Diane White, senior vice president for Condominium Management for The Habitat Company. "For over 30 years, The Habitat Company’s Condominium Management Group has employed the highest levels of integrity, customer service and expertise to protect and preserve the value of the overall property and each unit owner’s home. It is our distinct pleasure to partner with Quadrangle Condominium Association and continue to build upon the property’s positive reputation,” added White. "We look forward to enhancing the quality of life and experience for the residents at Quadrangle."


0 7. 1 7. 1 5 Eaglewood Resort ~ Itasca, IL

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Condo & HOA Representation Corporate • Real Estate • Litigation • Wills Personal Injury 85 W. Algonquin Rd., Ste #420, Arlington Heights, IL 60005

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For more information, visit our website at 01.15

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condo lifestyles

From the Editor


hile we have not had the major snowfalls that we experienced last winter, the new year has been dominated by

periods of severe cold. Many people took better precau-

tions this year against frozen pipes, but the brutal cold has still caused plenty of



Y Mike Davids

headaches from burst pipes. hopefully you enjoyed the holiday season and are renewed and refocused on getting your association(s) off to a good start in 2015. economic conditions such as low interest rates continue to fuel housing market sales and low prices for gasoline are a welcome surprise. however, the stock market gains of 2014 have been diminished by recent

januaRy 2015 | volume 18 | numbeR 4 editor & Publisher Michael C. Davids vice President Sherri Iandolo art Director Rick Dykhuis Special events Coordinator Mary Knoll

drops in the market. Most experts are forecasting more overall improvement with cautious optimism. only time will tell us for sure what will happen. our cover story is a report on our “condo lifestyles state of the industry” program held in december at the chicago cultural center. attorney gabriella comstock gave a presentation on recent legislative and legal update for attendees. attorney and columnist howard dakoff, property tax attorney Jim field and a panel of leading property managers shared their perspectives on current hot topics such as palm ii, life safety, and property tax appeals at the soi event as well. our cover story features the highlights of the information shared by our experts at the soi program. Ms. comstock provided an overview of new laws and several court cases that directly impact commu-

Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold administration Cindy Jacob and Carol Iandolo Condo Lifestyles magazine is published quarterly by mCD media, a wholly owned subsidiary mCD marketing associates, Inc. For editorial, advertising and subscription information contact: 935 Curtiss Street, Suite 5, Downers Grove, Il 60515. 630-932-5551 or 630-202-3006.

nity associations including an update on the community Manager licensing act in illinois. We have included her summary of all the recent legislation and court cases that you should be aware of as a separate article in this issue (some of which were not discussed at the soi program). our second story covers the highlights of Mr. dakoff’s presentation on the palm ii court case. he provided a number of excellent suggestions and sound advice for managers and boards on how to communicate and function effectively within the parameters of the palm ii court ruling. two articles on property tax appeals that offer some great insight on the who, what, where and why of property tax appeals can be found in this issue. additional coverage of this special event is also featured in this edition including photo highlights. you can also view all the event photos from this event at media. a special feature on fair housing laws appears in this issue. While they are not new, it is important to

Circulation: Condo Lifestyles is available for a single issue price of $8.95 or at a $30.00 annual subscription. Distribution is direct mailing and delivery direct through authorized distributors to over 5,000 officers and directors of Common Interest Communities, 800 property managers, 400 realtors, 400 developers and 400 public officials. Total Circulation is 9,500.

understand that national and state fair housing related laws supersede an association’s governing documents. a guest editorial by salvatore sciacca offers a guest editorial on the top 10 Ways to screw-Up your association. our regular industry happenings column appears in this edition as is customary. MCD Pool Party to feature Condolympics Games our annual Mcd pool party will be held on March 13, 2015 at the pyramid club in addison. tourna-

Condo Lifestyles attempts to provide its readership with a wide range of information on community associations, and when appropriate, differing opinions on community association issues. All material herein is copyrighted 2015. No part of the publication may be reproduced whatsoever without written consent from the publisher.

ments will be held for 8-ball (billiards) and darts. other events for condolympics competition 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 on July 17 at eaglewood resort in itasca, and a luncheon at arlington international racecourse in late summer. We will provide more information on these events as you request and as details are available at thanks to the many new subscribers that have found our publication useful and informative. special

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


condo lifestyles

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


No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2015©.

