Condolifestyles 01 2014 by S//94

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JANUARY 2014 | VOLUME 17 | NUMBER 4

CondoLifestyles

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

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State-of-the-Industry

Report F E AT U R E S

Hot Topics for Community Associations: Energy Benchmarking, Bed Bugs, Rentals, Life Safety and More Reserves, Studies, Restoration & Budgets New Rules Impacting the Mortgage Industry Top Ten Ways to Avoid Emergencies

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table of contents COVER STORY

03 Condo Lifestyles State of the Industry Report By David Mack S P E C I A L F E AT U R E

09 Reserves, Studies, Restoration & Budgets By Michael C. Davids 17 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 20 Editors Message 21 Directory Advertising M O N E Y M AT T E R S

28 New Rules Impacting the Mortgage Industry By Michael C. Davids BOARD BASICS

30 Top Ten Ways to Avoid Emergencies By Sal Sciacca INDUSTRY HAPPENIGS

32 The Montgomery, DK Condo and ISED announce Implementation of KISBI Innovative Smart Building Solutions By Michael C. Davids S P E C I A L F E AT U R E

34 Hot Topics for Community Associations: Energy Benchmarking, Bed Bugs, Rentals, Life Safety and More By David Mack EVENT HIGHLIGHTS

39 Condo Lifestyles State of the Industry program

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By David Mack

CondoLifestyles State-of-the-Industry

It had been a bitter cold, sub-zero early morning on December 12, 2014, but the discussion was on hot topics among managers, board members, attorneys and other professionals serving the association industry at the 18th annual Condo Lifestyles State of the Industry conference held at the Chicago Cultural Center.

ichael C. Davids, publisher of the magazine that gives its name to the occasion began the session as he customarily does, by welcoming the attendees. “Thank you for being here,” he said. ”We appreciate your coming to join the discussion of the important issues of the year. We’re grateful that you took the time to be here to exchange our views and perspectives so that we can all be better prepared for what we do.” Continuing, he said, “Legislation and government matters have always been an important part of our program,” through

which, “we try to provide an open forum for discussion of those issues affecting our industry,” as well as, “through our publications and other meetings.” Davids encouraged audience involvement in the discussion by panel members who would be making presentations. “We want you to participate and share your opinions during the program. He then identified the various persons who had served on the event committee and were responsible for assembling the speakers. He also recognized the members of the Condo Lifestyles Advisory Board as

Report well as those persons who served in the same capacity on the Advisory Board of sister publication Chicagoland Buildings & Environments. “We appreciate them very much as they help us with a variety of things having to do with our publications and programs,” he said. Finally, before the panelists provided their input to the proceedings, Tairre Dever Sutton, owner of Tairre Management Services, regularly a key aide to Davids in laying the groundwork for the State of the Industry program as well as serving as panel moderator,

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and Tom Skweres of ACM Community Management together recognized all of the various non-profit and corporate sponsors that had contributed to making the event possible. Skweres also lauded Davids for his efforts. “I think it’s a great thing that Mike and MCD Media does, providing a great service for our industry and board members of community associations.”

Legal and Legislative Update The opening speaker on the formal program was Gabriella Comstock, representing the law firm of Keough & Moody, P.C. who presented a legal and legislative update both orally and through an explanatory handout provided to the audience. Comstock began her update on relevant case law by referring to the printed material. “There’s a lot I included in the handout that will give you guidance later,” she said, on both new legislation and active litigation.

Spanish Court The first case she discussed, Spanish Court

Two Condominium Association v. Carlson, deals with an owner’s defense against collection law suits by associations. The initial court ruling was that an association’s failure to maintain properly the common elements is a reasonable basis for an owner to withhold assessments. The association appealed the decision to the Illinois Appellate Court who affirmed the trial court’s ruling. Thereafter, the Supreme Court of Illinois agreed to review the case, which had not issued its judgment at the time of the Condo Lifestyles conference. “There’s been no ruling yet and we are anxiously awaiting the Supreme Court’s decision,” said Comstock.

100 Roberts Road Business Condos In another case, 100 Roberts Road Business Condominium Association v. Khalaf, the Illinois Court of Appeals concluded that if defendants do not dispute the issue of possession in a forcible entry & detainer (eviction) case, they cannot later allege that the association brought the suit without a proper motive. The Court further ruled that an association is not required to mitigate damages, which

means that it does not have to take action to reduce the damages it would ultimately obtain in a forcible entry action.

Kurtz v. Hubbard In Kurtz v. Hubbard, dealing with liens and settlement, the Court ruled that an owner can move against an association for slander of title when it filed a lien for an amount greater than was actually owed to the association. The Court said that liens are not an essential part of the collection effort and not filing one would have prevented such an action against the board. In the handout Comstock stated,” boards must make sure that their records are accurate and they do not exaggerate or inflate amounts owed by an owner.”

Orlan Brook Condo In Duffy v. Orlan Brook Condominium Owner’s Association, the Court ruled that it is a breach of an association’s fiduciary duty to not repair common elements and that it cannot delay corrective measures or only make cosmetic repairs rather than fix the underlying

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s Editor & Publisher Michael Davids welcomed attendees to the 18th annual Condo Lifestyles State of the Industry program and recognized members of the Advisor Boards for Condo Lifestyles and Chicagoland Buildings & Environments.

problems. Comstock added that we have seen a rise in these types of cases and that especially because of the Spanish Court litigation she recommended extra vigilance in attending to needed repairs of common elements.

Lake Holiday Association Turning to litigation over rules, Comstock said enthusiastically, “I love rules, I think

s Advisory Board Member Tom Skweres of ACM Community Management helped recognize the event's sponsors.

rules are great.” In Poris v. Lake Holiday Property Owner’s Association, the community owned the roads through its property and issued citations for speeding. The Illinois Supreme Court ruled that associations could adopt rules and regulations if granted the authority to do so in their governing documents. In this case, the Articles of Incorporation established that rule making authority.

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Further, the Court upheld the issuance of speeding tickets, finding that because of the voluntary nature of associations their internal affairs would be above reproach unless mistakes, fraud, collusion or arbitrariness were alleged and proven in their actions. In other words, Comstock said,” the Court ruled that associations wouldn’t be questioned as long as they acted reasonably.”

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Goose Lake Association In Ripsch v. Goose Lake Association, the Illinois Third District Court of Appeals also upheld the right of associations to adopt rules and regulations governing the common elements but inferred they do not have the power to adopt such behavioral constraints with respect to the use of the units. However, in the case, there was no language in the association’s legal documents granting it authority to enact rules. Said Comstock, “we need to look at governing documents to determine if an association can adopt rules, to see if they are given the power to do so by the documents.”

2800 Lake Shore Condo Regarding document requests by unit owners, the focus in Palm v. 2800 Lake Shore Condominium Association, the Illinois Supreme Court, in April, 2013, upheld a City of Chicago ordinance concerned with this issue. In a 5-2 decision the Court determined that in most circumstances, a municipal condominium ordinance is valid and enforceable even if it conflicts with relevant state law.

Chicago had required that document requests be processed within 3 days by associations without there having to be a specific purpose declared and didn’t restrict the age of documents. Chicago later modified its ordinance by permitting 10 business days for an association to produce the requested papers.

1324 W. Pratt Condo In 1324 W. Pratt Condominium Association v. Platt Construction Group, Inc., alleged construction defects were the essence of the suit. In an earlier opinion the Court ruled that the association could sue a sub-contractor if the general contractor becomes insolvent. The relevant date for insolvency was determined to be the date of filing a complaint. The Court also ruled that the association could continue its claim against the sub-contractor because the general contractor was insolvent, although still in good standing and defending itself in the litigation. The Court reasoned that the general contractor was insolvent because its debts exceeded its assets and it had ceased paying its debts.

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Wolinsky v. Kadison Concluding her coverage of current litigation, Comstock referred to Wolinsky v. Kadison, which she described, somewhat facetiously, as, “one of my favorite cases that has been pending for over 30 years.” It involves an owner who sued his association for failing to properly follow the by-laws in exercising a right of first refusal, for discrimination based on sex or marital status and willful and wanton conduct. The Court did determine on appeal that the association had not acted in a discriminatory manner in exercising its right of first refusal for the unit she had initially desired because it gave her the opportunity to buy another unit. But the board had not gotten the requisite two-thirds approval from the unit owners to exercise the right of first refusal and the Court rejected the board’s position that the business judgment rule protected them from liability. The plaintiff ultimately won a $56,992 judgment. Comstock said the Court in Wolinsky really had looked closely at the board’s ability to interpret its governing documents in

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s Attorney Gabriella Comstock of Keough & Moody presented an update on various legislative issues and case studies impacting Chicagloland community associations.

s (L) Chicago's Chief Sustainability Officer, Karen Weigert presented an overview of the new Chicago Energy Benchmarking Ordinance. (R) Elena Lugo of FirstService Residential and other leading property managers discussed the impact of Energy Benchmarking on their properties.

totality when considering the authority it had to take certain actions. It is important, she said, in addressing the managers and board members in the audience that you, ”need to read documents as a whole to determine that you are making a reasonable interpretation of those documents.”

New State Laws On the legislative front in Springfield, the General Assembly enacted a number of laws that impact community associations. Act 2374 and Act 1773, amend the Common Interest Community Association Act to clarify the restrictions placed on common interest associations in executing contracts with board

members, their immediate families or companies in which either owned a 25% or greater interest. Immediate family members include siblings, spouses, parents and children.

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By Michael C. Davids

Reserves, Studies, Restoration & Budgets Given the financial challenges that community associations (and everyone) have faced since the economic recession began in late 2007, many boards have had to make difficult decisions regarding their budgets including whether to fund their reserve account. Tough decisions as to whether your association(s) can undertake necessary restoration and maintenance projects have also had to be made.

ut to avoid funding reserves is generally deemed financially foolish as this practice will lead to the need for separate assessments as a property’s common elements wear with age and require repair and restoration. And an association without a reserve fund will face difficulty trying to obtain a bank loan for major restoration work (or at least pay a much higher finance rate for the loan). In some situations, lenders may even decline to loan money to an association that does not have any savings (a capital reserve account). fortunately most associations are somewhat financially astute in their long range planning and short term budgeting. Many hire management

professionals, some of which distinguish between two types of reserves in the budgeting process. Almost all of the budgets we prepare for our client associations contain capital replacement reserves,” said Cathy Ryan, President of Property Specialists, Inc., who added that some are also now including a designated amount to replenish any amount of their capital reserve account that was used in recent years to cover reduced assessment income related to recent economic challenges.

Some Just Can’t Afford It While most of PSI’s clients set aside money for a reserve account, Ryan realizes that for different

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reasons some associations do not, especially those populated by retired residents, some of whom have limited income. Despite the potential issues this can cause, they will rely on separate assessments for major repairs and restoration. “Some simply do not have a membership that can afford it (paying regularly into the reserve) and still others are short sighted, stating that they (the decision makers) may not be living at the property that long so why put money aside.” An outlook of neglecting the funding of reserves places the burden on those who come after them to raise the funds to do major repair work. This is no easy task for most associations that get caught in this kind of financial bind. They find it very difficult to raise assessments to begin building a reserve when prior budgets have given regular ongoing funding little or no consideration. other factors begin to bear heavily on assessments forcing them higher just when these associations finally come around and see the necessity of building up the reserve. “Prior to the economy

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going bad in 2007/2008, the trend (in assessments) had been up and up, based primarily on the impact of building/property maintenance needs and rising energy costs,” said Ryan. “for those who were struggling to make up deficiencies in their reserve funds before the bad economy, replenishing reserve funds will be even more difficult.”

Educating Board on Reserves & Building Restoration Much as with PSI, most of the budgets created for clients by ACM Community Management contain a reserve but in some cases it has taken extra effort to persuade boards to go along with the recommended amount. “We have received resistance when starting with an association when they feel the percentage we suggest is too high,” said Tom Skweres, Regional vice President of ACM, who pointed out that most of those that ignore the reserve do so because they do not value the preservation of the common elements by proper upkeep on a short or long term basis. But ACM tries through an ongoing education effort (including seminars at their office facility) to overcome the reticence of some associations to plan for those rainy and stormy days ahead that are sure to come. ACM explores with their boards, “dif-

ferent scenarios that can happen when associations do not budget for emergency situations and have to slap the unit owners with an expensive special assessment.” Most eventually see the light.

Planning with Common Sense funding of the reserves by most ACM clients eventually reaches an adequate level, although, again, it may require continual encouragement by ACM staff of disinclined board members of some of the associations to bite the bullet and raise assessments to where they have to be to meet sensible reserve funding goals. Not just putting aside funds to handle major repairs and improvements to common elements but enough money to do the job thoroughly is what a future oriented association should be doing in the present. for some, “there is always the need to educate some boards where for some it seems like common sense,” said Skweres. “After all, we invest in our insurance policies for almost everything, we plan for our retirements, we purchase car warranteeswhy would we not plan for a building that is going to age over time?” and do so realistically. Ryan concurs that education is necessary and PSI hosts seminar programs at their office for boards as well.

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Board Leadership Matters At Werk Management, staff also finds the same need to inform and instruct the board members of the associations it manages in the necessity of funding a reserve account before many get the point and realize that doing so is part of their fiduciary duty to their unit owners. But that patience in leading those boards to this understanding eventually pays off. “Most of our clients do have an adequate amount after they learn their responsibilities,” said Jack Mancione of Werk, adding, though, that it is sometimes those who head up a board who are the biggest obstacles. “Properly funding reserves is (not only) difficult when a board is not educated, but also when the directors do not have good leadership.”

Determining How Much How much to set aside in reserves, Mancione explained, should be based on a number of factors- “historical review, governing documents, reserve studies and constant evaluation of how current needs are being met.” But any plan that Werk recommends to a client for dealing with future major repairs and improvements is only partially based on the availability of reserve funds. The balance would come from assessments and

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bank lines of credit. But gradually accumulated reserves can reduce the need, sometimes significantly, for tapping those other sources.

