Blog

 

As a practitioner for many years in the area of association law, I have been aware of a long-standing difference of opinion among association attorneys as to the obligation of a condominium association to pay for damages caused to the Common Elements (CE), Limited Common Elements (LCE), and to the Units and personal property of owners by the failure of the CE. An example would be water damage caused by the failure of the roof to keep rain water out. On the one hand, some association attorneys argue that an association’s only obligation with regard to such an event is to repair and replace the CE, up through the primer paint covering the walls of a unit. On the other hand, I (and various other attorneys) believe that if an association is responsible to maintain, repair and replace the CE (the usual formulation) which fails to do its job, the association is responsible for all of the damages that result from that failure. The whole question is complicated by variations in relevant declaration provisions and also by the duties of both an association and its unit owners to maintain casualty (property) and/or liability insurance. While it is possible that the interplay of liability law, declaration provisions and insurance may result in an association’s out-of-pocket liability being limited to the repair and replacement of CE up through the primer paint, I believe that such an outcome should not be assumed to be the customary outcome. Indeed, it will often not be the customary outcome.

What is very interesting to me is that there is no controlling caselaw in Illinois answering the question. Although CEs fail every day, causing damage to both real and personal property in condo associations, it appears to be one of those matters that does not get litigated (or at least not litigated at the appellate level).
As a further matter, I want to recognize that it is possible that CE could fail for reasons beyond an association’s control. The roof could be struck by lightning; an exceptionally heavy snow or rain could fall. Such “occurrences” (an insurance term, which will be relevant later on in this article) from nature are not what I am trying to address. However, an association could have a routine and apparently proper repair/replacement policy on which it follows though in a timely manner, with the result that it could argue that it has not breached its duty to keep the roof (or the particular CE at issue) in good repair. Still, I have found that such an argument usually has holes in it: Repairs may have been timely done, but the contractor hired to do the job may not have done it properly; the repair/replacement policy misunderstood the useful life of the CE with the result that it was in fact “older” than the Board realized; some prior event damaged the CE in a way that could have been noticed but wasn’t. I am not arguing that an association has “strict liability” for a failure of a CE. But it has been my experience that an extremely high percentage of CE failures are avoidable with proper attention from the Board. It is those CE failures, which raise the issue of breach of duty, to which I address myself.

In order to examine the problem at hand, I want to go back to basics:
In a condominium property, everything is either Unit or CE. See Section 2(e) of the Illinois Condominium Property Act, 765 ILCS 605/1 et seq., the “Act”. If and to the extent that a property has LCE, the LCE are simply “a portion of the common elements as designated in the declaration as being reserved for the use of a certain unit or units to the exclusion of the units…” Act, Section 2(s).
The boundaries of units at an association are defined on the plats of survey required to be attached as an exhibit to the declaration. Act, Sections 5 and 6. An example of a common formulation of the definition of the boundaries of a unit is: “The horizontal and vertical planes forming the boundaries of a unit coincide with the top of the finished floor, bottom of finished ceiling and interior face of perimeter finished walls.” Thus a unit is a cube of air ending at the finished walls, floor and ceiling. In the absence of any other provision in the declaration, the finishes on the walls, ceiling and floor (paint, wallpaper, molding, paneling, etc.) are also considered part of the unit. Act, Section 4.1(a)(2).

Important: The Act does not control many aspects of the issues discussed below. Since there is no one standard form of condominium declaration in Illinois, the following analysis cannot be deemed to be always correct for every condominium association. What follows are what I consider to be general rules in this area. It is always possible that a given declaration may have language that mandates a different result. Review of any given situation by the association’s attorney is always proper.

A. Maintenance, Repair and Replacement (“MRR”)
The Act makes the association, by its board, responsible for the maintenance of the CE. Act, Section 18.4 preamble and (a). Every declaration I can remember seeing (and I have seen hundreds) makes the association responsible for the MRR of the CE.
Somewhat oddly, the Act says nothing at all about who is responsible for the MRR of the units (although as will be seen later, the association is obligated to insure the entire building, at least up to the bare walls, bare floors and bare ceiling of the unit-i.e. through the primer paint, but not the finishes). Since the units are separate real estate, title to which is owned by the unit owner, logically the MRR of the unit should fall to the unit owner. Virtually all declarations I have seen make a unit owner responsible for the MRR of the owner’s own unit.
Responsibility for the MRR of LCE is variable. If a declaration says nothing specifically about the LCE, then the MRR of the LCE are treated the same way as the CE (remember that LCE are just a subcategory of CE). But often, especially in more modern declarations, there is a separate provision that makes the relevant unit owner(s) directly responsible to maintain some part or all of their appurtenant LCE. Or a declaration may give the association the right or even obligation for the MRR of the LCE, but then allow the association to charge the cost back to the appurtenant unit owners. This is authorized under Act, Section 9(e).
So the result is that in order to analyze the obligation for the MRR of a part of a condominium, first you must determine what part of the building is at issue: CE, Unit or LCE. Even then, you must review the declaration to see who has the obligation for the MRR of that particular part of the building.

B. Common Elements Failures
To make this discussion slightly easier, I want to use the example of the roof as a CE. The roof of a condominium building is almost always expressly deemed a CE. And, if there is a rainstorm and the roof leaks, it is easy to see understand the consequences of such a leak.
If a roof leaks, virtually every type of property at a building can be affected. The roof itself, the hallway walls, walls interior to units, the finishes on the walls, floor and ceiling of a unit, even an owner’s personal property inside a unit, like furniture, rugs and clothing, can all be damaged by water from a leaking roof.

C. A Pure Liability Analysis
In what follows I am assuming that no person caused the roof to leak. That is, noone went up on the roof and poked holes in it or took any other actions to cause the leak. If someone does damage CE, whether intentionally or through negligence, virtually all declarations make the person doing so liable for all injury and damages caused by his/her actions. See, e.g. Gelinas v. Barry Quadrangle Condo. Assn., 2017 IL App (1st) 160826, para. 18.
Rather, the situation I am positing is that the roof is, for whatever reason, not properly maintained, and that as a result the roof begins to leak.
By contrast, if the cause of the water leak is from a unit (overflowing tub or other water leak internal to the unit), the Act, at Section 9.1(a), makes the unit owner responsible for all injury and damages cause by the leak. “A unit owner shall be liable for any claims, damages, or judgment entered as a result of the use or operation of his unit, or caused by his own conduct.”
No similar statement exists in the Act for association CEs.
As a general proposition, the party who has the duty to maintain, repair or replace a part of building is responsible for injury and damages caused by the failure of the relevant part of the building. Kallman v. Radioshack Corp., 315 F.3d 731, 737-39 (7th Cir. 2002), rehearing denied. As mentioned above, the Act clearly makes the association, by its board, responsible for the MRR of the CE. Act, Section 18.4(a); See also Spanish Court Two Condominium Association v Carlson, 2014 IL 115342, at para. 21.

Generally speaking, at Illinois common law, the elements of a claim for premises liability are existence of a duty owed by the defendant to the plaintiff, breach of the duty, and injury (or damage) caused as a result. Keating vs. 68th and Paxton LLC, 401 Ill.App.3d 456 (1st Dist. 2010), appeal denied 237 Ill.2d 559.

The duty of the association for the MRR of the roof is thus both statutory (Act, Section 18.4) and per the declaration (a form of contract). The failure of the roof to prevent the leak is a breach of the duty. The injury is the actual damage caused as a result of the leak.

The next question is the measurement of the damages. In Illinois, it depends if the property damaged is beyond repair or not. If beyond repair, then the damages are the fair market value of the property immediately before the destruction, less any salvage value the property may have. If the property can be repaired, then the damages are the cost of repairs necessary to restore the property to its physical condition before the damage. Macy’s Inc. v Johnson Controls World Services, Inc., 670 F.Supp.2d 790, 800-01 (N. D. Ill., 2009). To the extent that personal property is damaged, the damages are the fair market value of the property immediately before the loss. But not the replacement cost. See Benford v. Everett Commons, LLC, 2014 IL App (1st) 130314, paras. 30-32.

So, under a pure liability analysis, the various outcomes are these:

1. If the roof leaks and other CE (e.g. walls of the hallway) are damaged as a result: The hallway walls are CE. The association is responsible both for the MRR of the hallway walls and the roof which leaked. Clearly the association is responsible for the damages to its “own” property caused by the failure of the roof to do its job.

2. If the roof leaks and the perimeter walls (and/or ceiling and/or floor) of a unit (but not the finishes) are damaged as a result: The association is responsible for the MRR of the walls, floors and ceiling which are CE (that is, the walls and ceiling up through the primer coat and the floor often to the finish flooring). Again, because those walls are CE and the roof which leaked is CE, it is the association that has to bear the damages caused by the roof’s failure.

3. If the roof leaks and the finishes on the interior of the perimeter walls (and/or ceiling and floor) of a unit are damaged as a result: The finishes are usually part of the unit (Act, Section 4.1(a)(2)-although the declaration may alter that conclusion), and the unit owner is usually stated in a declaration as being responsible for the MRR of the finishes on the walls of his/her unit. But the issue is not who has the obligation for the MRR of them. The issue is who has damaged them (that is, a liability, not a maintenance analysis). After all, the unit owner is blameless in causing the damages. Thus, the roof CE having caused the damages to the finishes, the association will either be obligated for the MMR of the finishes, or the association will have to pay damages to the unit owner for the damaged finishes, measured as stated above.

4. If the roof leaks and a LCE of a unit below are damaged (such as, for this purpose-a perimeter door): The LCE may be the responsibility of the association for the MRR of that item. Or the LCE could be the responsibility of the owner for the MRR of that item (depending on the declaration). But the issue is not who has the obligation for the MRR of the item. The issue is who has damaged it (that is, a liability, not a maintenance analysis). After all, the unit owner is blameless in causing the damages. Thus, the roof CE having caused the damages to the door, the association will either be obligated for the MMR of the door (if the association has the responsibility for the MRR of the door in the first place). Or the association will have to pay damages to the unit owner for the damaged door, measured as stated above.

5. If the roof leaks and personal property (furniture, clothing, rugs) of a unit owner is damaged as a result: The unit owner’s personal property is never the obligation of the association for MRR. Here again the unit owner is blameless in causing the damages to his/her personal property. To the extent of the damage to the personal property (as measured as above) the association will be responsible to the unit owner.

D. Insurance at an Association

The association is obligated by statute to carry both property (casualty) insurance and liability insurance. Act, Section 12(a). The property insurance is required to be in the full insurable replacement cost of the property (including CE, LCE and units, up through the primer coat on the walls, subject to certain board decisions). Act, Section 12(a)(1). If a unit owner makes certain improvements to his/her unit, the increased value of the building doesn’t have to be covered by the property insurance. But if such improvements are covered, the association may bill the increased premium costs for those improvements back to the relevant unit owner. Act, Section 12(b).

The amount of any deductible under the association’s policies is a board decision, not governed by the Act.

From the unit owner’s side, insurance is more hit or miss. Most more modern declarations require an owner to carry property insurance on the unit owner’s property anywhere on the property (whether inside the unit or, for example, in a storage area). In addition, a unit owner is often required by the declaration to carry liability insurance-that is, insurance against the unit owner or the unit causing injury to a 3rd person or damage to a 3rd person’s property. The Act, at Section 12(h), allows (but does not require) an association’s declaration (or bylaws) or rules to mandate that each unit owner have liability insurance. There is no comparable statute re unit owner property insurance.

Finally, many declaration have a provision that states some variation of the following: “Each Unit Owner hereby waives and releases any and all claims which he or she may have against any other Unit Owner, the Association, its officers, members of the Board, the Declarant (developer) the managing agent of the Association and their respective employees and agents, for damages to the Common Elements, the Units or to any personal property located in the Unit or Common Elements, caused by fire or other casualty, theft, vandalism and each and all other causes to the extent that such damage is covered by fire or other form of casualty insurance.”

Note that I have seen the last few words have a number of variations, such as: “to the extent such damage is actually covered by fire…insurance”; “to the extent the unit owner has received payment, in whole or in part, from said unit owner’s fire insurance”; “to the extent that such damage is covered by fire or other form of casualty insurance or would be covered by insurance for which the unit owner is responsible to obtain under this declaration”; and other variations.

Each of these formulations can result in a different outcome. If the unit owner has insurance, makes a claim and is paid in full (less a deductible) that is the easy situation. But maybe the unit owner doesn’t want to make a claim for some reason. Or maybe the unit owner doesn’t have the insurance he/she was obligated to obtain. The exact language of the waiver/release section is important.

Note that under Act, Section 12(c), the board can determine who is responsible for damages and cause that party to have to pay the deductible of an innocent unit owner who makes a claim on his/her insurance and who gets paid (less the deductible). In that way, innocent unit owners (or, if the damages to CE are caused by action of a unit owner, then the association itself,) can be truly made whole. See Gelinas, at paras. 20-22.

E. Effect of Insurance on the Liability Analysis.

Let’s return to the 5 situations posited above:

1. If the roof leaks and the walls of the hallway (for example) are damaged as a result: The association’s property insurance is at issue here, as the property damaged is CE. The association’s liability insurance is not at issue, as the damaged party is not a 3rd person, but is the association itself.
A roof leak, not caused by an “occurrence”, may not be covered by the property insurance. If that is the case, the association will have to pay for the MRR of the hallways to the extent the association chooses to do so (after all, the hallways being CE, the association has control of how the hallways look).

2. If the roof leaks and the perimeter walls (and/or ceiling and/or floor) of a unit are damaged as a result: Here again, the property damaged is CE (up through the primer coat), so the association’s property insurance is at issue. The association may (or may not) get insurance proceeds due to the lack of an “occurrence”, but because the damaged walls are CE, the association (not the unit owner) will have to pay to restore the interior walls and ceiling, at least through the primer, and the floor, up to (depending on the definition of CE at the association) the finished flooring.

3. If the roof leaks and the finishes on the interior of the perimeter walls (and/or ceiling and floor) are damaged as a result: My analysis is that since the finishes are often deemed part of the unit (and not CE or LCE), and are on the unit side of the primer paint, the association’s property insurance will not cover the damage. Then the association liability insurance will take over, as the damaged property is being treated as a 3rd party’s (the unit owner’s) property.
The outcome is that the association (and likely its liability insurer) will be liable for the damages under the liability analysis. The only other issue is whether the unit owner’s insurance covers the damage and whether the waiver/release language of the declaration (referenced above) is applicable to mandate such waiver or release.
It could happen that the waiver/release language applies but the unit owner, for reasons of his/her own, does not wish to, or will not, make a claim on his/her property insurance. In that case, the association doesn’t have to pay for the damages, but the unit owner’s insurance hasn’t reimbursed the unit owner. The finishes could remain unrepaired, as the association can claim that, despite its liability, until the unit owner’s own insurance has paid or denied coverage, the association will not know if the unit owner’s insurance coverage will result in waiving or releasing the association’s liability.
Such a situation (finishes remaining unrepaired) is rarely acceptable. So the alternative is for the association (or its liability carrier) to repair the finishes, and then assess the unit owner for reimbursement depending on the outcome of the waiver/release issues.
And as between the association’s property insurance and the unit owner’s insurance (if both arguably cover the same damaged property), the association’s insurance is primary. Act, Section 12(f).

It has been argued that because the CE only run through the bare walls (primer coat) as a matter of MRR, the association’s liability to a unit owner is similarly limited. I do not agree with this. The issue of the extent of the association’s obligation for the MRR of the CE at a building is not the same, in my opinion, as the issue of liability for failure of the CE. In the liability context, the existence of the MRR obligation only goes to establishing who is liable if that part of the building fails to do its job, and is not a limitation on that liability.

I note that it is also possible a declaration may affirmatively make the “interior surface” of the perimeter walls, ceilings and floor LCE of that unit, and not part of the unit itself. Such a provision overrules the default provision of Act, Section 4.1(a)(2). Thus, the finished interior surface, as LCE, could be deemed covered by the association’s property insurance. The exact coverage of the association’s property insurance would have to be reviewed to determine the insurance outcome here. If the association’s property insurance does not provide coverage, the association’s liability insurance still could do so.

4. If the roof leaks and a LCE of a unit below is damaged (such as, for this purpose- a perimeter door): My analysis here is the same as per the last paragraph of no. 3 above.
But, if the doors are treated in the declaration as part of the unit, then the association liability insurance would take over, as the damaged property is being treated as a 3rd party’s property. See also para. 3 immediately above.

5. If the roof leaks and personal property (furniture, clothing, rugs) of a unit owner/occupant is damaged as a result: The association’s property insurance never covers the unit owner’s personal property. But the association’s liability insurance may be triggered. At the same time, the unit owner’s property insurance (if required of the unit owner, or if the unit owner has the same) should cover the damages. Thus, again, the association remains liable to the unit owner. The only issues are whether the association’s liability insurance covers the damage, and the extent, if any, that the unit owner’s own property insurance covers the damages (and/or the effect of the waiver/release language on the liability of the association).

Overall, issues of liability for the failure of the CE as a result of failure to properly maintain, repair and replace them are a complex combination of common law, statutory, documentary and insurance analysis. Basic liability law mandates that the association will, in almost all cases, be liable for all such damages. The Act, and the given association’s documents and insurance may result in that liability being covered by insurance and/or waived/released. But there is no basis, in my opinion, for automatically concluding that, in the ordinary course, the association’s liability for damages to the unit, LCE or the personal property of the unit owner or other occupant, is limited solely to putting the CE, up through the primer paint, back into good repair.

© 2017
Mark R. Rosenbaum

 

Winter, even the mild one we are experiencing, can wreak havoc on your property! Between the snow, ice, wind and cold, lots of repairs are made in the winter that need to be readdressed in the spring. Why are we talking about spring already? Well, spring will be here before you know it and your favorite contractors are already filling their calendars! Regardless of what your needs are, it is never too early to get a scope of work.

Here are 10 tips to get your property ready for spring!

• Get your gutters cleaned! Snow, ice and debris can make a mess of gutters during the winter. Often time gutters get damaged and need to be repaired. Broken gutters can lead to a significant amount of headaches so avoid it by getting them cleaned!
• Did you experience any Ice Damming this winter? Make sure you bring a roofing expert out to reevaluate the damage and make sure the roof is in good shape and any leaks have been properly repaired. The last thing you want is to have more ice damming next winter.
• Water damage can be a problem in the winter from frozen pipes, poorly sealed windows and doors, ice damming, etc. Make sure you get everything sealed correctly since water is an issue year round. Drywall repairs should be completed as soon as the leaks are fixed. It’s dusty, but someone’s got to do it…
• You know all those pot holes we see throughout the winter and spring? Yeah, surfaces don’t like snow, ice or snow plows either! Cracks can form and sections can break and the last thing you need is someone tripping or hurting themselves.
• Regardless of a building’s exterior, dirt, algae and anything attached to it can have a negative impact on its continued durability. Power washing regularly can greatly increase the longevity of your siding and masonry.
• Exterior painting can only be done above a certain temperature depending on the product. With the mostly mild winter, exterior painting season hasn’t really ended, however, if you are planning any major exterior painting projects or have touch-up’s that need to be completed, now is the time to start thinking about your needs! Weather of all kinds can impact a painter’s ability to complete the project quickly and on time. Remember the month of rain in 2015?
• Summer BBQ’s are a wonderful thing, but not if your decks are a mess! Wood decks that need repairing or full replacement take a great deal of time because wood had to have time to acclimate before they can be painted and stained. No one wants multiyear projects so it’s critical to get these projects started as soon as possible.
• Got Rust? Salt is a beast and can tear up your metal gates, railings, etc. Make sure to get it repaired before someone hurts themselves or the rust completely corrodes the metal.
• Lastly, landscaping! Spring is a time for the colors to come back to your property! Make sure you have a landscaping plan in place so you are able to showcase your property at its finest to prospective renters and buyers.

While we’ve had a mild winter, it is always good to make sure your property is looking its best! Remember to always use a licensed and insured contractor whenever possible. Not sure who to use? Your CAI Membership Directory is a great place to start!

 

Alexis Hansen

 

The 2017 Cook County assessment season has begun. This year, all property in the south suburbs will be re-assessed.
After several years of steady market declines, property values and assessments are on the rise again in most places. Over the past two years, assessment increases proposed by the Assessor have typically ranged from 15% to 40% with the largest increases occurring in the highest property value areas. Increased assessments coupled with increased local government spending suggest rising property taxes and the need to aggressively monitor and contest assessments.

Property owners in each of the seventeen south suburban townships will receive a notice of re-assessment in the mail during 2017. This notice will set forth the proposed 2017 assessment. Taxpayers will have thirty days to file an assessment appeal with the Assessor’s office to seek a reduction in the proposed re-assessment.
In a non-reassessment year, the taxpayer will only receive an assessment notice if the Assessor proposes to increase the assessment. However, all taxpayers have the right to appeal during the 30-day filing period for their township, regardless if their assessment has been increased.
To view a list of Cook County townships and a tentative township mailing schedule click here.

What is a re-assessment?
Illinois law requires that the estimated property value and assessed valuation of your property be periodically updated for real estate tax purposes. In Cook County, property is re-assessed at least once every third year. This is called triennial re-assessment. Elsewhere in Illinois the general assessment of property occurs every four years.
The assessment process begins with the Assessor determining the market value of your property. The Assessor then applies an assessment percentage to the market value to determine the assessment or assessed valuation.
In Cook County, residential property is assessed at 10% of fair market value. Commercial and industrial properties are assessed at 25% of fair market value. Properties outside of Cook County are assessed at 33.33% of fair market value.

Why appeal?
The assessed value placed on your development directly impacts the amount of real estate taxes you will pay for each year of the triennial 3-year period (Cook County).
The assessed value is the largest component of your tax bill. The larger the assessment, the larger the tax bill.

How does the Assessor determine the property value for residential condos?
Basically, by analyzing recent sales in the building.

Residential properties are assessed as of January 1st of the current year, using three years of prior sales information. The Assessor typically excludes sales that are not arms-length transactions (a transaction in which the seller and buyer act independently and are not related or subjected to duress by the other party).

What can my association do to lower assessments?
Illinois law allows condo boards to appeal tax assessments on behalf of all unit owners. These are known as collective appeals and is the method preferred by assessing officials.
The assessing officials prefer collective appeals for a few reasons:
• Collective appeals are less work for the assessing officials.
• The assessing officials generally prefer to negotiate with one knowledgeable attorney rather than numerous property owners or their attorneys.
• Collective appeals result in uniform assessment results.

What is needed for a successful condominium association appeal?
Consideration of a 3-year sale history of units within the association is the best evidence for a successful condominium association appeal. Understanding what deductions will be considered by the assessing officials for personal property adjustments is also important. If inadequate sales exist an appraisals can also be used to determine the value of the units.

How long is the appeal process?
The tax appeal process begins with the Assessor. Once an appeal has been filed with the Assessor and a decision is rendered the taxpayer will have a second opportunity to appeal to the Cook County Board of Review. It is not uncommon for associations who have been denied a reduction by the assessor’s office to have a successful appeal at the board of review. The entire appeal process prior to the issuance of the tax bill can span up to a year. Cook County tax bills are paid in arrears and issued in two installments. The 1st installment bill is always 55% of the previous total tax bill and will be due while the appeals are pending. The 2nd installment tax bill is issued and due later in the fall. Assessment reductions granted by the Assessor and/or Cook County Board of Review will be reflected in the 2nd installment tax bill and result in a lower tax bill than otherwise.
Further appeals from the board of review decision can be pursued but may take another year or more before a decision is rendered. If these subsequent appeals prove successful a refund of any excess tax paid will be ordered.

Does our association have to hire an attorney?
The filing of a tax appeal in Illinois is considered the practice of law. As such, corporations or associations must use an attorney. However, individual unit owners can file pro se appeals for their individual units.

Joanne P. Elliott
Attorney

 

Happy Birthday to your Association!! The annual meeting can be a chance for the current board to shine on the past year’s performance, promote the plans of the community, and answer the myriad of questions that come with being a board member. This is usually the meeting with the most residents in attendance. A statement prepared by the board president giving an overview of the past year can set the stage of welcoming community members to the annual meeting. Annual meetings can become contentious as well, so the board and manager should be prepared to explain all procedures in advance. This meeting can change the way business continues within the community.
Planning your communities’ annual meetings shouldn’t be so stressful and mind-boggling if conversations begin at earlier meetings. Discuss with your board members at open meetings the subject of whose term is up and who plans to run again. This starter conversation allows the manager to begin the preparation of the annual meeting and light a candle under new members into running. Reviewing board obligations may ease the minds of potential candidates and encourage them to run for the board.
Before preparing your meeting notice, review the bylaws to determine the terms of the positions up for election. Start a folder and on the inside flap make notes that are easily understood for the next annual meeting. Review required quorum for annual meetings which, as you should know, is not the same as quorum for board meetings. This information should be highlighted in your notice so owners understand the importance of returning their proxies and/or attending the meeting. Determine whether or not a proxy vote is allowed and the type of proxy allowed. Different types of proxies include: quorum only proxies, ballot proxies, designated proxies. Determine if only secret ballots are allowed which must be mailed in as opposed to being hand solicited and carried into the meeting. If you are unsure, you should check with the association’s attorney, who may also prepare the association’s proxy for them. Your meeting notice should contain the day, date and time and include the purpose of the meeting. Clear instructions on the use of the proxy, a candidate form for those wanting to be on the meeting ballot, and possibly an agenda if the association declarations calls for it should also be included.
To prepare for your meeting in advance start accumulating your gifts. A good tool to have is a checklist and box available which holds a reminder notice of what should be brought to the meeting including an owner list for signing in, plenty of pens, a calculator for tallying owner percentages, or a laptop with a spread sheet formatted to tally owner percentages (much easier) and copies of the ballots (at least enough to cover the number anticipated in attendance). It is also a good idea to have copies of the agenda and annual meeting minutes from the previous year available for residents in attendance so they can feel like part of the meeting. You can then use the box/file for ballots being turned in.
Treat your annual meeting like a party, with a cheese, sausage & cracker tray, fruit bowl or cakes and cookies for guests. This information should be included in your invitation to entice owners to attend. If you know your community will have a lot of guests in attendance, it is a good idea to bring a party guest – AKA – a co-worker, or request a volunteer owner to help sign residents in and count proxies. Logging in RSVP’s (proxies) on the sign in sheet in advance will save time especially in communities where it might be a blow out celebration!
Once you have determined that quorum is met for the meeting it is a good time to go over board member responsibilities and talk a little about the time involved in the service. Try not to scare away potential candidates with horrid owner stories, just give a brief summary of planned projects the board will be looking in to.
Welcome residents in attendance with requests for nominations from the floor. Be sure to ask each candidate to stand and introduce themselves and accept their nomination as well as discuss why they want to be a board member. Don’t forget to close the nominations. After all nominees have been added to the ballot, ask those candidates who turned candidate forms in advance to introduce themselves in the same manner. Provide election instructions including how many votes each owner is allowed, and whether it will be cumulative (casting all votes for one candidate) or non-cumulative voting (one vote for each number of votes available). Remind residents that only one owner from each address may cast the votes for their unit.
Always call for volunteers to count the ballots and proxies, so residents are part of the process. Pick at least two (and more for larger gatherings) from opposite sides of the room if possible, to appease the conspiracy theorists. These are the same individuals that probably peek thru the blindfold on Pin the Tail on the Donkey! As manager, you should also be prepared to oversee the tally process or use your helper if you brought one. If votes are cast through owner percentages, you will be able to tally the percentage of votes right on your computer spreadsheet if needed. While we can always hope for smooth annual meetings, some communities request oversight by their attorneys and sometimes even their accountants. The more that come to the party, the less likely someone will contest the results.
Remember, all ballots and proxies must be counted regardless of how many people are running for the board. In some instances the number of candidates equals the number of positions however; the length or term of the positions may be staggered. The candidate with the least number of votes would have the shortest term available. Retaining these ballots and proxies is required for a minimum of one year and owners can request review of the material.
While ballots are being counted residents can be invited to share in all the sweet treats prepared by store or contributed by residents. This gives residents a chance to meet their neighbors and stretch their limbs and may soften any contentious behavior between members.
After all ballots have been tallied (twice if necessary) it’s time to announce the successful candidates, who will bring new experiences and ideas to the community, and if necessary, thank the former board members for their contributions. To prepare your new board members, provide a gift of their own binder complete with a copy of the ‘Board Members Oath’ which you can obtain from CAI’s website. Your binder can include copies of past minutes, the current budget, a current financial report, a copy of the Declarations, Bylaws, Rules and Regulations, Condominium Property Act and/or Common Interest Community Association Act, and anything else you may have specific to forecasted activity within the community. A greener way to do this is to provide a USB drive with all the documents. This way your new members will have the tools needed to be the best board members they can be. One final item, don’t forget to plan your follow up meeting to determine board positions if necessary, and if they are not determined at the annual meeting as well

Sharon Gomez, Foster/Premier Property Management

 

Oftentimes Boards of Directors believe that after the holidays, they can catch a break for a couple of months prior to meeting and discussing Spring projects. They use Winter months as a ‘rest period’ from Board activities.  Yet, the beginning of the year can be used to accomplish important tasks and administrative projects like improving Board operations, putting the association on the right track, or educating owners of new legislation and/or

snow covered building during snowstrom

requirements.