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DONE JUST RIGHT INC. 630-893-0757

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COMMUNITY ADVANTAGE, A WINTRUST COMPANY (847) 304-5940 loans, reserve investments & lock Box services

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SMART ELEVATORS CO. (630) 544-6829

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

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BRAL RESTORATION, LLC. (847) 839-1100 Masonry and concrete restoration

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hoa Banking • internet cash Management hoa loans • online payment services


HARD SURFACE SOLUTIONS (630) 916-8005 / (847) 838-6610 concrete flatwork specialists | asphalt paving curbs & driveways | sidewalks footings & foundations colored concrete | stamped concrete aggregate finish concrete Parking Structure Maintenance & Repair Contact Tom Frye

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ENERGY USE/BENCHMARKING WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690 serving the tri-state area since 1970 Contact: Jackie Loftis *


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fire alarm / sprinkler systems fire pumps / extinguishers fire panel Monitoring installation / testing / Maintenance 24/7 Service: (630) 948-1200

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EMCOR SERVICES TEAM MECHANICAL fire protection division (847) 229-7600

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FIRSTSERVICE RESIDENTIAL (312) 335-1950 Contact Asa Sherwood or Elena Lugo



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condo lifestyles




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established 1965 Maintenance & repairs roofing/sheet Metal/tuckpointing

for all your property needs


S&D ROOFING SERVICE (630) 279-6600



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condo lifestyles

By David Mack

Fair Housing Laws Are Reasonable there are a number of fair housing laws which all community associations, board members and property managers must comply with in their various capacities and the performance of their duties.


uch laws supplement but, at the same time, supersede an association’s documents- its declaration, by-laws and rules and regulations. Where there is conflict, the fair housing laws prevail in resolving any situation covered by the statutes. Fair housing laws to which adherence by the above named parties is mandatory include: • Title vIII of the Civil Rights act of 1968, aka the Fair Housing act (FHa), prohibits discrimination in the sale, rental and financing of dwellings and in related housing transactions based on race, color,


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national origin, religion, sex, familial status and disability. • Title II of the americans with Disabilities act (aDa) of 1990 forbids discrimination based on disability in programs, services and activities provided or made available by public entities. The aDa is limited to those parts of a community association’s property that are considered public accommodations and available for public use such as a community association pool that is open to the public for swim meets and other activities. • The Illinois Human Rights act (IHRa) which is much the same as the federal


Fair Housing act in its prohibition of discrimination in the sale or lease of housing. • other applicable legislation to which community associations, boards and managers are subject to include the Chicago Fair Housing ordinance, the Cook County Human Rights ordinance and other fair housing laws adopted by local municipalities, all of which prohibit discrimination in housing and other areas on the same basis as the FHa but generally with additional protected classes.

Fair Housing Act at a recent aCTHa conference lara anderson, an attorney with Fullett Rosenlund anderson PC and Dan Hauman of advocate Property management offered the above

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overview but then made a further presentation that focused on issues related to only the federal Fair Housing act. expanding on what was stated above, specific actions forbidden by the FHa include: • Refusal to sell, rent or negotiate or otherwise make unavailable or deny a dwelling to any person based on any of the factors specified earlier. • any form of discrimination in the sale or rental of a dwelling and in the available services or facilities associated therewith. • The use of discriminatory notices, statements and advertisements connected to housing. • Refusal to allow reasonable modifications or accommodations to facilitate accessibility by the disabled or handicapped. • Discrimination in connection with home loans and other related housing transactions. • Coercion, intimidation or interference with any person who is exercising a guaranteed right under the FHa. The FHa has been extended to cover con-

dominium and other community associations by virtue of an association’s declaration. Purchasers in an association are governed by the association and ergo its declaration, which further broadens the FHa to cover unit owners, preventing them from violating the restrictions against discrimination instituted by the association’s board through its declaration. In terms of what are the customary activities of community associations, their boards and property managers should enforce rules even handedly, consistently provide services to all members of the community and avoid adopting rules that restrict a particular class.

Disabled & Handicapped The class that anderson and Hauman focused on extensively is that consisting of the disabled and handicapped, the type and nature of physical and mental impairments of that class and what an association must do in accommodating their impairments and needs. While there are many types of impairments, not all necessarily constitute a disability that must be accommodated. Some

impairments are obvious to the eye while others are not overtly apparent. associations can request substantiation of a claimed disability when it is not something clearly observable but they should refrain from insisting on access to confidential medical records when considering a request for a reasonable accommodation of an applicant’s or resident’s disability or handicap. Impairments must substantially limit a major life activity. In considering that requirement, associations must evaluate evidence on 3 factors- the nature and severity of the impairment, the duration or expected duration of the impairment and the permanent or long term impact resulting from the impairment. according to available reference materials, a finding of disability is not necessarily based on the name or diagnosis of the impairment the person has but rather on the effect of that impairment on the life of the individual. a determination of disability must be made on an individual case by case basis.