Don’t Defer Major Repairs failure to adequately fund reserves can lead to deferring of necessary major repairs or capital improvements. PSI has managed several associations like that (less than 10% of its clients that wouldn’t budget for reserves) although some were able to eventually get necessary work done by the other methods available to them- previously mentioned separate assessments and bank loans. But not without putting a serious financial squeeze on unit owners and having to convince lenders, with PSI’s support, that they would mend their wayward financial ways. Mancione has found that a few boards have neglected funding reserves sufficiently because of a mistaken impression that keeping assessments low was their primary responsibility to unit owners regardless of the long- term consequences. “We have experienced boards which refused to raise capital (reserve) funds in the best interests of the association, thinking this was what a ‘good’ board member does,” he said. They acted in this way despite recommendations of management. ACM’s efforts to educate associations in the necessity of making a “responsible contribution” to a reserve do occasionally fall on deaf ears, with the result that major work gets postponed until a crisis point is reached when repairs can no longer be ignored and their cost will have increased beyond what it would have been if done earlier. This can be a wake up call that hurts like a hard slap in the face and management can only sit back and bite its tongue to keep from saying, “I told you so.” “We can only advise of the downfalls or added expense from putting of repairs as opposed to handling them sooner,” Skweres said.

Low Reserves Impact on Bank loan As noted above, a deficiency in the reserves may force an association to seek bank financing for urgent repairs and improvements. This can create a Catch 22 situation in which an association needs a loan because of a lack of reserves but its application is rejected because the reserves are inadequately funded. There are situations where a property can be denied a loan because of a poor budget and low reserves. In other cases, associations may have to pay a higher interest rate on their borrowing because of their financial condition. Werk Management knows the rules banks follow in considering applications for capital improvement loans and works on improving the financial status of an association before collaborating in any such submission. “We would never approach a financial institution until we felt all the required needs were in place,” explained Mancione. But that can mean having to delay an application until all of an association’s ducks are lined up, which often includes substantial assessment increases to fund shortages in reserves. During that additional period further wearing of deteriorating building components for which the loan is being sought is likely to occur with the consequence that it will cost more to repair or replace them. There is just no easy way to get around the inevitable problems that will result from under funding the reserve.

Guidance on Reserve Amount Section 9(c)(2) of the Illinois Condominium Property Act offers some guidance for condo associations in the determination of a reasonable reserve amount. A board should consider repair and replacement costs as well as the useful lives of common element components; the current and anticipated return on investment of association funds; any independent professional reserve study; the financial impact on unit owners and the market value of the units of any assessment needed to fund reserves. Lastly, an association’s ability to obtain financing should be added to the mix of the evaluation. But as has been pointed out earlier, this last factor can be tricky. If board members

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believe, “hey why put money in a reserve since there are a lot of banks out there just waiting to lend us the money when we need it?” and choose to only minimally set funds aside, or to ignore doing so altogether, in a reserve they may find out when they apply for a loan that prospective lenders will turn them down. or require them to make some hard commitments that involve significantly raising assessments before agreeing to a financing package.

Reserve Study is Great Tool one of the most important elements to consider in the determination of how much to budget for a reserve is a reserve study. Some associations arrive at reserve numbers haphazardly- by guessing how much to include in assessments but not in an educated way. The intent of a reserve study is to bring more precision to the methodology rather than relying on a shot in the dark. Professionals can come up with much better calculations. Someone conducting a reserve study looks at each of the major and some of the minor components of the common elements of a property and knowing their age projects their remaining useful life depending on the quality of the material and construction. The estimate of remaining useful life will be based on an assumption of a reasonable

degree of care for each A board should consider repair and ment time arrives. But some reasonable amount should component through regular replacement costs as well as the be allocated. and preventive maintenance. A determination is useful lives of common element com- Get Study Done Early made as to what it will cost Ryan recommends to replace each component ponents; the current and anticipated that a reserve study be high when it has run its estimated life cycle, accounting return on investment of association on the agenda when owners take over a new for inflation as well.. The funds; any independent professional association. It, “should be amount that should ideally one of the first items of be budgeted in the reserve reserve study; the financial impact business when the first for any one element should homeowner board is be the cost to replace on unit owners and the market value elected,” he said. “It should divided by expected be completed in their first remaining years of life folof the units of any assessment year of service and be used lowing the study. for thereafter by the board or example, to provide for a needed to fund reserves. an appointed Long Range roof that has a projected 15 Planning Committee to map out the long term years of life remaining and a future estimated cost financial needs of the association.” of replacement of $45,000, the association should, for existing associations, a reserve study absent other considerations, set aside $3000 per should also be high on the board’s agenda as it is year in its reserve for this big ticket item. extremely helpful in budget preparation and finanHowever, when weighing such other factors in cial planning. 9(c) as return on investment of association funds Some professionals in the reserve study busiand the financial impact on unit owners, the assoness suggest that the analysis should be conducted ciation may choose to budget less for it and to pareven earlier than the turnover of the association to tially rely on other financing sources when replacethe homeowner board. John Poehlmann of Reserve

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S P E C I A L â&#x20AC;&#x201A; f E AT u R E

Advisorsâ&#x20AC;&#x201A;said,â&#x20AC;&#x201A;â&#x20AC;&#x153;theâ&#x20AC;&#x201A;idealâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;to haveâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studyâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;whenâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;developerâ&#x20AC;&#x201A;startsâ&#x20AC;&#x201A;to marketâ&#x20AC;&#x201A;units.â&#x20AC;?â&#x20AC;&#x201A;Itâ&#x20AC;&#x201A;would,â&#x20AC;&#x201A;therefore,â&#x20AC;&#x201A;beâ&#x20AC;&#x201A;developer directedâ&#x20AC;&#x201A;sinceâ&#x20AC;&#x201A;heâ&#x20AC;&#x201A;controlsâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;boardâ&#x20AC;&#x201A;atâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;time andâ&#x20AC;&#x201A;heâ&#x20AC;&#x201A;could,â&#x20AC;&#x201A;â&#x20AC;&#x153;marketâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;unitsâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;fairâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;accurateâ&#x20AC;&#x201A;estimateâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;whatâ&#x20AC;&#x201A;condoâ&#x20AC;&#x201A;feesâ&#x20AC;&#x201A;(assessments)â&#x20AC;&#x201A;will be.â&#x20AC;?â&#x20AC;&#x201A;unfortunatelyâ&#x20AC;&#x201A;tooâ&#x20AC;&#x201A;fewâ&#x20AC;&#x201A;developersâ&#x20AC;&#x201A;orderâ&#x20AC;&#x201A;upâ&#x20AC;&#x201A;a reserveâ&#x20AC;&#x201A;study.â&#x20AC;&#x201A;â&#x20AC;&#x201A;otherâ&#x20AC;&#x201A;thanâ&#x20AC;&#x201A;atâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;mostâ&#x20AC;&#x201A;favorable point,â&#x20AC;&#x201A;Poehlmannâ&#x20AC;&#x201A;agreedâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;Ryanâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;added, â&#x20AC;&#x153;thatâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;bestâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;soonâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;(first)â&#x20AC;&#x201A;homeownerâ&#x20AC;&#x201A;boardâ&#x20AC;&#x201A;takesâ&#x20AC;&#x201A;over.â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;soonerâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;beginâ&#x20AC;&#x201A;to planâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;capitalâ&#x20AC;&#x201A;replacements,â&#x20AC;&#x201A;theâ&#x20AC;&#x201A;moreâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;to accumulateâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;properâ&#x20AC;&#x201A;reservesâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;lowerâ&#x20AC;&#x201A;the monthlyâ&#x20AC;&#x201A;assessmentâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;reservesâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;be.â&#x20AC;?â&#x20AC;&#x201A;â&#x20AC;&#x201A;â&#x20AC;&#x201A;â&#x20AC;&#x201A;â&#x20AC;&#x201A;â&#x20AC;&#x201A;

Transitional vs Reserve Studies Beforeâ&#x20AC;&#x201A;goingâ&#x20AC;&#x201A;furtherâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studies,â&#x20AC;&#x201A;aâ&#x20AC;&#x201A;brief digressionâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;warrantedâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;distinguishâ&#x20AC;&#x201A;between transitionalâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studies.â&#x20AC;&#x201A;Whileâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;mayâ&#x20AC;&#x201A;be conductedâ&#x20AC;&#x201A;atâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;sameâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;byâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;sameâ&#x20AC;&#x201A;person, theirâ&#x20AC;&#x201A;objectivesâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;different.â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;formerâ&#x20AC;&#x201A;are intendedâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;uncoverâ&#x20AC;&#x201A;constructionâ&#x20AC;&#x201A;defectsâ&#x20AC;&#x201A;whereas theâ&#x20AC;&#x201A;latterâ&#x20AC;&#x201A;are,â&#x20AC;&#x201A;asâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;beenâ&#x20AC;&#x201A;pointedâ&#x20AC;&#x201A;outâ&#x20AC;&#x201A;above, budgetingâ&#x20AC;&#x201A;toolsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;establishâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;allocation fromâ&#x20AC;&#x201A;assessmentsâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;assumeâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;anyâ&#x20AC;&#x201A;constructionâ&#x20AC;&#x201A;deficienciesâ&#x20AC;&#x201A;haveâ&#x20AC;&#x201A;beenâ&#x20AC;&#x201A;remedied.â&#x20AC;&#x201A; Movingâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studies,â&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;shouldâ&#x20AC;&#x201A;be conductedâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;newerâ&#x20AC;&#x201A;propertiesâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;conversions

andâ&#x20AC;&#x201A;thenâ&#x20AC;&#x201A;updatedâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;needed.â&#x20AC;&#x201A;â&#x20AC;&#x153;Weâ&#x20AC;&#x201A;haveâ&#x20AC;&#x201A;doneâ&#x20AC;&#x201A;them onâ&#x20AC;&#x201A;newâ&#x20AC;&#x201A;buildingsâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;evenâ&#x20AC;&#x201A;buildingsâ&#x20AC;&#x201A;pushingâ&#x20AC;&#x201A;100 yearsâ&#x20AC;&#x201A;old,â&#x20AC;?â&#x20AC;&#x201A;saidâ&#x20AC;&#x201A;Markâ&#x20AC;&#x201A;Waldmanâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;Waldmanâ&#x20AC;&#x201A;Engineeringâ&#x20AC;&#x201A;Consultants.â&#x20AC;&#x201A;â&#x20AC;&#x153;Eachâ&#x20AC;&#x201A;oneâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;itsâ&#x20AC;&#x201A;major replacementâ&#x20AC;&#x201A;costsâ&#x20AC;&#x201A;butâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;olderâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;buildingâ&#x20AC;&#x201A;the nearerâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;equipmentâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;endâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;itsâ&#x20AC;&#x201A;usefulness.â&#x20AC;?â&#x20AC;&#x201A; Whenâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;startsâ&#x20AC;&#x201A;outâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;physicalâ&#x20AC;&#x201A;plantâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;fewâ&#x20AC;&#x201A;decadesâ&#x20AC;&#x201A;orâ&#x20AC;&#x201A;moreâ&#x20AC;&#x201A;old,â&#x20AC;&#x201A;major repairsâ&#x20AC;&#x201A;orâ&#x20AC;&#x201A;replacementsâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;generallyâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;needed muchâ&#x20AC;&#x201A;sooner.â&#x20AC;&#x201A;Itâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;especiallyâ&#x20AC;&#x201A;important,â&#x20AC;&#x201A;therefore, forâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;analysisâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;doneâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;earlyâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;possible forâ&#x20AC;&#x201A;existingâ&#x20AC;&#x201A;structuresâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;haveâ&#x20AC;&#x201A;beenâ&#x20AC;&#x201A;converted fromâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;priorâ&#x20AC;&#x201A;useâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;communityâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;use.â&#x20AC;&#x201A;And ifâ&#x20AC;&#x201A;yourâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;notâ&#x20AC;&#x201A;updatedâ&#x20AC;&#x201A;theirâ&#x20AC;&#x201A;reserve studyâ&#x20AC;&#x201A;sinceâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;economicâ&#x20AC;&#x201A;recessionâ&#x20AC;&#x201A;began,â&#x20AC;&#x201A;â&#x20AC;&#x153;nowâ&#x20AC;&#x201A;is definitelyâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;goodâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;doâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;update.â&#x20AC;?