From reviewing legal updates, updating the rules and regulations of the association, to evaluating your maintenance calendar and creating a maintenance responsibilities chart,  below are some items that the board should review at the beginning of the year.

1) Legal Updates

Every year new legislation affects the community association industry. 2017 is no different.  Several new legislations passed in 2016 in the Illinois General Assembly that will affect community associations this year. New laws or provisions went into effect on January 1st, 2017 about closed board meetings/executive sessions, amendments to Declarations in case of error, acceptable technological means, association’s assets, Ombudsperson Act, developer’s rights, etc.

The Board should consult with the association’s attorney to get information and opinions about any new legislation or provisions that may affect the association and the Board’s operation.

2) Rules and Regulations

The Board of Directors should review the violations and complaints brought to the management and/or Board of Directors over the course of the previous year. By reviewing the complaints and violations, the Board may find that they need to amend the rules and regulations.

It is important to follow the rules to keep an association well-run. From time to time, rules need to be updated. Too many times, Boards of Directors have a reactive approach to rules and regulations; they wait until the issue becomes a nuisance before taking action. In addition, the rules and regulations may need to be updated to take into consideration recent municipal ordinances that may impose a burden on the association (for example the new recycling ordinance for the City of Chicago).

It is strongly recommended that associations have any revision of the rules and regulations reviewed by an attorney prior to adopting them.

3) Review your maintenance calendar and evaluate it:

It is important to review and evaluate your maintenance calendar and systems in place on a yearly basis. This allows you to adjust, verify and improve these systems. The Board should review the actual expenses, work orders, and service calls for the past year and may want to survey residents about problems and issues they may have seen but went unreported.

After compiling the information from the review, the board should evaluate the maintenance calendar and seek professional advice for each area that may be a concern.

For example, if the association has been oiling the garage door of the parking garage once a year, and multiple service calls were placed throughout the year, it is likely that the maintenance of garage door is improper and more frequent professional inspections are required. Does the association have extra parts on-site for quicker turnaround on repairs? This is also something to consider during the evaluation.

4) Create a maintenance responsibility chart:

Every association should have a maintenance responsibility chart.  Usually drafted by the association’s attorney, the chart lists all elements (Common Elements, Limited Common Elements, Unit Elements) of the association as described in the Declaration and Plat. The chart also provides who is responsible for the maintenance, repair, and replacement of each element.

The chart helps the association respond to maintenance and repair requests more quickly as well as establish procedures for specific maintenance items. The maintenance responsibility chart is a great tool to educate the owners of your association as well as inform them of their responsibilities.

While many people and animals choose to hibernate for the Winter, association Boards of Directors should not follow this practice.  Using this “downtime” to evaluate some of the administrative aspects of the association will help you get a jump on your year and help the association run much more smoothly in the process.

 

Nicolas Marin, CMCA, AMS, Wesley Realty Group, Inc.

 

Condominium associations often choose to finance major common element repair projects by obtaining bank loans. This type of loan is typically secured by the association’s pledge to the lender of all or substantially all of the association’s assets, including the association’s assessment receivables, operating account and reserves. Effective January 1, 2017, the procedure for approving this pledge of collateral has been streamlined for Illinois condominium associations.

It is fairly common for condominium instruments (particularly older sets of documents) to require that a condominium association obtain the consent of two-thirds or some other supermajority of the unit owners before pledging all or substantially all of the association’s assets as collateral. Previously, Subsection 18.4(m) of the Illinois Condominium Property Act provided that such unit owner approval requirements were enforceable. This unit owner consent requirement often proved burdensome to condominium boards seeking to undertake much-needed common element repair projects and to spread the repair costs over time, rather than having to fund the projects through large special assessments payable within a short time frame. Historically, many condominium boards were unaware that their condominium instruments contained this restriction and were caught by surprise when the restriction was discovered shortly before the scheduled loan closing date and the anticipated commencement of the repair contractor’s work.

Effective January 1, 2017, Subsection 18.4(m) has been amended to provide that all condominium associations have the right to pledge all or substantially all of the assets of the association by a majority vote of the entire board of managers, regardless of governing document restrictions requiring unit owner consent. This change will make loan transactions much more efficient for many condominium associations, obviating the need to obtain a supermajority vote of the unit owners, amend the condominium instruments or restructure the loan transaction due to governing document language restricting the authority to pledge assets.

Condominium associations should remain aware that governing documents may contain other restrictions relevant to a loan transaction which remain unaffected by the amendment to Subsection 18.4(m). Most notably, the governing documents might contain a contract duration limitation applicable to loan transactions having loan terms exceeding a specified number of years. Also, it is important to note that the change to Subsection 18.4(m) only affects condominium associations and does not apply to other types of community associations. It therefore remains advisable for all community associations to consult with legal counsel regarding the scope of corporate authority to enter into a loan transaction during a project’s planning stage, before entering into a binding transaction with a lender or repair contractor.

Scott A. Rosenlund

 

Many of our associations were created and developed in the ‘80’s and ‘90’s. Trees and shrubs were part of thedormant_pruning_trees_winter enhancements and have been thoroughly enjoyed over the years. Unfortunately, in all too many cases, they have been neglected over the years except to remove broken limbs and those that have fallen victim to rot, disease and other misfortunes.

It’s time to do more on a scheduled yearly basis to preserve these important and valuable assets. Take advantage of the many good days during the winter months to help correct this long-standing problem in your association.

Why prune trees during the dormant season?

• Many structural problems and maintenance hazards go undetected during the growing season because they are hidden by foliage.

• Thinning the crown will allow better sunlight penetration to your turf and flower displays, and reduce wind related storm damage.

• It’s good for the tree! Regular care will keep your most expensive landscape investment on the site growing strong. Healthy trees increase property values 5-20%.

• Routine tree pruning will increase your site’s safety by removing hazardous limbs over buildings and cars, and clear important sight lines to lighting or signage.

• Several species of trees should only be pruned during the dormant season to reduce the chance of infection from disease.

• When ornamental trees need to be shaped or have their crowns reduced, working with the structure of the plant is more effective when the foliage is gone.

• Many trees in our urban environment don’t have the room they need to grow to maturity. They will often develop structural problems or suffer damage and become a risk. Developing a regular inspection and pruning cycle for landscape trees is highly recommended to reduce the risk of injury, accident, or liability.

Diccon Lee, Certified Arborist
IL-1333A

brightview_logo_2016

 

con·ti·nu·i·ty
ˌkäntəˈn(y)o͞oədē/house
noun
1. the unbroken and consistent existence or operation of something over a period of time.

The word continuity is often overused in homeowners associations.  Board members and managers often use it as a means of defense against “off the wall” request in the same way that middle school teachers use “insubordination” as the catch all for unruly behavior.

When you stop and consider the reason behind the rule, there really is a value in keeping continuity in a community.  In my travels to various condo & townhome buildings, I have seen a stark contrast in communities that value keeping the buildings “looking alike” verses those that take the “laissez faire” approach to exterior architectural modifications.

The challenge in this regard is evaluating homeowner’s individual expression, style, and preference with the good of the community at large.  Sometimes these two spheres cannot coexist and the community value needs to oversee the individual value.

One of the secrets to limiting the amount of conflict between the individual owners and the association at large is to be clear in guidance regarding the exterior standards for the association.  For instance, in regards to window and door replacement request it is helpful for the association to offer a clear specification for owners to follow.

If the current doors are entry doors with 9 lites and 2 panels below, provide some acceptable replacement models house-doorfor homeowners to follow and also a place where they can purchase the door locally with a contractor who is familiar with the association’s guidelines.  This will limit the amount of frustration for owners who go shopping and have their heart set on a front door with decorative glass.

Additionally, outside of white windows and doors, the exterior color can provide a significant problem in replacement request.  Manufacturers often use the same name but have different shades of the same color.  Inversely, manufactures also in many cases have different names for the same color.  Specifying a product which does meet the needs of the community offers the guidance that the majority of homeowners are looking for such as “Marvin Ultimate Double Hung Windows with Evergreen Clad Exterior” instead of just saying to make sure the windows have a green exterior.

Not only is it important to be specific in the type of windows or doors that residents will install into their homes, but is also equally important to specify some guidelines for the installation method that will affect not only the final look of the product, but also the integrity of the building.

There are some instances when contractors can install a new window while leaving the original window frame in place, while in most cases this will result in a different look for the building.  The glass will be smaller as well as the exterior aluminum trim being wider.  In these cases, it will be difficult for the association to know the method of replacement that is planned unless the contractor is thorough and specific in the contract document.

The community can combat the installation variable issue by working with a reliable contractor or architect/engineer to specify the basic installation requirements such as requiring complete removal of the existing windows and frames in the document provided to owners.  It may be beneficial to require the homeowner and contractor to sign off on receipt of the installation specifications and window/door specification to avoid confusion between the contractor and homeowner.

Lastly, it is important in the architectural process to require the certificate of insurance information from the contractors to avoid claims against the association.  If the association is clear in insurance requirements through a specification for windows and doors, this will avoid the issue on the back end of approval when the insurance provisions of the contractor do not meet the association requirements and deposits have already been made by homeowners.

Essentially, if the homeowners associations become more proactive in providing clear guidance for homeowners in regards to the window and door replacement requirements, then they will be less likely to end up in a regrettable position of dispute with homeowners/contractors after work has been complete.  Encouraging owners to work with reputable contractors providing reputable products will also encourage the quality assurance for the building and will also streamline the architectural approval process.

This will lead to “continuity” which is a key component in maintaining the “curb appeal” of an association and showing potential “owners” in the market that the association has order.  Maintaining the curb appeal, encourages a sense of pride in ownership which also directly impacts the desirability of a given community and ultimately impacts home value.  Start the process of developing a clear and concise specification for window and door replacement in your community today!

Phil Mariotti, CSI, CDT

logo_woodlandwindows_2011

 

If you’ve never seen an ice dam, it actually looks a lot like you would expect. It is an accumulation of ice on along the eave line of a sloped roof. The ice can build and build over the winter months until it is a solid wall that can be ice-damfeet thick and can span the entire eave line of a roof. The reason ice dams are so detrimental is because, as temperatures rise they can trap the melting snow on the roof behind them creating a little pond of standing water. A sloped asphalt roof is designed to shed water moving in only one direction, down and off of the roof. The second water becomes static and starts to accumulate it can easily defeat even high quality, correctly installed roof components and can cause leaks in the home.

Almost all ice dams start inside the home as a result of heat loss through the attic. The most effective way for properties to address ice dam issues is to have a qualified insulation company come in and make a review of the attic spaces. There are three basic things that need to be checked:

  • Is there a proper amount of insulation in the attic?
  • Are the pipes and ducts sealed where they penetrate into the attic space?
  • Is the attic ventilation system functioning properly? Are the soffit vents clear and allowing the intake of cool, dry air?

If the answer to any of these questions is ‘no’ then correcting these issues will go a long way to preventing ice dams this winter. Of course there will be costs in making these improvements, but when compared with how much it costs to get an ice dam removal company out with a steamer, it will be money well spent.

If insulation and ventilation seem adequate, but ice dams persist or if the design of the home makes some or all of the attic incapable of meeting these requirements, then the next step is to consider installing heat cable in the vulnerable areas (usually eavelines, valleys, gutters and downspouts). As long as the heat cable is kept in good working condition and is turned on for the appropriate interval at the correct times, ice dam issues should be minimized if not eliminated completely. There are also professionally installed systems that have sensors that can turn the system off and on for you.

If, for some reason, heat cable is not feasible for your situation, the only other practical preventative measure that can be taken is to diligently remove the snow from the roof as soon as possible after it falls. The snow must be removed before the ice dam forms.

Ice dams and the leaking they cause are not an indication that there is something wrong with the roof. They indicate that the attic is too warm. If this is a persistent problem for any homeowner then a little prevention will go a long ways in controlling in controlling if not eliminating this expensive nuisance.

Wayne Srsen

abcusa-logologo-8-9-11

 

 

It is not unusual for owners to try to enlist the help of the board of directors to resolve disputes with their neighbors. Sometimes, the board is required to assist because a violation of the declaration or rules and regulations has occurred. In many instances, the board tries to stay out of the dispute and asks those involved to resolve it amongst themselves. New rules adopted by the United States Department of Housing and Urban Development (“HUD”), which became effective on October 14, 2016, has made it mandatory for associations to take action to bring a dispute to an end if it involves discriminatory conduct by one of the owners or occupants.

The Fair Housing Act (“FHA”) prohibits associations from engaging in discriminatory treatment based on race, color, religion, sex, handicap, familial status or national origin, which are often called protected classes. The FHA has, for years, prevented associations from targeting protected classes or treating them differently. If an association were to do so, it would be directly liable for it discriminatory conduct. Likewise, associations have long been held responsible for the actions of their employees and agents. This means that an association can be responsible for discriminatory conduct by its property manager.

Under the new rules, associations can be responsible for quid pro quo (this for that) harassment, where the association or its agents condition receipt of any of the benefits of ownership in the association based on an unwelcome request or demand. For example, an association board member cannot request an owner to engage in sexual relations in exchange for reducing fines levied against the owner’s account. While we hope this is unlikely, it can lead to discrimination.

The more likely issue for associations is the interpretation of what constitutes hostile environment harassment. The new rules define hostile environment harassment as unwelcome conduct because of an individual’s membership in a protected class, which is so sufficiently severe or pervasive that it unreasonably interferes with the availability, terms and/or privileges of living in a unit within the association. Beyond being liable for its own conduct and that of its agents and employees, an association can be liable for failing to take prompt action to correct the conduct of third-parties, including owners and occupants.

Before an association could be found liable for the actions of a third party, it must be shown that it knew or should have reasonably known about the discriminatory conduct and had the power to correct it. HUD makes it clear that a court must consider the amount of control the association has over the third party and what legal responsibility it has to correct the conduct. While it can always be argued that an association does not have the power to stop the conduct of its unit owners, it is clear that almost every association does have enforcement remedies that it can use when owners overstep their bounds such as fines for noxious and offensive behavior. The rare exception would be a homeowners association that was developed before 1985 and which has never adopted the Forcible Entry and Detainer Act.

HUD states that a totality of the circumstances test must be used to determine whether hostile environment harassment exists. This means that a court must consider all of the facts of an event to determine whether harassment is occurring. The factors, include, among others, the nature of the conduct, the context in which the incident or incidents occurred, the severity, scope, frequency, duration, and location of the conduct, and the relationships of the persons involved. The conduct can include written, oral or other conduct. Moreover, it does not have to involve multiple incidents in order to be actionable. To determine whether conduct is sufficiently severe or pervasive, a court will look at a reasonable person in the victim’s shoes.

What does all of this mean for associations? Since associations can be responsible for actions by third-parties if they knew or should have known about the discriminatory conduct, they must be more willing to take sides in disputes when discrimination is clearly or appears to be involved. Evidence of discrimination can manifest itself in many forms. If an owner versus owner dispute has any hints of being motivated by a protected class (race, color, religion, sex, handicap, familial status or national origin), the association should consult with its attorney to ensure that it is properly informed on how it must proceed.

Robert M. Prince, Chatt & Prince P.C.

 

 

Governments from around the world, including, China, Germany, Japan, Netherlands, Norway, U.K. and the U.S. are taking steps to combat climate change by increasing access to clean energy technologies and reduce dependence on oil.  One policy focus has been on programs that will accelerate the adoption of electric vehicles. electric-charging-station

A Bloomberg New Energy Finance report suggests that the sale of electric vehicles in the U.S. will hit 41 million by 2040, representing 35% of new car sales.  The future of electric vehicles, however, depends on several factors; including vehicle cost and maintenance, oil prices, government tax incentives to manufactures and purchasers, and … vehicle charging stations.

Accessibility to vehicle charging stations at the workplace and at home are critical to the future of the electric vehicle.  Consumers are going to demand they be close to their home or better yet – at their home.  What leadership role will condominium and homeowners associations take in helping our country meet the changing needs of consumer choices as it relates to their vehicle?

The U.S. Department of Energy’s office of Energy Efficiency and Renewable Energy will be working with the American Public Power Association to collaborate on fleet electrification – aka helping consumers find places to charge their electric vehicle.  Power companies and municipalities will collaborate to establish convenient locations for electric charging stations.  The goal of the Obama Administration is to establish a plan to have charging stations throughout the country close enough in proximity so an electric vehicle could be driven across the country maintaining the charge through strategically placed electric charging stations.

As quickly as the demand for charging stations will increase, the standards and practices for green buildings – especially multi-unit dwellings – are changing to prepare a building (condominium or townhome community) with electrical infrastructure to accommodate a future charging station installation.

The Obama Administration encourages collaboration with vehicle manufactures, power companies, state and local governments, universities and local communities to identify strategies and solutions for community electronic charging stations.  For more information about the Obama Administration’s White Paper on Electric Vehicle Adoption in the U.S., click here.

The community association housing model currently makes up approximately 20% of the housing stock.  In 2040, CAI anticipates community associations will represent a majority (more than 50 percent) of the housing stock in the U.S.  As we continue to transition towards this majority, it is each of our responsibility to take a leadership role in planning for the consumer shifts around us; including the electronic vehicles and the need for charging stations near residents in our communities.

Dawn Bauman, CAI Advocacy

 

In reviewing condominium association declarations over the past several years, on a number of occasions I noted a similar provision in many declarations which places a cap on the amount of a special assessment the board of directors can adopt without an owner vote. Typically, this provision provides that the board may adopt a special assessment, but if the special assessment is for more than three hundred dollars ($300) per unit or more than five (5) times the monthly assessment per unit, then owners with at least two-thirds (2/3) of the total votes in the association must approve the special assessment before it can be adopted. Such a provision would seem to restrict a condominium association’s board of directors’ ability to adopt a needed special assessment if the special assessment would be more than the capped amount.

However, while this language remains in many condominium declarations, and in particular those declarations drafted in the 1970s (or earlier), 1980s and early 1990s, it is outdated based on changes to the Illinois Condominium Property Act (765 ILCS 605/1 et. seq. and referred to as “Condo Act). While the relevant changes to the Condo Act took place more than twenty (20) years ago, based on my experiences there remains some confusion as to the applicability of these provisions related to caps on special assessments.

Specifically, the Condo Act used to have a section, Section 9(d), which provided that special assessments over a certain amount could not be adopted by a condominium association board without the approval of owners with at least two-thirds (2/3) of the vote in the association. Presumably, this former section of the Condo Act is the reason many older declarations contain a cap on special assessments. But, the Condo Act was amended in 1994 by Public Act 88-417 to eliminate Section 9(d). The historical notes to the Condo Act provide that “P.A. 88-417, effective January 1, 1994, repealed the unit owner approval requirement of Subsection 9(d) and replaced it with amended procedures set forth in Subsection 18(a)(8) giving condominium boards substantially greater latitude with respect to increases in special assessments.” The historical notes further provide, in discussing PA 88-417, that the language in Section 18(a)(8) of the Condo Act “was intended to totally replace the procedure previously set forth in Section 9(d), which had placed the burden on the condominium board to obtain approval from unit owners with two-thirds of the interest in the condominium before a large special assessment could be adopted.”

Thus, in 1994 the Illinois General Assembly removed the requirement that all special assessments over a certain amount must be approved by owners with two-thirds (2/3) of the total vote in a condominium association. Instead, the provisions of Section 18(a)(8) of the Condo Act apply with respect to special assessments. Section 18(a)(8) of the Condo Act provides in part:

“that except as provided in subsection (iv) below, if an adopted budget or any separate assessment adopted by the board would result in the sum of all regular and separate assessments payable in the current fiscal year exceeding 115% of the sum of all regular and separate assessments payable during the preceding fiscal year, the board of managers, upon written petition by unit owners with 20 percent of the votes of the association delivered to the board within 14 days of the board action, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the budget or separate assessment; unless a majority of the total votes of the unit owners are cast at the meeting to reject the budget or separate assessment, it is ratified, (iii) that any common expense not set forth in the budget or any increase in assessments over the amount adopted in the budget shall be separately assessed against all unit owners, (iv) that separate assessments for expenditures relating to emergencies or mandated by law may be adopted by the board of managers without being subject to unit owner approval or the provisions of item (ii) above or item (v) below. As used herein, “emergency” means an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners, (v) that assessments for additions and alterations to the common elements or to association owned property not included in the adopted annual budget, shall be separately assessed and are subject to approval of two-thirds of the total votes of all unit owners, (vi) that the board of managers may adopt separate assessments payable over more than one fiscal year. With respect to multi-year assessments not governed by items (iv) and (v), the entire amount of the multi-year assessment shall be deemed considered and authorized in the first fiscal year in which the assessment is approved;”

Accordingly, the Condo Act permits a condominium association board to adopt a special assessment of any amount in most cases. But, if the board adopts a special assessment that results in the total assessments in a given year exceeding one hundred and fifteen percent (115%) of the total assessments in the prior year, then owners can petition the board for a meeting of owners to vote on such special assessment. The petition must be signed by owners with at least twenty percent (20%) of the total votes and presented to the board within fourteen (14) days of the board’s approval of the special assessment. If such a petition is presented, the board must call a meeting of owners within thirty (30) days, and at the meeting owners with a majority of the total votes in the association must vote to reject the special assessment, or else it is ratified.

Further, Section 18(a)(8) of the Condo Act provides that all special assessments related to emergencies (as defined above) or mandated by law are not subject to veto by the owners. However, there is also a requirement in Section 18(a)(8) of the Condo Act that any special assessments for additions or alterations to the common elements or other association owned property must be approved by owners with at least two-thirds (2/3) of the total votes in the Association.

In conjunction with questions about caps on special assessments within condominium declarations, one of the questions I often receive is about a cap on expenditures within condominium declarations. A number of condominium declarations I have reviewed contain language prohibiting the board from making expenditures over a certain dollar amount without the approval of a certain percentage of owners. While these types of spending caps remain valid, Section 18.4(a) of the Condo Act contains language which limits what these spending caps apply to. Specifically, Section 18.4(a) of the Condo Act provides in part that:

“Nothing in this subsection (a) shall be deemed to invalidate any provision in a condominium instrument placing limits on expenditures for the common elements, provided, that such limits shall not be applicable to expenditures for repair, replacement, or restoration of existing portions of the common elements. The term “repair, replacement or restoration” means expenditures to deteriorated or damaged portions of the property related to the existing decorating, facilities, or structural or mechanical components, interior or exterior surfaces, or energy systems and equipment with the functional equivalent of the original portions of such areas. Replacement of the common elements may result in an improvement over the original quality of such elements or facilities; provided that, unless the improvement is mandated by law or is an emergency as defined in item (iv) of subparagraph (8) of paragraph (a) of Section 18, if the improvement results in a proposed expenditure exceeding 5% of the annual budget, the board of managers, upon written petition by unit owners with 20% of the votes of the association delivered to the board within 14 days of the board action to approve the expenditure, shall call a meeting of the unit owners within 30 days of the date of delivery of the petition to consider the expenditure. Unless a majority of the total votes of the unit owners are cast at the meeting to reject the expenditure, it is ratified.”

Accordingly, Section 18.4(a) of the Condo Act gives the board of a condominium association much flexibility with expenditures by providing that spending caps included within declarations do not apply to expenditures by the condominium association for “repair, replacement or restoration” of the existing common elements. While a definition for what constitutes a “repair, replacement or restoration” is provided in the Condo Act, if a condominium’s declaration contains a spending cap, it is a good practice for the board considering an expenditure of an amount greater than the spending cap included in the condominium’s declaration to consult with the association’s attorney prior to approving the expenditure to determine whether or not the spending cap applies to the proposed expenditure.

In summary, any condominium declaration which contains an outright prohibition on a board adopting a special assessment over a certain amount (such as $300 per unit or five (5) times the monthly assessment) is outdated. The Condo Act was amended more than twenty (20) years ago to give condominium association boards more flexibility in passing special assessments. The Condo Act gives condominium association boards the ability to adopt most special assessments, while reserving to owners a veto option for special assessments over a certain amount, and still requiring the approval of a certain percentage of owners for special assessments used for additions or alterations of the common elements or other association owned property. Further, even if an association is able to raise funds through a special assessment, its declaration may contain a spending cap. For an association facing a spending cap in its declaration, the association should consult with its attorney to determine the applicability of the spending cap.