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Reasonable Request for Accommodation Those persons with a validly substantiated disability may request an association to make a reasonable accommodation for that disability. The association is obligated to participate in an “interactive process” to confirm the acceptability of the request and to determine possible accommodations when such a request is deemed valid. an accommodation

should provide the applicant with the same equal opportunity to enjoy a dwelling or common areas as that which non-disabled residents have but the FHa does not require preferential treatment for the disabled. It is also important to remember that accommodations are not reasonable if, “they are unduly burdensome or require a fundamental alteration of the existing physical structure or the nature of a program.” When it is necessary to make physical

modifications to comply with a disabled person’s right of equal opportunity to enjoy the premises, any necessary alterations can be made to do such things as widen doorways, install ramps, lower the height of wall switches, install grab-bars and more. Generally the cost of reasonable modifications is the responsibility of the disabled person, noted anderson, but if a dwelling was built after march 13, 1991 and does not meet Federal Housing design and construction standards the association will have to bear the cost of any structural upgrades necessary to meet those standards.

Service Animals anderson discussed other accommodations that may be necessary for a disabled applicant such as service animals and how they differ from pets. a service animal often will be a guide dog for a blind person. “True service animals have gone to school and been trained,” she said. “you will bend the rules for people who require that type of animal.” a problem arises when people claim the need for emotional support animals, a category which has included such creatures as guinea pigs and pot-bellied pigs. “under the law,” said anderson, “if they are emotional support animals, they are not to be considered pets.” but they are treated no differently than pets when it comes to having controls over them. “you still have rules and guidelines but they are not pet rules. you call them animal rules, which owners are required to follow or you can evict an animal.” owners must dispose of their animal’s waste on the property or someone else has to do it for them if they are unable to do it. “They can’t rely on the association to do that,” said anderson. The board has the fiduciary duty to enforce the rules and continued violations can and should lead to eviction of an animal whose owner (with the physical or emotional disability) must suffer the consequences of not being responsible for control or proper care for the transgressing service animal to prevent them from becoming nuisances to the community. “There are truly people who benefit from emotional support animals but there are also people who abuse the law,” said anderson. So when a request is made, an association must ascertain whether the proposed animal is actually necessary for the person to have an


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equal opportunity to have the full use and enjoyment of their home and that there is a direct connection between the applicant’s disability and the emotional support the animal would provide. If both of those prerequisites are met the applicant should be permitted to have the animal unless the request is determined to be unreasonable. an excerpt from the material provided by anderson and Hauman provides that, “a request would be considered unreasonable if it would impose an undue financial or administrative hardship on the community association, fundamentally alter the community association’s operations, pose a direct threat to the health and safety of the community association’s residents or cause significant damage to the property of others. Threats to the health and safety of residents may not be speculative or based on an individual’s fears.” an emotional support elephant would be an extreme example of an unreasonable request. also community associations may deny a request for an emotional support animal that is prohibited from being kept by local ordinance.

Alternatives to Requests Can be Offered even if a request for a service or emotional support animal is found reasonable based on a doctor’s prescription for one, an association may turn the request down if it can offer an alternative. For example, someone wants an emotional support dog and his doctor concurs in that need. The association has a no pet rule and the emotionally disabled person wants a 150 pound pit bull. The board can deny that request and insist that the animal be no more than 20 pounds. “you can do things like that,” said anderson. another situation would be a request for a specific parking spot by a physically disabled person. The board has the right, if that space is unavailable for a particular reason, “to offer an alternative spot that is reasonably the same,” said Hauman. anderson cited another set of circumstances in which a family with a three year old autistic child wanted to install a fence around their single family lot to keep the child from

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wandering into the street. This was a no fence community association and the local government also prohibited them. even though the question also came up as to why should there be a fence at all to contain a three year old who should have been under the supervision and control of the parents, the association offered the alternative solution of a smaller fence on the side of the property out of public view, The parents rejected that proposal and eventually moved. anderson emphasized that in complying with the Fair Housing law, “you don’t have to give the disabled exactly what they want. you may not be able to come to agreement and this may lead to litigation.” Hauman added, “if you’re going to say yes, you can handle it yourself. If you’re going to say no, you will probably have to engage an attorney.” Y

condo lifestyles


condo lifestyles

By Matt Panush - Worsek & Vihon LLP

‘Tis The (Property Tax) Season as everyone recovers from what we hope was an exciting and joyful holiday season, the property tax scrooge is waiting in the wings! starting in late January of 2015, all properties within the city of chicago will be reassessed, with the tax implications first seen in the 2nd installment tax bills of 2016. also in 2015, most of the collar counties (lake, dupage, Will, etc...) will be reassessed.