Reserve Study is Helpful Regardless of Property Age Evenâ&#x20AC;&#x201A;ifâ&#x20AC;&#x201A;notâ&#x20AC;&#x201A;doneâ&#x20AC;&#x201A;atâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;birthâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;association, aâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studyâ&#x20AC;&#x201A;shouldâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;completedâ&#x20AC;&#x201A;wheneverâ&#x20AC;&#x201A;a previouslyâ&#x20AC;&#x201A;negligentâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;realizesâ&#x20AC;&#x201A;itâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;to beginâ&#x20AC;&#x201A;planningâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;itsâ&#x20AC;&#x201A;futureâ&#x20AC;&#x201A;financialâ&#x20AC;&#x201A;needsâ&#x20AC;&#x201A;regardlessâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;whenâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;is.â&#x20AC;&#x201A;Asâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;sayingâ&#x20AC;&#x201A;goes,â&#x20AC;&#x201A;â&#x20AC;&#x153;betterâ&#x20AC;&#x201A;late thanâ&#x20AC;&#x201A;never.â&#x20AC;?â&#x20AC;&#x201A;â&#x20AC;&#x201A;Thatâ&#x20AC;&#x201A;mayâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;whenâ&#x20AC;&#x201A;newâ&#x20AC;&#x201A;boardâ&#x20AC;&#x201A;membersâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;electedâ&#x20AC;&#x201A;whoâ&#x20AC;&#x201A;foreseeâ&#x20AC;&#x201A;financialâ&#x20AC;&#x201A;troubleâ&#x20AC;&#x201A;at someâ&#x20AC;&#x201A;uncertainâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;aheadâ&#x20AC;&#x201A;ifâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;donâ&#x20AC;&#x2122;tâ&#x20AC;&#x201A;prepareâ&#x20AC;&#x201A;for theâ&#x20AC;&#x201A;inevitableâ&#x20AC;&#x201A;failureâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;commonâ&#x20AC;&#x201A;elements.â&#x20AC;&#x201A;

â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;sâ&#x20AC;&#x201A;somethingâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;canâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;implementedâ&#x20AC;&#x201A;at anyâ&#x20AC;&#x201A;time,â&#x20AC;?â&#x20AC;&#x201A;saidâ&#x20AC;&#x201A;Poehlmannâ&#x20AC;&#x201A;and,â&#x20AC;&#x201A;â&#x20AC;&#x153;onceâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;(the board)â&#x20AC;&#x201A;getâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;goodâ&#x20AC;&#x201A;planâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;placeâ&#x20AC;&#x201A;itâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;benefit ownersâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;perpetuityâ&#x20AC;&#x201A;soâ&#x20AC;&#x201A;longâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;useâ&#x20AC;&#x201A;itâ&#x20AC;&#x201A;and keepâ&#x20AC;&#x201A;itâ&#x20AC;&#x201A;updated.â&#x20AC;?â&#x20AC;&#x201A;Itâ&#x20AC;&#x2122;sâ&#x20AC;&#x201A;justâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;laterâ&#x20AC;&#x201A;implementingâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;studyâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;startedâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;moreâ&#x20AC;&#x201A;itâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;goingâ&#x20AC;&#x201A;to costâ&#x20AC;&#x201A;unitâ&#x20AC;&#x201A;ownersâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;triesâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;buildâ&#x20AC;&#x201A;a reserveâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;shorterâ&#x20AC;&#x201A;periodâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;time. Asâ&#x20AC;&#x201A;farâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;Waldmanâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;concerned,â&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reserve studyâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;alwaysâ&#x20AC;&#x201A;haveâ&#x20AC;&#x201A;someâ&#x20AC;&#x201A;practicalâ&#x20AC;&#x201A;value,â&#x20AC;&#x201A;â&#x20AC;&#x153;unless theâ&#x20AC;&#x201A;buildingâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;fallingâ&#x20AC;&#x201A;down.â&#x20AC;? Andâ&#x20AC;&#x201A;onceâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;initialâ&#x20AC;&#x201A;(orâ&#x20AC;&#x201A;current)â&#x20AC;&#x201A;studyâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;completed,â&#x20AC;&#x201A;itâ&#x20AC;&#x201A;needsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;updatedâ&#x20AC;&#x201A;periodically.â&#x20AC;&#x201A;â&#x20AC;&#x153;Itâ&#x20AC;&#x201A;is importantâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reserveâ&#x20AC;&#x201A;studyâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;doneâ&#x20AC;&#x201A;atâ&#x20AC;&#x201A;least everyâ&#x20AC;&#x201A;5â&#x20AC;&#x201A;years,â&#x20AC;?â&#x20AC;&#x201A;saidâ&#x20AC;&#x201A;Skweres.â&#x20AC;&#x201A;Conditionsâ&#x20AC;&#x201A;change overâ&#x20AC;&#x201A;timeâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;follow-upsâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;necessaryâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;track themâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;modifyâ&#x20AC;&#x201A;projectionsâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;estimates.â&#x20AC;&#x201A; Inâ&#x20AC;&#x201A;mostâ&#x20AC;&#x201A;situations,â&#x20AC;&#x201A;professionalsâ&#x20AC;&#x201A;shouldâ&#x20AC;&#x201A;performâ&#x20AC;&#x201A;reservesâ&#x20AC;&#x201A;studiesâ&#x20AC;&#x201A;evenâ&#x20AC;&#x201A;ifâ&#x20AC;&#x201A;someoneâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;boardâ&#x20AC;&#x201A;orâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;bodyâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;membership feelsâ&#x20AC;&#x201A;qualifiedâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;undertakeâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;effort.â&#x20AC;&#x201A;Ryanâ&#x20AC;&#x201A;does notâ&#x20AC;&#x201A;recommendâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;volunteerâ&#x20AC;&#x201A;approach.â&#x20AC;&#x201A;â&#x20AC;&#x153;Anâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;muchâ&#x20AC;&#x201A;betterâ&#x20AC;&#x201A;servedâ&#x20AC;&#x201A;byâ&#x20AC;&#x201A;engagingâ&#x20AC;&#x201A;the servicesâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;firmâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;doesâ&#x20AC;&#x201A;theseâ&#x20AC;&#x201A;studiesâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;businessâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;reputationâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;doingâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;work well,â&#x20AC;?â&#x20AC;&#x201A;sheâ&#x20AC;&#x201A;said.â&#x20AC;&#x201A;â&#x20AC;&#x153;Itâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;alwaysâ&#x20AC;&#x201A;advisableâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;boardsâ&#x20AC;&#x201A;to obtainâ&#x20AC;&#x201A;thirdâ&#x20AC;&#x201A;partyâ&#x20AC;&#x201A;adviceâ&#x20AC;&#x201A;ratherâ&#x20AC;&#x201A;thanâ&#x20AC;&#x201A;dependâ&#x20AC;&#x201A;only onâ&#x20AC;&#x201A;theirâ&#x20AC;&#x201A;ownâ&#x20AC;&#x201A;wisdom.â&#x20AC;?

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01.14

CoNDoâ&#x20AC;&#x201A;LIfESTyLES

1213.5658 CL[0114]40pgrMSTR.qxp_Layout 1 1/19/14 11:13 AM Page 14

1213.5658 CL[0114]40pgrMSTR.qxp_Layout 1 1/19/14 11:13 AM Page 15

S P E C I A L f E AT u R E

Skweres concurred with Ryan. “We do not recommend someone just casually doing a reserve study since it should be professional and (well) documented,” he said. Mancione, on the other hand, noted that it might be possible for someone with an engineering background in an association to conduct a study but the end product of the effort should establish a reliable framework for future planning by the association. “Credibility and quality are important,” he said.

Expense for Reserve Study Can Vary

to conduct a study and for whatever reason decided to never utilize it.” That could have been because a new board took over or a reluctance to increase assessments to the extent needed.

Study is Only as Good as Application It is a waste to have a reserve study done and then to ignore its conclusions because to follow them would mean having to raise assessments. Some boards have done just that. “Reserve studies are great tools, but they are only as good as people are willing to apply them,” said Man-

cione. “It does no good if the information is discarded and placed on a shelf.” Waldman knows from experience that some associations will decide to deviate from his recommendations and they may guess right in doing so because projections regarding useful life are only best estimates rather than accurate, dead on forecasts. Better preventive maintenance will likely extend durability for building equipment and components and usually lead them to lasting longer than projected before replacement or major rehabilitation is required.

When done early in the life of a new property, a reserve study may cost less than if completed later, but not significantly so. “Typically it is easier to access different areas and easier to read equipment tags on newer equipment,” said Waldman, and other information if more readily available. “It should be less money.” Poehlmann agreed that the expense can vary depending on age and conversions will likely cost more to do a thorough analysis than new construction. “older buildings take longer to inspect, tend to have more out of date systems that take longer for engineers to research and may have more line items included,” he explained. With fiscal audits an association can select from 3 different types that vary in depth of review but not generally so with reserve studies. Although Reserve Advisors classifies its studies as new, an update with a site visit or an update without a site visit all are exhaustive analyses of conditions. “We have a very detailed report performed by our expert engineers,” said Poehlmann. “We choose not to offer a less detailed analysis, which would come at a lower cost so that we maintain our reputation and homogeneity in our studies. other firms may offer different levels of detail, we do not.” other than for associations built from the same design and construction template, reserve studies will vary between properties because of the distinct physical characteristics each possesses. While there may be some ways in which each is evaluated similarly, there is no one size fits all. “A general wide brush approach usually does not work well with reserve studies,” said Waldman. “We still have to look at all of the equipment (and other components) and give life expectancies, which takes time, and we try to give a detailed study to all of our clients.” once a reserve study is completed, it’s up to the association what use will be made of it. In Poehlmann’s experience, more follow the recommendations for funding than those that do not. “I’d say most associations either partially or fully implement the reserve recommendations,” he said, however, “I do know there are associations that hired us

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.

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CoNDo LIfESTyLES

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Hardships Exist

Baum PROPERTY MANAGEMENT

Professional Community Management

Ryan has found that the vast majority of the associations PSI manages comply faithfully with their reserve studies within the limits of the financial abilities of their unit owners. “Those that are serious about planning for the future follow the recommendations as closely as the economics of their membership will allow,” she said. “That would include a good 85 percent of our clients.” occasionally full suggested reserve funding is just not possible because it would be a financial hardship for many residents so an association has to go with a level that is realistically achievable. Skweres pointed out that his ACM’s associations tend to do the same and as with PSI there is the added factor of management’s guidance that helps keep clients on target with their reserve funding so that a profound financial crisis in the future can be averted. Werk management also makes it a point to get behind a reserve study and urge an association

to adhere as closely as possible to its funding suggestions. The company has generally been successful in this encouragement and feels responsible when it fails at the task. “Most associations endorse our recommendations,” said Mancione. “That’s our role as the professional involved. If they do not, we’re doing something wrong.”

Danger Ignoring Reserve Study There is a danger in ignoring the findings of a reserve study. failure to fund reserves according to some reasonable formula based on a study will not only almost certainly lead to the need for large separate assessments but some unit owners may be so aggravated by such a call for money that they sue the board for breach of its fiduciary duty in paying for the professional analysis and then disregarding its recommendations by not funding the reserve steadily over time. It would actually have been better under those circumstances to never have contracted for the study than to have one completed and then file it away. Y

C O N TA C T

Michael D. Baum, CPM, PCAM

630-897-0500 www.BaumProp.com

16 C o N D o L I f E S T y L E S 01.14

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INDuSTRy HAPPENINGS

industry happenings FirstService Residential firstService Residential would like to announce the promotion of Patricia Bialek, CMCA, AMS, PCAM to vice President of Property Management. In her new role, Bialek is responsible for the day to day management operations and supervision of Property Supervisors and Directors of Portfolio Management. In addition to responsibilities in customer service, talent management, strategic leadership, financial management, Pat will consult on the financial and operational goals and objectives of each client. “Pat consistently goes above and beyond her current role. Her ability to train, mentor, and support those that report to her is remarkable.” said Asa Sherwood, President of firstService Residential Illinois. “With her depth of experience and successful community management career, we look forward to further enhancing operations and services for our clients.” Effective January 1, 2014, firstService Residential assumed property management of The Darien Apartments Condominium Homeowners Association in Chicago and Park West Townhome Condominium Association in Deerfield.

Keough & Moody Keough & Moody, P.C. is excited to announce the addition of Rachel Nagrant to its team of attorneys. Prior to joining Keough & Moody in December, 2013, Rachel litigated collection issues for three years. She mainly represented banks, insurance companies, hospitals, and commercial businesses. Before practicing in Illinois, Rachel was a judicial clerk for Hon. Matthew S. Switalski in the Sixth Judicial Circuit of Macomb County, Michigan where she had the opportunity to observe both criminal and civil cases. While in law school, Rachel also worked in public interest law when she was a law clerk for the Wayne County Corporation Counsel. During her time in Wayne County, Rachel represented county employees in various civil matters, including litigation brought under 42 uSC §1983 .

The Darien is a striking high rise community located in the popular Lakeview neighborhood. The community offers its 222 homes the necessities with a touch of luxury. The property is staffed with 24-hour doormen, maintenance personnel, and a site manager. In addition to essential services and amenities, the building features a heated garage, on-site dry cleaner, coin-laundry, exercise room, hospitality room, sundeck, storage lockers and vending machines. Park West is conveniently located in the prestigious village of Deerfield. The community comprises of 296 townhomes which are spread out over 40 acres of pristine landscaping. Park West’s townhomes offer homeowners spacious layouts with a private backyard. Residents also enjoy enhanced amenities: an olympic size pool, lighted tennis courts & a clubhouse with business center and party room. Rachel graduated from the university of Michigan in 2007, with a bachelor's degree in English Language and Literature and a minor degree in Moral Philosophy. Then, in 2010, Rachel obtained her J.D. from Thomas M. Cooley Law School, where she participated in both Mock Trial and Moot Court, and graduated with a concentration in Litigation. Currently, Rachel is pursuing an LLM degree from John Marshall Law School in Trial Advocacy and Alternate Dispute Resolution. She is a member of the Illinois Bar Association and the Chicago Bar Association, and is licensed to practice before all Illinois courts, as well as the united States District Court for the Northern District of Illinois. In July of 2013, based upon her litigation experience, Rachel was also admitted to the federal Trial Bar for the Northern District of Illinois.

The Habitat Company The Habitat Company is pleased to announce that on December 1, 2013, Habitat was awarded the management contract for Silver Tower Condominium Association. Silver Tower is a 39 story condominium high-rise built in 2009. Silver Tower features condos with floor plans ranging from 728 to 1,810 square feet of living space. Silver Tower is located at 303 W. ohio in Chicago. Amenities include 24/7 doorstaff, fitness center, sundeck, on-site management and available garage parking. Laura Norris is the Property Manager. Brian Kelly was hired by Habitat in November 2013. Mr Kelly is the property manager for The Buckingham. Natalie Drapac is the new property manager at Skybridge Condominium Association..

Community Associations Institute Community Associations Institute (CAI) begins its 41st year under the leadership of Julie McGhee Howard, a five-year member of the Board of Trustees, past president of the Georgia chapter, chair of the Georgia Legislative Action Committee and member of CAI’s College of Community Association Lawyers. Local community association leader Julie Hardy Cramer of oakwood Homeowners Association in Westmont, Ill. was also named to the 14 member Board of Trustees of CAI National. 2014 Membership Representation Groups (MRGs) CAI’s three primary member constituencies are represented by the Association of Professional Community Managers (APCM) Board, Business Partners Council (BPC) and Community Association volunteers Committee (CAvC). MRG representatives are elected by CAI members in that membership group. Hardy-Cramer serves as Chair-Elect of the CAI 2014 CAvC of CAI. Another local community association leader, property manager Jessica Towles, CMCA, AMS, PCAM, of Grand Dominion by Del Webb, Mundelein, Illinois serves on the 2014 APCM Board. More than 60 million Americans make their homes in an estimated 325,000 association-governed communities. With more than 32,500 members dedicated to building better communities, CAI works in partnership with 60 chapters, including the Illinois Chapter of CAI. for more information visit www.cai-illinois.org

ACM Community Management ACM Community Management participated jointly with the Acres Group and in the JDRF Walk to Cure Diabetes on october 6th, 2013. Thousands of people showed up to show their support for this great cause. The ACM/Acres team raised over $7,000 for Juvenile Diabletes Research foundation at this event. If you would like to learn more or donate please visit www.jdrf.org.