Keith R. Jones

logo_keaycostello_blue_jpg00241630xcf553-3-5x3logo_keaycostello_blue_jpg-00241630xcf553-3

Please refer to the latest legislation for updates on dates and deadlines

 

As the warm days of summer quickly fade and the cold weather months draw near, it is important to protect your home, or vacation home from such elements as ice, swinterizenow and wind. Here are some important tips to follow:

1. Eliminate drafts by closing off crawl spaces, vents and doors; especially under mobile homes. Repair broken or cracked windows, and check insulation and caulking around doors and windows.
2. Shut off the water supply and drain outside sprinkler systems and hose bibs. Detach hoses.
3. Insulate pipes in unheated parts of the home, such as the garage. Pipes close to exterior walls or in unheated basements can be wrapped with pieces of insulation or heating tape.
4. Remove leaves and debris from gutters so melting snow and ice can flow freely and prevent “ice damming” – a condition where water is unable to properly drain through the gutters and instead seeps into the house causing water to drip from the ceiling and walls.
5. Check the roof and make any repairs that are needed.

If a property is to be unoccupied for an extended period of time, or a vacation home will be closed for the season, experts recommend these additional winterizing tips are followed:

1. Drain the water heater. Start this step first as it will take a while to drain.
2. Empty and unplug the refrigerator and freezer. Prop open the doors to prevent a moldy fridge.
3. Unplug all electrical appliances to avoid damage during thunderstorms.
4. Prevent rodent infestation by removing any garbage from the home.
5. Add anti-freeze solution to toilet tanks and sink traps to prevent the tank from cracking.
6. Turn the heating system to the off position on the furnace or circuit panel to ensure the furnace does not inadvertently go on.
7. Rake leaves and debris away from the foundation of the home. Left to sit during the winter months, this material would otherwise become a collection area for ice and water.

If you experience water damage in your home from a burst pipe or an ice dam, for example, here are some things you can do to help minimize the damage until a trusted restoration contractor arrives.

● MOST IMPORTANT – eliminate the source of water. Cleanup and restoration cannot begin until the origin is 100% addressed.

● Turn off circuit breakers to wet areas to prevent risk of electric shock. Unplug and remove electrical devices located on wet floors and surfaces. Do not operate electrical devices or equipment while standing on any wet surface.

● Turn off the HVAC system(s) if it has been in contact with any water or sewage to prevent spread of biohazardous materials throughout the entire property.

● Remove and secure small furniture and valuables to minimize direct damage to these items and the residual damage these items can cause when wet (such as stain transfer from wood items, rust stains from metal items, ink or dye transfer from paper and fabric). Remember to check under beds and in closets.

● Place aluminum foil under legs of wood furniture, especially antiques, to protect carpet and other furniture from staining. Do not place newspaper on any wet surfaces, newspaper ink transfers very easily to porous surfaces.

● Pin up dry draperies and furniture skirts to prevent contact with wet floor coverings to avoid watermarks, browning and dye transfer. Do not leave wet fabrics in place. Move fur or leather goods to a safe area to dry at room temperature.

● Try to minimize traffic on wet surfaces to minimize safety hazards and limit the spread of damage and potential contaminates.

● Make plans for restoration crews to remove large furniture items from affected areas. Do not attempt to dry on your own as improper techniques can do more harm and increase claim costs and restoration time.

● Wet floors are only the tip of the water damage iceberg. Proper water removal and complete structural drying is crucial to minimizing contamination, added expense and inconvenience.

Hiring trained water damage mitigation and structural drying professionals is safer, easier and less expensive than the cost of repair and replacement of property damaged during improper water mitigation efforts. It is also important to note that many standard insurance policies do not cover secondary damages – such as mold, one of the most common secondary effects of water disaster. Carriers often specify the policy holder must initiate “reasonable and prudent procedures necessary to mitigate the loss.” In other words, immediate action must be taken to protect the property from excessive damage and claim cost. If the insurance carrier determines proper steps were not taken in a timely fashion, it could be released from all financial responsibility – leaving the policy holder to absorb the full financial burden.

The Insurance Information Institute states, “Winter storms caused an estimated $3.5 billion in insured losses in 2015, up from $2.6 billion in 2014, according to Munich Re. From 1995 to 2014 winter storms resulted in about $27 billion in insured catastrophe losses (in 2014 dollars), or more than $1 billion a year on average, according to Property Claim Services (PCS).”

For additional information on winterizing your home, visit the Institute for Business & Home Safety’s DisasterSafety.org. Source: Insurance Information Institute. 2016. http://www.iii.org. ISO’s Property Claim Services unit (PCS).

Fred Schroeder

logo-8-24-12

 

CAI-Illinois is hosting a Downtown Happy Hour. This is sure to be a great opportunity to network with property managers, board members and colleagues.

October 20th

5:30pm-7:30pm

Bull & Bear

431 N. Wells St., Chicago

Guests are responsible for their own drinks & food

RSVP by emailing vivianav@www.cai-illinois.org

 

World Rabies Day is September 28th this year. The annual event is designed to raise awareness about the impact of rabies on humans and animals. This year’s theme is “Rabies: Educate. Vaccinate. Eliminate.” With the aim of educating, ABC Humane Wildlife Control & Prevention in Arlington Heights, Ill. has shared a video about one abc-humane-wildlife-batfamily’s experience with bat-related rabies. The video may be viewed on ABC Wildlife’s website on their bat exclusion page.

Rabies is a deadly disease that kills between 25,000 and 60,000 people worldwide each year. An additional 15 million people receive post-bite vaccinations, undoubtedly preventing hundreds of thousands of additional deaths. The availability of post-exposure vaccination in the United States makes rabies deaths in the US very rare. About 50,000 people in the US receive post-exposure vaccination annually, preventing them from developing rabies after an exposure.

Once a person or animal becomes sick with rabies, it is almost always fatal. This means the best way to combat rabies is with prevention. Fortunately, the post-exposure vaccines are very effective. These special shots for people who have contact with a rabid animal keep them from getting sick as long as the shots are given within days of the exposure. There are also very effective vaccines to prevent pets from getting rabies. These preventative vaccines for pets are given on an annual schedule. When pets miss a scheduled vaccine, they may need to be quarantined, or even euthanized after contact with a rabid animal. In the attached video, the cherished family pet, a Chihuahua named “Bella” had to be put to sleep after contact with a rabid bat.

Finding a single bat does not automatically mean there is a colony in the home’s attic or walls, but it is important to rule it out. If a single bat is found, a bat exclusion contractor should be contacted to conduct a thorough building inspection to identify evidence of a roost. When a roost is found, if the bats have stayed in the walls and never come into the human-occupied spaces of the building, they can generally be safely excluded by installing a one-way valve allowing them to leave but not re-enter. When the bat has had contact with a human or pet, or has been in the human-occupied areas while people slept, it must be sent for rabies testing. If it tests positive for rabies, the humans that may have been exposed must receive shots.

In Illinois, bats are the number one carrier of rabies. Rebecca Fyffe, a wildlife educator with ABC Wildlife explained that the human exposure risk posed by bats, compared to other wildlife, needs to be taken very seriously because, “In Illinois, of the 311 animals that have tested positive for rabies since 2012, 100 percent of them were bats,” Fyffe explained.

All bats are protected in Illinois, however, not all bats are endangered. There are four species of bats on Illinois’ Endangered Species List, but the Little Brown Bat, the species most commonly found in attics and homes, is not one of them. Quite the opposite, the Little Brown Bat is considered abundant in our state.

Bats are an important part of the environment and eat many harmful insects. Bat conservation efforts, such as putting up bat houses and preserving bat habitats, do not pose risk to humans and should be encouraged.

Rebecca Fyffe explained that we do not need to be fearful of bats behaving normally in the wild. Watching bats hunt mosquitos at dusk poses no danger and is a welcome sign of a healthy ecosystem. A bat behaving abnormally, such as fluttering around on the ground, initiating contact with humans, or being carried in a pet’s mouth, is more likely to be sick than those behaving normally. Because bats are Illinois’ number one rabies carrier, with 1 in 1,000 bats having rabies, it is important to avoid physical contact with bats and to submit bats for testing once contact has occurred. “If the specimen has escaped or is not available for rabies testing, public health officials will direct the exposed person to seek shots,” explained Rebecca Fyffe. If the specimen is available for testing, the exposed person can avoid undergoing shots by testing the specimen instead.

In Illinois, Rebecca Fyffe supervises a team of 50 state-certified nuisance wildlife control specialists who are also certified to remediate bat colonies. Her organization, ABC Humane Wildlife Control & Prevention Inc. runs a free 24-hour a day telephone hotline at (847) 870-7175 where callers can have bats captured for testing and have their homes checked for the presence of a colony.

Rebecca Fyffe explains that through a partner nonprofit, she is able to gather grant funding to provide bat control capture and remediation service to those who cannot afford it. In partnership with the nonprofit Wildlife Control Policy Institute, it is ABC Wildlife’s policy to never turn a caller away for inability to pay. One instance of service that the company provided free was when a blind couple woke up with what they thought was a mouse in their bed, but they realized it was a bat when they felt its membranous wings. Rebecca Fyffe received the call from police officers who were standing in the blind couple’s bedroom trying to shoo the bat out the open window. She instructed the officers to close the window instead and she sent her team of biologists to capture the bat. Luckily the bat tested negative and the couple didn’t need to undergo shots. “We’re there for people 24-hours a day, 365 days a year, and if they truly can’t afford service and would otherwise go underserved, we help them first and ask questions later. Working with the Wildlife Control Policy Institute nonprofit has enabled us to donate our service under their grant structure and assist those who needed an emergency responder right away.”

Rabies can be a deadly disease, but we can mitigate the risk of bat-related rabies. We can protect our families by making sure our own animals are kept current on their rabies shots and by having bats that have come in contact with a person tested for rabies.

abc-wildlife-logo

 

 

credit-card-swipe-2PCI compliance, which from the perspective of the merchant is the Payment Card Industry standards that all companies accept, process, store and/or transmit credit card information in a secure environment, or in simpler terms, and from the resident’s perspective – is the ability to safely use one’s credit card without the apparent fear of having your identity stolen, misused, misrepresented, or a random Batman costume purchased without your consent, is in the foreground of many discussions. Those credit cards, and their relatively new connections to our smart phones, have opened up a new world of conveniences, impulse purchases and threats from the very innocuously titled, Internet of Things. The Internet of Things, or “The Iot”, which sounds more like a tough neighborhood than a pile of connected microchips, is comprised of millions of devices that we come into contact with every day – everything from gas pumps, to ATM’s, Smart Phones, Fitbits, laptops, IPads and even those attractive “learning thermostats” which have proved to possess the ability to be hacked and “teach” thieves, when we are not around – guiding them to our unattended, but well-connected homes.

But today, let’s say that we would like to leave our well-connected home and go out and defy the odds, against all better judgement, leaving our home vulnerable, and purchase some candy at the clubhouse in our community. We begin our journey without our credit card, even though we are going to make a credit card purchase. With our ferocious Golden Doodle, Barley at our side we head out, confident that we will return successful, candy in hand and credit intact. But from where does this confidence come? The fact that our facility has always recognized their legal exposure surrounding their need to be PCI-compliant, but now, they have taken new steps in an attempt to thwart even the most determined of cyber criminals.

Entering the Clubhouse retail shop, I search for the candy, retrieve my purchase and head for the checkout staring off into the distance as the clerk slowing becomes menacing closer. With each step my confidence grows, and as I come within a few feet of the clerk, I hear him greet me by name, even though I have never seen him before as he is a new employee. The community’s clubhouse is now utilizing a Beacon system which recognizes the fact that I have the properties App running on my smart phone, securely opening a transaction on the clerk’s screen. The Beacon system is a low-energy Bluetooth device which emits a signal, or ‘beacon’, and when it senses the unique ID of my smart phone and community app, it “recognizes” me. The clerk is able to see my picture and visually verify that I am the resident in front of him. He is, as am I, confident that he is addressing the proper resident. Quickly, he scans my chocolate bar, and the transaction has begun. Overjoyed at our impending departure, I look at my phone, see that my App is requesting my fingerprint identification. Quickly I press my thumb upon the home button, and the clerk tells me to enjoy my evening. I take my prize, Barley is excited and back home we head ready to toss the Hershey wrapper of victory stout heartedly into the imaginary faces of the cyber-bullies looking to take my candy money.

But what happened behind the scenes?

When the staff member enters the tender screen and selects the credit card option, the system then reaches back out to the resident’s phone and requests another level of verification through the use of the device’s finger print identification system. Once this has been received, the system will then proceed with the credit card sale through the use of a tokenization system. This means that the actual credit card data is not stored within the system, but off-site on the server of the credit card processor. When the request is initiated, a token is requested and one-time access is granted to charge that card – again, never passing that information through the system, and again never giving anyone the chance to intercept the information. In essence the system is not PCI compliant, but truly PCI out-of-scope. The resident, may purchase goods and services at the facility without ever having to remove a card from a wallet or purse, and in reality, without even having to carry a card – thus even eliminating the possibility of electronic card scanning.

Breaking it down further:

  1. The Resident was visually identified, when the Beacon system identified his device.
  2. If the device was lost or stolen, visual identification could thwart a user, as would the fingerprint functionality.
  3. If a resident does not have the App running or does not wish to be identified in this manner, the App also has an electronic card, which may be displayed visually to be scanned – giving all of the same verifications.
  4. The off-line storage of the card keeps the information secure and eliminates the need for the resident to physically carry the card. This eliminates the dangers from physical loss, electronic scanning or skimming.
  5. The tokenization methodology allows for the usage of the card, without the exposure of the information to interception.
  6. Fingerprint verification allows for further identity confirmation.

A few extra measures – certainly. However, the facility has taken some great steps to increase the confidence of its residents, protect its reputation, enhance its competitive position and strengthen any potential legal issue that may arise. Now if only the clubhouse would have something for Barley to enjoy too!

Jim Wisniewski

northstar-logo-2016

 

snow-ball

For community associations that maintain their own streets, exterior parking lots and sidewalks, snow removal services can easily be one of the highest budgeted expenses each year. In the real estate boom of the early 2000’s, buyers purchased homes without knowing that maintenance of the streets and sidewalks (including snow removal) would be the responsibility of the association. Developers arranged for low cost services to keep the assessments down, and after they left the community, the shock of snow removal expenses left many associations using reserve funds or passing special assessments to cover the bills. Now, professional community managers and experienced board members plan well in advance for snow management expenses. With snow removal season recently behind us, and budget season quickly approaching, late spring is an ideal time for an association’s manager and board to look back at last season’s snow plowing service and expenses, and discuss alternatives for next winter.

While there really is no avoiding snow removal in the Chicago-area (other than moving to a warmer climate!) there are two primary contract/billing options for professional snow management services: per occurrence fees and seasonal fees. In general, a per occurrence contract allows a fee to be charged each time service is provided, and a seasonal flat rate contract establishes a monthly fee during the snow season, regardless of services rendered. When reviewing contracts for snow management services, one needs to look closely at the fine print. Per occurrence contracts generally have different fees levels based on the depth of snow to be plowed, and seasonal fee contracts usually establish a seasonal cap, after which a fee per occurrence is charged. Ice melt may or may not be included in the base price, so that’s another factor to consider. Weighing the pros and cons of each contract type can help a manager and board decide which option is best for their association.

Point: It’s easier to budget accurately for snow management expenses with a flat seasonal rate, the likelihood of a deficit (or surplus) to resolve at the end of the year is very slim, which makes the board of directors and management look good.

Counterpoint: By looking at several years of snow removal expenses for associations with per occurrence contracts and finding the average it’s really not that difficult to prepare a reasonably accurate budget figure. It just takes a little more effort.

Point: By paying a flat rate, the board is saving the association money in years with higher than average snowfall. Associations that pay per occurrence spend much more money in these years.

Counterpoint: By paying a flat rate, the board is throwing away money in years with less than average snowfall. Associations that pay per occurrence spend much less money in these years.

Point: Flat rate contracts result in poor snow plowing services and response time because the contractor has less incentive to service the property when they aren’t billing for each visit. Per occurrence providers service the property quickly and efficiently in order to get to the next client and complete another service.

Counterpoint: Flat rate providers are better staffed because they have more reliable income, this results in servicing properties quickly. Eager to make money, per occurrence providers might service the property when snowfall doesn’t quite meet the depth that triggers service, which results in billing disputes and arguments over snow measurements.

Point: Service providers who offer flat rate contracts make more money from their clients because they are collecting a high monthly fee even during months with minimal (or no) snow removal provided. They should refund that money to associations.

Counterpoint: While there are seasons when flat rate providers come out ahead due to light snow, there are certainly seasons when they barely break even. Service providers are in business to provide a service, but also to make a profit, a fact often forgotten by associations.

Point: Only suburban communities have flat rate contracts and downtown properties have per occurrence agreements.

Counterpoint: Properties with streets, driveways and large parking lots are more likely to choose a flat rate option. These types of properties are more prevalent in the suburbs than urban areas.

So, what’s the best option for your association? The best option is to choose one type of service agreement and stick with it. In a season with average snowfall, either type of service agreement should be adequate. If you are budgeting for a per occurrence agreement, look at several years of actual expenses to find an average. Don’t double the budgeted amount after one year of heavy snowfall. If you’re working with a flat rate contract, understand that some years the expense will be a good investment and some years it won’t. Don’t change to a “per occurrence” after one year with light snow removal. While it’s frustrating to spend money and not receive a service, look at the figures from years past when services received exceeded the expense. Continuous flip-flopping between flat rate and per occurrence service agreements won’t pay off in the long run. Mother Nature is unpredictable, which makes budgeting for weather-related maintenance services difficult. But by accepting the unpredictability that some winters will be mild, some will be normal, and some will be brutal, boards and managers can do their best to plan for the future without seeing it through a crystal ball.

By Gail Filkowski, CMCA, Vice President First Community Management

first-community-logo

 

BILLS AFFECTING COMMUNITY ASSOCIATIONS IN THE 99TH GENERAL ASSEMBLY

INTRODUCED IN 2016

 

           Similar to past legislative sessions 2016 has been an active year for legislation affecting common interest communities and condominium associations. CAI Illinois’ Legislative Action Committee (ILAC) has, again, had an active year in sponsoring, advising, commenting on and opposing various bills throughout the year. Below is a list of legislation introduced throughout 2016. CAI was active in opposing House Bills, 4489, 4490 and 4491. CAI drafted, sponsored and supported Public Acts 099-0567, 099-0569 and 099-0849.

PUBLIC ACTS

Public Act 099-0567 (Sen. Haine) EXECUTIVE SESSION/CLOSED PORTION OF MEANINGS. The act amends Section 1-40 of the Common Interest Community Association Act and Section 18 (a) (9) of the Illinois Condominium Property Act. The new law changes both the Condominium Property Act and the Common Interest Community Association Act to clarify what items may be discussed by a board of directors during the closed portion of a meeting or executive session meetings. Importantly, the new law the specifies that board members can meet in a closed portion of a noticed meeting, or separate from a noticed meeting to discuss certain enumerated executive matters. The act details that Boards may discuss engagement, interviewing and dismissal of employees, independent contractors, agent or providers of goods and services. Finally, the law makes it clear the Board members can meet with legal counsel outside to the presence of an open meeting. The effective date is January 1, 2017.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=2354&GAID=13&GA=99&DocTyp eID=SB&LegID=93705&SessionID=88

Public Act 099-0569 (Sen. Mulroe) SUCCESSOR DEVELOPERS. This bill creates a new section 47 of the Common Interest Community Association Act and Section 9.5 of the Illinois Condominium Property Act. The new law changes both the Common Interest Community Association Act and the Condominium Property Act to require successor developers to obtain written assignment of developer (declarant) rights and to require the successor to record the assignment prior to it being effective. This alleviates the situation where a bank or subsequent purchasers of undeveloped portions of an association contends “they are the new declarant” without having anything in writing. The effective date is January 1, 2017.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=2358&GAID=13&GA=99&DocTypeID=SB&LegID=93712&SessionID=88

Public Act 099-0612 (Rep. Cassidy) AMENDMENT TO DEFINITION OF ACCEPTABLE TECHNOLOGY. The act amends the definition of “acceptable technological means” in both the Condominium Property Act and the Common Interest Community Association Act to expand its meaning to include “any generally available technology that, by rule of the association, is deemed to provide reasonable, reliability, identification and verifiability.” Additionally, the Act makes technical changes to the statutes to create a consistent use of the term “acceptable technological means. The effective date is January 1, 2017.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=5696&GAID=13&GA=99&DocTypeID=HB&LegID=95150&SessionID=88

Public Act 099-0627 (Sen. Haines) ERRORS AND OMMISSIONS CORRECTIONS UNDER CICAA. This act amends the Common Interest Community Association Act to provide that if a provision of the community instruments does not conform to the Act or to another applicable law because of an error, omission, or inconsistency in the community instruments of the association, the association may correct the error, omission, or inconsistency to conform the community instruments to the Act or to another applicable law by an amendment adopted by vote of two-thirds of the board of directors, without a membership vote. The effective date is January 1, 2017.

ILAC ACTIVELY SUPPORTED THIS LEGISLATION

 http://www.ilga.gov/legislation/billstatus.asp?DocNum=2741&GAID=13&GA=99&DocTypeID=SB&LegID=96048&SessionID=88

Public Act 099-0776 (Rep. Nekritz) AMENDMENT TO OMBUDSPERSON ACT. This law amends Condominium and Common Interest Community Ombudsperson Act and a small portion of the Freedom of Information Act. The act provides that information under the Ombudsperson Act may not be subject to certain Freedom of Information Act requests. Additionally the act provides that neither the Department nor the Ombudsperson shall consider charges under the Illinois Human Rights Act. Further, it amends Section 30 of the Ombudsperson Act to, in addition to a website, require the Department to provide a toll-free number for information and resources. Section 35 of the Act has been amended to move the date back upon which associations have to enact a written complaint policy from December 28, 2016 to January 1, 2019. Importantly the new law repeals Section 55 of the Act thereby providing that associations will no longer be required to register with the Department. Finally, it amends Section 50 of the Act to require the Department to submit an annual report to the General Assembly regarding education and training requests received instead of dispute resolution assistance requests and outcomes.

ILAC WAS ACTIVELY ENGAGE IN NEGOTIATING THIS LEGISLATION

 http://www.ilga.gov/legislation/billstatus.asp?DocNum=4658&GAID=13&GA=99&DocTypeID=HB&LegID=93903&SessionID=88

Public Act 099-0849 (Sen. Mulroe) BOARD’S ABILITY TO APPROVE A LOAN. The new law changes the Condominium Property Act to clarify the inconsistency in within Section 18.4 of the Act. The amendment to Section 18.4 (m) of the Act permits boards of directors, by majority vote, to execute various bank documents to secure a loan on behalf of an association. Currently the language of Section 18.4 (m) has a qualifier relating to the “condominium instruments” and there is a concern that some old condominium declarations and by-laws may require up to two-thirds of the owners to vote when either pledging an association’s assets or assigning future income. This change makes it clear that a board of directors, without owner approval, by majority vote can assign future income of an association and pledge the assets of an association. The effective date is January 1, 2017.

http://www.ilga.gov/legislation/fulltext.asp?DocName=09900SB2359sam001&GA=99&LegID=93713&SessionId=88&SpecSess=0& DocTypeId =SB&DocNum=2359&GAID=13&Session=

 

 BILLS WHICH DID NOT PASS

HB4489 (Rep. Drury) – UNIT OWNER LITIGATION. This bill amends the Illinois Condominium Property Act by creating Section 33 entitled “Unit owner’s right to fairness in litigation.” The bill states that an owner has a right to “fairness” in all litigation between the owner and a condominium association regardless of whether the owner commenced the litigation or the litigation is commenced against the owner. The bill voids any covenant or rule which limits the owner’s right to commence litigation. The bill provides an owner be awarded attorney’s fees if the owner prevails in any litigation or if the unit owner prevails on any affirmative defense against the association. The bill further provides for a judicial reduction of attorney’s fees in litigation (except assessment collection matters) and a complete bar to an association recovering attorney’s fees in an assessment collection matter if the owner prevails on any affirmative defense or counterclaim. Finally, the bill prevents an association from being represented by counsel of it’s choosing in any litigation if such counsel “also represents the board of managers either individually or collectively.” On February 4, 2016 this bill was assigned to Judiciary – Civil Committee. On March 2, 2016 this bill lost in Judiciary by a vote of 3-8.

ILAC ACTIVELY OPPOSED THIS BILL

 http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=88&GA=99&DocTypeId=HB&DocNum=4489&GAID=13&LegID=93465 &SpecSess=&Session=

HB4490 (Rep. Drury) ATTORNEY’S FEES IN THE EVENT OF AN OWNER DEFAULT. This bill amends Section 9.2 (b) of the Illinois Condominium Property Act. Currently Section 9.2 provides that attorney’s fees incurred by an association arising out of default by a unit owner, tenant guest or invitee of the governing documents or the Act can be added to the unit owner’s share of the common expense or unit owner’s account. The bill amends the section to prohibit an association from adding attorney’s fees to an owner’s account without a finding by a court. The bills require a court to award attorney’s fees, in every default, before attorney’s fees can be added to the unit owners’ account, thereby requiring a judicial finding on any default. On February 4, 2016 this bill was assigned to Judiciary – Civil Committee.

ILAC ACTIVELY OPPOSED THIS BILL

 http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=88&GA=99&DocTypeId=HB&DocNum=4490&GAID=13&LegID =93467&SpecSess=&Session=

HB4491 (Rep. Drury) EXPANSION OF UNIT OWNER DEFENSES IN COLLECTION CASES UNDER THE FORCBILE ACT. This bill amended Sections 9-106 and 9-111 of the Illinois Forcible Entry and Detainer Act. Effectively this bill seeks to overturn the Illinois Supreme Court’s decision in Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342 (2104). In Spanish Court Two the Supreme Court held that the obligation to pay assessments was an independent covenant and a unit owner’s attempt to raise as a defense a breach of duty by an association was not “germane” to the collection case and thereby not permitted.

This bill seeks to amend the Forcible Act to reverse the holding of the Supreme Court and permit an owner to raise, in any delinquent assessment collection case, a “material breach of any duty” in the condominium instruments, rules or statutes, or an “improper motive” by the association in bringing the action. Further, the bill amends the Forcible Act to bar an association in a collection case from recovering any attorney’s fees and costs if the court finds that the association breached an obligation under the governing documents or a fiduciary duty to the unit owner, regardless of non-payment of assessments. On February 4, 2016 this bill was assigned to Judiciary – Civil Committee.