s the president of a large property management firm stated during a seminar we attended in november of 2014, “if you are not appealing the assessed value of your property, you are letting the county take whatever they want!” despite the harsh nature of the statement, the truth is that all property managers and owners should be proactive in inquiring about the tax assessment appeal process. cook county is the second-largest county in

america, with 1.9 million parcels of property, 1.2 million of those classified as residential. due to this overwhelming number of parcels, the county is divided into three distinct areas for assessing purposes: the city proper, the south suburban areas, and the north suburban areas. the south suburban areas were just reassessed in 2014. in 2015, all properties within the city of chicago will be re-assessed. all north suburban areas will be reassessed come 2016.

there is never a wrong time to appeal your property’s assessed value. however, appealing in the first year of the reassessment period will maximize any tax savings, as most reductions granted through the appeal process remain for all three years (2015-2017) of the triennial period. property managers and condo boards should act upon receipt of their reassessment notice. if yoU don’t taKe action Until yoU get yoUr taX Bill, yoU have already Missed the Boat!! during past city reassessments, the appeals of condominium associations have accounted for over half of all properties appealed! it is important to know some facts on how the appeal process works inside the halls of cook county. the entire condo building is given an overall assessed value. this assessed value is then broken down by each individual unit’s percentage of interest. this ensures that units with the same per-

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centage interest in the association are assessed in a uniform manner. for this reason, both the cook county assessor’s office and Board of review encourage the entire association to file as a whole. their main goal is to keep uniform assessments within the association. When an appeal does not include all units, it creates a situation where identical units in the building may have different assessed values. this lack of uniformity results in confused and unhappy unit owners, the inevitable phone calls to the property manager, and usually an

explanation by the tax attorney on how units with the same percentage of interest have different assessed values. the best method to determine the overall value of an association, which is the preferred method used by the assessing officials, is analyzing the most recent sales that have taken place within the association and the percentage of ownership that those sales represent. nothing speaks to market value better than sales of units made available on the open market within the same association. in cook county, the level of assessment for all residential properties is 10% of market value. By using the recent sales and the 10% level of assessment as guides, it can be determined if an association is fairly assessed. an appeal of the assessed value should not have a negative impact for the unit owner. Whether they be a new owner, a senior receiving all available exemptions, or an investor who rents out the unit, there is one simple rule to follow: every Unit owner should Be part of the appeal. for three straight years, the property tax bills for cook county were mailed on time! per illinois state statute, tax bills for cook are to be mailed by July 1st, payable by august 1st. this is due to great efforts by assessor Joe Berrios, commissioners

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Michael cabonargi, larry r. rogers, Jr., and dan patlak of the Board of review, as well as cook county treasurer Maria pappas, all who made ontime tax bills a priority. it had been 38 years since the bills were mailed on time! there are many positive aspects to getting the bills collected in a timely manner, none more important than local school districts being fully funded by the time the school year begins. property tax revenue is the main source of financing for school districts. in past years, collections of these revenues were pushed back to november and december. several school districts were forced to obtain short-term loans to fund their school systems. having to secure financing in order to start the school year became more difficult with each passing year. of course, this all leads back to being proactive in appealing the overall assessed values of each association. no one enjoys paying taxes, but the appeal process grants unit owners the opportunity to only pay their fair share of property taxes. for 2015, our wish for everyone is health, happiness, and lower assessed values! Y

condo lifestyles


condo lifestyles

10. Have a "I could care less attitude" - don't worry if a homeowner has worsening bathroom and bedroom ceiling damage for the last six months and has triplet newborns. and even if the ceiling collapses, it doesn't affect me anyway. i live in a completely different tier. so it's not something to worry about. Besides, the association doesn't have the money to fix anything. as far as the board is concerned, this is an issue between the two homeowners. let's let them figure this out.

By Salvatore Sciacca, Chicago Property Services

A Guide for Board Member Dummies...

Top 10 Ways To Screw Up Your Community Association somehow a conversation i was part of at a recent networking event took a turn that ended up with me laughing to the point that i almost peed in my pants. We agreed that i should write an article for board member dummies.


ow I am not one to criticize people and I certainly don't want people to take this concept the WRonG way. but fortunately, others have already paved the path and written all sorts of guides for dummies like "The Complete Idiot's Guide for Dummies" or “Pilates for Dummies.” So I won't be the first nor the last to write about Dummies. and I just think the concept is so “spot on” as I hear of so many mismanaged community associations. unlike some of the “Guide for Dummies” books that

are available, the list below points out advice that should noT be taken! The list is really just ten of the best ways to mismanage an association that I have seen. now the reasons that specific community associations are mismanaged vary widely. I'm not going to focus on the errors that some property managers and management companies are committing. I'm going to focus on board members just as the title suggests. So sit back. Relax. and hopefully have a few chuckles.