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industry happenings Community Specialists Community Specialists held a Doorman’s Training Seminar on November 19, 20 and 21, 2013. The program was hosted by the 1000 Condominium Association in their hospitality room. The training was presented by Maria Perez ,who has trained for Local 1. Maria covered the topics of customer service, conflict resolution, crime prevention and the newest module, team building. feedback from the sessions has been very positive. Mario Acevedo, a doorman at the 1000 Condominium Association commented on his experience at the seminar, “overall the training seminar was very informative.. We had group participation and worked together in teams.” Community Specialists began managing 100 Bellevue Place Condominium Association January 1 of 2014. The property manager for 100 Bellevue Place is Teresa Lee who has worked with Community Specialists previously at another property. Community Specialists is happy to welcome Teresa back into the company along with her Assistant, Carol youngkrantz. other additions to Community Specialists staff include; Holly Ferguson as an assistant at 1720 S. Michigan Avenue Condominiums, Timothy Le Cour, the new fulltime Property Manager at Horizon House Condominium Association, Christina Cozma, the new Assistant Manager for 2800 Lake Shore Condominiums,

ACTHA Conference

s Shown here are participants at a recent seminar for high rise building door staff held by Community Specialists. Sharon Locket the Admininstrative Assistant for River Plaza and Maria Clark the Admininstration Assistant for 1000 Condominium Association. Community Specialists recently promoted, Terry Pasquale from her position as the Assistant Manager at 2800 Lake Shore to Property Manager at 555 Cornelia Condominiums and Sewellyn Cate, who was managing Horizon House, is staying on in with Community Specialists as Property Supervisor there.

Grand Dominion By Del Webb

MCD

ACTHA is pleased to announce the educational program offerings for the Spring Conference on Saturday, April 12, 2014 at Drury Lane in oakbrook Terrace. Registration and the trade show open at 7:30 am and the trade show featuring over 100 exhibitors will close at 11:30 am. Seminars begin at 8:30 am and continue until 3:30 pm. Seminar topics include avoiding pitfalls, role of the board, developing a maintenance plan, selecting a manager, communication, transparency, RfP's and contracts, elections and “Ask an Attorney.”

07.18 .14

full Access Conference Registration is $45/per person for ACTHA members or $40/per person if sending three or more from the same association; $120/per person for non-members. full Access Registration includes all seminars, Ask an Attorney, Lunch and Trade Show. for more information visit www.actha.org

Jessica has a wealth of experience in community management. She was most recently Assistant vice President for a local management company overseeing a portfolio of seven high-end communities from Highland Park to Inverness. Her day to day activities have included: budget preparation, bill approval, addressing homeowner issues, property inspections and compliance, vender negotiations, human resources, committee meetings and supervising various size staffs.

THE SOURCE FOR INFORMATION ON INDUSTRY NEWS AND TRENDS

Her 12 years of hands-on experience, computer knowledge along with her community management certifications, CAM, PCAM, AMS, CMCA, will serve the Grand Dominion residents well. She is also a certified trainer of community managers and has studied engineering at Purdue university.

GOLF INVITATIONAL Eaglewood Resort

* Itasca, Illinois

Call 630-932-5551 for more information.

Interested in Green Building Issues

Effective Monday, January 14, 2014, Jessica Towles began as Community Association Manager for Grand Dominion by Del Webb. She is replacing Kevin Green who has chosen to pursue new career opportunities. Prior to this announcement, she had been on temporary assignment at Grand Dominion for foster/Premier, assisting the board with various tasks and preparation for the new Lifestyle Director.

Chicagoland

Buildings Environments FOR MORE INFORMATION CALL

630.932.5551

For more information, visit our website at

www.condolifestyles.net

OR VISIT

www.chicagolandbuildingsandenvironments.com

18 C o N D o L I f E S T y L E S 01.14

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INDuSTRy HAPPENINGS

Vanguard Community Management The annual Proposalpalooza Plus event hosted by vanguard Community Management/Associa took place on Saturday, November 16, 2013 from 9:00 AM – 3:00 PM at Bellevue Events in Elk Grove village. The purpose of the event is to begin executing the 2014 business plans for all of vanguard’s Communities. According to Executive vice President Don Kekstadt, “By obtaining bids for various jobs now we will be better prepared for next year. We also wanted to educate our Board members on this process so they can be an active participant in executing the 2014 Business Plan.” Three mini-seminars were held for Board Members and community managers to attend. “vanguard’s Great outdoors Panel of Experts” which included short presentations by three landscaping companies was followed by a question and answer session. State Representative Elaine Nekritz spoke regarding the “Changes in the Community Manager Licensing Act” and Don Kekstadt presented a seminar discussing “Executing the 2014 Business Plan” This year, vanguard went a step further with the event, making it Proposalpalooza PLuS, by extending the invitation to all Board Members to attend. over 100 vendors with guests were in attendance and over 50 Associations were represented by board members and all vanguard properties were represented by property managers.

s Pictured above (LtoR) are Christine Evans-Vanguard Community Management, Elaine NekritzState of Illinois Representative 57th district and Assistant Majority Leader, Don Kekstadt and Robin Braun –Vanguard Community Management.

s The annual Proposalpalooza Plus event hosted by Vanguard Community Management/Associa took place on Saturday, November 16, 2013 at Bellevue Events in Elk Grove Village.

Kekstadt continued, “The event is really a great way for contractors, community managers, and Board Members to become better acquainted in a face to face environment. Community managers gather proposals for the upcoming year for their associations, we get better pricing and our projects scheduled faster in 2014.” over 600 tickets were sold for the “50/50; Split the Pot” raffle held to raise funds for Associa Cares that donates money to those in need.

s State representative Elaine Nekritz presented "Changes in the Community Association Manager Licensing Act"

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Serving Metropolitan Chicago, Las Vegas, Milwaukee & Tampa

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From the Editor

eavy amounts of snow and record breaking cold have dominated the first part of winter. Several records were broken for both snowfall amounts and cold. The regular hustle and bustle of the holidays

was complicated further by the brutal weather. Despite our weather challenges, we

CondoLifestyles

s Mike Davids

hope that you and your association(s) are off to a good start in 2014. Economic conditions including housing market sales and the stock market continue to improve. Most experts are forecasting more improvement with cautious optimism. of course, it will take more time for many to recover from the past five years of financial crisis.

JANUARY 2014 | VOLUME 17 | NUMBER 4 our cover story is a report on our “Condo Lifestyles State of the Industry” program held in December at The Chicago Editor & Publisher Michael C. Davids

Cultural Center. Attorney Gabriella Comstock provided her insight on current trends and recent legislative and gov-

Vice President Sherri Iandolo

special guest speaking on the topic of Energy Benchmarking and a panel of leading property managers shared their

Art Director Rick Dykhuis Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold Administration Cindy Jacob and Carol Iandolo

ernment activity concerning community associations. Chicago’s Chief Sustainability officer Karen Weigert was our perspectives on current trends and hot topics at the SoI event as well. Comstock provided an overview of a number court cases that directly impact community associations along with an update of state and local laws including the Community Manager Licensing Act in Illinois. Manager Licensing is a topic that provokes a lot of discussion and undoubtedly there is more to come on this important issue. A report on her presentation is our cover story for this issue. our second story covers the highlights of our panel discussion and Q&A session that focused on (beyond Energy Benchmarking) the continued widespread use of condominium units in Chicago as rentals and what this means to the Community Association and its board of directors. foreclosures, evictions, delinquent assessments, bed bugs, life safety & fire protection issues were also discussed. Additional coverage of this special event is also featured in this edition including photo highlights. you can also view

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.

all the event photos from this event at the mcd media facebook page.

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 8,500.

our Board Basics column features a top 10 list of ways to avoid emergencies that offers some great advice. An article

A special feature on funding of reserve accounts and restoration projects is offered in this issue. As we emerge from economic difficulty it is important to consider where your association(s) are relative to your reserve study and long term financial plans. for many, this will be a good time to update your reserve study.

profiling recent changes in rules and laws governing the home mortgage industry is featured in our Money Matters column. our regular Industry Happenings column appears in this edition as is customary.

MCD Pool Party to feature Condolympics Games The 20th annual MCD Pool Party will be held on March 14, 2014 at The Pyramid Club in Addison. Tournaments will be

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 2014. No part of the publication may be reproduced whatsoever without written consent from the publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought. Advertisers assume liability for all content of advertisements printed, and also assume personal liability for any claims arising therefrom against the publisher relating to advertising content. The publisher and editors reserve the right to reject advertising or editorial deemed inappropriate for the publication.

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 in July 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. Thanks to the many new subscribers that have found our publication useful and informative. Special thanks to the firms, associations and groups that are Authorized Distributors of Condo Lifestyles. Those of you who are not current subscribers can obtain subscription information on our website www.condolifestyles.net 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 (mdavids@condolifestyles.net) Y

Michael C. Davids Editor and publisher

20 C o N D o L I f E S T y L E S 01.14

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SERvICE DIRECToRy

ACCOUNTANTS

ARCHITECTS/ENGINEERS

ATTORNEYS

CANTEY ASSOCIATES, CPA’S (630) 681-9400

FULL CIRCLE ARCHITECTS, LLC (847) 564-0884

ANNUAL ACCOUNTING SERVICES:

(847) 564-3880 FAX

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

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

Daniel Baigelman, AIA dan@fullcirclearchitects.com Capital Improvements • Reserve Studies Engineering Reports www.fullcirclearchitects.com 85 REvERE DRIvE, SuITE B, NoRTHBRooK, IL 60062

www.canteycpa.com

J. HERSHEY ARCHITECTURE (847) 549-5900

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

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

(630) 832-2222 EXT 113 CONTACT BRAD SCHNEIDER Brad@CondoCPA.com CERTIFIED PUBLIC ACCOUNTANTS

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

CERTIFIED PUBLIC ACCOUNTANTS

(847) 496-7180 A full-service accounting firm speacilizing in the unique needs of homeowners associations.

www.ckwcpa.com

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

pcostello@keaycostello.com www.keaycostello.com

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

KOVITZ SHIFRIN NESBIT (847) 537-0500

CERTIFIED PUBLIC ACCOUNTANTS

Contact: Steve Silberman, CPA

www.waldmaneng.com

(847) 382-4100

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

DICKLER, KAHN, SLOWIKOWSKI & ZAVELL, LTD. (847) 593-5595

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

ALLIANCE ASSOCIATION FINANCIAL SERVICES (815) 342-4228 full service banking and lending solutions for management companies and associations. www.aafin.com

ATTORNEYS

ARCHITECTS/ENGINEERS coder@codertaylor.com

www.ksnlaw.com Covenant Drafting & Enforcement Advising & Consulting with Boards Construction Defect Litigation Collecting Delinquent Assessments

BANKING WALDMAN ENGINEERING CONSULTANTS (630) 922-3000

CODER TAYLOR ASSOCIATES

Legal Representation for Community Associations www.kmlegal.com

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

Reserve Studies & Transition and Condition Assessment Reports facade/ Roofing / Windows Garage Evaluations, Water Infiltration Investigations fire Escape/Balcony/Porch Evaluations, Life Safety Evaluations www.maximaconsultants.com

FROST, RUTTENBERG & ROTHBLATT, P.C. (847) 282-6340

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

“Autographed with Excellence” www.jhersheyarchitecture.com

MAXIMA CONSULTANTS CORPORATION (312) 223-8414

CUKIERSKI & KOWAL, LLC

www.frapc.com

www.dicklerlaw.com

ITASCA BANK & TRUST (630) 773-0350 “Together We’ll Shape the future” www.itascabank.com

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.

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BANKING

BUILDING RESTORATIONS

CONCRETE RAISING

COMMUNITY ADVANTAGE, A WINTRUST COMPANY (847) 304-5940

LS CONTRACTING GROUP, INC. T (773) 279-1122 f (773) 279-1133

CRC CONCRETE RAISING & REPAIR (847) 808-7400

Contact: Tom Laird tlaird@lscontrtacting.com www.lscontracting.com

Raising Settled Concrete throughout Chicagoland wwwWeCanRaiseIt.com

Loans, Reserve Investments & Lock Box Services www.communityadvantage.com

MUTUAL OF OMAHA BANK (866) 800-4656 HoA Banking • Internet Cash Management HoA Loans • online Payment Services www.mutualofomahabank.com

DOORS

QUALITY RESTORATIONS (630) 595-0990

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

BUILDING RESTORATIONS RIGGIO/BORON, LTD.

ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com

BRAL RESTORATION, LLC. (847) 839-1100 Masonry and Concrete Restoration www.bralrestoration.com

DAKOTA EVANS RESTORATION, INC. (847) 439-5367 Tuckpointing ~ Masonry Repairs Waterproofing ~ Terra Cotta Repairs Caulking & Sealants ~ Structual Repairs Cleaning ~ Balcony Restoration Concrete Restoration www.dakotaevans.com

Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

(847) 531-5700 A Total Exterior facade Restoration Company www.RiggioBoron.net

SITE MAINTENANCE, INC. (847) 697-1077

AIRWAYS SYSTEMS, INC. (630) 595-4242

www.sitemaintinc.com

Cleaning: Air / Laundry / Toilet Exhaust Ducts, Coils, Trash Chutes, Parking Garages. Also Air filters, Belts

www.airwayssystems.com

BUSINESS EXPENSE REDUCTION OCEANS COST CONTAINMENT (312) 925-3047 info@oceanscc.com www.oceanscc.com

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

www.ForumGroupInc.com

Concrete flatwork Specialists Asphalt Paving Curbs & Driveways | Sidewalks footings & foundations Colored Concrete Stamped Concrete Aggregate finish Concrete www.hsshardsurfacesolutions.com

www.golfconstruction.net

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

(847) 253-3886 TEL / (847) 253-3255 FAX John@holtonbrothers.com www.holtonbrothers.com

SMART ELEVATORS CO. (630) 544-6829

SUBURBAN ELEVATOR CO. 847-743-6200 Simplifying vertical Transportation Contact: Max Molinaro www.suburbanelevator.com

ENERGY GAS & ELECTRIC

FM&J ASPHALT PAVING, INC. (708) 544-6700 / (630) 279-0303 Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack filling & Striping www.fmjasphalt.com

ELEVATORS/CONSULTANTS

www.smartelevatorsco.com smartin@smartelevatorsco.com

FORUM GROUP, INC. (773) 732-3051

GOLF CONSTRUCTION (219) 933-3420

DUCT CLEANING

COST CONTAINMENT INTL. LLC (877) 265-2799 Contact: Hans Herrmann www.c2intl.com

View our Special Event Photos @ www.Facebook.com/mcdmedia 22 C o N D o L I f E S T y L E S 01.14

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SERvICE DIRECToRy

ENERGY GAS & ELECTRIC

FIRE SAFETY & PROTECTION

GROUP BENEFITS

OCEANS ENERGY (312) 870-0580

EMCOR SERVICES TEAM MECHANICAL fIRE PRoTECTIoN DIvISIoN (847) 229-7600

OCEANS ADVISORS (312) 508-3032

info@oceanscc.com www.oceanscc.com

www.emcortmi.com

info@oceansadvisors.com www.oceansadvisors.com

ENERGY USE/BENCHMARKING

FIRE/FLOOD RESTORATION

HVAC

WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690

BROUWER BROS. SERVICES (800) CLEAN54

ALTHOFF INDUSTRIES (312) 332-5700

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

Mechanical - Plumbing - Electrical - Building Automation www.althoffind.com

GENESIS CONSTRUCTION, INC. (847) 895-4422

AMS MECHANICAL SYSTEMS, INC. (800) 794-5033

Serving the Tri-State Area Since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com

FHA/FANNIE MAE CONDOMINIUM PROJECT APPROVALS

www.genesisconstruction.com

CONDO APPROVAL PROFESSIONALS LLC (847) 293-2962 contact: Steve Stenger

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

www.condo-approval.com

www.QCIrestoration.com

FIRE SAFETY & PROTECTION CONTECH MSI CO. (847) 483-3803

24 Hour Service HvAC • Industrial Refrigeration Service/Maintenance • Systems Integration Energy Management • Electrical Process Piping • Plumbing www.amsmechanicalsystems.com

THE RESTORATION GROUP, LLC (630) 870-0658

EMCOR SERVICES TEAM MECHANICAL (847) 229-7600

www.trgrestore.com

www.emcortmi.com

fire Detection & Signaling Systems fire Alarm Systems Chicago Life Safety Evaluation Solutions Security Systems/CCTv Card Access Systems See our ad on page 9 www.contechco.com

NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) (866) 2NIFSAB (866-264-3722) 708-403-4468 www.firesprinklerassoc.org

SIMPLEX GRINNELL (630) 948-1235 fire Alarm / Sprinkler Systems fire Pumps / Extinguishers fire Panel Monitoring Installation / Testing / Maintenance 24/7 Service: (630) 948-1200 www.simplexgrinnell.com

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.

FITNESS SOLUTIONS DIRECT FITNESS SOLUTIONS (847) 680-9300 cgallagher@directfitnesssolutions.com www.directfitnesssolutions.com

WESTSIDE MECHANICAL GROUP (630) 618-0608 / (630) 369-6690 Serving the Tri-State Area Since 1970 Contact: Jackie Loftis * jloftis@wsmech.com www.wsmech.com

H V A C CLEANING GARBAGE CHUTE CLEANING BROUWER BROS. SERVICES (800) CLEAN54 (708) 396-1477 www.bbsteamatic.com

BROUWER BROS. SERVICES (800) CLEAN54 (708) 396-1477 www.bbsteamatic.com

INSURANCE GREEN SUSTAINABILITY SOLUTIONS HOLLINGER SERVICES, INC. (847) 437-2184

OCEANS ENERGY (312) 870-0580

Property Casualty • Employee Benefits Workers Compensation www.HollingerInsurance.com

info@oceansenergy.com www.oceansenergy.com

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CoNDo LIfESTyLES

INSURANCE

LANDSCAPE CONTRACTORS

MAILBOXES

MESIROW FINANCIAL (312) 595-8135

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

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

www.alanhorticultural.com

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

Nancy Ayers

OCEANS ADVISORS (312) 508-3032 info@oceansadvisors.com www.oceansadvisors.com

BALANCED ENVIRONMENTS, INC. (847) 395-7120 www.BalancedEnvironmentsInc.com

MOLD REMEDIATION

JANITORIAL SERVICES

ILT VIGNOCCHI (847) 487-5200

DJR CLEANING ENTERPRISES (773) 640-1588

www.iltvignocchi.com

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

KINSELLA LANDSCAPE, LLC (708) 371-0830

David Melone

NON PROFIT/EDUCATION

Creating Lifestyles from The outside In…™ www.kinsellalandscape.com

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

TOWER BUILDING SERVICES (312) 404-3943

www.landscapeconcepts.com

www.towerservices.net

LAKE & POND MANAGEMENT

QCI RESTORATION (847) 891-2929 (866) 832-6724 www.qcirestoration.com

www.djrcleaning.com

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

Since 1989

www.MailboxWorks.com

SEBERT LANDSCAPING, INC. (630) 497-1000

ACTHA (312) 987-1906 Association of Townhome and Condominium Associations

actha@actha.org | www.actha.org

COMMUNITY ASSOCIATION INSTITUTE OF ILLINOIS (847) 301-7505 info@cai-illinois.org | www.cai-illinois.org

www.sebert.com

PAINTERS LAUNDRY SERVICES & EQUIPMENT

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

LANDSCAPE CONTRACTORS

FAMILY PRIDE LLC (630) 827-6362 Contact Paul Anzell paula@hughesenterprises.net www.familypridelaundries.com

LAWN CARE

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

SPRING-GREEN LAWN CARE (800) 830-5914

Professional Landscaping and Snow Removal www.acresgroup.com

www.spring-green.com

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

ABBOTT PAINTING, INC. (312) 636-8400 (773) 725-9800 Quality Painting & Decorating since 1973 Our Mission: Guaranteed Committment to Quality Now offering Parking Lot Painting www.Abbottpainting.com

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 24 C o N D o L I f E S T y L E S 01.14

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SERvICE DIRECToRy

PAINTERS

PLUMBING

PROPERTY MANAGEMENT

ATJ'S HOME IMPROVEMENTS (630) 432-3238

AMS MECHANICAL SYSTEMS, INC. (800) 794-5033

DK CONDO (312) 346-8600

24 Hour Service HvAC • Industrial Refrigeration Service/Maintenance • Systems Integration Energy Management • Electrical Process Piping • Plumbing www.amsmechanicalsystems.com

www.dkcondo.com

www.atjshomeimprovement.com

CERTAPRO PAINTERS OF THE NORTH SHORE (847) 287-2642 Interior & Exterior Painting Wallcoverings • Decorating • Remodeling Drywall Repair • Decks & Staining Tile Installation • Metal & Iron Painting www.certacommercial.com tivanov@certapro.com

Contact Tom Taylor

PROPERTY MANAGEMENT ACM COMMUNITY MANAGEMENT (630) 620-1133 Contact Tom Skweres

PARKING GARAGE CLEANING

www.habitat.com

FIRST COMMUNITY MANAGEMENT (312) 829-8900 www.condomanagement.com

www.acmweb.com

EXTREME POWER CLEANING INC. (630) 532-0345

FIRSTSERVICE RESIDENTIAL (312) 335-1950

ALMA PROPERTY MANAGEMENT (847) 517-4400

www.ExtremePowerCleaning.com info@extremepowercleaning.com

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

Contact Asa Sherwood or Elena Lugo

www.almapropertymanagement.com

Elena.Lugo@fsresidential.com www.fsresidential.com

BAUM PROPERTY MANAGEMENT, LTD. (630) 897-0500

G&D PROPERTY MANAGEMENT (630) 812-6400

www.BaumProp.com

www.gd-pm.com

www.duboispaving.com

CARUSO MANAGEMENT GROUP, INC.

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

RESIDENTIAL & CoMMERCIAL

(630) 717-7188

Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer Repairs Sealcoating, Crack filling & Striping www.fmjasphalt.com

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

www.carusomanagementgroup.com

www.hillcrestmgmt.com

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

LEGUM & NORMAN MIDWEST (312) 944-2611

www.chicagopropertyservices.com

www.lnchicago.com

HARD SURFACE SOLUTIONS (630) 674-4520

MORE LIVING. LESS WORRYING.

www.hsshardsurfacesolutions.com

CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300

PEST CONTROL

THE HABITAT COMPANY (312) 527-5400

LIEBERMAN MANAGEMENT SERVICES (847) 459-0000 www.liebermanmanagement.com

www.chicagoland-inc.com

SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500 www.smithereen.com

No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2014©.

COMMUNITY SPECIALISTS (312) 337-8691 www.communityspecialists.net

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CoNDo LIfESTyLES

PROPERTY MANAGEMENT MCGILL MANAGEMENT, INC. (847) 259-1331

RESERVE STUDIES

ROOFING

RESERVE ADVISORS, INC.

S&D ROOFING SERVICE (630) 279-6600

Reserve Studies & Transition Defect Studies

1 (800) 221-9882

www.mcgillmanagement.com

PROPERTY SPECIALISTS INC. (847) 806-6121 ROLLING MEADOWS OFFICE

Conducted by Professional Engineers Enhanced Report / Most Customized Studies www.reserveadvisors.com Long-term Thinking. Everyday Commitment.

100,000 roofs installed TEAR OFFS • SHINGLES • FLAT ROOFS our experience & technical know-how gets the job done right the first time! Serving the area since 1963 www.sdroofing.com sales@sdroofing.com

(630) 633-5450 WOODRIDGE OFFICE

www.psimanagement.net

ROOFING

SECURITY SERVICES

SUDLER PROPERTY MANAGEMENT (312) 751-0900

ATJ'S HOME IMPROVEMENTS (630) 432-3238

ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888

www.atjshomeimprovement.com

www.sudlerpropertymanagement.com

TAIRRE MANAGEMENT SERVICES (847) 299-5740

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

tsutton@tairremgmt.com

Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing www.activeroofing.com

WERK MANAGEMENT (630) 241-0001

ELLIOTT & ASSOCIATES (847) 298-8300 www.elliottlaw.com

GUARDIAN SECURITY SERVICES (708) 385-3300 Providing Chicagoland’s finest Door Staff and Security officers since 1975 www.guardiansecurityinc.com

PREMIER SECURITY (773) 867-8813

for All your Property Needs www.werkmanagement.com

REAL ESTATE TAX ATTORNEY

www.admiralsecuritychicago.com

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

www.premiersecuritycorp.com

www.lakeroof.com

SECURATEX (630) 317-8980

CSR ROOFING CONTRACTORS (708) 848-9119

REMODELING/REPAIRS MI MAINTENANCE AND CONSTRUCTION (630) 241-0001

”Keeping Tenants Happy” www.securatex.com

www.csr-roofing.com See our ad on page 8.

SIDING / RENOVATIONS

PROHTOP ROOFING (847) 559-9119

ACCURATE EXTERIORS (630) 830-9191

We’re Here When you Need us! www.protoproofing.com

www.mancioneinc.com

SITE MAINTENANCE, INC. (847) 697-1077

ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com

www.sitemaintinc.com

Please Contact Us @ (630) 202-3006 or email mdavids@condolifestyles.net 26 C o N D o L I f E S T y L E S 01.14

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SERvICE DIRECToRy

SIDING / RENOVATIONS

TREE CARE

WINDOWS/REPLACEMENTS

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

KRAMER TREE SPECIALISTS, INC. (630) 293-5444

www.lakeroof.com

Tree Pruning, Tree Removal, Cable Bracing, Plant Health Care, Tree Planting & Transplanting www.kramertree.com

WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667) Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

TV-BULK CABLE & SATELLITE

WINDOW RESTORATION

RCN (312) 955-2322

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

WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667) Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

SNOW REMOVAL ATJ'S HOME IMPROVEMENTS (630) 432-3238 www.atjshomeimprovement.com

HARD SURFACE SOLUTIONS (630) 674-4520

THE WINTER WERKS (630) 241-0001

rcnchicagoapts@rcn.net www.rcn.com

www.windowwallservices.com All Types of Window Restoration

XFINITY 1 (800) XFINITY

Weather Stripping / Hinges Handles and Adjustments Curtain Wall Repair Specialists

www.comcast.com

WASTE SERVICES LAKESHORE RECYCLING SYSTEMS (773) 685-8811

WOODLAND WINDOWS & DOORS (630) 529-DOOR (3667) Window and Related Masonry Interior & Exterior Doors | Siding & Gutters www.woodlandwindows.com

www.LakeshoreRecyclingSystems.com

www.mancioneinc.com

View our Special Event Photos @ www.Facebook.com/mcdmedia

SWIMMING POOLS SPMS (630) 692-1500 Heaters Pumps • Repairs • Chemicals Pool Maintenance • Complete Water Analysis Pool Guards, Inc. ross@spmspools.com

CONDOLIFESTYLES

CondOlympics March 1 4, 2014

For more informatio www.condolifestyl n visit es.net

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01.14

CoNDo LIfESTyLES

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CoNDo LIfESTyLES

by Michael C. Davids

New Rules Impacting the Mortgage Market New rules took effect on January 10, 2014 that are intended to create a safer mortgage market with fewer tricks and traps, says Woodstock Institute.

he Consumer financial Protection Bureau (CfPB) is implementing rules that require mortgage lenders to ensure that borrowers can reasonably repay their loans, provide protections for borrowers who fall behind on their mortgages, and help current homeowners stay abreast of the status of their mortgages. “The CfPB’s rules promote safe and sustainable homeownership and prohibit some of the worst practices that led to the burst of the housing bubble,” said Dory Rand, president of Woodstock Institute. “We must ensure that the rules are strongly enforced so that mortgage borrowers can be confident that lenders are setting them up to succeed.”