ILAC ACTIVELY OPPOSED THIS BILL

 http://www.ilga.gov/legislation/billstatus.asp?DocNum=4491&GAID=13&GA=99&DocTypeID=HB&LegID=93468&SessionID=88

HB4959 (Rep. Batinick) AMENDMENT TO MANAGER LICENSING ACT. This bill amends the Community Association and Manager Licensing and Disciplinary Act. The bill makes some minor language changes to the Act. The bill modifies the initial examination standard to remove the requirement that the initial licensing exam comply with standards set by the National Organization for Competency Assurances. The bill includes a reference to limited liability companies. On February 5, 2016 this bill was referred to Rules Committee.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=4959&GAID=13&GA=99&DocTypeID=HB&LegID=94257&SessionID=88

HB5812 (Rep. Breen) MORE AMENDMENTS TO OMBUDSPERSON ACT. This bill amends multiple sections of the Condominium and Common Interest Community Ombudsperson Act. The bill makes some minor technical changes to the Act and the terms. Additionally, the bill amends Section 15 of the Act to revise the definition of “Condominium Association” to mirror the definition within the Condominium Property Act. The bill includes a new term in Section 20 to provide that the Ombudsperson has no authority to consider matters which would constitute charges under the Illinois Human Rights Act. The bill amends Section 30 to provide that the Office of Ombudsperson make available a toll free number to provide information and resources.

The bill provides that the Ombudsperson would be named (rather than employed) by the Department and the office would also be situated under the Division of Real Estate instead of the Division of Professional Regulation. The bill retains the existing requirement that, on or before December 27, 2016, associations must establish and adopt written policies for resolving complaints made by unit owners.

The bill amends Section 35 by requiring an association to make a final determination on a unit owner’s complaint within 90 days (versus a reasonable time). The bill removes a provision enabling the unit owner to notify the Department of the association’s lack of, or the inadequacy of, a written policy, which could lead to an association losing its legal rights to bring civil actions for the collection of delinquent assessments.

The bill repeals Section 55 of the Act thereby providing that associations will no longer be required to register with the Department. Significantly, the bill mandates associations amend their governing documents to adopt dispute resolution mechanism. The bill provides that no later than July 1, 2019, Associations will be required to adopt a bylaw or declaration amendment to provide for mandatory mediation or arbitration with respect to the vast majority of disputes between associations and unit owners. The parties could choose whether alternative dispute resolution would be binding or non-binding. The bill removes all provisions relating to the Ombudsperson providing “request for assistance.”

Finally, the bill amends Section 50 of the Act to require the Department to submit an annual report to the General Assembly regarding education and training requests received instead of dispute resolution assistance requests and outcomes. On April 8, 2016 this bill was re-referred to Rules Committee.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=5812&GAID=13&GA=99&DocTypeID=HB&LegID=95276&SessionID=88

HB5927 (Rep. Fine) CODIFIES A COMMON INTEREST COMMUNITY’S ABILITY TO ENACT RULES. This bill amends Section 1-30 of the Common Interest Community Association Act to explicitly provide that a board of a Common Interest Community has the statutory authority to adopt rules and regulations. Similar to the Condominium Property Act, the bill sets forth a mechanism of prior notice to the members of the Board meeting whereby rules and regulations will be considered and adopted. The bill prohibits a board from adopting rules which impair First Amendment rights or conflict with the declaration or bylaws. On April 8, 2016 this bill was re-referred to Rules Committee.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=5927&GAID=13&GA=99&DocTypeID=HB&LegID=95414&SessionID=88

HB6243 (Rep. Jesiel) CREATES SHORT-TERM RESIDENTIAL RENTAL PROPERTY ACT. The bill creates the Short-Term Residential Rental Property Act. It provided that a short-term residential rental property listed on internet-enabled platforms (such as airbnb) shall not be regulated by a unit of local government in a manner more restrictive than bed and breakfast establishments are regulated under the Bed and Breakfast Act. Further provides that a short-term residential rental property, platform administrator, rental property host, or guest shall not be taxed by a unit of local government in an amount greater than a hotel, a hotel operator, or hotel guest. On February 11, 2016 this bill was referred to Rules Committee.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=6243&GAID=13&GA=99&DocTypeID=HB&LegID=95784&SessionID=88

SB2837 (Sen. Silverstein) AMENDMENT TO SMOKE DETECTORS ACT. This bill amends the Smoke Detector Act. It provides that if a smoke detector is battery powered, then the battery must be non-replaceable, non-removable, and capable of powering the detector for a minimum of 10 years. An amendment was filed in the Senate further defining the requirements and providing that it shall apply to smoke detectors which more than 10 years old, fail to respond to testing or are newly installed. Additionally, the amendment provides that the requirements will not apply to centrally monitored systems, low frequency/Wi-Fi devices or those designated by State Fire Marshall. Finally, provides that violating of the statute is a petty offense subject to fines. On April 21, 2016 this bill passed the Senate. On April 22, 2016 this bill was referred to the House Rules Committee.

http://www.ilga.gov/legislation/fulltext.asp?DocName=09900SB2837sam001&GA=99&SessionId=88&DocTypeId=SB&LegID= 96149&DocNum=2837&GAID=13&Session=

SB2863 (Sen. Connelly) AMENDMENT TO SECTION 15 OF THE CONDO ACT. This bill amends Section 15 of the Condominium Property Act “Sale of Property.” Section 15 provides a mechanism where the entire condominium property can be sold to a third party. The bill was amended on March 15, 2016. The bill amends a subsection (a) to Section 15 of the Act to provide that if a unit owner has filed a written objection to the sale within 20 days after approval the unit owner shall be entitled to receive reimbursement for relocation costs. This bill will not apply to any pending approved sales. On April 6, 2016 this bill passed Judiciary. No additional action was taken.

http://www.ilga.gov/legislation/BillStatus.asp?GA=99&DocTypeID=SB&DocNum=2863&GAID=13&SessionID=88&LegID=96180

SB3275 (Sen. Connelly) AMENDMENTS TO MANAGER LICENSING ACT. This bill amends Community Association Manager Licensing and Disciplinary Act. The bill removes the requirements that any examination for obtaining a license utilize “psychometric measurement” and employ standards set forth by “National Organization for Competency Assurances.” Additionally, the bill makes other technical changes to the Act. On April 21, 2016 this bill passed the Senate. On April 21, 2016 this bill was referred to House Rules Committee.

http://www.ilga.gov/legislation/billstatus.asp?DocNum=3275&GAID=13&GA=99&DocTypeID=SB&LegID=96626&SessionID=88

This document provides a general synopsis of various bills that affect community associations. This list is by no means complete. Further, the information contained herein can change throughout the legislative process. Bills can be amended and language originally proposed can be deleted. In order to assure you have the most accurate information about any given bill, please go to www.ilga.gov and review not only the synopsis but the actual language of the bill and any relevant amendments. This information is provided as May 24, 2016.

 

Ancillary IncomeThere are many types of ancillary income available for common interest realty associations. Income for community association can be divided up into three categories:

1. Income that comes from each unit owner for the right to own and maintain a unit, i.e. assessment income.

2. Income that is also derived from unit owners for use of specific optional facilities, such as parking, a fitness center, a pool, a party room, unit transfer fees and many other related income categories. Some associations charge additional administrative fees or cost to the association for renting their unit out, or for making additional keys. This category will also include costs to collect assessment income such as late and legal fees.

3. The final category is the income that is not derived from owners. Some examples are antenna income, outside parking income, signage income, advertising income, and movie income.

Most will agree that the best type of income for the owners is the income that they do not have to pay (outside income). That income of course reduces the assessments they pay to the association. Usually these types of income will be taxable. However, depending on the type of association and the type of tax return filed, the income can be offset with directly related expenses. Most often, the income net of related expenses for tax purposes will not be significant or will be offset with other types of income that run at a loss that year. If there is a taxable situation, generally the tax will be minimal. True, you say, but taxes are not something association owners want to pay. After all, this is the USA and we all do our best to avoid all taxes, right? To avoid is our right; to evade is against the law.

Investment income is usually looked upon as good, but sometimes that income can be increased by taking on more risk. Taking on more risk may not be what most owners want. What about the negatives? If you put a sign on the building and make money on the use of the sign area, this can detract from the aesthetics of the building. If you put several antennas on the top of your building, this could generate significant income but it is possible that it can also affect the aesthetics. If you allow your building to be used as a movie set for some movie scenes, it can definitely add to the income of the building and possibly the notoriety of the building, but it can also cause an issue for owners to access the building. In these situations, residents will probably need to use the back entrance if filming occurs at the main front entrance, and the street may be blocked off during the filming as well. Everyone will have an opinion regarding ancillary income, but like decorating the halls or voting in the primary election, opinions will vary. At the CAI National conference two years ago, there was a manager speaking about how assessments at one association are minimal because they charge for the usage of their facilities with a resort fee and it is charged to all renters. Unfortunately, Chicago is not like the South Carolina coast in the summer where they have beaches, multiple pools and tennis courts and are more like a resort than a condo. Few associations in our Chicagoland area have these types of amenities to offer!

Preparing a budget and charging assessments based on a good projection of costs is essential for the running of the association. Owner user fees are not essential, are they? Well of course they are. Just ask John’s neighbor: Does he think John should pay for usage of the condo garage when John’s neighbor does not own a car? Why should he (the neighbor) have to pay for upkeep costs of the garage when he (the neighbor) doesn’t even use it? John would argue that the neighbor should also have to pay for upkeep of the garage because the parking facility is more than a benefit to just John, it improves the resale value of all unit owners, so why should only John have to pay for it? This is an argument that can be carried over to almost any type of user fee. Another example is the infamous administrative fees. Why should Jill have to pay for the administrative time spent on the transfer of Jack’s unit to a new owner? Jack will tell you that charging him for administrative time will increase the administrative time spent on the transaction. So why not just disregard it altogether? Arguments can be made on each side, but that is the nature of user fees. Some feel it is best to include the charge in their normal assessment fee (usually the user), and others that feel they should not have to pay for something they do not use (the non-user).

So what is the answer? The answer will vary based on what facilities are available and the opinion of the owners. It is the opinion of the author that probably maximizing the outside income is best as long as it does not detract or lower the market value of your unit. Taxes may come into play, but would you rather have 80% of $10,000 or 100% of 0 dollars? Most people would take door number one. User fees are normal and necessary when they make sense. Allowing everyone to use a specific facility can be the best option, such as a pool when most owners will want to frequent the facility. When the interest in using something like the racquetball court is limited to a small group of owners then it may be more appropriate to charge a fee.

Evaluate the situation from all sides and how it will affect all owners and the association as a whole; that is when you will tend to arrive at the best decision. It’s up to your association to sort out the good, the bad, and the ugly!

Brad Schneider, CPA, Certified Fraud Examiner, President of CondoCPA, Inc.

CondoCPA

 

Handicapped SpotAs any Chicago resident with a motor vehicle knows, from the expensive park-per-day prices to the difficulty of parallel parking, owning a car in the city can sometimes be a nuisance and a burden. Even rightful owners of parking spaces in the city have faced some interesting challenges in more recent years.

One such issue is ownership of accessible spaces (or handicapped parking), which has caused some controversy in condominium properties. Per the Fair Housing Accessibility Guidelines, at least two percent of parking spaces in multi-family homes must be available to individuals with disabilities. Availability does not dictate ownership, however, so developers have historically sold accessible parking spots to non-disabled individuals after all non-accessible parking spots have been sold. This has proven to be a somewhat lucrative choice for developers, who can sell those spots at a premium, given their location and spatial convenience.

So what happens when non-disabled residents rightfully and legally own an accessible parking spot, and a handicapped individual comes to need a handicapped parking space of his own in that particular lot? Courts have been reluctant to create a bright-line rule on this issue. As seen in a few cases, courts are not willing to punish non-handicapped individual owners of accessible parking spots by forcing them out of their spaces. , Instead, courts have looked not only to the developers who profited from the sale of the parking spots but to condominium associations with little to no real authority or capability to accommodate handicapped individuals. Suggestions have been made that condominium associations should somehow “take” physical space that does not belong to the association and re-designate for the benefit of the disabled owner such as redrawing parking lines to create an additional space where none existed or even forcing the sale of an accessible parking space from one rightful owner to a needing disabled owner.

So far, the courts have conveniently ignored this takings issue. If, as Americans, the Bill of Rights represents our core values, one must wonder, how can a court usurp private property for private use? The answer should be that the private parking space cannot be taken unless it is for “public use” and unless there is “just compensation,” per the Fifth Amendment Takings Clause.

The terms in the Takings Clause have been debated amongst courts for as long as the Clause has been in existence. What constitutes as “public use,” and how much compensation is “just compensation”? Courts have set many different answers to these questions. But whatever the answer, no court has indicated that forfeiture of private property to another individual for private benefit is either “public use” or that the taking of private property could be justly compensated, regardless of the fact that it may involve individuals with disabilities. In fact, it has been decided by many courts, many times over that taking private property for another’s private use, no matter the attempted justification, is a violation of the Takings Clause.

Further, the taking of a privately owned condominium parking space runs into other issues outside of constitutional rights. For example, though the Fair Housing Act (“FHA”) does exist to prohibit discrimination, it “does not create a right to an assigned handicapped space.” The FHA merely ensures that accessible spaces be created in the first place. The Illinois Human Rights Act (“IHRA”) outlines a similar definition of discrimination, and just like the FHA, the IHRA has no language indicating that a handicapped person is entitled to a handicapped space merely because one exists.

It is also important to note that residential facilities, i.e. condominiums, are not under the purview of “public accommodation” under the Americans with Disabilities Act (“ADA”). This helps to retain the private nature of condominiums, including their respective parking lots.

Given these parameters, courts would be left little room to justify taking one person’s parking space to give to another individual. However, condominium associations may still be liable for failing to accommodate handicapped persons in this regard. Though no owner can be forced to forfeit his parking space, the FHA defines discrimination as “refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied…by such person if such modifications may be necessary to afford such person full enjoyment of the premises.” The question then turns to a matter of what a reasonable modification might be in matters of accessible parking.

Courts dealing with this issue have made a few suggestions with respect to accommodating handicapped individuals whilst keeping non-handicapped owners’ constitutional rights intact. The court in Jafri, for example, said that possible avenues to accommodate individuals with disabilities under these circumstances might include “reserving at least some accessible spaces for individuals with disabilities, including a clawback provision in the deeds for accessible spaces that were sold to individuals without disabilities, providing valet parking, or creating additional accessible parking with the parking spaces it retained or spaces that it could have repurchased.” The problem with the Jafri Court’s suggestions is that the Court failed to consider these suggestions in time and scope or expense. While a developer might take some of these suggestions to heart at the initial creation and selling stages of the project, an association cannot go back in time and change the restrictions in the initial deed. Further, the Jafri Court fails to address how an association would go about purchasing a parking unit or forcing an owner to sell a parking unit he did not want to sell. Lastly, a valet seems more in line with a modification rather than an accommodation as it requires an expenditure on the addition of a service rather than merely a change in policy. While it may be incumbent upon the association to allow the use of a private driver to drop off and pick up a disabled individual while parking or retrieving their vehicle, the cost of a valet service would be borne entirely by the disabled owner.

As this is a more recent problem, Courts haven’t held condominium associations liable yet, for the Developer’s sale of these accessible parking spots, but such sales “may be an FHA violation [by the Developer] if they are made without providing alternative means for making the building accessible.” While this statement was made in reference to a Developer’s sale of a parking space, associations are not in the clear. The court in Weiner went so far as to say, “condominium owners are required to take additional action to ensure that handicapped residents who require handicap parking space or other reasonable accommodation are, in fact, accommodated.” Because the Weiner Court was unable to provide any meaningful suggestion it conveniently left the unenviable task of formulating the remediation to the condominium association.

Though these options are highly problematic, opting for at least one alternative for handicapped individuals could save condominium associations a lot of hassle (and a lot of legal fees) in the future.

Authored by: Matthew J. Goldberg, Bancroft, Richman & Goldberg, LLC with assistance from Briana DeMaster

BRG Logo

______________
(i) Final Fair Housing Accessibility Guidelines, 56 FR 9472-01.

(ii) Weiner v. Prairie Park Condo. Ass’n Inc., 16 C 1889, 2016 WL 3444210 (N.D. Ill. June 23, 2016)

(iii)Jafri v. Chandler LLC, 970 F.Supp.2d 852 (N.D. Ill. 2013)

(iv) U.S. Const. amend. V.

(v) Missouri Pac. Ry. Co. v. State of Nebraska, U.S.Neb.1896, 17 S.Ct. 130, 164 U.S. 403, 41 L.Ed. 489

(vi) Jankowski Lee & Assocs. V. Cisneros, 91 F.3d 891, 896 (7th Cir. 1996)

(vii) Gragg v. Park Ridge Mobile Home Court, LLP, 10-3313, 2011 WL 4459701 (C.D. Ill. Sept. 26, 2011)

(viii) 42 U.S.C.A. § 3604

(ix) See Jafri, 970 F.Supp.2d 852.

(x) See Jafri, 970 F.Supp.2d 852.

(xi) See Weiner, 2016 WL 3444210.

The comments and opinions expressed in this blog are of the individual author and may not reflect the opinions of CAI-Illinois.

 

When community associations assume ownership of their buildings, the process is essentially no different than an individual purchasing a car or home, or making a substantial investment in the stock market.  Performing due diligence is always good practice to ensure you are getting what you paid for.  Although individual unit owners may have performed some due diligence through home inspections, the ownership “transition” period is the most opportune time for community associations to assess the condition of their common elements.  Such assessments, commonly known as transition studies, should be performed by experienced engineering professionals that have the expertise to identify potential deficiencies that may require future attention.

Transition studies should not be confused with reserve studies.  Reserve studies are typically more cursory in nature and are intended to provide financial information on future repairs and capital projects projected over a specified period of time.  Although reserve studies often include a field review of the condition of various common elements, their primary focus is not to address design or construction defects.  The focus of a reserve study is to assess anticipated repairs and capital projects for the purpose of long-term budgeting.

The objectives of a transition study are most commonly outlined as follows:

    1. Evaluate potential deficiencies in the design and construction of major building components and systems.
    2. Evaluate the overall quality of construction.
    3. Identify apparent building deficiencies that can result in increased future maintenance and expedited deterioration.
    4. Evaluate building code compliance issues such as failure to meet ADA requirements or non-compliant ventilation rates.

To achieve these objectives, engineering professionals perform a detailed review of available documentation, conduct field investigations, and prepare detailed reports.  The documentation review often includes a review of design and/or construction drawings, maintenance logs, warranties, and other pertinent documents.  Field investigations are then performed and include a visual review of all common area components and building systems, which can be grouped into component categories.  Although each project is unique, such component categories may include the following:

  • Site elements (i.e., driveways, surface parking, landscaping, fencing, exterior amenities)
  • Roofing and waterproofing
  • Parking garages
  • Facade (i.e., cladding, windows, doors, balconies)
  • Corridors and public areas (including finishes, furnishings, and equipment)
  • Heating System(s)
  • Cooling System(s)
  • Domestic Hot Water System(s)
  • Domestic Cold Water System(s)
  • HVAC Control System
  • Ventilation and Exhaust Systems
  • Pumps
  • Fans
  • Common Area Lighting
  • Electrical Infrastructure and Backup Power
  • Fire Protection System(s)
  • Life Safety System(s)
  • Elevators

Often times, it is not possible to identify all potential (in some cases perceived) deficiencies without input from unit owners.  As such, the preparation and review of unit owner surveys can be a valuable part of developing a transition study.   Persistent reports of issues by unit owners may indicate significant underlying problems.  Experienced engineers use such surveys to determine what building systems or components should be subjected to additional scrutiny.

Given the complexity of today’s building systems, no single consultant is an expert in all these components and systems.  In some cases, the prime consultant may recommend involving sub-consultants to assist with an evaluation of some systems.  For example, building professionals typically retain mechanical, electrical, plumbing (MEP) and elevator specialists to assist in the evaluation of such building systems.

Transition studies are valuable tools regardless of whether significant defects or deficiencies are suspected.  In the case of deficiencies, a transition study can serve as the basis to compel the developer to remedy those deficiencies that, if not detected, would become the responsibility of the community association assuming ownership.

It is important to understand that transition studies are not intended to serve as punch list inspections.  They are only intended to reveal major code violations or deficiencies.  As such, certain minor issues such as missing electrical junction box covers, or small openings in exterior sealant joints will likely not be detected through a transition study.

Additionally, the value of the transition studies is directly proportional to the extent of effort invested and the qualifications of the firms performing them.  The results and value of the transition studies can therefore vary greatly depending on the fees and qualifications of the firms performing them.

Kami Farahmandpour, Principal – Building Technology Consultants, Inc.
Chris Kottra, Senior Engineer – Building Technology Consultants, Inc.
Steve Maze, Principal – Elara Engineering

 

As the summer months are winding down, TV commercials for school supplies abound and parents are overjoyed with soon-to-be quiet households. It truly is a wonderful time of the year – unless you work in property management. For property managers, this time of year is the most dreadful. If your association is on a January through December fiscal year, budget season starts in September. A budget is a crucial tool to effective management and a successfully running the association. As we near the end of the year, there are a few tips one can utilize to verify that an association stays within budget and anticipates concerns. If you have the right tools, you can certainly make your life less stressful and more productive.

All property managers know the annual budgeting process for an association is not an easy task. In order to create a balanced budget, managers must have intimate knowledge of annual operating costs. The annual operating costs are a key factor in determining the annual income requirement. Another factor to be determined, the amount of the reserve contribution. The final key factor in the budget review process is determining which capital improvement projects are to be done this budget year. One of the professional tools that a manager may consult while drafting the budget is a reserve study.

An important practice used when drafting the annual budget, is comparing the income and expense statements from previous years. This information will assist you in formulating a plan for the year to come by allowing you to examine previous historical trends of income and expense. This process is especially helpful with anticipated utility costs for the property. The anticipated utility and other budgetary factors will fluctuate with geographic location. For example, properties within the Chicago-land area have fluctuating utility costs. This is evident in the water and gas bills. These bills are based on the seasons as they can affect the extent to which the utilities are used. Using the trend information gathered from previous years, a property manager can safely estimate how much a property is expected to spend on utilities. Taking that number and allowing for a 10-15% increase for the monetary cushion will help ensure that the property is prepared to handle most cost fluctuations that the year may bring.

An important distinction must be made regarding the reserve study. The reserve study is not the same thing as the annual budget. An annual budget is approved at the annual meeting of the association and includes annual maintenance. The reserve study is meant to deal solely with major repairs and replacements projects.

A reserve study is a long-term budget-planning tool that identifies all the facility and common elements at the property and it provides an approximate timeline of life expectancy for all of these elements. Additionally, the reserve study provides budget projections for the anticipated cost of the element replacements over the entire term of the study, 20-30 years.  The reserve study provides us an anticipated income requirement over the term of the study to fund all of the anticipated capital improvements. An independent consulting company generally prepares reserve studies for the associations. The reserve study can be costly, but it provides us the road map for financial planning and facility maintenance and repair over the long term. The majority of the reserve study companies are licensed professional engineers or architects. As property managers we are trained to rely on the expertise of trained professionals in matters where we need their expertise. Creation of a long term capital planning project to maintain an entire facility, and to create budgetary cost projections is best left to an expert.

Unfortunately, there are some associations that refuse to have a reserve study. Some of the consequences of not having a reserve study are emergency special assessments to fund emergent projects. Another consequence of not having a reserve study can be the failure to have a road map planning capital improvements and creating the method to fund them.  The associations that have the reserve study are in a much better position to plan for and fund capital improvements and to obtain bank loans where necessary. There are many benefits to a reserve study and property managers should be encouraged to discuss this budget tool at initial budget planning session. The property managers are charged with educating board members and associations owners regarding the reserve study that will essentially save the board money and prepare the association in the best way possible to manage the property.

Over the years of being a licensed and certificate property manager, experience has taught me a few things:

  1. When you’re at the end of the budget year and you have a large cash surplus this may indicate that you did not perform all the budget maintenance and repairs for the year that were originally funded for the year’s budget.
  2. On the other hand, if you end up with ZERO dollars at the end of the year or a negative balance, you may have over spent the budget or there may have been some unanticipated repairs or costs.
  3. The budgeting process is basically a monthly process for the entire year. Property Managers are charged with monitoring the income and expenses and alerting the Board when there are short falls or overages.
  4. Our monthly monitoring of the income and expenses allows us to tailor the reserve contribution that’s in the budget.

With the change in seasons approaching, it is imperative to finish summer projects before the on-set of fall season. An important item at this point of the year is to remember to anticipate fall and winter annual maintenance items. If you live in an area that receives a winter snowfall, an important budget consideration is snow removal and salt supply. This means that evaluating the cost and effectiveness of past snow plow contractors, requesting proposals, and anticipating salt supply costs must have already taken place. Another example of a winter maintenance item is conducting service on boilers and air conditioning systems. Shut down service for air-conditioning systems is a must, especially if the summer was especially warm. In preparation for winter, start up service on all boilers will ensure adequate preparation for colder months. These kinds of services will also help these systems run efficiently throughout the year. A third winter maintenance expenditure that must be accounted for is conducting annual roof maintenance. The premise behind this expenditure is preparing your roof for the winter season. If you manage properties with flat roofs, inspecting all the parapet walls, termination bars, flashings, skylights and roof exhaust fans and roof drains should be done prior to the winter season. Another improvement to be considered would be the installation of gutter and downspout heat tapes to prevent ice damming. This maintenance is cost efficient and is expected to reduce the amount of water leak service calls during the winter months. We should keep in mind that repairing these types of problems may be difficult due to harsh weather conditions. These type of maintenance services will prolong the life of the roof and other named elements.

Another important practice that managers are charged with is physical inspections of the facilities. At the minimum quarterly inspections of the facilities are recommended. Bringing along the reserve study timeline during inspection, is an excellent tool for monitoring conditions of the various elements of the facility. Using this guideline allows us to identify easily the various elements of the facility as such making observing their current condition easy as well. We may find that some portions of the facilities listed in the Reserve report may not last as long as projected and other may last longer than projected. The key goal of these inspections and monitoring of the facility elements are to be familiar with them in real time enabling the manager to advise the Board to accelerate plans for certain elements where necessary.

In conclusion, as the dreadful budget season approaches, keep in mind some tips. A reserve study is necessary to prepare for major projects or replacements that are not part of annual maintenance costs. Staying within a budget and comparing projects to the approved budget is important in order to keep order and stay on a certain monetary path. A budget is meant to help managers and the Boards maintain the property by keeping up with maintenance and controlling costs. Effective budgets will help control all maintenance costs and ensure that we are doing the maintenance that is required yearly. A budget along with a reserve study will also eliminate special assessments, bank loans and negative cash flows at the end of the year for all the planned maintenance and projects. The budget and reserve study are tools that can be used in order to be cost efficient. In this day and age, we all know how important it is to save money. As the year comes to an end, keep in mind these tips and look to local CAI chapters on further budgetary recommendations. These tips will not only make your life less stressful, but it will make the association and property owners happier.