9. Accept and condone poor quality - so what if the janitor never changes light bulbs and forgets to mop the floor in the bathroom each and every time. Besides, he is the person that knows the building the most and was the original janitor when the building was converted from apartments to condos. no one else could ever know the building as well as he could. so let's put up with completely unacceptable quality. and i really do feel sorry for the guy. i know he recently went through a divorce so let's give him another pass on the sub-par quality. i know one day he will step things up. 8. Meet only once a year: Who has time for board meetings? We all have full time jobs, families and friends. so maybe once a year is enough. and even then, there is not really much to talk about. so what if the law says to meet quarterly. it's not like anyone is watching or saying anything. i never see my neighbors and they don't like me anyway. and i have lots of friends on

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facebook so who needs more friends, especially those who live so close to me. 7. Ignore loud noise and barking dog complaints: so what if homeowners are complaining about loud noises from parties and barking dogs at 2am. as long as i don't hear the noise, i am not going to worry about it. Besides, i am not getting paid for this thankless unpaid position. eventually, the person making the noise will sell and move out and the noise will go away. or maybe we can feed the dogs ground meat laced with broken glass? naaah. let's just let the two homeowners keep calling the police on each other. i have a hUge appetite for drama and this is JUst the way i like it!

dead! and then again, what's the point of switching anyway. i hear all the management companies are all about the same. i will just keep complaining and hopefully things will get better one day and i won't have to send so many emails to so many people about condo association stuff that never gets addressed. 1. Do as I say. I'm the Board President. i am the board president for the last 30 years and i am very knowledgeable about pretty much everything. in fact, it seems i am telling the property manager what to do. then again, i know the answers and know how to do things quicker and more effectively than anyone else. so what if i never get a consensus. no one challenges me

anyway. i just do whatever i say and it seems to work for me. i don't see a problem with that even though i live with about 500 other people.

Summary Seems like a fantasy? Seems unbelievable? Think again. These are real life situations taking place in community associations around the country. The real question is are you part of the problem or part of the solution? let's stop accepting mediocrity. let's start demanding excellence for ourselves, your neighbors and for everyone within your community Y

6. Raise assessments? let's lower them!: i'm sick and tired of paying such high assessments. Besides, everyone else on our block has lower assessments. and i'm planning on selling within the next five years, so why would i want to build up the reserves to benefit other people. i'm actually going to fight to lower our assessments and put off all capital plans for the next five years. if the boiler breaks in the middle of the winter, we can just have everyone run to home depot and plug in a few space heaters. and we have some people that haven't paid for five years anyway. so since we are letting that slide, it's about time i catch a break! 5. My Uncle owns a construction company that I partially own: Why go elsewhere when the board president's uncle owns a few companies including a construction company. then again, why even disclose it. less is more? right? Besides, board members are unappreciated and underpaid. so why not make a few bucks here and there. none of the other board members or homeowners will notice it anyway. and by the time they notice all the money that i took, i'll be long gone far away! 4. Annual Meetings? they're not necessary. there is no need to have elections annually. Besides, no one ever shows up to the board meetings anyway. things are going smoothly and no one ever complains. the homeowners pay their assessments and that's all that matters. the board should stay the same and it doesn't matter that the governing documents call for annual elections. then again, we don't even have copies of the governing documents. We never got a copy at the closing. Maybe the previous owner still has them? 3. Single bid that $500,000 project. serving on the board is a lot of work. i am sick and tired of people complaining and never stepping up. so i'm going to make My life easier and get one bid from this company that i know will do a great job. i'm the only one doing work around here and i'm going to make my life easier. and maybe along the way, i will also pick up a few other perks from this vendor who is getting this big fat juicy contract. and that is something that i deserve! 2. It's the management company's fault. again. i'm sick and tired of dealing with the incompetency of the management company and the multitude of property managers that they keep assigning to us. it seems that every six months our manager quits, gets fired or drops