Chicago Property Services inc. Chicago’s #1 Property Management Company

More Living. Less Worrying.

Complaints from Illinois consumers to the CfPB about mortgage lenders clearly illustrate a need for mortgage market reform. A Woodstock Institute analysis found that complaints about mortgages were the most common type of complaints from Illinois consumers, comprising 49 percent of all complaints to the CfPB. The most common mortgage complaints were about loan modifications, collections, and foreclosure (56 percent); loan servicing, payments, and escrow accounts (26 percent); and applications, origination, and mortgage brokers (8 percent). The mortgage rules address many of the issues raised by Illinois consumers. The new rules will: • Require lenders to verify a borrower’s ability to repay virtually any mortgage. Lenders must now collect and verify documentation of a borrower’s income and assets, debts, credit history, and more. The borrower must be able to repay the mortgage at any point during the life of the loan—even after low “teaser rates” expire. • Encourage lenders to make safer, easier to understand loans. The rules create a class of loans called “Qualified Mortgages” (QM) that are designed so that borrowers will be less likely to default on their loans. QM loans limit the amount of debt borrowers can take out relative to their income, lack risky features, and limit points and fees. Lenders receive extra legal protections for making QM loans, which creates an incentive for lenders to offer high-quality mortgages. The CfPB estimates that more than 95 percent of mortgages currently offered would qualify as QM loans. • Protect borrowers against steering and fair lending abuses. During the housing bubble, some employees at mortgage lenders received bonuses for steering borrowers into higher-cost loans—even when borrowers qualified for more affordable mortgages. This practice disproportionately affected borrowers of color. The new mortgage rules prohibit lenders from compensating their employees for putting borrowers in more expensive loans.

condominiums | townhomes | hoas | 100 units & under 3634 W. Wrightwood

Chicago 60647

www.chicagopropertyservices.com 312.455.0107

Create a clear process for borrowers who fall behind on their mortgage payments. In the wake of the housing crisis, many struggling homeowners had difficulty communicating with their loan servicers. There are many reports of servicers that have

28 C o N D o L I f E S T y L E S 01.14

poorly trained personnel, lose paperwork or payments, and pursue foreclosure at the same time the borrower is trying to reach a solution. The new mortgage rules require servicers to educate borrowers regarding all alternatives to foreclosure available to them, notify borrowers early that they are behind on their payments, provide timely and accurate communications to borrowers, inform borrowers why a loss mitigation application is rejected, and more. The rules also prohibit servicers from moving forward with a foreclosure while a borrower is pursuing an alternative, but only if borrowers submit complete applications in a timely manner. (Advocates are working with the federal Housing finance Administration to adopt a stronger rule against “dual tracking.”) Help borrowers understand the status of their mortgages. Mortgage servicers must now provide clear monthly statements, credit payments on the same day, fix mistakes quickly, and let borrowers know about any interest rate increases on adjustable rate mortgages well in advance. Homeowners can use a number of resources provided by the CfPB, including a summary of the new rules, tips for homebuyers, sample letters to mortgage servicers to correct errors and request information, a checklist for avoiding foreclosure, and more. Housing counselors can gain a better understanding of the new mortgage rules with this detailed guide. If borrowers suspect that their lender or servicer is not complying with the new rules, borrowers should file a complaint with the CfPB.

More Mortgage Law Changes To help potential homebuyers understand how changes in mortgage laws will affect their mortgage processes, Don frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), outlined some of the regulations that have started in January 2014. “Since 2009, the housing market has been working to create standards and regulations that minimize the risk of another mortgage industry fiasco,” says frommeyer. “The ability-to-repay mandate is a perfect example of this and it exemplifies how mortgage professionals are taking extra caution with every customer.”

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M o N E y â&#x20AC;&#x201A; M AT T E R S

Additionalâ&#x20AC;&#x201A;upcomingâ&#x20AC;&#x201A;mortgageâ&#x20AC;&#x201A;industry changesâ&#x20AC;&#x201A;include: â&#x20AC;˘ Decrease in FHA Loan Limit: Theâ&#x20AC;&#x201A;federal Housingâ&#x20AC;&#x201A;Administrationâ&#x20AC;&#x201A;(fHA)â&#x20AC;&#x201A;announcedâ&#x20AC;&#x201A;that beginningâ&#x20AC;&#x201A;Januaryâ&#x20AC;&#x201A;1,â&#x20AC;&#x201A;2014,â&#x20AC;&#x201A;mortgagesâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;be limitedâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;$625,000,â&#x20AC;&#x201A;downâ&#x20AC;&#x201A;fromâ&#x20AC;&#x201A;$729,750.â&#x20AC;&#x201A;Homebuyersâ&#x20AC;&#x201A;lookingâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;obtainâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;largerâ&#x20AC;&#x201A;loanâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;haveâ&#x20AC;&#x201A;to applyâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;jumboâ&#x20AC;&#x201A;loan,â&#x20AC;&#x201A;whichâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;mostâ&#x20AC;&#x201A;likely comeâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;higherâ&#x20AC;&#x201A;downâ&#x20AC;&#x201A;payment.â&#x20AC;&#x201A;â&#x20AC;&#x153;forâ&#x20AC;&#x201A;many areasâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;countryâ&#x20AC;&#x201A;thisâ&#x20AC;&#x201A;changeâ&#x20AC;&#x201A;wonâ&#x20AC;&#x2122;tâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;huge issueâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;averageâ&#x20AC;&#x201A;homeâ&#x20AC;&#x201A;pricesâ&#x20AC;&#x201A;fallâ&#x20AC;&#x201A;belowâ&#x20AC;&#x201A;the establishedâ&#x20AC;&#x201A;limit.â&#x20AC;&#x201A;However,â&#x20AC;&#x201A;borrowersâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;metropolitanâ&#x20AC;&#x201A;areasâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;higherâ&#x20AC;&#x201A;averageâ&#x20AC;&#x201A;housingâ&#x20AC;&#x201A;prices mayâ&#x20AC;&#x201A;faceâ&#x20AC;&#x201A;challengesâ&#x20AC;&#x201A;whenâ&#x20AC;&#x201A;applyingâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;mortgagesâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;20â&#x20AC;&#x201A;percentâ&#x20AC;&#x201A;downâ&#x20AC;&#x201A;paymentâ&#x20AC;&#x201A;associatedâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;jumboâ&#x20AC;&#x201A;loansâ&#x20AC;&#x201A;willâ&#x20AC;&#x201A;beâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;enormous increaseâ&#x20AC;&#x201A;fromâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;traditionalâ&#x20AC;&#x201A;loanâ&#x20AC;&#x2122;sâ&#x20AC;&#x201A;3.5â&#x20AC;&#x201A;percent downâ&#x20AC;&#x201A;payment,â&#x20AC;?â&#x20AC;&#x201A;notesâ&#x20AC;&#x201A;frommeyer. â&#x20AC;˘ Caps on Loan Origination Fees: Januaryâ&#x20AC;&#x201A;10, 2014â&#x20AC;&#x201A;bringsâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;ruleâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;Qualifiedâ&#x20AC;&#x201A;Mortgageâ&#x20AC;&#x201A;that pointsâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;feesâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;mortgagesâ&#x20AC;&#x201A;cannotâ&#x20AC;&#x201A;exceedâ&#x20AC;&#x201A;3%. â&#x20AC;˘ Tighter Regulations for Self-Employed: Asâ&#x20AC;&#x201A;the rulesâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;createâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;QMâ&#x20AC;&#x201A;(qualified-mortgage)â&#x20AC;&#x201A;take effect,â&#x20AC;&#x201A;peopleâ&#x20AC;&#x201A;withoutâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;W-2â&#x20AC;&#x201A;willâ&#x20AC;&#x201A;faceâ&#x20AC;&#x201A;difficulty whenâ&#x20AC;&#x201A;theyâ&#x20AC;&#x201A;applyâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;loans.â&#x20AC;&#x201A;Itâ&#x20AC;&#x2122;sâ&#x20AC;&#x201A;moreâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;taskâ&#x20AC;&#x201A;for individualsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;proveâ&#x20AC;&#x201A;theirâ&#x20AC;&#x201A;debt-to-incomeâ&#x20AC;&#x201A;ratio withoutâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;properâ&#x20AC;&#x201A;documentation,â&#x20AC;&#x201A;evenâ&#x20AC;&#x201A;ifâ&#x20AC;&#x201A;they haveâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;highâ&#x20AC;&#x201A;net-worthâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;perfectâ&#x20AC;&#x201A;credit.â&#x20AC;&#x201A;The incomeâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;calculatedâ&#x20AC;&#x201A;bringingâ&#x20AC;&#x201A;intoâ&#x20AC;&#x201A;playâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;customerâ&#x20AC;&#x201A;writeâ&#x20AC;&#x201A;offsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;reduceâ&#x20AC;&#x201A;taxableâ&#x20AC;&#x201A;income.

New FHA Condo Certification Guideline Theâ&#x20AC;&#x201A;federalâ&#x20AC;&#x201A;Housingâ&#x20AC;&#x201A;Administrationâ&#x20AC;&#x201A;(fHA) recentlyâ&#x20AC;&#x201A;releasedâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;statementâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;shouldâ&#x20AC;&#x201A;provide reliefâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;Americansâ&#x20AC;&#x201A;tryingâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;obtainâ&#x20AC;&#x201A;fHA-insured mortgagesâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;purchaseâ&#x20AC;&#x201A;condominiums.â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;fHA guidanceâ&#x20AC;&#x201A;allowsâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;associationsâ&#x20AC;&#x201A;to qualifyâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;certification,â&#x20AC;&#x201A;thusâ&#x20AC;&#x201A;givingâ&#x20AC;&#x201A;buyersâ&#x20AC;&#x201A;the opportunityâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;purchaseâ&#x20AC;&#x201A;homesâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;thoseâ&#x20AC;&#x201A;communities. Industryâ&#x20AC;&#x201A;expertsâ&#x20AC;&#x201A;hadâ&#x20AC;&#x201A;urgedâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;offer anotherâ&#x20AC;&#x201A;optionâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;condominiumsâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;whichâ&#x20AC;&#x201A;owners wereâ&#x20AC;&#x201A;unableâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;sellâ&#x20AC;&#x201A;unitsâ&#x20AC;&#x201A;dueâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;recentâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;interpretationâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;itsâ&#x20AC;&#x201A;certificationsâ&#x20AC;&#x201A;guidelines. underâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x2122;sâ&#x20AC;&#x201A;newâ&#x20AC;&#x201A;guidance,â&#x20AC;&#x201A;condominium associationsâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;donâ&#x20AC;&#x2122;tâ&#x20AC;&#x201A;complyâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;prohibitionsâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;leasingâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;offeredâ&#x20AC;&#x201A;twoâ&#x20AC;&#x201A;complianceâ&#x20AC;&#x201A;options:â&#x20AC;&#x201A; â&#x20AC;˘â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;mayâ&#x20AC;&#x201A;amendâ&#x20AC;&#x201A;itsâ&#x20AC;&#x201A;governingâ&#x20AC;&#x201A;documentsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;removeâ&#x20AC;&#x201A;bank-ownedâ&#x20AC;&#x201A;propertyâ&#x20AC;&#x201A;exemptionsâ&#x20AC;&#x201A;fromâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;leasingâ&#x20AC;&#x201A;prohibitions. â&#x20AC;˘â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;mayâ&#x20AC;&#x201A;provideâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;datedâ&#x20AC;&#x201A;andâ&#x20AC;&#x201A;signed statementâ&#x20AC;&#x201A;onâ&#x20AC;&#x201A;associationâ&#x20AC;&#x201A;letterheadâ&#x20AC;&#x201A;affirming thatâ&#x20AC;&#x201A;noâ&#x20AC;&#x201A;unitsâ&#x20AC;&#x201A;withinâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;communityâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;leasedâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;termâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;lessâ&#x20AC;&#x201A;thanâ&#x20AC;&#x201A;30â&#x20AC;&#x201A;daysâ&#x20AC;&#x201A;and thatâ&#x20AC;&#x201A;tenantsâ&#x20AC;&#x201A;areâ&#x20AC;&#x201A;notâ&#x20AC;&#x201A;providedâ&#x20AC;&#x201A;servicesâ&#x20AC;&#x201A;commonly associatedâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;hotel.