Narcis Oros, CMCA AMS

 

 

 

CAI Illinois is offering special prizes for several lucky Facebook Fans.Like and Share FB

Here’s What You Could Get:

-$50 Visa gift card for every 50 new likes

-Grand prize of $150 Visa gift card once we reach 500 likes!

Here’s What You Do:

“Like” Community Associations Institute of Illinois (@CAIIllinois) on Facebook and SHARE our page on your timeline. Once you have done this, simply comment on our pinned Facebook post with the word SHARED to complete your entry into the drawing.

For every 50 new likes we get on our page, CAI Illinois will have a drawing for a $50 Visa gift card for everyone who shared our page. Once our page receives 500 “Likes”, we will hold another drawing and announce the winner of our Grand prize of a $150 Visa gift card.

Here’s Why We Do It:

CAI Illinois hopes by sharing our page that we will spread the word about our exceptional education programs, fantastic networking opportunities and top notch service providers.

So what are you waiting for?

https://www.facebook.com/CAIIllinois/

 

Requests for Proposals (RFPs) are a tool managers can use to ensure the best products and rfpspecifications are used in their projects. By getting all vendors to bid on the same specifications and use the same materials you are ensuring that you are receiving comparable bids at the most competitive pricing.

However, if it is not done correctly, this process can produce no bids, bids that are a waste of your time and unwanted frustration. Common mistakes people tend to make when writing an RFP are to include vague details, no materials list and short turn-around times.

Writing a good RFP and managing a well thought out process to select the right partner for your association can mean the difference between a great success and a total disaster for you and everyone involved.

Here are some valuable tips and recommendations to help write a great RFP.

Step 1– Do your research and decide on a project with your Board that fits in with the association budget. Sure it would be nice to paint the entire complex, but does the association only have enough budget to do half this year?

Step 2-Determine whether this project will be a one-year project or phased out throughout several years. Maybe the association can’t afford all of the association painting this year but could if it is phased over the course of 3 years. Being up front with the vendors about this could impact their pricing and possibly hold pricing over the course of the 3 years.

Step 3-Select a qualified contractor to inspect the property and prepare the scope of work. A professional in their field can more easily identify the issues an association has, over a board member or property manager with either little to no experience in the repairs needed or that is juggling 8 different association needs. This contractor in conjunction with a manufacturer representative can determine the best products and warranties needed for your project. If this project is to have a master list of replacements or repairs it is best to have your selected contractor provide this list as well. Or else, you will have 3-5 vendors providing their own lists for these repairs/replacements. Talk about a nightmare! For example, if Vendor A submits a wood replacement list of 20 areas of replacement for a total of $6,000 and Vendor B submits a more comprehensive wood replacement list for 45 areas of replacement for a total cost of $15,000 how would you be able to compare them? Sure the association may be inclined to go with Vendor A due to their low pricing but in the end this could end up being costlier to the association if this vendor missed a lot of areas that Vendor B had accounted for and had to submit additional change orders adding additional expenses. Why not have all vendors bid off the same master list to avoid this type of headache?

Step 4– Select and distribute your RFP to qualified, reputable and trusted vendors.

Step 5– Remember your end goal. Your end goal is not to simply go with the lowest bidder or to just get the job done. Your end goal is to find a partner in which you can trust your association needs and more than exceed your and your Board’s expectations.

While these may seem like obvious tips, they’re always good to keep in mind to save both time and effort and to avoid unnecessary frustrations. By following these steps, you will ensure all vendors who bid will have the same information and therefore an apple to apples comparison can be made which in turn could make the vendor selection a simple task.

Chris Matson, Business Development Manager

Hammerbrush-LOGO-HORIZONTAL

 

 

There are both advantages and pitfalls for common interest realty associations (CIRAs or associations, plainly) that wish to self-manage.  A self-managed association typically employs an onsite professional manager who works directly at the board’s behest and is given authority to complete assignments, coordinate departments, collect and disseminate information to the board, protect assets, enter into contracts, handle the accounting for the association, manage other association employees, work with the board and sub-committees, and serve as a liaison between the board and individual homeowners and contractors.

An association can benefit in many ways by employing its own onsite professional manager. The primary advantage of self-management is that it provides an association with additional control over its day to day operations. Often, these managers work on the property site, which in turn provides both board members and property owners with increased access to management.  For the board members, having their own association manager onsite makes it easier to get answers quickly and to address homeowner issues expeditiously.  For homeowners, having an onsite manager makes it easier for them to get help when emergencies or problems arise.

In some communities, particularly in affluent areas, onsite professional managers offer various “concierge” services, services which go well beyond what is typically offered in communities employing a management company. Examples of concierge service include picking up mail for residents who go on vacation, watering plants, taking out refuse, starting cars, and opening units for service people (i.e., exterminators, cleaning professionals, etc.). While these extra services typically involve a reasonable fee, such services make things much easier for busy professionals and individuals who may not be living at their residences throughout the year.

Aside from the increased personal attention, an onsite professional association manager can resolve issues more quickly and hopefully reduce the red tape in doing so.  In contrast to associations that utilize a management company, a professional manager who is employed only by that association is less prone to having a conflict of interest between the association (to whom the manager has fiduciary duties) and the management company employing him or her (since an onsite professional manager is directly accountable to the association that employs him or her).  An onsite professional association manager also can be more responsive to his or her community and can more effectively manage projects occurring at associations.  Often, by cutting out the “middle man” an association can save a significant amount of money by hiring an individual manager as opposed to hiring a management company.

While the advantages are many, employing a professional manager does create certain issues and pitfalls. First, an onsite professional manager may have less support and fewer resources than a management company, which may have dozens or even hundreds of employees. In that sense, an association who hires an unqualified onsite manager may find itself in a particularly precarious position.  A professional management company with multiple managers could also have countless years of experience, an extensive network of vendors in various industries to call upon for advice and proposals, and a plethora of experiences to draw from in providing guidance to each association they manage. A self-managed association that has had the same manager for a long time has only its own limited experiences from which to draw upon… especially if that manager has only managed that one association.

Additionally, an association can find itself “shorthanded” should its manager go on an extended vacation without a suitable short-term replacement, be stricken with illness, or leave an association unexpectedly.  Management companies typically have various licensed and qualified managers who can step in to cover unexpected absences more efficiently than a self-managed association placing “help wanted” ads to find temporary or replacement managers.

Any association considering self-management should consider its particular needs and weigh the cost-benefits. Given the benefits and the risks, it is fair to say that self-management could offer greater rewards in many circumstances, but it also carries potentially greater risks should an association fail to hire a qualified, competent and hard-working professional. Do the proper research on your candidates and make sure they are bringing to the table exactly what your association needs.

By: Lisa U. Rose, CMCA, AMS, Community Association Manager for Royal Ridge Homeowners Association (Northbrook, Illinois)

 

Many of you are in the process of completing your 2017 operating budgets for your boards/committees/commissions (constituencies). Most operating budgets consist of anywhere between 80-100 individual line items that will guide the association with its operations for the next year. Of these 80-100 line items your constituencies will debate heavily on 5-10 items since the majority of the other line items are governed by union labor rates and contract requirements. Here are a few questions: When you and your constituencies are reviewing the proposed budget, how much time is spent on analyzing your reserve budget? Are you making decisions on what the association will complete in the next five years? Are you analyzing whether current funding of the reserves is adequate to achieve all of the association’s goals? Finally, do you feel that your association is reactive rather than proactive with capital repairs/projects?

The reserve budget is as important (if not more important) than the annual operating budget yet many associations spend only a few minutes reviewing reserve funding and expenditures on an annual basis. Section 9.c.2 of the 2016 Illinois Condominium Property Act (ICPA) states:

All budgets adopted by a board of managers on or after July 1, 1990 shall provide for reasonable reserves for capital expenditures and deferred maintenance for repair or replacement of the common elements. To determine the amount of reserves appropriate for an association, the board of managers shall take into consideration the following: (i) the repair and replacement cost, and the estimated useful life, of the property which the association is obligated to maintain, including but not limited to structural and mechanical components, surfaces of the buildings and common elements, and energy systems and equipment; (ii) the current and anticipated return on investment of association funds; (iii) any independent professional reserve study which the association may obtain; (iv) the financial impact on unit owners, and the market value of the condominium units, of any assessment increase needed to fund reserves; and (v) the ability of the association to obtain financing or refinancing.

Where do you start? The reserve study. Your association should have a detailed reserve study performed by a third party engineering firm. Community Associations Institute (CAI) has a Reserve Specialist (RS) designation that is awarded to qualified reserve specialists who through years of specialized experience can help ensure that community associations accurately prepare their reserve budget (https://www.caionline.org/LearningCenter/credentials/Pages/RS.aspx). The reserve study will report on the physical analysis and the financial analysis of the association for a period of time (15 – 30 years) and will assist you in developing a funding plan. Finally it will become a road map that will let you know what expenditures you and the board should begin to think about.

Grant Ostrek, RS, CDT of Waldman Engineering Consultants, Inc. recommends “to have a reserve study updated every three to five years including a site visit by a professional consultant and review of any changes to the common elements since the last study was performed.  Conditions that may accelerate this timeline include performing significant replacement or restoration projects at the property or determining that a need for such projects exists that may alter the fund status or call for a detailed plan of action that considers the financial status and impact on fund levels.  Since elements deteriorate at varying rates and the finances of the property are typically changing on an annual basis, the need to maintain balance between the two is an ongoing process”. Further information about reserve studies and how to properly maintain a reserve study can be found in many CAI publications and white papers.

Other considerations include: 1) bank statements from the previous and current years showing the reserve account balances, 2) loan documents and amortization schedules, and 3) Year to Date General Ledger Reports from previous and current years. All of these documents will assist you in building an accurate starting point for your reserve budget. The starting point is identifying which projects (if any) have been completed and how much cash you will have at the beginning of your reserve budget. The result is, in essence, a cash flow report showing the income flowing into the reserve account (reserve contributions, interest, etc.) paired with the expenditures reported by the reserve study, any loan expenses, as well as any special projects that the board would like to accomplish. The length of the report can equal the length of your reserve study (15, 20, 30 years); however, it is the first five years that are the most beneficial. A board can make decisions over the next five years as it directly affects them. Items reported in future years are rough estimates. In the future, the reserve budget adds another year so that it is always reporting five years worth of accurate information.

How much should your association contribute to the reserve account on an annual basis? This is the most common question asked by boards/committees/commissions and unfortunately there is not one correct answer. The answer depends on two things: 1) what does the board want to accomplish? and 2) what is the board’s funding strategy? The funding strategy can either be statutory funding (based on local statutes), baseline funding (goal is to keep the reserve balance above zero), threshold funding (keeping the reserve balance above a specified dollar or percentage funded amount) or full funding. The most conservative approach is full funding as its goal is to maintain the reserves at or near 100% as called for on the component inventory. Further information regarding these funding strategies can be found in CAI white papers and publications.

What are some of the benefits of a well-developed reserve budget?

A Game Plan

Once a reserve budget is developed and maintained on a regular basis, it becomes a tool that the board and management team can rely on. It is the game plan that everyone refers too. If a new idea or change in strategy comes up then the board can immediately see the financial consequences of the idea before the change is approved. For example: Let’s say the owners are requesting that the hallways be updated with a new look in the year 2017 but the reserve budget shows that the hallways are not scheduled to be looked at until the year 2020. With a reserve budget projecting a cash flow into the future, the board can see what the consequences of that change will have on its overall cash flow and if the project can be done in 2017 without additional funding. The board can then make a sound business decision on the owners’ request rather than a guess.

Assessments

The current owners will not be over assessed due to a higher than necessary reserve contributions and, more importantly, the future owners will not be under assessed and issued a special assessment to take care of a capital project. How many times have you come across a building with inadequate funds to pay for a large capital project that was previously reported in the reserve study? The board is faced with a decision to enter into a loan or issue a special assessment (or both) depending on the size of the project. Unfortunately, some boards decide to take the path of deferment and let future boards handle the issue. A reserve budget can assist boards with planning for these projects.

Investments

With an accurate plan in place boards can begin strategizing on how to invest reserve funds. Anthony Dister, CMCA and Vice President at Community Advantage adds that “interest rates are somewhat flat so boards should attempt to maximize every dollar available and earn additional interest income on investments”.

Energy Saving Projects

Energy savings projects can be analyzed with their up-front costs vs. the pay back periods due to the energy savings that will be achieved. The project is most likely not listed in the reserve study and therefore not part of the funding analysis in that study. The reserve budget will be able to show you if the up-front costs and subsequent energy savings to pay those costs can be included in the overall funding plan without any severe consequences to the association’s cash flow. An example would be updating all of the common area lighting, moving from an all electrical building with the HVAC equipment to all gas or updating the property’s building automation system (BAS).

A reserve budget is as important – if not more important – than the annual operating budget for the financial sustainability of the association. A game plan based on opinions and expert recommendations that is specific to the association can be analyzed and both short and long term goals can be formulated. A reserve budget allows for impetus of projects and care of the building to transition seamlessly from one board to another. Finally, a reserve budget provides complete transparency for all involved. So, as you begin to prepare your 2017 operating budget remember to also prepare your reserve budget. Your association will thank you for it!

Happy Budgeting!!

 

Ian Novak
CMCA, AMS, CPM

 

 

 

 

 

Dogs

Many condominium and community associations are receiving increasingly frequent requests from residents to keep dogs and other “assistance animals” in communities that do not allow pets. Where pets are allowed, the requests are often for dogs that are much larger than the maximum weight limit, or are for a prohibited breed of dog, such as a pit bull. For even those associations that allow pets without size or breed restrictions, almost all have rules addressing issues that associations face when pets are allowed. Whether your association’s restrictions are based on provisions in the declaration or are included in the rules adopted by the board, those restrictions may not apply if a proper request for an assistance animal is made. Although understanding and navigating this area of the law may seem much like trying to find your way out of the Bermuda Triangle while blindfolded, don’t fret, this article will provide your association with steps to take the next time it receives one of these requests.

What is an Assistance Animal? According to the U.S. Department of Housing and Urban Development, an assistance animal is not a pet. Rather, an assistance animal is “an animal that works, provides assistance, or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one or more identified symptoms or effects of a person’s disability.” Many people confuse “assistance animals” with “service animals” and assume that exceptions must only be made for persons with physical disabilities, such as a seeing eye dog for a resident who is blind. But assistance animals include a much broader group of animals. Assistance animals are not limited to dogs. Nor are they limited to specific breeds, sizes or types of animals. In fact, any animal can be an assistance animal. This is true even if the type or breed of animal is typically considered to be dangerous. Further, assistance animals do not need to be certified or trained. An animal qualifies as an assistance animal so long as it helps the individual deal with his or her disability.

Who Is Entitled to Keep an Assistance Animal in a “No-Pet” Community? Any person with a disability, including a physical, mental, or emotional disability, is entitled to a reasonable accommodation. Federal fair housing law requires associations to allow disabled residents to have assistance animals in communities which otherwise prohibit pets or restrict the size, type or breed of animal, if a proper request is made.

Requests for assistance animals beg two important questions: 1) Is the person making the request disabled?, and, 2) Does the animal alleviate one or more of the symptoms or effects of the disability? If the answer to these questions is yes, then a reasonable accommodation must be granted, despite any prohibitions or restrictions to the contrary for that association.

What Documentation Must a Disabled Person Provide in Order to Keep an Assistance Animal? If the disability is not readily apparent, a disabled person seeking a reasonable accommodation must provide reliable documentation from a licensed healthcare professional to establish that he or she suffers from a disability. The disabled person must also provide documentation that he or she has a disability-related need for the assistance animal. In other words, the animal must help with one or more of the symptoms or effects of the disability.

What Should An Association Do When It Receives A Request for An Assistance Animal?

  • Review and respond in writing as soon as possible.
  • Request documentation. Unless the necessary documentation is provided with the request, the association should request documentation to establish that the individual suffers from a disability and that the animal will help with the disability. If the documentation provided does not satisfy these requirements, the association should respond in writing and provide the individual with at least one opportunity to provide supplemental documentation. However, associations cannot request medical records or require a medical provider to give specifics about the person’s disability.
  • Confirm that the documentation is reliable. The documentation should come from a licensed physician, psychiatrist, social worker or other mental health professional. Be wary of online services which provide emotional support letters for pets in exchange for a fee. The reliability of such letters is often doubtful when there has been no meaningful treatment relationship. Further, providing a certificate or identification card stating that the animal has been registered does not establish that the resident is disabled or that the animal will help with a disability.
  • Evaluate each particular animal. Associations should consider only that particular animal when responding to a request. Assistance animals cannot be denied simply on the basis of breed or species. And yes, this applies to even those types of animals presumed to be dangerous such as a python snake or a pit bull. Instead, the request must be analyzed for that particular animal. If that particular animal has done something to indicate that it poses a danger, such as biting or attacking someone in the past, the association may have a basis for denying the request. But do not deny an animal based on the assumption that it will be dangerous or cause damage because of its breed or species. The only question to ask is whether that specific animal will help with the person’s disability. Further, assistance animals are not required to be trained or certified.
  • Maintain confidentiality. The information provided by the requesting individual should remain confidential.
  • Vote on the request at an open meeting.
  • Seek legal counsel when in doubt. If the association has any doubts or concerns about the request or the reliability of the documentation received, seek counsel. This area involves very complex laws and the association may face liability if a request is improperly denied. In fact, denials of these requests are often the basis for discrimination claims filed with the Illinois Department of Human Rights or the filing of a lawsuit.

What Should An Association Do When It Grants A Request?

  • Grant requests subject to terms and conditions. Associations may hold the owner of the assistance animal liable for any damage the assistance animal may cause. Further, even assistance animals must behave themselves, meaning they cannot bark until all hours of the night or cause unreasonable disturbances to the other residents. Rules relating to nuisance and damage to property apply just as they apply to any other unit owner.
  • Waive any pet deposits or fees. Associations may not require the applicant or resident to pay a deposit for an assistance animal, since assistance animals are not “pets”.

 

  • Waive any breed, size, or weight limitations for pets. Pet restrictions such as these do not apply to assistance animals.

So next time your association receives one of these requests, try to keep these guidelines in mind. When in doubt, talk to the association’s attorney. But be careful, it’s a jungle out there!

Laura Lau Marinelli, Esq., Arnstein & Lehr LLP

 

The Chicago City Council passed a vacation rental ordinance on June 22 that will further regulate the house-sharing industry and provide protections to consumers like those living in the city’s community associations. Mayor Emanuel’s ordinance amends Chapter 3-24 of the Municipal Code of Chicago.

Here are specific changes that impact and/or protect condominiums, housing cooperatives, and townhomes (community associations) in the city:

  1. Explicitly defines single-family homes, condominiums, housing cooperatives, and townhomes as establishments impacted by the ordinance.
  2. Recognizes homeowner’s association, condominium association and housing cooperative boards may prohibit short-term rental activity through written bylaw and/over covenant restriction.
  3. Requires an owner interested in listing their home/unit as a vacation rental or short-term rental to register with the City of Chicago and become a licensee.
  4. Requires an owner to disclose whether the home/unit/building is compliant with the American with Disabilities Act (ADA). Note: The ordinance does not require ADA compliance.  The ordinance requires disclosure only.
  5. Prevents an owner from listing their home/unit as a vacation rental or short-term rental if their community association governing documents prohibit short-term rentals.
  6. Allows entire buildings to opt out of short-term rentals. The ordinance provides for creation of a list of ineligible units that will not be allowed to operate and a list of prohibited buildings.
  7. Provides clear limits on the number of allowable rental units within buildings. In single-family homes, only primary residences can be rented; in homes with two to four units, only primary residences can be rented and only one unit per building can be rented; Buildings with more than 5 units will be limited to the lesser of one quarter of the total number of dwelling units or six rental units.
  8. Requires on-line platform companies (Airbnb, Home Away, VRBO, etc.) to take responsibility for compliance of the regulation.  In other words, if there is a unit owner posting their unit in a building that has opted-out,  the on-line platform companies have responsibility for compliance.
  9. Creates a one-strike-and-you’re-out rule for certain egregious conditions and a three-strikes-and-you’re-out rule for units that cause a disturbance. To ensure compliance, the ordinance establishes a clear penalty structure, as violators may be fined $1,500 to $3,000 per offense, with each day that a violation exists treated as a separate and distinct offense. Egregious conditions, criminal activity or public nuisance will be subject to a heightened $2,500 to $5,000 per offense penalty.

This is not the first vacation rental ordinance to be passed in Chicago; in fact, a vacation rental ordinance has been law in the City for more than five years, but the majority of the market continues to operate illegally, without a license. In addition to the protections above, the ordinance provides funding for the Mayor’s office to regulate and enforce the law; the ordinance includes fines, suspension and revocation of license to scofflaws. Rigorous enforcement is critical to the success of this ordinance.

CAI Illinois supports aggressive regulation as the only solution to remedy the serious issues that have arisen from the rapid growth of the short-term rental market and the intermediaries such as Airbnb, Homeaway, VRBO that market these rental units.

Please refer to the latest legislation for updates on dates and deadlines.

 

 

 

               On July 15, 2016 Gov. Rauner signed two CAI-Illinois sponsored pieces of legislation into law.  Click below to learn more about these bills.

http://www.ilga.gov/legislation/publicacts/99/PDF/099-0567.pdf

 http://www.ilga.gov/legislation/publicacts/99/PDF/099-0569.pdf

 

Common Interest Summer

Common Interest Magazine is CAI Illinois’ quarterly magazine that presents timely articles on community association issues and local legislature updates, as well as upcoming events, a classified directory of association service providers and easy access to business partner advertiser websites by clicking an ad.

In this summer issue titled, ‘Point-Counterpoint” we cover among many other topics, the risks and rewards of a self-managing association, the pros and cons of hiring and engineer, budgeting for snow removal and our round up of the best pictures of our Golf Outing!

This and many more fascinating articles in this edition of Common Interest

 

Federal Housing Administration Proposed Rule on Reverse Mortgage Program for Seniors Program excludes Seniors Living in Community Associations.

Take Action! CAI needs you to help by participating in this grassroots effort by contacting your congressmen and FHA that the proposed exclusion of community association senior citizens from the FHA reverse mortgage program which would expose association seniors to higher housing costs, fraud, and foreclosure—is simply bad public policy. 

Federal government officials need to hear from as many people as possible! Encourage those in communities in your area to take action by visiting our ‘Take Action!’ center at www.caionline.org/takeaction to file comments with FHA and write their congressmen.

 

 

Game of Life

Just like in the Game of Life, a board has to have a plan to succeed. Whether it is taking the quick route by attacking an issue head-on, or taking time to get educated on the issue first, a board has to carefully and strategically plan its course if it has any hope of successfully tackling an issue. As a veteran community association board member, Jack Thew has excellent advice and ideas that can help any board succeed.

The following tips were provided by Mr. Thew after a recent conversation about association life.

Give True Effort. Board members are operating a business. They need to strive for excellence in everything they do. Half an effort will almost certainly yield mediocre results. At the end of the day, the board has to answer to the members about what was done and why it was done. If the board was not doing everything in its power, the answer may not be what you like. Going through the motions will not help you get to a point where you can retire from the board or feel comfortable that you are truly going to win when you get there.

Build A “Sense of Community”. Building a sense of community is easier said than done. The board will have to go out of its way to do this. Today, communities are more ethnically diverse, resident apathy is widespread, social media is a major form of communication and people live very busy lives. Bringing everyone together is a challenge. There has to be an identified need clearly communicated to the members. Strong consideration should be given to budget for this need and perhaps introduce a standing committee to tackle it.

Practice The “Art Of Compromise”. Many board members have business experience and maybe business owners. Associations are run under a pure form of representation (a republican form of government with a little “r”) where board members have fiduciary duties to all unit owners. The association’s business cannot be conducted using a CEO, top-down approach. Every board member has equal voting power. Every board member may, and usually does, have distinct opinions on how a project should be handled or an issue resolved. There must be a full discussion of all ideas and a melding or compromise to get to a final decision. Time consuming, sometimes cumbersome, but this is the proper way to arrive at decisions.

Avoid The Temptation of Micro-Managing. Board members come from diverse backgrounds, including many that are business or science related. Avoid the temptation to take over and become the in-house expert. In retrospect, it may be better to focus on leading a discussion of your fellow board members to reach a particular conclusion on their own. Also few things will exasperate and anger a property manager than board members micro-managing the association affairs. It is far better to step back and oversee the management of the association.

Develop Specifications For Projects. The vendor selection process does not need to start from scratch each year. Boards should spend time setting specifications detailing all aspects of a project, whether it is big or small. Professionals can help develop the specifications. Once developed, they should be kept with the Association’s records for use in the future. The specifications should be reviewed and, if necessary, updated annually. If done right the first time, changes should be minor. These specifications can be used to get apples-to-apples bids from vendors. While a property manager may play a significant role in developing and maintaining the specifications, the board should maintain oversight on them.

Adequately Vet Vendors. A board needs to vet vendors. The board needs to find out what the vendors are all about. What is the vendor’s business philosophy? How does the vendor handle complaints and unexpected problems? Knowing the answers to these questions is vital because no matter how carefully the board plans and implements a project, something may go wrong. If it does, how will the issue be resolved? Is there room for compromise among the parties? Likely, the board has intentions of being in business with the vendor for some time. Do you want the vendor as one of your business partners? The answer should be ‘yes’, or you should move on.

Develop Institutional Knowledge. Often, when a new member is elected to the board, he or she is greeted with a handshake and a thank-you. Boards should maintain a “Book of Resolutions” for board policy. The resolutions will change over time as the board is confronted with new challenges. Along with the meeting minutes, the resolutions can provide excellent historical information about the association. The Book of Resolutions should be passed down to future boards.

Address the Causes of Issues and Not Just the Effects. Many physical components in a community association do not function as they were designed or intended. Sometimes the developer took the easy way out, causing issues immediately or many years later. For example, downspouts draining directly on a shrub bed routinely kills the plants. A board could replace the plants, but that’s not the real problem. You have to relocate the drainage, perhaps, underground, before spending any more money on plants. If problems are addressed correctly the first time to avoid recurring issues, an association can reduce its long term operating costs.

Don’t beat the last nickel out of a vendor. Is the vendor reasonably competitive in their pricing? What good is a vendor going broke on your project? Vendors are in business to make money. A vendor that does not make an appropriate profit on your project, is a vendor who is not interested in your project. This is a surefire recipe for trouble. A vendor who bids correctly, wins a project with well-designed accurate specifications and makes money, which is why he is in business. The vendor will be happy and will want to do more business with the association and remain attentive to your issues. This is a win-win situation for all parties.