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condo lifestyles


Common Questions About Property Tax Appeals Q: Can an additional appeal be pursued after filing at the Assessor’s Office and Board of Review? a: yes, typically only a minimal amount of relief is obtained at the assessor’s office while most relief is obtained at the Board of review in cook county. Most often, the assessments are fair and reasonable after completion of our filings at the Board of review. despite this fact, it is possible to file for further relief at either the property tax appeal Board (“ptaB”) or circuit court. typically, neither venue is recommended unless the case involves “special circumstances” as the burden of proof is very high in circuit court and the ptaB. Both carry risks of taxing districts intervening. More so in ptaB cases, but also in increasing numbers in circuit court cases. Q: How is a condominium assessment determined by the Assessing authorities? a: condominium assessments are determined for real estate tax purposes by developing an aggregate market value for the entire building and then applying the assessor’s current level of assessment for residential property (10%) and a unit owner’s percentage of ownership to the total market value of the building. the aggregate market value is determined by analyzing sales

that have occurred during the 3 years prior to the lien date (January 1, 2015 for 2015 appeals) and comparing how these sales relate to the values in the building. Modifications are then typically made for statistical anomalies and for personal property. in illinois, only real property is taxable. thus, personal property such as washers, dryers, refrigerators, ovens and other types of personal property are excluded from an analysis of price. Q: I thought an assessed value is based upon “market value,” not my percentage of ownership? a: “Market value” is a relative term that is generally interpreted to mean market value of the whole building. as such, it is custom and practice to establish a value for the whole building using all non-compulsory recent sales in the building during the applicable time period, and then apply each unit’s percentages of ownership to the total. this is done to accommodate a mass appeal system. again, the best evidence of market value is a recent sale within the same building, thus recent sales are used to establish market value of the entire asset. Q: Why is my percentage of ownership important? a: percentage of ownership is critical because it

essentially controls your proportionate share of monthly assessments and your share of real estate taxes. if a unit’s (or tier’s) percentage of ownership is unfair, it is nearly impossible to change. changing percentage of ownership requires unanimous consent of the condominium owners. thus, it is unlikely that a situation including unfair percentages will be remedied. We always check percentage of ownership for fairness before we advise clients to purchase units! Q: If my proposed assessed value initially increases, what will you do about it? a: We will likely file a 2015 appeal with the cook county assessor’s office to protest the assessor’s proposed increase. the appeal at the assessor’s office is based upon a brief which relies on a sales ratio analysis. all sales that occurred in your building during the past 3 years will be used for this analysis, which looks at the proposed assessed value, sales price and personal property. the sales ratio is determined by dividing the current proposed assessed value by the sale price. ideally, the property’s sales ratio should be at or below 10%. Based upon our prior experience we believe that it is likely that the assessor will provide minimal relief. We will then file an appeal

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with the cook county Board of review. We anticipate the Board of review will grant the remainder of the relief that has been requested. typically, most relief for condominiums is achieved at the Board of review.

purposes are generally not considered persuasive due to the multitude of recent sales that are available in your condominium building. the best evidence of market value is typically a recent arms’ length sale within the building.

Q: Why would the Assessor initially increase our assessed value at all? My value has fallen! a: the operative inquiry is whether your market value has fallen during the applicable time period. By statute, the assessor values property as of January 1. values falling after January 1, 2015 will not help for a 2015 appeal although they may help for a 2016 appeal. a simple rule to follow is that all residential real estate is assessed at 10% of market value. if you divide your assessed value by 10% the result will be your property’s market value as of January 1, 2015. for example, a property with a 25,000 assessment is actually valued at $250,000. again, it is imperative to note that the result is your property’s market value as of January 1, 2015. Market value was established by reviewing three years of sales for the 2015 triennial. sales in 2012, 2013, & 2014 were reviewed in order to establish a market value for 2015. any decrease in value after this time is technically not relevant for 2015, but may help with a 2016 appeal.

Q. Can an Ad Valorem tax appraisal be used for a tax Appeal? a: yes, but we generally do not recommend it. our experience has been that these appraisals are very costly (they could cost upwards of $15,000 or so depending on a building’s size). further, both assessing agencies generally frown upon using these reports. typically there are a plethora of arms-length sales at the subject property. as such, there is usually no reason to obtain the appraisal when the assessing authorities will likely rely on the actual sales from the subject. the reasoning is that it is generally understood that the best evidence of market value is a recent arms-length sale of the subject property.