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Condominiumâ&#x20AC;&#x201A;governingâ&#x20AC;&#x201A;documentsâ&#x20AC;&#x201A;often restrictâ&#x20AC;&#x201A;leasingâ&#x20AC;&#x201A;unitsâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;hotelâ&#x20AC;&#x201A;orâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;purposes,â&#x20AC;&#x201A;normallyâ&#x20AC;&#x201A;definedâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;leaseâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;termâ&#x20AC;&#x201A;of lessâ&#x20AC;&#x201A;thanâ&#x20AC;&#x201A;30â&#x20AC;&#x201A;days.â&#x20AC;&#x201A;Itâ&#x20AC;&#x201A;isâ&#x20AC;&#x201A;alsoâ&#x20AC;&#x201A;commonâ&#x20AC;&#x201A;forâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;associationsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;provideâ&#x20AC;&#x201A;anâ&#x20AC;&#x201A;exceptionâ&#x20AC;&#x201A;to theâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;leasingâ&#x20AC;&#x201A;prohibitionâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;lendersâ&#x20AC;&#x201A;taking possessionâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;unitâ&#x20AC;&#x201A;afterâ&#x20AC;&#x201A;aâ&#x20AC;&#x201A;foreclosure.â&#x20AC;&#x201A; Itâ&#x20AC;&#x201A;hasâ&#x20AC;&#x201A;beenâ&#x20AC;&#x201A;reportedâ&#x20AC;&#x201A;thatâ&#x20AC;&#x201A;fannieâ&#x20AC;&#x201A;Maeâ&#x20AC;&#x201A;had requiredâ&#x20AC;&#x201A;thisâ&#x20AC;&#x201A;languageâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;governing documentsâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;midâ&#x20AC;&#x201A;1980s.â&#x20AC;&#x201A;Whileâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;hadâ&#x20AC;&#x201A;previouslyâ&#x20AC;&#x201A;approvedâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;projectsâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;this language,â&#x20AC;&#x201A;theâ&#x20AC;&#x201A;agencyâ&#x20AC;&#x201A;abruptly,â&#x20AC;&#x201A;andâ&#x20AC;&#x201A;withoutâ&#x20AC;&#x201A;explanation,â&#x20AC;&#x201A;startedâ&#x20AC;&#x201A;rejectingâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;languageâ&#x20AC;&#x201A;inâ&#x20AC;&#x201A;April 2013,â&#x20AC;&#x201A;whichâ&#x20AC;&#x201A;requiredâ&#x20AC;&#x201A;theâ&#x20AC;&#x201A;condominiumâ&#x20AC;&#x201A;associationsâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;amendâ&#x20AC;&#x201A;theirâ&#x20AC;&#x201A;governingâ&#x20AC;&#x201A;documents.Â â&#x20AC;&#x201A;That preventedâ&#x20AC;&#x201A;manyâ&#x20AC;&#x201A;condominiumsâ&#x20AC;&#x201A;fromâ&#x20AC;&#x201A;gainingâ&#x20AC;&#x201A;and renewingâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;certification.â&#x20AC;&#x201A;Theâ&#x20AC;&#x201A;agencyâ&#x20AC;&#x201A;interpreted theâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;prohibitionsâ&#x20AC;&#x201A;asâ&#x20AC;&#x201A;violationsâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;the Nationalâ&#x20AC;&#x201A;Housingâ&#x20AC;&#x201A;Act,â&#x20AC;&#x201A;whichâ&#x20AC;&#x201A;strictlyâ&#x20AC;&#x201A;prohibitsâ&#x20AC;&#x201A;the useâ&#x20AC;&#x201A;ofâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;mortgageâ&#x20AC;&#x201A;insuranceâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;supportâ&#x20AC;&#x201A;transientâ&#x20AC;&#x201A;orâ&#x20AC;&#x201A;hotelâ&#x20AC;&#x201A;housing.Â Theâ&#x20AC;&#x201A;newâ&#x20AC;&#x201A;statementâ&#x20AC;&#x201A;givesâ&#x20AC;&#x201A;condominiumsâ&#x20AC;&#x201A;the twoâ&#x20AC;&#x201A;waysâ&#x20AC;&#x201A;toâ&#x20AC;&#x201A;complyâ&#x20AC;&#x201A;withâ&#x20AC;&#x201A;fHAâ&#x20AC;&#x201A;regulations. Y

01.14

CoNDoâ&#x20AC;&#x201A;LIfESTyLES

1213.5658 CL[0114]40pgrMSTR.qxp_Layout 1 1/19/14 11:14 AM Page 30

CoNDo LIfESTyLES

by Sal Sciacca - Chicago Property Services

Top 10 Ways to Avoid Emergencies As a board member and homeowner at your community association, one of your main responsibilities (regardless of whether you have a community property management company or not) is to properly maintain the common elements of the association and to avoid maintenance emergencies such as floods and life threatening events such as fires. fires clearly are the number one cause of deaths and causes the most amount of damage while water leaks are the most common cause of damage within community associations. In this article, you will find the most common scenarios that cause maintenance emergencies and life threatening events and the ways to AvoID these scenarios. 10. Sump/Ejector Pumps – It is very important to frequently check the sump pumps (annually at minimum, quarterly is preferable) and if possible install a power backup system to ensure the sump pumps continue to operate in a power outage scenario. In some cases, it might make sense to install a backup sump pump that will automatically turn on if the 1st sump pump fails. failed sump/ejector pumps is one of the more frequent reasons why condo associations experience water damage and the damage is often quite smelly! Proactive replacement of sump pumps every 5 to 7 years is a great way to avoid headaches and will help avoid water leak emergencies. 9. Outdoor Grills – When warmer weather comes to Chicago, many people love to grill outdoors. When that happens, it is important that homeowners refrain from certain activities that could potentially create fire hazards and life threatening emergencies such as charcoal grill usage. In fact, according to the National fire Protection Agency, 50% of all fires created by gas or charcoal grills start on balconies or porches. It is recommended that each spring season, a

notice is sent out to ALL homeowners (and tenants) about the importance of following safe grilling practices. It is also advised that the community associations maintain fire extinguishers around the entire property. Taking proactive measures is always a much less expensive approach especially when it comes to fires! 8. Frozen Water Pipes – When the chilly Chicago winter hits, the temperatures often go below freezing and sometimes dip into negative territory. What that means is that pipes that are not properly insulated are at HIGH RISK of freezing and bursting. What is even more risky is having fire sprinkler pipes bursting. These pipes will cause even more substantial damage to your community association property. In order to minimize these circumstances, have your fire sprinkler pipes checked annually and make sure that all areas of the community association including garages, vacant units, community rooms, and club houses are heated at ALL times during the winter months. The temperatures in all areas should remain at about 50 degrees or higher. In extremely cold tempera-

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tures, it is advisable to turn on the hot water faucet so that a very slow drip flows and this step can often times prevent freezing pipes from occurring and bursting. Water flow helps minimize pipe freezing so fire sprinkler pipes that usually have no water flow tend to freeze before other pipes. 7. Dryer Vents – Dryer vents can cause fires. The leading cause of dryer vent fires is due to the improper cleaning of lint traps, vents, and the immediate areas surrounding the dryers. It is advised that community associations, especially condominium associations, ensure that all the dryer vents are free from obstructions, especially where they exit the property and are properly maintained. In addition, it is advised the the community association maintain fire extinguishers around the property common areas and that homeowners maintain fire extinguishers within their homes. 6. Washing Machines – Improper maintenance of washing machines causes a fair amount of water leaks and floods within condominium associations. It is advised that homeowners are educated and reminded of the importance of checking the drain hoses and plumbing connections to the in-unit washing machines on a regular basis. Some community associations adopt and enforce a mandatory washing machine hose replacement resolution to avoid the potential of flooding especially in mid-rise and high-rise buildings. Proactive education and regular reminders of best practices to avoid leaks and floods is always a cheaper and more stress free approach. 5. Aging Electrical Wires and Systems – Should it be up to a homeowner to determine when outdated electrical wiring is upgraded? Should the association require upgrading of all outdated wiring components? Either way you look at it, the facts are that malfunctioning outdated electrical wiring and systems are one of the LEADING causes of fires within a home and community association. These issues should be of particular concern to board members living in community associations that have wiring and electrical distribution systems that are 30 years old. I can personally attest to a situation where a homeowner, who was living in an old vintage building with very old outdated wiring, was complaining about flickering lights and upon further investigation, an electrician found an electrical extension cord within a wall actually connected and conducting electricity. of course I immediately notified the board of this circumstance and advised that the association

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1213.5658 CL[0114]40pgrMSTR.qxp_Layout 1 1/19/14 11:14 AM Page 31

BoARD BASICS

conduct a more detailed evaluation of the building’s electrical systems. The board replied that they did NoT want to further investigate due to a shortage of funds.

responsibility to maintain the flue pipes? Regardless of who ultimately is responsible, wood burning fireplaces can cause fires if not properly maintained. Ideally, the flue pipes should have a newer sheet metal liner rather than simply exposed inner bricks that can allow smoke and soot to enter into people’s condos while traveling up the chimney shafts. Additionally, the fire places should be checked by a professional fireplace technician annually. There are many ways that fires can start but educating homeowners and taking proactive steps as a Board of Director will greatly diminish the possibility of fires.

4. Candles – In case you haven’t noticed, candles have grown in popularity over the last 10 years. unfortunately, so have the number of fire incidents caused by candles. The leading cause of candle fires is due to having combustible materials too close to the candle flames which results in a fire. Research has shown that Christmas day, Christmas Eve, and New year’s Eve rank 1st, 2nd and 3rd peak days of the year for candle fires. As a result, it is advised that community associations educate and remind homeowners the importance of practicing safe candle usage. Simple reminders to the homeowners can help save lives and help save unnecessary damage and headaches to the association homeowners.

1. Sewers and Drain Pipes – one of the most common causes of maintenance emergencies for community associations is due to plumbing backups and clogs. These emergencies are frequently due to the lack of preventative plumbing maintenance that should be part of an overall preventative maintenance plan. Associations should have plumbing maintenance performed at least once annually for all major drain lines and sewer lines and should have all catch basins cleaned out during the plumbing maintenance service. It is usually much cheaper to have a plumber come out during normal business hours to perform proactive plumbing maintenance versus calling out a plumber at 2am on Super bowl Sunday. unfortunately, some associations and board members have a fear of spending money and wait until issues become emergencies before taking action. This however ends up costing the association significantly more money and creates many more headaches than it would have otherwise through a more proactive approach.

3. Water Heaters – In unit water heater tanks are fairly common in certain newer community associations but they DoN’T last forever. The average life for a typical standard hot water tank is about 10 years. Board of Directors should expect hot water tanks to fail now for buildings built around 2003 or earlier assuming the homeowner has not already replaced the tank. The question that comes up in my mind is the following ”Should the association intervene and require homeowners to proactively replace their individual hot water tanks through an amendment of the governing documents?”. Regardless of your position, it is advised that the homeowners are educated and reminded that it is important to have their hot water tanks checked regularly for rust and leaks. furthermore, it is recommended to proactively replace hot water tanks at or around the 10 year mark in order to avoid potential leaks and flooding scenarios, especially in mid-rise and high-rise buildings.

In summary, Board of Directors have a fiduciary responsibility to maintain the association. And it is usually more cost effective to take proactive steps to maintain the building and to educate and remind the homeowners on what are safer ways to live within a community association. your association budget will thank you! Y

2. Chimneys, Vents and Wood Burning Fireplaces – Does your community association have wood burning fireplaces? Are your fire place flue pipes properly maintained? Is it the homeowners’ responsibility or the association’s

Tom Engblom

Larry Myers

CMCA AMS PCAM

Assistant Regional Account Executive

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03.14.14

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The Montgomery, DK Condo and ISED Announce Implementation of KISBI Innovative Smart Buildings Solutions The Montgomery, DK Condo and the Institute for Sustainable Energy Development announced on November 22, 2013, the deployment of next-generation energy efficiency technologies at The Montgomery, a 245-unit, 28-story luxury condominium tower located in Chicago’s upscale River North neighborhood.

s a part of the Korea Illinois Smart Building Initiative (KISBI), the projects at The Montgomery include a series of smart building demonstration projects that will reduce energy consumption at the building by as much as twenty percent (20%). These demonstration projects, which include the implementation of advanced metering and monitoring devices, building automation, and enhanced building energy management systems will also allow The Montgomery to serve as a national model for large residential building participation in demand response and energy management programs. The

Montgomery was selected from among 100 other communities in the DK Condo portfolio based upon its structural and operating characteristics that best matched the criteria established by the consortium. KISBI, a joint-initiative to prove the benefits of Smart Building energy efficiency technology in Illinois, has been jointly funded by a $1 million grant from the Illinois Department of Commerce and Economic Opportunity matched by more than $2 million of foreign direct investment by a consortium of South Korean enterprises led by the Korea Smart Grid Institute. Korean KISBI partners include KT Corporation, which provided building

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energy management systems to The Montgomery and NARA Controls, which provided building automation systems. “The Montgomery has committed itself to continuing to improve the environment while serving as the national model for cutting-edge, energy-saving technologies in condominium buildings,” said Michael Riordan, President of The Montgomery on Superior Condominium Association. “Our participation in the KISBI Initiative and our partnership with KT and NARA Controls has helped us to realize our vision and has made us a model that we hope other Chicago condominiums will replicate.” The Montgomery project was designed to make the 28 floor luxury condominium building more energy efficient by making the building “smarter.” This was accomplished by a three phase process. First, DK Condo led an Illinois team that installed additional meters

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INDuSTRy HAPPENINGS

and monitoring devices on the building’s mechanical systems to capture more accurately when, where and how much electricity the building is using. Next, NARA Controls supplied additional building automation systems, which allow building engineers to automatically change the usage patterns of these mechanical systems based on the information they received from the monitoring devices. Finally, KT Corporation supplied building energy management systems that provide immediate information on when to make electricity saving shifts on the basis of enhanced analytics that further enhance the effectiveness of the new monitoring and automation equipment. These systems will also allow The Montgomery to participate more effectively in energy efficiency programs like demand response programs, which will allow the building to earn revenue for reducing its electricity consumption. “We are proud to support The Montgomery in showcasing the energy efficiency benefits of smart buildings in Chicago,” said Tom Taylor, vice-president at DK Condo. “Demonstrating that home-owners and asso-

ciations can use smart building technology and alternative energy programs will save buildings and associations money while they reduce their impact on the environment. This opens up entirely new markets for energy efficiency products in Illinois.” “Many buildings have resisted moving aggressively to enhancing their automation or analytics because of cost concerns,” said Andrew Barbeau, President of the Institute for Sustainable Energy Development, a partner in the KoreaIllinois Smart Buildings Initiative. “We believe that the results of the KISBI Initiative will prove that enhancing building automation and energy management will benefit businesses and landlords in the short-term and the long-term.”