Understand your fiduciary duties. Associations can handle very large sums of money. Even if it is small, it is everyone’s money. Board members are entrusted to take care of the money using the best business practices and, yes, common sense. Questions should be asked where is the money, when was the last time it was checked on, who has access to it, is it insured, what investment risks is the board taking?

Understand the Association’s Financials. Association financial documents can be difficult to understand as there are a myriad of accounting tools including spreadsheets, tax forms and the like. You do not have to be an accounting genius to be on the board. Ask property management and your accountant if you do not understand something. Never lose sight of the fact that they work for you, and not the other way around.

In summary, according to Mr. Thew, board participation goes beyond volunteering for something. It should be an honor and a privilege to serve one’s community. One person can truly make a difference for an association. Keeping in mind the need to do things for the good of the association will help you successfully move through the Game of Association Life.

By: Jack Thew, Dedicated Community Association Leader and Robert M. Prince, Chatt & Prince P.C.

 

On behalf of snow contractors everywhere, if you currently have your snow and ice management contract signed, and/or plan to have it signed on or before October 15th, please consider yourself “HIGH FIVED”. Your pro-active leadership should pay off big time when it counts. Your association should recognize you as a superior board member or property manager. GOOD JOB!

If you are not in the “HIGH FIVE” group, let’s harken back to November 20th of last year. The forecast was for a rain event that would potentially leave a couple inches of snow. What developed was 11.2” of snowfall (O’Hare), with the first 2 – 4” compacting to slush. With temperatures dropping to 27 degrees overnight, any of that mess not plowed off turned to ice.

We received numerous bid requests and signed contracts the 19th and 20th. While we appreciate the business, it put our team through some very serious “pain” over the course of a 72 hour period. Some clients also felt the pain, because there are a lot of logistics, planning, preparation, and communication needed to have the best outcomes.

It is important to take the operator(s) and crew to the site for an inspection and planning meeting to make sure that everyone knows the site and understands the service plan and client expectations. Can you imagine going to the site for the first time during a snow storm (normally in the dark) and trying to figure out plowing operations from a site map? Even if the operator(s) and crew serviced the site the year prior, there may be changes in expectations, from build-outs, or it’s just hard to remember since you have not plowed it in 8 months.

To provide a professional service to clients, contractors find it best to have time to prepare their entire team for individual property needs, characteristics, and expectations.

What are best practices for a successful snow season? Here are a few recommendations:

  • Sign your contract before October 15th
  • Conduct a pre-season meeting with your contractor, Board of Directors, and Property Management to discuss topics such as:
    • Are there any special needs home owners that need priority service
    • Identify priority or problem areas – action plan to address
    • If a tractor or tractors are to be used, where are they to be parked and where can the direct report crew park their vehicles (we strongly recommend direct report)
    • What is the plowing pattern? Someone is going to be first and someone is going to be last. They need to know this upfront and that we will flip starting points annually
    • Where is it acceptable and not acceptable to pile snow
    • Who is the property contact/decision maker prior to and during the event? This person should be accessible 24/7 as conditions are fluid and we are dealing with safety and liability. Your contractor contact must also be accessible 24/7
    • Establish a de-icing protocol prior to the season. I.E. – We will not authorize de-icing for any event with the exception of an ice storm. Or – We will authorize de-icing of roads, driveways, walks, and stoops to automatically occur after a plowing operation. Or – We will make a de-icing decision for all events based upon current conditions and forecast. Or – We will not de-ice for any event, but will provide homeowners with ice melt buckets or shaker jugs. Etcetera . . .
  • Once all the decisions are made, it is best to tell the homeowners through a homeowner forum, website, newsletter, mailing, etc. It is important that people know how to prepare and for all of us to manage expectations. I.E. – If the association chooses not to approve de-icing applications, homeowners should know to be mentally prepared for potential slippery conditions. This will also guide them in footwear choices. No flippy floppies!
  • During the season, your contractor should notify the association and property management prior to an expected snow event, and submit the action plan so that no one is surprised and questions may be discussed prior to the event. A post event recap is also good practice. I don’t know about you, but most days I can’t remember what I had for breakfast, let alone the details of three storms ago. Storm memories tend to blend together.
  • If an accident or problem occurs happens, (plow truck hits parked car, tractor hits garage door, equipment breaks, etc.) your contractor needs to be the one to tell the property manager, not the other way around. These things may happen on occasion . . . it needs to be somewhat expected when working in potentially hazardous, slippery conditions, at night, and for extended periods of time. If for some reason a homeowner makes property management aware of an alleged incident, they should notify the contractor immediately for investigation and resolution. A good contractor should own their work and take care of any damage they caused promptly. As an example however, there are some folks that claim that the snow plow company “had to be the one” that scratched their car or dented their garage door. During some investigations we occasionally find that the scratch on the car is thoroughly rusted, and that the dent on the garage door is 8 feet high and looks like a baseball or basketball hit it. 99.9% of clients are good & honest people, but there appears to be a few out there that seem to be a bit “unscrupulous” or confused. Subsequently due diligence is a necessary protocol. Homeowner incident claims should be made known to contractor no later than April 30th. Normally, claims made after April 30th will not be accepted.
  • Turf and plant damage from snow plow and de-icing operations supplied by the contractor should be completed no later than April 30th. These are normally at no additional charge and part of the contract specifications.

Along with the best practice recommendations for snow season success, please find the following factoids which you may find helpful:

 

  • A skid-steer tractor can plow a standard driveway 2 times faster than a pickup truck.
  • Most companies will provide you with a choice between a per occurrence or seasonal contract. Our study shows that as long as you pick one or the other and stick with it, there will only be a variance of +/- 3% in price over time. Note: we have been having some big swings in annual snowfall totals measured at O’Hare, consequently, you will need to stay the course long term. Can you imagine the consternation of an association that chose to change to a per occurrence contract in 2013/14 because we had light snow years in 2011/12 and 2012/13? Ouch
    • 2011/12  19.31”
    • 2012/13  30.0”
    • 2013/14  81.42”
    • 2014/15  49.55”
    • 2015/16  29.3”
  • Most slip and falls occur at public mailboxes, 2nd most is in front of garage door
  • The 3 most frequent times that an association authorizes de-icing are:
    • Ice storms
    • Holidays
    • Special community events
  • The recommended de-icing material for new concrete is magnesium chloride or calcium magnesium acetate
  • The recommended de-icing material for walks and courtyards around substantial plant material is magnesium chloride
  • The recommended de-icing material for walkways with normal turf or bed conditions is a standard magnesium or chloride based product mix in which there are several suitable blends
  • The recommended de-icing material for asphalt is rock salt or treated rock salt

On a final note, the first average frost date for Chicago is October 24. Another reason that it’s always good to have your snow contract in place by October 15th!  Thank you very much for listening!

Sherman Fields

Web Ad - Acres Group 2012

 

One of the greatest investments a society can make is in the education of their young.  The same principles apply to members of a condominium or HOA board.  Educating those who have volunteered their time; charged with making decisions that impact the entire community, one of the biggest personal investments for most, should be a priority.

Jack Thew, Director of his Naperville condominium association, is a fierce proponent of board education.  “After becoming a board member and later an officer, I have made it a priority to attend as many seminars as possible, some several times over, because you always pick up something new or had not thought about before. Taking CAI’s best business practices and weaving them into the governance of an association makes it run easier, more efficient, and with fairness to its unit owners,” he said.

Now as volunteers, many board members do not take advantage of attending educational courses through CAI as there is a cost involved.  Why not budget for that expense when it can benefit the entire community?

“I think Associations should be adding either a combined budget amount or separate line items to their budgets for board member education to allow board members to obtain training in the matters affecting associations”, said Brad Schneider, CPA at Condo CPA.

There are many nuances involved in effectively leading a condominium or homeowner association, and with the constant change in state and federal laws it is becoming more and more difficult for volunteer board members to serve.

Sheila Novak, President of her Naperville homeowner’s association said, “CAI’s educational courses have given me the knowledge and confidence to lead our 15-year old association through strategic planning, tactical maintenance, and reserve accumulation. Bravo, CAI, and thanks!”

Every association should consider budgeting their CAI membership in order to obtain access to education courses that are included at no charge as a member benefit. Your membership will expand your knowledge and understanding of the vast world of community association management and provide you with the tools and resources to run your association successfully.

Brittany Ryan, CMCA

Property Specialists, Inc.

 

Budget Chess

Once we have completed our annual budgets, held all our meetings, approved the plans and sent out the annual assessment coupons /statements, we can breathe that sigh of relief and look forward to the new year. Hopefully in preparing your budgets you reviewed your association’s reserve study and all contracts in place. Before we enter the next season, now is a good time to review the plans for the coming years.

We all remember planning to move from our parents’ homes to our own places. We may have had a car and bills, like everyone else. We may have prepared a monthly breakdown of what our bills would be at the encouragement of our parents, to prepare for the road ahead. What happens next is a learning experience that I would hazard to guess everyone has experienced in some form or another. All that is important to YOU, funds you had saved for, had to be spent for that “set of new tires” or that “insurance deductible from the hit and run.” At that age, who would have thought?

Having a Plan – Preparing for the long haul is not only necessary, it is also important to account for the uncertainty of the future. As in the game of chess, your opponent may make a move that doesn’t fit with your next planned intentions. You ask “who is the opponent in preparing a budget”? It might be unforeseen expenses such as failed boilers, leaky roofs, or mold growing in attic spaces. All of these things can put a damper on savings.   Perhaps you, or your Board, are the opponents because you are reluctant to propose assessment increases.

Getting Started – Reviewing an association’s reserve study and the life expectancy of capital expenses is foremost in preparing for the future. The reserve study notes the capital expenses, typically listed in the association’s Declaration for which the association is required to set aside funds. All too often boards and community members provide excuses and reasons for not funding the reserves in the manner for which the reserve study calls. Historical Moves – While reserve studies are very important, it is also imperative that we understand where funds were spent in the past and if those elements were included in the reserve study. In the game of chess, once a player takes his finger off the game piece the move is over and the turn is up. You may have thought long and hard about that move but as soon as your opponent made his next move, you realize your strategy has been foiled. Many boards assume that when they are low on funds, they can “bust” into their reserves, however they fail to realize that these funds might have to be paid back. Be sure to review governing documents regarding reserve expenditures and reach out to your association’s CPA for advice on the possible tax implications involving the use of reserve funds. Reviewing costs from similar past projects will help the board understand the costs of future projects.

Knowing your Property and your Vendors – In addition to having a reserve study in hand, visual inspections of your property also help to determine areas in need of maintenance sooner rather than later. Avid chess players may anticipate all the moves before they occur, and boards and managers can prepare for disasters by understanding the components of the important players they are protecting. But what happens when the unexpected occurs?  You may have noticed additional work orders for various repairs of common elements. This may signal the need to push up the scheduling for replacement which would eat into your reserve savings and possibly even into the operating budget.   In some chess tournaments, a player’s turn may be timed. The players must be ready to make quick and accurate decisions under the watchful eye of cameras and onlookers. The key to chess is to outsmart the other guy and the key to planning for future expenditures is to review your strategy by starting early. Contacting trusted vendors should be utilized to help the board minimize future losses. Making sure all building components are properly maintained and serviced at appropriate times may increase the life expectancy of those items. Community members rely heavily on the board to make important and informed decisions to protect their “castles.” Preparing a maintenance plan in advance of unexpected replacements may extend the life of the common element components and give the association more time to save for these projects.

Allocating your Funds – Remembering to use only operating expenses designated for regular maintenance and avoid dipping into reserves that are set aside for capital improvements is most important. It was recently affirmed that the Internal Revenue Service (“IRS”) does not consider painting a reserve expense (Revenue Ruling #75-370). This does not mean the association cannot allocate a line item and continuously fund that line item yearly through their operating budget. Reach out to the association’s auditor or accountant and review governing documents to determine the best way to carry funds from one year to the next, and do so up until the year the expense occurs. Obtaining a proposal or reviewing past expenditures will give the board an idea of what painting costs will be. Your reserve study can also list painting and its expenditures as a non-capital reserve item. Planning to budget appropriately each year for painting (and other large expenditures which don’t occur yearly) by dividing the proposed cost by the number of years anticipated until the project is due and then allocating those funds on a yearly basis for the project, can prevent having to special assess residents. By allocating enough funds for specific projects, the association can avoid a potential “blunder” and cease worrying about the unexpected “checkmate.”

Sharon L. Gomez CMCA, AMS

foster premier logo 2014

 

On July 1, 2016, the Condominium and Common Interest Community Ombudsperson Act will go into effect.  The Act establishes the Office of the Condominium and Common Interest Community Ombudsperson.  This regulatory Office is designed to educate and assist condominium and common interest community owners and managers about the Condominium Property Act and the Common Interest Community Association Act.  The Act also tasks the Office with responsibilities including association registration, legislative reform, unit owner complaint resolution, and enforcement.  Notably, complaints can’t be filed by unit owners until July 1, 2019 and the law will be automatically repealed July 1, 2021.  That said, unit owners and associations will need to be aware of this currently limited life legislation and its effect on their community.

Here are some of the highlights of the Ombudsperson Act.

By January 1, 2017, associations must adopt a written policy for resolving complaints made by unit owners. The policy must include a sample form upon which owners can make complaints, a description of the process by which complaints are to be delivered to the association, the association’s timeline and manner of making final determinations in response to a unit owner’s complaints, and requirement that the final determination made by the association response to a unit owner’s complaint be in writing, within a reasonable time after the unit owner’s original complaint, and marked clearly conspicuously as “final.”

On or before July 1, 2018, the Ombudsperson, to be appointed by the Illinois Department of Professional Regulation, must offer training, educational materials, and courses to unit owners, associations, boards of managers, boards of directors in subjects relevant to the operation or management of condominiums and common interest communities and the condominium property act and the common interest community association act

Beginning July 1, 2019, qualifying unit owners may make complaints to the Ombudsperson for assistance in resolving a dispute between a unit owner and an association that involves a violation of the Condominium Property Act or the Common Interest Community Association Act. Notably, the Ombudsperson may not accept requests for resolutions of disputes with community association managers, or of disputes for which there is a pending complaint in any court or administrative tribunal.

In order for a unit owner to make a complaint, they must meet various qualifications, including that they must not owe any funds to the association (unless those funds are central to the dispute), the dispute must have occurred within the past two calendar years, the owner must have followed the complaint procedure within their own association, and the owner received a final adverse decision within their own association. The requirements of what must accompany the complaint are also outlined.

Every association is required to register with the Department of Financial and Professional Regulation. A registration is effective for two years, and the initial registration for an association existing on July 1, 2016 is due within one year, or at such later time as the Department has adopted rules and forms for registration. Newly created associations required to register with the Department must register no later than 90 days after the association has assumed control of a property.

If an association fails to initially register as provided in the Ombudsperson Act, or fails to timely renew its registration, the Department of Financial and Professional Regulation may impose a late charge or late fee against the association. More importantly, if an association fails to properly register within two years after the effective date of the Ombudsperson Act, or fails to renew its registration on three or more occasions, the association is ineligible to impose or enforce a lien for common expenses or to pursue any action or employ any enforcement mechanism otherwise available to it in enforcement of a lien for common expenses until it is validly registered pursuant to the Ombudsperson Act. So registration will be imperative.

Do note that common interest community associations that are exempt from the Common Interest Community Association Act are also exempt from the Ombudsperson Act.

As noted above, the Ombudsperson may not accept requests for resolution of disputes with community association managers.  Those disputes would have to be addressed through the Community Association Manager Licensing and Disciplinary Act.  Property managers will likely find themselves administering complaints received by the associations from owners and shepherding the complaints through the association’s resolution process that the board is required to establish.

Note that there is legislation, that has passed both legislative chambers, that provide that the Ombudsperson Act would be effective January 1, 2017 (instead of July 1, 2016), and that it would be repealed on July 1, 2022 (instead of July 1, 2021).  It currently awaits the Governor’s signature though.

David M. Bendoff, Principal

KSN

David M. Bendoff is a Principal with the law firm of Kovitz Shifrin Nesbit. He may be reached at Kovitz Shifrin Nesbit (voice: 847-777-7254; fax: 847-777-7368; e-mail: dbendoff@ksnlaw.com).

 

Please refer to the latest legislation for updates on dates and deadlines.

 

 

 

Mouse Trap

The phrase “mouse trap”  brings to mind methods of trapping mice, rats or other rodents, or the children’s board game that involves a plastic Rube Goldberg-like contraption to catch mice and win. In the board game,  the goal is to capture all of your opponents’ mice while keeping your mouse safe from capture. As the game is played a familiarity with the spaces on the board gives players experience with where they can escape the mouse trap. Rodents have similar experiences; watching videos of rodents they get faster each time they move through a maze and the goal is the food at the end of the maze. Think of the maze as a  structure perhaps a home or office. Everything that can be done to prevent rodents from entering the maze helps prevent rodents from establishing themselves in the structure.

The primary goal of pest management professionals (“PMPs”) developing a rodent management program is to prevent rodents from entering structures. It is much easier to control a pest outside of the maze, than once it has entered the maze. Gaps or openings in structures are a way in. Mice need a smaller gap in comparison to rats; but as a general rule of thumb, if you can see light, then they can get in. Inspecting for these gaps is critical to the success of a rodent management program. A good PMP will identify and communicate the problem areas long before rodent activity is seen. Once the gaps are found they should be closed or filled in with copper mesh or a sealant.

Cheese is often used in movies, cartoons, and in the aforementioned board game as rodents’ main food source. However, rodents eat a variety of foods.   PMPs should inspect the structure exterior for trash debris close to the structure and around the dumpster area.   Rodents have a well-developed sense of smell and an  overflowing or loose trash can attract them toward a structure in search of food or soft nesting material. Once they are near the structure, they will look for shelter in or around the structure.

Preventing rodents from entering the structure is only part of a rodent management program. Monitoring for rodent activity helps PMPs establish current activity by use of bait or glue boards. Exterior monitoring is important to aid in the prevention of getting rodents into the maze. A structure can have rodent activity on the exterior, but no activity on the interior. Remember those gaps; if they are sealed, then the only way in is through the door. Once rodents have entered the structure then interior monitors are used to evaluate the success of the rodent management program.

The board game Mouse Trap has an elaborate mechanical trap for mice that includes bait, gravity, a bathtub, and a net to help capture mice. PMPs have a variety of choices for mechanical traps. Some monitoring devices can serve double duty and can contain a snap trap or glue board. Some more  recent products can be placed in difficult-to-reach  areas such as on pipes close to the ceiling, or come in a variety of different styles (one of which resembles a dinosaur’s jaw). PMPs typically bait the mechanical traps with a strong smelling food attractant or bait, such as peanut butter with anchovy oil. The bait may smell bad or very strong to humans, but can be extremely attractive to the rodents.

There are many great and funny quotes about building a better mouse trap and mice becoming harder to catch; unfortunately this is true. Rodents make choices which are often due to previous experience. Think back to the videos of lab rats moving through the maze – each time the rodent goes through the maze they leave a scent of where they were. Each time the rodent or a family member uses the same runway through the maze the scent gets stronger and becomes more familiar. Objects such as traps or monitors placed in the runway may be investigated or avoided by jumping or moving around. It is the PMP’s experience, persistence, and knowledge of the structure and rodent behavior that will capture rodents.

Moving around the Mouse Trap board, there is one other type of rodent control represented in the game. One of the Mouse Trap boards has a picture of a cat and another of a dog. The cat looks healthy and fat, as if it had just eaten a mouse or two. The use of biological organisms to control pest populations is called biological control.   PMPs don’t use biological control, but they do need to be aware of pets and small children when determining which control methods they are going to use. Bait stations are designed to be tamper-proof, but the possibility of tampering, loose bait, or secondary poisoning should be considered when determining which rodent control methods to use.

The most important part of rodent management is communication, documentation, and an understanding that the management program is a partnership between the PMP and the structure representatives. The management program should be proactive and preventative. Once rodents have entered a structure, the reactive approaches can take time to be effective; but with persistence and knowledge of rodent behavior, the program can go back to being proactive. So dig out Mouse Trap, roll the dice or spin the spinner, and may all the rodents be captured.

Angela M. Tucker, Ph. D.

smithereen logo 8-9-11

 

 

Golf Collage

We would like to thank all our sponsors and attendees for making this golf outing the best one yet! We hope you had as much fun as we did and we look forward to seeing you there again next year! Hopefully to win one the fabulous prizes from our contest holes! Below is a recap of our winners!

Dubsdread Lowest Score

Chris Matson, Hammerbrush Painting & Construction

Shannon Skeels, Liberman Management Services

Ivan Milojovich, IM Electric

Matt Herman, Hammerbrush Painting & Construction

Lowest Team Score, Courses 1 & 3

Damian Bierman, Twin Bros. Paving & Concrete

Jon Summers, Twin Bros. Paving & Concrete

Darrin McDonald, ACM Community Management

Allen Van Horn, ACM Community Management

Highest Team Score, Courses 1 & 3

Tracy Fagan, Hillcrest Property Management

Karen Iverson, AAA Painting

Jen James, Hillcrest Property Management

Tina Straits, Baum Property Management

Longest Drive-Course 1

Men-Ralph Mariotti, Woodland Windows & Doors

Women-Kathryn Formeller, Tressler

Closest to the Pin-Course 1

Ralph Mariotti, Woodland Windows & Doors

Laura Biagi, Guest of Itasca Bank & Trust

Longest Drive-Course 3

Men-Chase Carmel, Optimal Outsource

Women-Dawn Schwartz, Foster Premier

Closest to the Pin-Course 3

Men- Ted Gross Bruning & Associates

Women-Gina Cashman, Foster Premier

 

 

Trouble Article

In the popular board game “Trouble,” players move colored pieces around a board, and when one player lands on a space already occupied by an opponent, the opponent’s piece is sent back to start (hence, the “trouble”). The object of the game is for each player to gather all their pieces into the final “home” spaces where they can elude the “trouble.”

Every association faces trouble in one form or another over the course of time. Some boards do a good job of preventing trouble, resulting in few occurrences, while other boards seem to constantly be battling trouble, both on their board and in their association. Similar to the board game, board members often get into “trouble” when they want to occupy the same metaphorical decision-making “space.” This article focuses on five best practices for preventing and resolving trouble in an association.

One of the top reasons for association trouble is an unbalanced board. Boards are typically comprised of three to five members holding various positions, representing a cross-section of the ownership. All board members are elected by the owners, and have an equal vote in decisions affecting the direction of the association, regardless of their position. Trouble starts when one member of the board tries to control all decisions on the board, also known as autocratic decision making. This manifests itself in many forms, including raising their voice, openly criticizing others, and possibly even making edicts instead of taking board votes. When this happens, decisions can become very one-sided and only represent the opinions and prejudices of that one member. This situation leads to board resignations, because their opinions are not valued. It also can lead to unhappy homeowners because their interests may not be adequately represented. Autocratic decision making can be addressed in several ways. First, try to talk it out. Partner with the other board members to address it with the strong member. If that doesn’t work, try changing the positions on the board. It is healthy to rotate the positions on the board to ensure a balanced approach to association decision making. If trouble still occurs within the group, utilize the annual election process to change the board membership. Any board member can solicit proxies from owners to help in making a shift in the makeup of the board. Having a balanced board makes for a happy community.

Another common source of trouble for associations is when homeowners are not treated equally. If imbalanced treatment of owners exists, it commonly appears in two areas; maintenance and collections. One of the worst forms of homeowner inequality is when board members are favored over homeowners. When no action is taken on board members for past due assessments or they receive repairs and upgrades before the rest of the homeowners, it deteriorates homeowner trust in the board. The same occurs when friends and neighbors of board members get preferential treatment over other homeowners. When someone joins the board, they must leave their personal agendas behind. They are entrusted to represent the homeowners equally. One way to ensure equal treatment is to adopt written policies voted on by the board. A successful written policy, when followed, should produce definitive results and ensure objectivity in the decision making process. A written collection policy is one common way to improve equality of collections. A written maintenance plan that includes rotation of buildings or units when starting projects is another way to improve equality in an association. Creating, following, and maintaining written policies ensures no single person benefits frequently over others and is one of the best approaches to maintaining equality in an association.

Running an association can expose board members to a broad range of personalities and emotional topics. By listening more and talking less, people will open up and communicate their concerns, and the board will earn their trust and respect. Always maintain a policy of calm and respectful discussion. Note items of concern and try to arrange them into groups to reduce the effort to resolve them. Being a board member requires thick skin and the ability to allow some emotional comments without striking back. In other words, don’t sweat the small stuff. With patience and persistence, the board will prevail in creating a positive and equal experience for both the board and the homeowners.

When problems occur in the community, resolve them quickly. Delays in board decision-making can lead to escalation of association problems. Maintenance issues can get worse and more costly, disputes can escalate turning discussions into lawsuits, and financial shortages can lead to the inability to pay bills. Maintain an action item list for issues raised at board meetings and begin tackling them the next day. Keeping action items in an electronic list helps with prioritizing and updating the list periodically. One way to help resolve action items quickly is to seek the advice of professionals. Utilize vendors as more than just service providers. The best service providers also work with boards as partners to help resolve their problems, even when there is no direct monetary benefit to them. So, whether it is a banker, lawyer, maintenance professional, or property manager, tap into the association’s professional network and get their advice. Many times, they will be able to help with additional options, and assist in eliminating options that don’t make sense. They may also be able to provide sources of professional education to help improve knowledge in weak areas.

Communication is another good way to prevent problems from happening or amplifying in an association. An important aspect of communication is transparency. It is important to ensure owners understand the problems being faced by the association. Holding board only workshops or making decisions outside of board meetings diminishes transparency and trust. In today’s busy work environment, owner participation in board meetings has been declining as well. Finding other ways to communicate with the community on activities, maintenance issues, and financial conditions – especially in ways that allow the homeowner to seek the information on their timeframe – is a positive move towards improving transparency. Newsletters, websites, email blasts, and mailings are all good ways to communicate with owners. Try to seek solutions to increase owner knowledge and involvement in order to create a more positive community experience.

When trouble starts brewing in an association, make sure the entire board is included in the decision-making process, treat everyone in the community equally, make listening a priority, address problems quickly, and communicate transparently to owners. If these five tips are followed, the level of trouble in the association should be kept to a minimum.

By: Dan Haumann, President

logo for website

 

I’m obsessed with HGTV and one of my favorite shows is Flip or Flop.  It’s based on two successful real estate agents who renovate distressed homes and sell them for what mostly turns out to be a substantial profit.  They make it look easy right?  How hard can a home rehab really be and why aren’t more people doing it?  Well the answer is easy, it’s a hard job.  It requires a ton of planning and years of experience in order to make the jobs look easy.  These two have house flipping down to a science, from selecting the properties, working with the right contractors to get the job done and then pricing the home just right to get the offers they need for a quick sale.