Q: Can a financing appraisal be used as Persuasive Evidence to appeal my assessed value? a: no. typically the assessor and Board of review will not consider financing appraisals as persuasive evidence of market value for tax appeal purposes. even appraisals done for real estate tax

Q: If the entire building is assessed at the same market value how could my assessment and taxes differ than someone else’s? a: assessments and taxes usually differ because of the unit’s different percentage of ownership, interests, or the number or amount of exemptions applied. for example, a unit that is on the 10th floor may have an ownership interest of 5% while a similar unit on the 19th floor could have a 6% ownership interest. thus, the higher the unit’s ownership interest, the higher the assessed value will be. this functions the same as for monthly assessments in a building. also, tax bills

could differ if one unit is getting a homeowner’s exemption or a senior citizen’s exemption and another unit is not entitled to one because it is rented or is not owned and occupied by a senior citizen. clearly, exemptions could radically change the tax bills for two similar units. Q: In the past we received a letter from our property manager providing that a firm saved us money on our tax appeal but when I opened my real estate tax bill it was different than the estimates previously provided, how could this happen? a: three variables make up a tax bill. the assessed value, the tax rate and the state equalization factor. although we may have reduced the assessed value the state equalization factor may have increased or the tax rate may have increased. rates will vary depending on the taxing district where a unit is located. again, rates increase because the city, county and state need money to function. if everyone’s assessed values declined and the tax rate or state equalization factor did not increase, the city would not have as much money to spend as they did the year before. Unfortunately, we all know that the city seems to require more money every year. When we bill we are only aware of the prior year’s tax rates. Q. Do you expect tax rates to increase again in 2014 & 2015? a: yes, however, we believe that in the city of chicago numerous budget concerns regarding

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has retained counsel, the unit owner is typically bound to join the appeal. despite this fact, there is no easy way to prevent a unit owner from filing on their own. We do not recommend filing on your own as the assessor and Board of review look at a condominium as a whole and base the assessments off of the aggregate value of the building and then apply each unit’s percentage of ownership to the total. as a result, unit owners will find there is a greater benefit to filing with the entire association than by themselves. the assessor and Board of review typically frown upon separate appeals as it is more efficient for them to look at and base a decision off of one unified appeal. for example, a single appeal of 700 units is much more persuasive than 700 separate appeals with varying requests!

pension funds will have a material impact on future tax rates. a favorable resolution of this issue will add certainty while an unfavorable one will create more uncertainty. We believe the tax base is now expanding again, whereas in prior years the tax base decreased. an increased tax base will help lower the final tax rate! Q: Why would the Assessor increase our Assessed Value as values have declined? a: again, it is critical to note that the lien date for real estate taxes in cook county is January 1, of a tax year. for 2015, the lien date will be January 1, 2015. as such, the relevant set of data for an appeal is 2012, 2013 and 2014. the assessor will analyze all the sales from your building from this time period. again, the most relevant evidence of market value is a recent arms-length sale in your building. the assessor and Board of review do not typically consider evidence of comparable buildings as all condominium buildings are unique and so recent sales at your building are the most important factor in an appeal. Q: So, you mean the Assessor and Board of Review do not focus on current years sales? a: that is correct. By statute, the assessor and Board of review are limited to data from the past three years (2012 to 2014) for a 2015 appeal. While this is the case, they are certainly aware of more recent sales that have occurred at the building. Q: Can a unit owner file a tax appeal on their own? a: a unit owner may file their own tax appeal, although technically if the condominium Board

Q: What information is available on the Cook County Assessor’s Website? a: first, each unit’s current year and prior year assessed value is available. further, past year’s history of appeals is available. note, the assessor’s office website is not regularly updated and therefore is not always accurate. also, any reduction granted through the Board of review will not be updated on the assessor’s website. Most reductions are received from the Board of review, thus the Board of review’s website should be reviewed or the cook county treasurer’s website of the cook county property tax portal should also be reviewed. their websites are:

cook county Board of review cook county treasurer’s website cook county property tax portal Q: My homeowner’s exemption amount seems different than past years. Did it change? a. the alternate general homestead exemption no longer was applicable in 2012. for taxpayers subject to the alternative general homestead exemption, if your property was located in the city of chicago your maximum equalized assessed value limit of $16,000 in 2010 was decreased by statute to a maximum of $12,000 for 2011, and is zero in 2012 and 2013 and future years. the general homestead exemption increased slightly to $7,000 in equalized assessed value. the total impact of these changes is that your homeowner’s exemption amount likely decreased compared to prior years. as a result, your recent taxes were likely higher, due to the decreased exemption. please note, in the northern suburbs, 2012 was the last year in the alternative general homestead exemption was applicable while in the southern suburbs, 2013 was the last year of the alternative general homestead exemption. as a result, tax bills in these areas are likely to be higher than they otherwise would have been.