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About The Montgomery: Built in 1972 as the corporate headquarters of Montgomery Ward & Co., The Montgomery is a 28-story tower designed by Minoru Yamasaki. It is one of only two Chicago buildings designed by Minoru Yamasaki, who also designed the World Trade Center in New York. In 2004, the tower was renovated by Chicago-based Centrum Properties, with contributions from Skidmore, Owens and Merrill and Pappageorge/Haymes as a 245-unit luxury condominium. Y

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By David Mack

Hot Topics for Community Associations: Energy Benchmarking, Bed Bugs, Rentals, Life Safety and More A panel discussion on various hot topics was held at the Condo Lifestyles State of the Industry seminar and luncheon.

airre Dever-Sutton moderated this segment of the program and introduced the speakers, the list of which was topped by Karen Weigert, Chief Sustainability officer of the City of Chicago with a supporting cast that included Elena Lugo of firstService Residential, Judy Rowe of Community Specialists, Natalie Drapac of The Habitat Co. and John Santoro of Lieberman Management Services.

Energy Benchmarking The opening comment by Dever-Sutton was, “everything we’re going to discuss affects our industry. We’re lucky to have Karen Weigert here to discuss energy benchmarking.” (The topic was the subject of a recent article in Chicagoland Buildings & Environments.) Weigert began her remarks by observing, “at

the big picture level we are working to make Chicago a very sustainable City.” She referred to a program entitled Sustainable Chicago 2015, which was announced by Mayor Emmanuel last fall and which describes what the City is doing and how the efforts are impacting Chicago. one recent undertaking she mentioned was the Bloomingdale Trail, which involved the City converting an abandoned rail line into a park. Turning to energy, Weigert said the City had gathered some very significant data on local energy usage. “All of us are spending $3 billion a year to heat, cool and operate our buildings.” she said adding that the Chicago Energy Benchmarking ordinance is to a great extent aimed at trying to control and bring down that collective expenditure. The ordinance, “is all about information and will require disclosure but not investment

in buildings. We think, though, that the information will be transformative.” Weigert then went on to describe some of the important aspects and requirements of the Energy Benchmarking ordinance. She noted that the first buildings that must provide energy use data- by June, 2014- are those designed for municipal or commercial use in excess of 250,000 square feet. Next, commercial and municipal structures whose size falls between 50,000 and 250,000 square feet must provide the data by June, 2015 along with residential buildings greater than 250,000 square feet. “By 2016 all commercial, residential and municipal buildings that are 50,000 square feet or greater must comply,” Weigert explained.

Portfolio Manager Software She described how owners and managers will benchmark the information using the software program Portfolio Manager. Beginning in 2014 the City and its partners will be providing extensive training and free benchmarking support for those

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CoNDo LIfESTyLES who need it. The data can come from various sources- from owners and managers who know their buildings, from Com Ed and eventually from People’s Gas, “This is use data, not cost data,”said Weigert, referring them to the ultimate goal of data gathering. “We think the information will lead to energy efficiency.” Weigert noted that some buildings have already begun their information gathering in a proactive approach. “for some buildings this will be an extension of what is already being done,” she said. She also pointed out that New york City, which has been out front in the effort to promote conservation of energy, has found that, “the most energy efficient buildings are those built before the crash of 1929.” WWW.CityofChicago.org/EnergyBenchmarking The local ordinance was passed by the City Council and signed by the Chicago Mayor in September. “We are drafting the rules and regulations now,” said Weigert. The City has put together a website- www.cityofchicago.org/energybenchmarking-to let owners learn all there is to know about the program. She then referred to the frequency of data submission which will be on an annual basis after the first year. verification of the data by an inhouse or 3rd party professional engineer, architect or other trained person will be necessary the first year and every 3rd year thereafter.

Weigert said when seeing the data and comparing their energy usage to other similar buildings and finding their consumption excessive, owners will ideally be inspired to make retrofits to reduce energy waste. Some financial support, particularly through programs managed by ComEd and People’s Gas, are available to assist owners in making improvements. “I hope buildings take advantage of subsidy dollars that are out there,” she said. “There’s a ton of money available to make buildings more cost efficient.”

Energy Benchmarking Q & A A Question & Answer dialogue with the audience followed. Q/ Where does this go? If buildings are not energy efficient will the City be asking buildings to do something about it? A/ We didn’t make any requirement that you have to make improvements. This is only about information transparency. We thought doing an information ordinance only was the way to go. New york does require specific action but we do not. Q/ What will be required of individual unit owners? A/ The ordinance is focused on whole building energy data. All of aggregate electricity data can be gotten from Com Ed. Peoples Gas is currently working toward doing the same thing. Q/ Is the website ready to use? A/ It’s in draft from but will be up in January 2014.We’re going to have a public comment

period on the rules and regulations in January and we’ll have the website up just before that. Q/ What’s the initial cost of monitoring equipment? A/ There is no monitoring equipment required with the ordinance. (Benchmarking is done using the Portfolio Manager software program as previously noted.) There is a potential cost in the data verification necessary every third year. Panelist John Santoro commented at this point in support of energy benchmarking. “This is not a bad thing,” he said. “It will be good for everybody. It’s great to have cheap energy. It’s better to use less.” Q/ What if a building does not comply with the benchmarking ordinance? A/ The goal is that every covered building will comply but there are fines if they don’t. But it will be easy to comply. Q/ Will there be something that can be given to board members so they can understand the program? A/ We will provide a simple cheat sheet and the website will be in simple, plain English. A fAQ sheet is now available (given to audience members.) Q/ After the ordinance was passed some aldermen tried to take out residential condos. What happened to that? A/ The ordinance as passed in September hasn’t been changed. (There is some controversy about the language of the ordinance being ambiguous as to whether it applies to residential condos, a point that has seemingly yet to be clarified.)

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S P E C I A L f E AT u R E In closing, Weigert said, “Thank you for inviting me here today. We look forward to good input to ensure that it is simple to comply with the energy benchmarking ordinance and to many examples of buildings that chose to become more energy efficient.”

Chicago Bed Bug Ordinance Judy Rowe of Community Specialists led a discussion on the Chicago’s Bed Bug ordinance through the medium of questions and answers. Q/ How should associations handle this and what should residents do? A/ officially bed bugs are now a public health problem. The ordinance is designed to provide a level of protection for owners and tenants. Treatment of any infestation must be by licensed professional. There can be no self treatment. The ordinance requires that residents be informed about bed bugs and that they can come from a variety of sources. They’re everywhere and the ordinance now requires us to deal with them. Q/ What is the responsibility of owners and tenants in a unit that has bed bugs? A/ owners must notify management of any suspected infestation. owners cannot self treat. As said already, a licensed professional pest company must be used. An association must adopt a plan on dealing with bed bugs and keep it on file. It doesn’t have to be sent to the City. And associations or landlords must provide a brochure to their members or new tenants to educate them on the potential problem.

s Session moderator Tairre Dever-Sutton of Tairre Management (at podium) led a panel of property management experts that included (from L to R) Elena Lugo-FirstService Residential, Judy Rowe-Community Specialists, Natalie Drapac-The Habitat Company and John Santoro-Lieberman Management Services. The group discussed a number of hot topics including energy benchmarking, life safety/fire protection, bed bugs, rentals/leasing of condo units, amending association declarations, and various other issues. Q/ Must any record be kept of a bed bug problem? A/ Aside from having a plan on file, the ordinance requires associations to maintain a record of any problem and what was done about it. Q/ Who bears the cost of treating for bed bugs if a unit owner advises the board he has a problem? A/ That’s the association’s choice. Some associations will bear the cost to assure notification by owners who have a problem. others will bill the cost to the owners. Santoro added an observation here. “If you can identify the source of an outbreak you have a better

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chance to charge the cost back to the owners.” Rowe commented further. “It’s going to be a case by case basis (charging the cost). you have to treat the problem first and worry how to pay for it later. The City can levy fines up to $2000 for noncompliance with the ordinance. It is going to come up with a sample plan for condo associations which should be at its website in early 2014.” Q/ What are the most common sources of bed bug infestations? A/ There are several common sources and bed bugs can be picked up anywhere. Common sources

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CoNDo LIfESTyLES are college kids returning home from dorms, travelers returning from hotel rooms and they can be picked up in many public spaces. Dever-Sutton noted that some people believe you can kill bed bugs by freezing them. ”That won’t work, it’s heat,” she said. Rowe closed out the bed bug dialogue by stating that associations could levy fines against unit owners who don’t notify them of a bed bug infestation.

Life Safety & Fire Protection Update Discussion about life safety requirements for Chicago high rise buildings was led by Natalie

Drapac of The Habitat Company. Drapac noted that the deadline for compliance with Chicago Life Safety ordinance is January 1, 2015. She referred audience members to Chicago’s website for more guidance on life safety obligations. And to show any City inspector what steps an association has taken to bring its building conditions up to City life safety standards, she said, “I recommend you create a life safety file to include a list of contracts and improvements you have made.” Santoro underscored the final 2015 deadline by adding, “it’s not at all likely that the City will extend the date for compliance again,” and then emphasized how important compliance is. “This is something that could save lives some day.”

Cost of Life Safety Compliance The question came up as to how associations can handle the cost of compliance with life-safety requirements. Drapac explained her experience by noting that costs have not been as exorbitant as once perceived. To those associations who have not yet considered how to pay for any work needed, she said, “you have to act now to get the fundseither from the reserve or through special assessment. The time for waiting is long gone now.” Briefly the discussion turned to the retrofitting of residential buildings with fire sprinkler systems, which had been proposed in the legislature earlier but withdrawn due to protests by a variety of industry groups and individuals. Dever-Sutton said the fire sprinkler ordinance may find new life. “If it comes up, we need to be prepared”

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The last subject on the panel’s agenda was leasing and rentals of units in community associations, which, “is a very controversial topic,” said John Santoro of Lieberman Management Services, and, “it has become increasingly popular because of the state of the economy, “adding that each association should take a step back and think of leasing as a potential advantage to their buildings. While there are obvious advantages to a high owner occupancy ratio, with regard to leasing, associations, “now have to make as strategic business decisions”no longer automatically adopting leasing restrictions. “Is it better to prohibit leasing and have units where the assessment may not be paid by the absentee owner or units are being foreclosed because investors were prevented from leasing them?” Santoro asked. “Some owners may slip into foreclosure because the only way they can pay the assessment is if there are renters in their units.”

Consider Leasing Restrictions Santoro advised that any association pondering a leasing restriction should seriously consider the downside to doing so. If you are going to, “then determine if you can do it by rule or if you must amend your governing documents,” he saidby consulting your legal counsel. But, he added,” I would advise you do a declaration change regardless of what others might recommend.” In closing, Santoro said, “there’s a lot of flexibility in doing this but it’s not as easy a decision as it used to be,” in fact, “more associations are now deciding not to do it than do it,” primarily for economic reasons. Amendments to governing documents require approval of a substantial percentage of unit owners, which can be a stumbling block to passage. “Two of my buildings have tried to adopt leasing amendments,” said Dever-Sutton. “one succeeded and one didn’t.” She recommended that a board establish a committee to consider the idea of a leasing amendment and working together, “they should think it through carefully with everyone giving a lot of serious thought to it. It takes a lot of effort to get an amendment passed.” Y

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CondoLifestyles

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State-of-the-Industry 12.12.2013

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from page 9 / Cover Story

State-of-the-Industry

benefit from the LCE must give concurrence to the installation.

Ordinary Amendments energy devices on common elements. A board can also license an individual or entity to install these systems on the common elements. Any installation on a common element is prohibited from affecting any owner(s) without the consent of the owner(s) and before any device is placed on a limited common element, whichever unit owners

Act 1606 clarifies Section 27 of the Condo Act regarding ordinary amendments by establishing that the maximum affirmative vote needed for an amendment shall be threefourths of all unit owners. Also, if other sections of the Act include specific provisions concerning amendments, those provisions will apply even if different than the three-fourths

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maximum pertaining to ordinary amendments.

Manager Licensing Act 595 updates the Community Association Manager Licensing and Disciplinary Act. The modifications adopted require business organizations offering management services of any type to obtain a license as a community association management firm. (See Section 50) In addition, each management firm must have on staff a supervisory community association manager who must meet additional education and examination standards (Sections 42 & 50). A grandfather provision requires that an application to be a supervisory manager be submitted within 6 months of the effective date of the requirement but the requirement will not be effective until 12 months after rules are enacted. “The rules have not yet been implemented,” said Comstock. “There will first be a public comment period. Now we can only await those rules.”

Proposed Laws That Did Not Pass Certain bills that had been proposed were not adopted by the legislature. Senate Bill 1602 would have increased the rights of a tenant after a foreclosure by requiring the lender to continue leasing to existing tenants. House Bill 2861 would have prohibited associations from interpreting their governing documents to ban day care centers in homes unless the documents had such a specific ban therein. House Bill 2645 and House Bill 2646 would have changed what associations could receive after a foreclosure sale. No bills were approved that would change the procedure for the determination of what an association would receive under those circumstances.

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Included with Comstock’s handout was a copy of the Chicago Landlord Tenant Ordinance. She made it clear that leasing of units (in associations) must follow that law. “We want to make sure that associations taking possession of units are in compliance with the ordinance in Chicago.” Citing an example where an association had not, she said,” one tried to evict a tenant who got an attorney who asserted the association hadn’t complied with the ordinance and the association had not.” Y

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“Our high-rise is retrofitted with fire sprinklers because it makes good business sense.” “Adding a fire sprinkler system in the Uptown Regency high-rise apartment building decreased our insurance rates and increased the value of our property. In fact, we believe some of our tenants chose our building because of the security provided by the fire sprinkler system.” - Jeffrey Michael Although Chicago’s fire sprinkler ordinance only requires life safety evaluations for residential high-rise buildings, the Illinois State Fire Marshal's Office requires existing high-rise buildings to be equipped with fire sprinklers or an engineered life-safety system according to NFPA 101: Life Safety Code (2000 edition). Life-saving fire sprinklers are easier to retrofit into a high-rise than most people would think, since they can be connected to the existing standpipe system. To find out how to use the existing infrastructure of a high-rise for a fire sprinkler system retrofit, please visit HighRiseLifeSafety.com/ retrofitting-fire-sprinklers.html or call NIFSAB toll-free at 1-866-264-3722. For more information about the Uptown Regency at 5050 N. Sheridan Road in Chicago, visit Horizon Realty Group’s website at www.HorizonRealtyGroup.com.

Jeffrey Michael The Uptown Regency 5050 N. Sheridan Road

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