Much like house flipping, coordinating large capital investment projects at associations might look easy on the surface, but reality is much different.  About 80% of the work involved with managing a successful capital investment project is in the planning stage.  Absent putting the right amount of time and effort in these projects will most certainly end up in costly errors that will result in a “flop” project.

Here are some tips to consider in order to make your project a “Flip”:

Set the Right Timeline:

Several years ago, I sat with a potential client who was considering my company as their management agent.  The meeting took place sometime in August and this client explained to us that their biggest priority was a multi-million dollar window replacement project that absolutely must get done before the end of the year.  They asked us, “If we select you as our management company, can you assure us that you can get this done?”.  My answer was “Most certainly, no.”.  Here is why:

We would have had no time to do the proper planning on this project.  Between engineer reviews, reports, RFP’s, financing, pre-construction walk throughs and homeowner access we would have to skip vital steps in the planning phase to even get to a point where we would have been able to consider executing on the project.  Custom windows take weeks, sometimes months to order and even if we moved quickly, we would have been replacing owners’ windows in the dead of winter which only gives the owners the impression that we are poor planners.  I explained to this client that in order to do this right, we recommend planning to execute on this project around the same time next year.  This was not the answer our prospective client wanted to hear of course and I was worried that it would have affected our chances of winning their business.  Needless to say, we still got the contract and just over a year later we were able to successfully complete a well planned and executed project.

As managers, we are often faced with juggling multiple projects at once and the quicker we can check things off our list, the better.  This can never be the case with capital investment planning.  When asked to work on a large-scale project, make sure you are communicating the right timeline in advance.  This sets the right expectations to your board and gives you the time to properly plan this project.  Engineering work, bidding, financial planning, contractor interviews, selection, scheduling and our lovely mid-west weather can all have a huge impact on timelines.  Work through each of these points with your association and set aside the right amount of time to properly plan these projects.

 

Get the Experts Involved

I see way too many projects flop because an association decided to move forward with a project without the right oversight or “experts”.  Community Managers are often expected to oversee and be the expert on a host of large projects including roofing, masonry, window or large mechanical work.  The only thing managers can really be considered experts on in instances like these is recommending the right experts to get the job done.  This is where a professional manager can create value for associations.

The most commonly skipped “experts” I see with flopped projects are engineers/architects or general contractors and legal experts.   Most of the time, these vital components are skipped because someone “has a guy” they know or trust, or they don’t fully understand why these experts are needed.  Here is my take:

Engineers/Architects/GC’s:  These vendors are vital to just about any project.  They review the requirement and develop a scope of work based on a solution set that will ensure the most efficient resolution to the issue that identified the project in the first place.  Having a thoroughly identified scope of work will ensure apples to apples bids.  It can also avoid costly work change-orders down the road.

Legal Experts:  Before executing on any contracts for capital investments, it is strongly recommended that the association’s counsel review and comment.  Associations need to ensure the contract has protections built in should something not go according to plan.  Attorneys review contracts on a daily basis so they are able to identify industry and bench mark standards and will always look out for the association’s best interest.

Develop the Right Budget

In an ideal world, associations should have a fully funded reserve account to handle large capital investment projects.  With our economy slowly stabilizing, we are seeing many associations plan for capital investment projects with special assessments, loans or lines of credit due to lack of reserve funding.  Determining the amount a project will cost will take some consideration before levying these special assessments to ensure associations are covered.

When planning a budget for a capital investment project, ensure you capture the following expenses:

  • Project Manager/Engineer/Architect: What will it cost for someone to develop a scope of work, bid and oversee the project?  Ensure you agree on any not to exceed terms if some of the rates are hourly and budget conservatively if there are any varying factors with this contract.
  • Main Contractor Cost: This is your roofer, mason, window contractor etc.  The bulk of your cost should be with this line item and it should cover the full scope of work identified in your bid specification.
  • Legal: This item is often overlooked when considering project budgets.  A legal review of the contract should for sure be included in the budget.  Other items you may need in conjunction with your project are opinion letters to define repair scope responsibility and/or any unexpected legal issues that arise as a result of the project.  Disputes with homeowners or contract disputes can easily put a project over budget, especially since they are most always unexpected.
  • Contingency: I recommend that all associations consider adding a contingency to their project budgets. Aside from all the items highlighted above, there is always a chance that the unexpected can occur.  If you are funding a project via a loan or special assessment, the last thing you need is to run out of funds in the middle of your project.  Contingency amounts can vary from project to project and your engineer or architect can recommend an amount.  Absent guidance from them, I recommend budgeting at least 10% of the total project cost if possible.

 

Hold a Home Owner Information Session:  

An important step that is too often skipped with association capital investment projects is an informational session for the homeowners.  This is a vital step, especially if an association plans to levy a special assessment to fund this project.  A Board of Directors and Manager may extensively know the reason why a project needs to be complete, but having an informational session for the homeowners will ensure they have an opportunity to understand the project and why a special assessment (if any) is needed.  I find that holding these well in advance of the project creates much more buy-in with the owners and much less push back or disruption when you are trying to execute these repairs.

At these informational sessions, consider putting together a power point presentation with plenty of pictures and details of the project scope.  I also recommend having your project manager, contractor and if necessary attorney and banker attend this session as well.  Having all the experts in the room will allow the owners to have access to all the information they need in order to be comfortable with the project.

Having this session is not a requirement of an association in order to approve projects or special assessments of course, but they are invaluable to increase communication within an association and to avoid complaints down the road.  If an owner is required to pay additional money for a special assessment, they will appreciate the extra effort that goes into ensuring they understand where their money is being spent.

 

With the weather forecast finally looking optimistic, the capital investment and construction season is well underway.  Many of you are just starting to execute projects and many of you may be considering or investigating projects in the future.  I hope these tips above will ensure you all are able to successfully “flip” your projects.

Best of luck!

Written By: Rachel Kegley, PCAM

PRMWebsiteHeaderLogo2016-1

 

A recent decision by the Illinois Appellate Court ruled that a condominium unit owner must pay post-judgment attorneys’ fees (in addition to post-judgment common expenses) before he or she can vacate the judgment and regain possession of his or her unit.

In State Place Condominium Association v. Magpayo, a condominium association filed an eviction action against the unit owner for unpaid assessments.  A trial was held and judgment was entered in favor of the association and against the unit owner for money damages (assessments, attorneys’ fees and costs) and for possession of the unit.  After trial the unit owner filed several motions, which the trial court denied.  The association was awarded additional attorneys’ fees in connection to those various post-judgment motions.  The unit owner was eventually evicted from the unit.  After the eviction, the unit owner filed a motion to vacate the judgment, which was denied because the unit owner had not paid amounts owed to the association before filing the motion and because the association had leased the unit.  The unit owner filed a motion to reconsider, which was also denied.  The association was then granted leave to file a petition for additional attorneys’ fees, and the unit owner filed an appeal.

One of the issues on appeal was whether the unit owner was required to pay post-judgment attorneys’ fees before the judgment could be vacated.  The unit owner argued that post-judgment attorneys’ fees are not required to be paid before the judgment could be vacated.  Is support of that argument, the unit owner relied on Glens of Hanover Condominium Ass’n v. Chiaramonte, an Appellate Court decision from 1987.  In Chiaramonte, the Appellate Court held that a unit owner is not required to pay post-judgment attorneys’ fees before he or she can vacate an order for possession in a condominium eviction case.

The Magpayo Court held that Chiaramonte is no longer good law because after that case was decided, the Illinois legislature amended Section 9.2 of the Condominium Property Act (“Act”), which “requires that attorney fees incurred by the Association that arise out of a default be added to a unit owner’s share of the common expenses.”  Since the unit owner in Magpayo had not paid in full the amount, including post-judgment attorneys’ fees, necessary to vacate the judgment, the Appellate Court affirmed the trial court’s denial of the unit owner’s motion to vacate.

The Appellate Court’s decision in the Magpayo case is certainly positive for condominium associations.  However, one issue that was not expressly addressed by the Magpayo Court is whether the post-judgment attorneys’ fees to be paid by a unit owner must be adjudicated.  Generally, attorneys’ fees are subject to a court’s review and adjudication.  In Magpayo, the association had already been awarded post-judgment attorneys’ fees by the trial court on one occasion and granted leave to file a petition for fees on another occasion before the unit owner filed the appeal.  Certainly, the unit owner was obligated to pay those adjudicated (or soon to be adjudicated) attorneys’ fees in order to vacate the judgment.

It is fairly common that an association incurs some post-judgment attorneys’ fees, which may even be incurred without actually going to court.  Although, the Magpayo Court does state that Section 9.2 of the Act requires attorneys’ fees to be added to a unit owner’s “common expenses,” it does not make clear whether those attorneys’ fees must be adjudicated.  Accordingly, there remains a question as to whether the Magpayo case requires a unit owner to pay non-adjudicated post-judgment attorneys’ fees before the judgment in a condominium eviction case can be vacated.

Further, although pursuant to the Forcible Entry and Detainer Act (Article IX of the Illinois Code of Civil Procedure), common interest community associations are afforded the eviction remedy in the same manner as condominium associations, the Common Interest Community Association Act does not contain a provision similar to that portion of Section 9.2 of the Condominium Property Act relied upon by the Magpayo Court.  Accordingly, a common interest community association will need to be mindful that the Magpayo case may be limited to condominium associations.

In summary, the Magpayo case confirms that Section 9.2 of the Condominium Property Act allows a condominium association to add attorneys’ fees related to a unit owner’s default to that unit owner’s common expenses, and that a unit owner must pay post-judgment attorneys’ fees before a judgment in an eviction action can be vacated.

By Kristofer D. Kasten of Michael C. Kim & Associates. Reprinted with permission. Originally published on IllinoisCommunityAssociationLawBlog.com

 

Reducing Risk Article

Risk is a popular strategic board game that was initially invented in the 1950s by a French film director, then later purchased and produced by Parker Brothers with a few modifications. The board game shows a map of the Earth, divided into 6 continents and even further into 42 territories.  The object of the game is to occupy every territory through the use of armies that capture other players’ territories, thereby eliminating the other players.  The “risk” arises as victories and defeats, and the eventual winner of the game, is determined through simple dice rolls.  Though the rules of Risk neither condone nor prohibit alliances, it has been acknowledged that alliances add a powerful interactive element to the game, and can be dealmakers or dealbreakers depending on what side of the alliance you find yourself on.  The game can be a metaphor for life, as sometimes the choices we make involve some risk and can sometimes have unintended unfortunate results.

We all experience risk in our everyday lives. Things such as making our morning coffee in our own kitchen, driving a car or even shopping at our local grocery store are all actions that can put us at risk.  We might forget to turn off the coffee pot one morning which causes a fire in our home, we might cause a fender bender while driving, or we might slip and fall on a wet spot on the floor in front of the meat counter in our favorite grocery store.  These are accidents that we don’t expect to happen – but are risks we take every day.

In the bigger picture, if you are reading this article, chances are you are involved in your local community association or are a service provider to associations. As insurance agents, it is our job to try and educate our clients on ways to reduce risk in their own community.

Being aware of situations around us is one of the best ways to reduce risk which might lead to an accident or a scenario that might cause damage to others.   When you leave your house in the morning, do you double check to make sure that all appliances are turned off?  Leaving a coffee pot on or forgetting to turn off the iron can lead to a fire.   When you are walking through the grocery store or walking around your community are you aware of your surroundings? Not paying attention to where you are walking can lead to a slip and fall situation.

If you are a board member of your association it is important to be alert and attentive when driving or walking through your association property; make sure to assess your territory. Are any street lights burnt out which cause a dark spot on the street?  Are there any pot holes in your streets that need to be reported to your municipality, or does action need to be taken by the board to get them repaired?  During a landscape walk did you notice any ruts or holes in the ground that need to be addressed? How about uneven sidewalks which can lead to a slip and fall?  Evaluating risk during your everyday life is important – especially if you are responsible for the wellbeing of others.

The very first thing potential insurance agents are taught as they travel down the career path to becoming Risk Managers is the theory of Transfer of Risk. The International Risk Management Institute, Inc. (IRMI) defines Risk Transfer as a “risk management technique whereby risk of loss is transferred to another party through a contract (such as a hold harmless clause) or a professional risk bearer (such as an insurance company)”. This means if there is a fire in your building you want your insurance company to give you dollars to repair or replace what was damaged.  If someone slips and falls and is injured, you want your insurance company fund to pay their medical bills.

Another way to reduce risk is to buy insurance to protect ourselves and others that we come into contact with. Buying insurance can be a daunting task especially since your insurance program is often the most expensive line item in your budget. Make sure you form an alliance with a capable expert.  Your insurance agent should be someone who has experience in working with community associations.  The CAI (Community Association Institute) and ACTHA (Association of Condominium, Townhome and Homeowners Associations) membership directories can give you a good place to start when you are looking for an insurance agent or an insurance consultant with whom to work.   Remember, there is nothing wrong with interviewing an insurance agent before you allow them to handle your association’s insurance program.  Would you hire a property manager, a landscaper or attorney without interviewing them first?

You also want to make sure that the insurance companies that insure your property are strong and solvent. You want to make sure that they have enough money in their coffers to pay for any claims that might arise.  Go to www.ambest.com to check out ratings for insurance companies. A.M. Best is the “go-to” company for credit ratings and financial data for the insurance industry. Knowing that your insurance company is strong and your insurance agent is experienced and reputable can give you great confidence in your alliance.

Another safeguard against risk is to hire an insurance consultant to act as a second pair of eyes to review your insurance program. No insurance agent should be afraid to cooperate with an insurance consultant that you hire to review your insurance program.  If they are, then that might be your first red flag that you have selected the wrong insurance agent!

When reviewing your insurance program you want to confirm numerous things. If you are a condominium, does your insurance program meet or exceed the requirements in the Illinois Condominium Property Act?  When was the last time your Association had an insurance appraisal completed to confirm that your building limit is correct?  Is your deductible appropriate for your exposure?  When was the last time you went out to bid on your insurance?  Going out to bid every 3-4 years is recommended.

You also want to make sure that your Fidelity coverage (which protects your association’s funds) meets state and Freddie Mac guidelines, which require that the Fidelity coverage must be in the full amount of both your association’s operating and reserve funds in the custody of the association or the management company.

Does your association have a Disaster Plan in place? If you are an apartment style association – when was the last time your association had a fire drill? Does your association include a copy of your Disaster Plan in the welcoming packet for new owners and renters?

Speaking of renters – does your association recommend to owners that rent out their unit that all renters carry an HO-4 (renters insurance) policy? Do you also require that all homeowners carry an HO-6 (condominium owners insurance) policy?  Ascertaining that your residents maintain appropriate insurance coverage can reduce the risk of an association having to foot the bill for any disasters stemming from a resident’s unit.

If you are a unit owner do you obtain a copy of your association’s Certificate of Insurance every year? Keep in mind that if you have a mortgage on your unit, chances are your mortgage company obtains this document on your behalf every year.  If you do not have a mortgage, you have the right to obtain this document which gives you information about your association’s insurance program.

Controlling risk in your everyday life is paramount in protecting not only yourself but the community you live in. Whether you are a homeowner, board member or service provider you should have a good strategy in place to control risk. You should form an alliance with an insurance agent, insurance company and insurance consultant you can trust to help you control your risk.  Finally, draft a plan of action in the event of disaster so that you will prepared if such an event ever transpires. Evaluating and managing risk will ultimately result in reducing situations that put you at risk and put the association at risk of loss.  In that game, you’re both winners!

Rosenthal Bros.

Karyl Dicker Foray, CIRMS, CRIS

Debbie Smith, CISR

 
 

Monopoly ArticleSo you landed in Park Place and decide this is the perfect home for you.  You sign the contract and look forward to paying the bank and moving in.  It is just like the game, Monopoly.  Not so fast – you have decided to move into a condominium!

Condominium living offers many fantastic benefits and attracts a wide array of buyers.  Condominium buildings and associations vary drastically so there is a great deal of diligence needed to ensure the association will be a good fit for you.  Thankfully, there are laws to help a buyer gather the information needed to make a smart buying decision, but what happens when the association decides it wants to make sure YOU are a good fit for IT?

New homeowners should feel like they have landed on Park Place and be welcomed into the community.  A new owner with a poor first experience with an association is less likely to volunteer and become an active member of the association.  So where in this process do things sometimes go wrong?

Many (but not all) condominium declarations and/or bylaws, particularly older ones, grant the association a Right of First Refusal on the sale or lease of a condominium unit.  Some boards incorrectly interpret this as an opportunity to select neighbors which, due to anti-discrimination laws, may place the association at risk of significant penalties. Oops – you may have just picked up a “Do Not Pass Go, Go Directly to Jail” card!

In order for an association to exercise its right of first refusal, the association must have:  a) the authority to purchase the unit (most declarations require significant homeowner approval to make large capital purchases); b) funds to purchase the unit; and c) a business reason to purchase the unit.  Given the challenges of exercising the right of first refusal, it is rarely practical in today’s market.  In addition, a board that is contemplating exercising its right of first refusal should have a clear policy in place on this matter and consult the association’s attorney before taking any action.

Don’t land on “Chance.”  Some boards take a chance and withhold providing a waiver because they first want to review the buyer’s information and conduct an interview with the potential buyer. They do this simply because this is how they have always done it.  The times and laws have changed, and causing a sale to fall through by unreasonable delays may cause financial harm to both the buyer and the seller.  This may also result in a damage claim against the association, particularly if the board cannot demonstrate it had the authority, opportunity and business reason to follow through with exercising the right of first refusal.

So why withhold the waiver? If it is the association’s goal to require a new owner orientation to review policies and rules of the association, then the board should consider alternative methods to obtain compliance.  While new owners receive the rules and regulations of the association, they rarely have the time during this busy moving process to read and understand all of the rules.  Instead, consider these suggestions:  1) Provide a simple, easy-to-read, excerpt from the rules and regulations that relate to moving; 2) require a move deposit that is subject to refund after the move is complete and a new owner orientation has taken place.

Don’t take any chances and know the rules of the game. Associations are encouraged to review their rules, regulations and policies with their attorneys to ensure compliance with laws and industry best practices. Avoid having to need that “Get Out of Jail Free” card and instead pass “Go” and enjoy life on Park Avenue!

Ken Metz, President

Logo

 

Operation Landscape

There are many parts to the landscape “game.”  Some are small, some large, some moving and some waving their arms frantically in the air, calling you over to handle the imaginary emergency that needs to get taken care of immediately or the world will end. But I digress.  All of these parts are in perpetual movement, changing in appearance, size, color, and texture.  It seems that the only constant among these parts is the level of attention needed to pull all of these pieces together without sounding the alarm.  In order to do so, it seems a landscape expert has to be as deft and skilled as a surgeon… or at least, someone pretending to be one, playing the board game “Operation” without tripping the buzzer on the “patient’s” nose.

When considering an Association’s landscape program and maintenance operations, there are an enormous amount of variables that go into deciding on the best plan.  Let’s be honest, the term “landscape maintenance” could not be any broader. It leaves so much on the table. What Company “A” considers weekly maintenance, will likely be different than what companies “B” and “C” do. Every contractor will have their own spin on how they maintain a property.  Is one right and one wrong?  Not necessarily. What’s important is that, at the end of the day, the expectations of the homeowners and board members have been met.  Meaning, they are getting what they are paying for.

The largest obstacle that we, as landscape contractors, will have to hurdle is controlling expectations. It is the job of the contractor to clearly outline, to not only the association’s board members, but also to its homeowners, the method behind the madness. Communication is the key to success.  If the expectations are openly discussed and decided upon prior to operations beginning, the amount of “why” will be kept to a minimum.  While weekly operations amongst contractors might differ, at the end of the day, it is a result-driven business.  If the property looks good, most customers don’t really care how you made it that way.

Ok, now the plan is in place.  The method has been laid out.  Expectations have been clearly discussed. Staff is trained.  The game of operation is about to begin.  As was laid out earlier, the parts of the game are ever-changing.  The mowing, the trimming, the fertilization program, the weed control, the edging, the flowers, the list goes on and on.  At the beginning of the season, these are the items that are on the table.  The goal of the contractor is to remove them from the list, one by one, without slipping up and letting the buzzer go off.

There is only so much planning that can be done.  While visions of butterflies and hummingbirds fluttering through the air fill customer’s minds, the harsh contrast of diesel and motor oil are all the contractors see.  Machines and trucks that were seemingly just serviced over the winter are back in the shop for tune-ups and repair. That’s all part of the game. Dealing with adversity is a daily occurrence. There will be issue after issue, reason after reason, hurdle after hurdle to overcome, but guess what, the client doesn’t care. They want it done, they want it done right, and they want it done now.  There are still “pieces” that need to be taken off the table as dexterously as removing the plastic funny bone from the game “Operation.”

With a level head, a steady hand, and the knowledge of how to play the game, there should be no reason to succumb to the adversities.  Take a deep breath, focus on the goal at hand, and do what you know is best.  You will get the complaints, you will hear the noise and you will feel the nerves.  Remember that you are the one in control of the situation.  Step up to the table, and start removing the pieces, the best you can.

 

PerriconeLandscpeHeaderWebFinalG4

Josh Gelvan & Joe Perricone, Directors of Landscape Maintenance and Operations, Perricone Bros. Landscaping

 

 

Common Interest Magazine is CAI Illinois’ quarterly magazine that presents timely articles on community association issues and local legislature updates, as well as upcoming events, a classified directory of association service providers and easy access to business partner advertiser websites by clicking an ad.

In this spring issue titled, ‘Developing a Winning Strategy for your Association” we cover among many other topics, formulating a strategic plan for your association, how to put your financial reports into words people can understand and how to stop trouble from derailing your association.

This and many more fascinating articles in this edition of Common Interest

 

The members of ILAC (Illinois Legislative Action Committee) met with IL legislators recently to discuss bills related to the community association industry.

ILAC represents the interests of CAI-Illinois Chapter members with respect to federal, state and local legislation and regulatory activities. Condominiums and other community associations are significantly affected by statutory changes. State and local legislation can either solve current problems or significantly and adversely affect the operations and governance of community associations. It is crucial that CAI Illinois’ position be considered by those that make our laws in Illinois. ILAC is the primary voice for community associations in the Illinois legislature and municipal governments.

Support ILAC

1.  Bid on online auction items from May 1 – May 12, 2016 at our online auction site.

 2.  Make monetary donations to our online fundraising page

3.  Attend our Annual Fundraiser on May 11th. Purchase Zanies tickets here

ILAC At Springfield 4_13_2016

 

Measure Would Give Millions of Homeowners a New Tax Deduction

February 16, 2016, Falls Church, VA—U.S. Representatives Anna G. Eshoo (D-CA) and Mike Thompson (D-CA) have introduced a measure that would allow homeowners in community associations who earn $115,000 or less in annual income to deduct up to $5,000 of their community association fees and assessments from their federal tax liability.

Community Associations Institute (CAI) has expressed support for the bill. The legislation will benefit many of the more than 66 million Americans who live in homeowners associations, condominium communities, cooperatives and other planned communities.

The bill—Helping our Middle-Income Earners (HOME) Act—“recognizes that millions of middle class homeowners are struggling to keep up with rising household expenses like child care, college tuition, health care, mortgage and community assessments,” Eshoo said. “The Home Act can go a long way by providing relief from this tax burden on millions of middle class families.”

This bill recognizes the financial unfairness facing homeowners in community associations, as they pay their fair share of local property taxes, along with their community assessments, and receive many municipal services from their community association, such as street and sidewalk cleaning, trash removal, snow removal and other services.

“CAI applauds Rep. Eshoo for her efforts to make homeownership more affordable and for recognizing the inequity of double-taxation faced by homeowners in America’s community associations,” said CAI Chief Executive Officer Thomas M. Skiba, CAE.

“We look forward to working with Eshoo and Thompson to ensure this legislation is a net gain for millions of Americans who live in community associations,” Skiba added.

While there hasn’t been a Senate companion bill introduced, CAI expects members of the House of Representatives in states with a large number of community associations—such as Florida, California, Texas, Illinois, North Carolina, New York and Massachusetts—to support the legislation and continue a dialogue that leads to inclusion of the tax deduction in comprehensive tax reform legislation.

With almost 34,000 members dedicated to building better communities, CAI works in partnership with 60 chapters to provide information, education and resources to community associations and the professionals who support them. CAI’s mission is to inspire professionalism, effective leadership and responsible citizenship—ideals reflected in communities that are preferred places to call home. Visit www.caionline.org or call (888) 224-4321.

______________________________________________________

For members and general inquiries, contact the CAI member service team:
Community Associations Institute
Phone: (888) 224-4321
E-mail: CAI-info@caionline.org

CAI GOVERNMENT AFFAIRS CONTACT: Dawn Bauman, CAE
Phone: (703) 970-9224
E-mail:dbauman@caionline.org

 

 

Our Homeowner Forum has gone Virtual! Get answers to your association questions without leaving the comfort of your home or office.

Panel

Attorney – Chuck VanderVennet – Law Office of Charles T. VanderVennet, P.C. Community Manager – Lea Marcou – Associa Chicagoland Insurance – Kathy Valek – Allstate Insurance Accountant – Steve Silberman –  Marcum, LLP

How Does it Work?

All you need is a computer, smart phone or tablet with internet access to participate. Don’t have internet access during the webinar and still want your question answered? No problem, pre-register with your questions and call in during the webinar to listen in to the ongoing questions and answers.
Check out this article in the Chicago Tribune about our last Homeowner’s Forum! Don’t miss out on the next!

Thursday, May 16th

6:30pm-8:30pm

Click here to Register

 
 

This document provides a general synopsis of various bills that affect community associations. This list is by no means complete. Further, the information contained herein can change throughout the legislative process. Bills can be amended and language originally proposed can be deleted. In order to assure you have the most accurate information about any given bill, please go to www.ilga.gov and review not only the synopsis but the actual language of the bill and any relevant amendments. This information is provided as April 4, 2016.

 

HB4489 (Rep. Drury) – UNIT OWNER LITIGATION. This bill amends the Illinois Condominium Property Act by creating Section 33 entitled “Unit owner’s right to fairness in litigation.” The bill states that an owner has a right to “fairness” in all litigation between the owner and a condominium association regardless of whether the owner commenced the litigation or the litigation is commenced against the owner. The bill voids any covenant or rule which limits the owner’s right to commence litigation. The bill provides an owner be awarded attorney’s fees if the owner prevails in any litigation or if the unit owner prevails on any affirmative defense against the association. The bill further provides for a judicial reduction of attorney’s fees in litigation (except assessment collection matters) and a complete bar to an association recovering attorney’s fees in an assessment collection matter if the owner prevails on any affirmative defense or counterclaim. Finally, the bill prevents an association from being represented by counsel of it’s choosing in any litigation if such counsel “also represents the board of managers either individually or collectively.” On February 4, 2016 this bill was assigned to Judiciary – Civil Committee. On March 2, 2016 this bill lost in Judiciary by a vote of 3-8.