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event highlights


State-of-the-Industry December 11, 2014

1. L to R. Roberta Morris - Triview Property Management, Tom Skweres - ACM Community Management, Diana Lane Community Associations Institute, Mathew Dorsch - Triview Property Management and Suzy Martin Smart Elevators. 2. L to R Beth Stubblefield - ABC Managers, Todd Emperado -Xfinity Communities, Pam Stanish and Elizabeth Czarny - ABC Managers.




6. L to R Mike Roche & Becky Weber - Waldman Engineering, Barbara Mueller and Judy Barnes - James Kilmer Condo Association at Sandburg Village, Allan Werth & Andrew Warner Community Specialists 7. L to R Sheila Malchiodi - QCI Restoration, Jackie Loftis Westside Mechanical, Max Molinaro - Suburban Elevator, Maggie Rude & Belinda Belsano Westside Mechanical



Xfinity Communities MAJOR SPONSORS

Field and Goldberg, LLP Keough & Moody P.C. Levenfeld Pearlstein, LLC Chicagoland


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Chicago Police CAPS


3. L to R Dennis Baier - CRC Concrete Raising & Repair, Peter Maneyski - Forum Group, Delph Gustitus - BTL Architects, Robbie Sakas and Mark Feil - CRC Concrete Rasing & Repair. 4. L to R Felicia Perkins - 209 East Lake Shore Drive, Barry Katz Omnibus Services, Marshall Dickler - Dickler, Kahn, Slowikowski & Zavell, Ltd. 5. L to R Tom Skweres - ACM Community Management, Christine Friend - Community Specialists, Jaime Sartin - dk condo, Vickie Farina - CenterPoint Energy and Tony Briskovic - Chicagoland Community Management.


Belfor Property Restoration Brouwer Brothers Services Centerpoint Energy ConTech MSI Co. Dickler, Kahn, Slowikowski & Zavell, Ltd. Frog Painting & Carpentry Landscape Concepts Management Simplex –Grinnell US BEPS/Beacom Energy Westside Mechanical Group


No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2015©.



Algozine Masonry Restoration CAI-Illinois Community Advantage, A Wintrust Company Chicagoland Community Management Community Specialists CRC Concrete Raising & Repair CSR Roofing The Habitat Company Itasca Bank & Trust Co. Kovitz Shifrin Nesbit LakeShore Recycling Systems Quality Restorations Semmer Landscape, Inc. 01.15

Smart Elevators Suburban Elevator Superior Reserve & Engineering W.J. McGuire Co. Woodland Windows GENERAL SPONSORS

AMS Mechanical American Technologies, Inc. CTL Group Dakota Evans Elliott & Associates Mesirow Financial Tairre Management Services The YMI Group

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Quinn Signs Law that Establishes State Ombudsperson On Way Out

Shaping the future!

on december 27th, 2014, outgoing governor pat Quinn signed a new law intended to help protect condominium owners and associations across illinois. the legislation creates a position within the illinois department of financial and professional regulation designed to help resolve disputes and to educate condominium owners. according to his press release, the action is part of governor Quinn's agenda to protect property owners across illinois.


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his new law will give condominium unit owners alternatives to litigation as they work to resolve disputes,” Governor Quinn said. “by helping prevent potentially expensive litigation the Condominium ombudsperson can help keep costs down for property owners throughout Illinois.” House bill 4204, sponsored by State Representatives elaine nekritz (D-northbrook) and State Senator Heather Steans (DChicago), creates the Condominium and Common Interest Community ombudsperson act which establishes an ombudsperson within the Department of Financial and Professional Regulation. This new position will provide dispute resolution assistance on behalf of condominium unit owners beginning january 1, 2019. "I have heard from a number of constituent condo owners who have struggled to find answers when they have disputes,” Representative nekritz said. “This bill creates an important process to have those disputes resolved, and I am happy to have helped push for this new law to address this problem." "The rights and responsibilities of condo owners and associations can be complex, so I'm pleased that Illinois will follow the lead of four other states whose residents are able to enlist the assistance of a condominium ombudsperson in resolving conflicts," Senator Steans said. "educating the public about condo law and assisting with dispute resolution when requested will help prevent unnecessary and expensive litigation." also under the law the new office will provide educational materials on a website that are relevant to condominiums and common interest communities. additionally, condominium and common interest community associations must have a written policy for resolving disputes and have registered with the Department of Financial and Professional Regulation. The legislation is effective july 1, 2016. Y


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enhancing landscapes for life… • Landscape Maintenance • Landscape Design/Build • Landscape Construction • Seasonal Flower Rotations • Snow and Ice Control


CondoLifestyles January 2015  
CondoLifestyles January 2015