CAI ILLINOIS OPPOSES THIS LEGISLATION

http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=88&GA=99&DocTypeId=HB&DocNum=4489&GAID=13&LegID=93465&SpecSess=&Session=

 

See More Bills

 

In recognition of National Volunteer Month, CAI-Illinois each week in the month of April will recognize an  Association Board of Directors and/or individual volunteers that have proven outstanding performance and commitment to their associations. This will give those remarkable individuals acknowledgement for their determination and dedication in promoting positive living within the common interest communities they serve. 

The first recognition will go to “Tallgrass Homeowners Association in Bartlett” who has had both the most DCAL members and the biggest attendance in DCAL courses in the past year. These leaders are: Kerry Riordan, Liz Kopitke, Mark Gray, Steve Gewartowski, Steve Saitta and Tom Martin who serve as Board of Directors within “Tallgrass Homeowners Association”.  Congratulations and thank you for your service and dedication.

 For more information on the DCAL Program, go to http://www.cai-illinois.org/board-member-education-dcal/

 Stay tuned for the announcement of more amazing individuals in the weekly CAI email blasts.

 

 

 

FB_ILAC_Fundraiser2-300x225

Illinois Legislative Action Committee (ILAC) Fundraiser
Wednesday, May 11, 2016
Doors Open 6:45pm, Show Starts at 8pm
Online Auction May 1 – May 12, 2016

  • Zanies Comedy Club in Rosemont Illinois
  • Bring your spouse, friends, and colleagues!
  • 6:45pm — Doors Open, Raffles, Cocktails
  • 8pm—Show Begins
  • There is a 2 drink minimum purchase during the show
  • Everyone must be 21 or over, with a proper photo ID
  • 25.00 / Ticket – Pay Online Below

“Support ILAC in 4 ways”

Donate an auction item!  Drop off at CAI office by April 15.

Bid on the online auction items from May 1 – May 12, 2016 at our online auction site.

 Make monetary donations to our online fundraising page

Purchase Zanies tickets here

 

Carrie Surratt from Care Property Management is the winner of our 2016 Bring Colleagues to the Expo contest. Carrie referred 5 new all-access attendees.

Lake Hinsdale Village Association won the drawing for communities who registered 2 or more board members.

In total, CAI presented $1,300 in prize money that could be used towards CAI education/event attendance, association services or a cash prize.

Want to learn how you could win a trip to Vegas? Read the details of our Recruiter Contest going on now!

 

Today, CAI held its semi-annual Committee Chair meeting. This meeting brings together Committee Chairs, Board Members and Staff for a brainstorming and strategy session that sets the direction for the chapter in the coming year. The four main categories that were explored were, Membership/Marketing, Education/Networking, Volunteers/Committees and CAI overall. The approach was for each of our leaders to make notes on what CAI is awesome at, what we need to improve and out of the box ideas, in turn this sparked an interesting and dynamic group discussion that got everyone talking on our goals for the remainder of 2016 and on how to accomplish them. This approach proved to be very successful by allowing everyone’s voice and opinion be heard and by coming up with some great strategies and connections to make our goals possible.

Want to be a part of helping set our Chapter’s direction? Don’t miss out on the opportunity to get involved by volunteering and joining a committee. You could be in this room next year.

 

CAI Chair Meeting

 

CAI Illinois Chapter president, Kerry Bartell wrote an important piece on regulation of Airbnbs in the Chicago Tribune this past week.

In her article, she cites a Pennsylvania State University study that found that nearly 30% of Airbnb’s revenue comes from users that list their units for rent full-time.

Why is this important to condo living you ask? Because platforms such as Airbnb provide landlords the opportunity to rent out their units without the need of licensing or following Association leasing policies, leaving condominium associations open to a revolving door of unknown renters.

The solution? Regulation that includes licensing of all short-term rental units that are not primary residences. This would provide Associations the information required to safely manage and police their buildings.

Click here to read the full article.

 

CAI-Illinois is hosting a Downtown Happy Hour. This is sure to be a great opportunity to network with property managers, board members and colleagues. Be sure not to pass up this opportunity as we are sure to have a great turnout since we have conveniently scheduled it after the Legal Forum and just 3 blocks away.

April 28th

4:00pm

Bar Louie

47 W. Polk Street, Chicago

Appetizers will be provided

Guests are responsible for their own drinks

RSVP by emailing vivianav@www.cai-illinois.org

This event is sponsored by:

Nania Energy

KSN

 

FB_ILAC_Fundraiser2-300x225On May 11, 2016, CAI Illinois and ILAC will hold a Fundraising event at Zanies in Rosemont to support the lobbyist who works on your behalf. We are asking for your support towards the silent auction by donating an item by April 15th to our CAI office.

If you prefer to make a monetary donation, you may do so by making checks payable to the Illinois Legislative Action Committee and mailing to CAI, 1821 Walden Office Square, Suite 100, Schaumburg, IL 60173. Or by visiting the CAI National Website to make your donation.

For more information on the Zanies event please visit our event page.

Did you know?

ILAC is the primary voice with legislators and regulators for the state chapter that speaks with one voice on state legislative and regulatory matters that affect community associations, community association managers and CAI business partners.

• ILAC takes a pro-active role and develops legislation for introduction in the Illinois legislature
• ILAC reviews, monitors, supports or opposes pending federal, state and local legislation or regulations, collectively takes “a position” on each bill or ordinance and through our lobbyist, communicates the position to elected officials
• ILAC encourages members to communicate with their representatives to influence the course of proposed legislation
• ILAC provides educational services to the chapter membership through legal forums which update members on legal and legislative developments affecting community associations
• ILAC contributes articles to Common Interest Magazine
• ILAC monitors growing trends and develops strategies to protect community associations
• ILAC promotes, communicates, and implements CAI public policy at the state level

www.cai-illinois.org/ilac

 

More than 1,500 industry professionals and homeowner volunteer leaders came together for the most comprehensive 2-day event for community associations in the state of Illinois!

This year’s CAI-IL Condo – HOA Conference & Expo offered education sessions on legal updates, innovative trends, hot topics, and industry best practices, as well as opportunities to share, learn, network, and discuss challenges and solutions.

Did you have as much fun as we did? Join us next year February 24th and 25th, to do it all over again!

Click here to see our wrap up video!

 

 

CAI-Illinois is pleased to welcome Viviana Valentino as our Marketing / Membership Coordinator. Viviana brings years of marketing and mulit-family association experience to the chapter. She will be working closely with our Marketing and Membership Committees to enhance the chapter’s image and increase membership satisfaction. Viviana can be reached by email at vivianav@www.cai-illinois.org or at 847-301-7505. We are thrilled to welcome her to Team CAI!

 

Viviana

 

HB 4489 did not advance from committee.  The votes were 8 no and 3 yes.  At that time Rep Drury withdrew HB 4490 and HB 4491 from consideration.  Be aware that this is not over.  It appears that the bills will be amended and possibly reintroduced in committee.

 
 
This pending legislation will greatly limit the rights of Associations, so please join a statewide effort to stop legislation proposed by Rep. Scott Drury from being passed.

Take 5 minutes to do this now (process needs to be complete before 4:30pm March 1.  Hearing is scheduled for 8:30am March 2):

1.        Visit the link below, which will take you to the House Judiciary page.
2.        On the bottom, you will see Representative Drury’s three bills HB4489, HB4490 and HB4491.
3.        To the far right, you will see two options under the column “Witness Slips.”  The tab on the right allows you to fill out a witness slip and
let the committee know your position.
4.    You can also make calls to members of the House Judiciary Committee to encourage them to oppose the bills.

http://my.ilga.gov/Hearing/HearingDetail/13413?CommitteeHearings-page=1&CommitteeHearings-orderBy=&CommitteeHearings-filter=&_=1456838645242

 

The Illinois Chapter of CAI is proud to announce that we have been selected by CAI National to host a PCAM Case Study in September 2016.

The Chapter is looking for a Community Association to host the PCAM Case Study.

A major benefit for the association hosting a Case Study program is receipt of the top three to five papers written for the program. While the opinions written in the papers are those of the authors and do not necessarily represent those of CAI or the Facilitator, the information can be of invaluable assistance to the property. (more…)

 

Most of us rue the end of summer—sunny days, mild nights, vacations, the beach, ball games, picnics and so much more. Although fall and winter bring holidays, the warmth of a fireplace and football (actual and fantasy), for many people the winter months mark the return of seasonal depression. CAI-IL-Winter-Blues

It’s known in medical circles as seasonal affective disorder (SAD), a type of depression that affects a person during the same season each year. If you get depressed in the winter but feel much better in spring and summer, SAD may be the culprit. Symptoms typically start in September or October and end in April or May. (more…)

 

Many of us regularly recycle soda cans and water bottles, but did you know that many other food and beverage containers and household items also are recyclable? Take a look at the list below for some guidelines for what you can put into your community-provided recycling bin and what should be handled by a waste management professional. logo-of-green-recycle-in-the-frame_G1mHgTYu_L

Learn more about Developing a Green Community at our 2016 CAI-IL Condo-HOA Conference & Expo! February 26 and 27, 2016.

Industry experts will discuss important factors to consider when making your community Green. You’ll explore the rules, regulations, cost effective innovations and best practices for implementing Green ideas into community association living.

 

(more…)

 
ILLINOIS LEGISLATIVE ACTION COMMITTEE
COMMUNITY ASSOCIATION INSTITUTE OF ILLINOIS


FACT SHEET IN OPPOSITION OF HBs 4489, 4490 and 4491

 

House Bills 4489, 4490 and 4491 were introduced in an attempt to reverse the Illinois Supreme Court’s holding in Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342 (2104).

Instead of “leveling” the playing field, the bills as introduced will encourage and increase litigation between condominium association and their owners. The result of the bill will see an increase of attorney’s fees being imposed on the association and passed back to all non-defaulting unit owners.

Additionally, the bills:

  • Will increase the time and expenses associated with delinquent assessment collection cases by allowing unit owner to interpose many defenses to the non-payment of assessments.
  • Limit (or in some matters bar) an association’s ability to recover attorney’s fees incurred as a result of an owner’s failure to pay or default, thereby increasing the expense on the remaining, non-defaulting owners.
  • Creates the legal defense to non-payment of assessments of “improper motive,” which is undefined and wholly subjective.
  • Increase litigation for any default of the governing document to ensure that an association has the ability to pass back any attorney’s fees incurred as a result of a default.
  • Prevent associations from choosing their own counsel if counsel represents the members of the board of directors collectively.
  • Increase lawsuits by owners against associations with the ability to recover attorney’s fees if the owner prevails on any claim or affirmative defense.
  • Ignores the alternative dispute and mediation provisions in the “Condominium and Common Interest Community Ombudsperson Act” and effectively encourages litigation.
  • Furthers the myth that condominium associations are hostile abusive entities instead of a collective of owners and neighbors working toward common understanding.

 

 

SYNPOSIS OF HOUSE BILLS 4489, 4490 AND 4491 (REP. DRURY)

 

HB4489 (Rep. Drury) – UNIT OWNER LITIGATION. This bill amends the Illinois Condominium Property Act by creating Section 33 entitled “Unit owner’s right to fairness in litigation.” The bill states that an owner has a right to “fairness” in all litigation between the owner and a condominium association regardless of whether the owner commenced the litigation or the litigation is commenced against the owner. The bill voids any covenant or rule which limits the owner’s right to commence litigation. The bill provides an owner be awarded attorney’s fees if the owner prevails in any litigation or if the unit owner prevails on any affirmative defense against the association. The bill further provides for a judicial reduction of attorney’s fees in litigation (except assessment collection matters) and a complete bar to an association recovering attorney’s fees in an assessment collection matter if the owner prevails on any affirmative defense or counterclaim. Finally, the bill prevents an association from being represented by counsel of it’s choosing in any litigation if such counsel “also represents the board of managers either individually or collectively.” On January 22, 2016 this bill was referred to Rules Committee.

HB4490 (Rep. Drury) ATTORNEY’S FEES IN THE EVENT OF AN OWNER DEFAULT. This bill amends Section 9.2 (b) of the Illinois Condominium Property Act. Currently Section 9.2 provides that attorney’s fees incurred by an association arising out of default by a unit owner,
tenant guest or invitee of the governing documents or the Act can be added to the unit owner’s share of the common expense or unit owner’s account. The bill amends the section to prohibit an association from adding attorney’s fees to an owner’s account without a finding by a court.
The bills require a court to award attorney’s fees, in every default, before attorney’s fees can be added to the unit owners account, thereby requiring a judicial finding on any default. On January 22, 2016 this bill was referred to Rules Committee.

HB4491 (Rep. Drury) EXPANSION OF UNIT OWNER DEFENSES IN COLLECTION CASES UNDER THE FORCBILE ACT. This bill amended Sections 9-106 and 9-111 of the Illinois Forcible Entry and Detainer Act. Effectively this bill seeks to overturn the Illinois Supreme Court’s decision in Spanish Court Two Condominium Ass’n v. Carlson, 2014 IL 115342 (2104). In Spanish Court Two the Supreme Court held that the obligation to pay assessments was an independent covenant and a unit owner’s attempt to raise as a defense a breach of duty by an association was not “germane” to the collection case and thereby not permitted. This bill seeks to amended the Forcible Act to reverse the holding of the Supreme Court and permit an owner to raise, in any delinquent assessment collection case, a “material breach of any duty” in the condominium instruments, rules or statutes, or an “improper
motive” by the association in bringing the action. Further, the bill amends the Forcible Act to bar an association in a collection case from recovering any attorney’s fees and costs if the court finds that the association breached an obligation under the governing documents or a fiduciary duty to the unit owner, regardless of non-payment of assessments. On January 22, 2016 this bill was referred to Rules Committee.

 

This document has been prepared by the
Legislative Action Committee of the Community Association Institute of Illinois Chapter

Please refer to the latest legislation for updates on dates and deadlines.

 

The CAI Illinois Conference & Expo is the first major event to kick off our calendar each year. CAI Illinois members, community association board members, volunteers and community management companies come together for a day of learning, networking and – of course – the exhibits.

With a schedule jam-packed with seminars, discussions and the ever-important expo hall, this annual event can be a bit overwhelming for newcomers. Having a game plan goes a long way to ensuring you have a memorable – and successful – Expo experience.

Innovation for a Stronger Community – you’re going to see these words a lot. At CAI Illinois Chapter, we don’t toss around buzzwords lightly. We understand the frustrations faced by homeowner association members, and we have made it our mission to develop innovative ways to help you build stronger communities.

As a board member or volunteer attendee, your reasons for attending the Expo will certainly be different compared to community association managers and service providers. But they’re certainly related. The name of the game? Building solid relationships and learning as much as you can to better serve your community’s association.

First, visit www.CAICondoHOAExpo.com to take a look at the variety of seminars available and choose those most aligned with your interests and responsibilities as a member of your association board. (more…)

 

As a condo association board member you face daunting challenges of keeping your condominium association running smoothly and providing quality services to your homeowners. Fortunately, our annual Conference & Expo puts quality community association training and access to experienced service professionals within easy reach.

Of all the responsibilities handled by community association board members, perhaps none are more anxiety-producing and occasionally frustrating than securing service vendors to maintain community areas for the safety and well-being of residents.

Landscaping, paving, roofing, snow removal (a reality for life here in Chicagoland!), interior and exterior maintenance – the list goes on for the typical service needs for any community. The importance of thoroughly vetting potential service vendors, collecting and evaluating bids, and establishing long-term relationships with these providers cannot be overstated; after all, residents of the community are counting on you as an association board member to serve their best interests and responsibly use association fees and assessments to ensure quality-of-life standards. (more…)

 

Homeowner Association Board Members are charged with keeping their community safe, harmonious and in good repair. You are not alone! The Illinois chapter of the Community Association Institute is hosting its yearly Conference & Expo to provide great training opportunities. Get answers from community association experts in topics ranging from insurance to landscaping to legal and accounting.

If you’re an association board member, you’re tasked with some pretty serious responsibilities – managing the upkeep of community areas, keeping residents communicating (not always an easy task!) and, perhaps most importantly, helping your community operating at peak financial health (and, yes, that means budgeting).

Innovation for a Stronger Community – you’re going to see these words a lot in the coming weeks. At CAI Illinois Chapter, we don’t toss around buzzwords lightly. We understand the frustrations faced by homeowner association board members, and we have made it our mission to develop innovative ways to help you build stronger communities. (more…)

 

CAI Illinois’ annual Conference & Expo offers the best opportunities to for professional property managers to keep skills sharp and stay up-to-date.

As a savvy property manager, you understand the value of continuing education and keeping your skills well-honed and always at the ready. The community management industry has undergone tremendous change over the past few years – there are new requirements, new regulations and let’s not forget about legislative updates which impact the way you do business. (more…)

 

The CAI IL Condo-HOA Conference & Expo is the first major event to kick off our calendar each year. CAI Illinois members, community association board members, volunteers and community management companies come together for learning, networking and – of course – the Expo.

Innovation for a Stronger Community – you’re going to see these words a lot in the coming weeks. At CAI Illinois, we don’t toss around buzzwords lightly. We understand the frustrations faced by contractors in the community association industry, and we have made it our mission to develop innovative ways to help you build stronger communities.

Trade shows are an effective way to meet prospects, increase brand awareness and visibility, and solidify relationships with customers and other vendors, but only when you go in with a solid strategy to maximize time in front of people interested in your product or service.

1/20/16 Update:  Exhibitor registration has been extended through February 5, 2016!  Visit www.CAICondoHOAExpo.com for more information and to reserve your place in front of 1,500 community association prospects!

The community association industry here in the Chicagoland area is connected and active, especially where members of CAI Illinois are involved. But it’s still important to let all those prospects know where you’ll be and what you’ll be doing at the Expo.

Getting ready for a trade show requires careful planning and preparation. Deciding to exhibit at a trade show carries cost — money, resources and time — and the returns on that investment can be substantial if you’ve done your homework and defined your goals for attending. (more…)

 

As the year winds down, it’s common to spend some time looking back at milestones and achievements over the past eleven months and look expecchalkboard-happy-new-year-doodles_zJT8D5O__Ltedly towards the possibility and opportunities of the new year.

For CAI Illinois, 2015 was a year of great successes, and it’s due in no small part to the dedicated business partners, associations, board members and volunteers who give their time, energy and expertise to offer learning opportunities and networking events for those in our industry.

While there are many cherished memories and events from this year, the following stick out in my mind the most: (more…)

 

The start of a new year always brings out the resolutions, doesn’t it?

2016 Calendar Meaning Planning Annual Agenda Schedule

We take a look back at the year just passed and, rather than celebrating the successes, we far too often note with regret and resignation the things we didn’t do — the projects unfinished or the revisions to the bylaws that are still “in process”.

As we start 2016, there’s an opportunity for associations and their boards to do things differently, more efficiently and with specific outcomes in mind — namely, to enhance the quality of life for the community and make decisions with the best interest of all community members in mind.

It all starts with the annual budget.

(more…)

 

2015 12 17 CAI Logo

A key development and highlight for CAI Government Affairs in 2015 was the increasing number of CAI members advocating on federal government issues. CAI members responded in record numbers to federal legislative alerts, contacting members of Congress at critical times. CAI member phone calls, e-mails, and letters had a significant impact, amplifying CAI lobbying activities in the Congress. In one instance, CAI members flooded key Senate offices with more than 1,400 messages over the course of two critical days.

Importantly, 2015 saw growth in CAI’s Federal Issues Summit. In October, more than 45 CAI members traveled to Washington, DC to discuss CAI’s federal policy issues and spend a day lobbying on Capitol Hill. In just one day, CAI member advocates met with the offices of almost 80 U.S. Representatives and U.S. Senators.

CAI federal advocacy faced critical challenges in 2015, which will continue in 2016. Looking ahead, CAI Government Affairs will be actively lobbying in the following areas—

  • Qualifying all community associations for federal disaster assistance
  • Preserving association governance over HAM radio towers and antennas
  • Federal Housing Administration (FHA) approval rules for condominiums
  • Preserving state association lien priority statutes

(more…)

 

Now that winter has settled in, many communities across Chicagoland are seeing the temporary7698043_s departure of some of their residents for points south to escape the snow, ice and harsh winter temperatures.

That’s right. Snowbirds. They spend the warmer months up north and head south for their second homes as soon as the weather turns. Maintaining two homes hundreds of miles apart poses some interesting logistical challenges, but here’s where HOAs (and their community management partners) can step in and provide peace of mind and assistance as needed.

HOAs can help snowbirds in both their primary and secondary residences through a number of services, including prevention and intervention. (more…)

 

gala logo 10 15 15 New

Our annual Excellence Awards and Winter Gala is always an event to remember, and this year’s was no different! CAI-Illinois is privileged to have an amazing membership – and it is our great pleasure to be able to honor many of you for your outstanding service each year.

(more…)

 

Your association’s holiday gathering is just around the corner. But that doesn’t mean PARTY TIME. We suggest you keep these tips in mind as you plan for your celebration of the season to ensure that everyone enjoys the gathering.Happy Holidays

  • Eat, drink and be merry — in moderation. While this is a wonderful opportunity for everyone in the association to get to know each other a little better, alcohol plus social interaction can sometimes lead to “I can’t believe I said that” moments.
  • (more…)

 

by Rebecca Fyffe, ABC Humane Wildlife

As the weather turns cool this fall, we aren’t the only ones preparing for the frigid months ahead. Mice don’t want to be out in the elements either. In fact, it’s biologically adaptive as a reproductive strategy for them to find their way indoors. Mice that live outdoors have fewer offspring and smaller offspring than mice who are lucky enough to freeload in human occupied spaces.

Once mice are inside, it doesn’t take long for them to proliferate. Their short gestation period and large litter size means that a female mouse can produce a litter of 5-6 young every 18-21 days, and each of her daughters will be capable of bearing litters of her own at just 6-10 weeks old. This means that a mother mouse and her female offspring can produce a mouse infestation of over 2000 mice in just a year’s time! One doesn’t need to be a statistician to realize that early intervention is key when dealing with mice.ABC-Humane-Wildlife-Mouse

There are a number of do-it-yourself mouse control products on the market, such as traps, repellents, and ultrasonic devices, but unless the larger issue is addressed, these methods are a waste of money.  While trapping mice may reduce the population slightly, it will not be swift or complete enough to make a meaningful difference when compared with mice’s prolific breeding. Ultra-sonic devices have been proven to be ineffective, because mice adapt quickly and ignore the sound they emit. There are only two methods of controlling mice that can truly make a meaningful difference in halting a mouse problem and preventing a new one from occurring: baiting and exclusion.

Mouse infestations in multi-unit properties are often first noticed when residents find telltale droppings in storage units or under sinks. Mouse stool looks like oblong black grains of rice, though they may turn gray with age.

It is an old adage in the pest control industry that there are 10 mice for every one you see. So when a mouse problem is reported, immediate response is key to arresting the problem.  In multi-unit buildings, an infestation is rarely confined to a single apartment. A mouse will invade one unit, and the population will spread throughout the entire building. This means that it is impossible to eliminate a rodent problem without treating the structure as a whole. For some property managers, this will involve speaking with condo associations and convincing residents to allow a pest control company access to their homes.  Getting everyone on board can be a serious challenge, but providing residents with extensive information regarding the dangers and damages associated with a rodent infestation can aid in this effort.  Some pest control companies will even send certified pest management specialists to attend board meetings where they will be able to report on the status of the building and answer any questions the board members may have.

Mouse droppings and the fleas mice carry can spread disease. They have some other dirty habits too. Their foul-smelling urine can soak insulation and spaces within walls and ceilings. This can give a property a lingering musty smell that seems to come and go, but worsens when moisture and temperature levels change at the turn of seasons. Since each mouse can dribble 100 drops of acrid urine each day, controlling a problem swiftly is necessary to prevent this lingering musty smell from damaging the air quality and freshness of a site.

Integrated Pest Management (IPM) is the newer, greener way of managing mice and other pests in multi-unit properties. IPM establishes action thresholds for each species. An action threshold is the number of pest sightings it takes to warrant treatment. For instance, when it comes to spiders, ladybugs, or boxelder bugs, property managers should advise residents to wait and see if the problem becomes more significant before treating. The presence of these kinds of species most often falls under the category of occasional invaders, rather than full-scale infestation. Mouse invasion is just the opposite. The action threshold for treatment should begin with the report of a single mouse or their droppings. A maintenance plan should be put in place until entry points into the building have been identified and sealed to prevent further invasion; a hallmark of IPM called structural exclusion.

Mice can fit through gaps and holes the size of a dime. Structural exclusion involves identifying and sealing any holes that are dime-sized or larger with materials that keep rodents out. Expanding foam is not an acceptable sealant for rodent exclusion, as rodents can chew through it easily and sometimes seem to rather like it. Steel mesh and metal hardware cloth are better for this purpose and can be trimmed and formed around areas where pipes lead into buildings and other vulnerable gaps. The most common place that rodents enter is beneath doors and garage doors. Tight-fitting door-sweeps, preferably those containing metal or hard plastic edges rather than fiber bristles, are the most effective and economical method of structural exclusion that property managers can invest in to reduce rodent invasion. Installing dryer vent covers, crawl space vent covers, chimney caps, and trimming trees back 6 -8 feet from the roofline will reduce entry and damage by not just mice, but also squirrels.

Installing bait stations, hard metal or plastic boxes that house rodenticide bait, is the best way to remedy an infestation. A licensed pest control firm must perform this service because the baits are heavily regulated and their placement requires licensure and expertise. However, preventing a mouse infestation is a much better plan than treating an existing one because there is a nearly unavoidable and highly undesirable risk associated with treatment; a mouse or mice may sometimes die within walls or ceiling voids creating an unpalatable putrefactive odor and flies. This problem most often resolves by itself within a few days or weeks, but may sometimes require opening the wall to remove dead mice. If this happens, it is not your pest control provider’s fault. Luckily it is rare, but having mice die in the walls should be viewed as an unavoidable adverse consequence of rodent abatement. The best way to avoid this risk and hopefully avoid repeated rodent baiting all together is by employing structural exclusion.

Since rodents breed so quickly, timely baiting by pest control professionals should be arranged immediately before a problem worsens. Once baiting is underway, structural exclusion, sealing up any hole the size of a dime or larger, should reduce the need for baiting in the future. While mice may be tiny, the burden they impose on property managers is huge, since their ability to spread diseases and ruin structures with chewing and smelly urine makes them particularly undesirable pests. In summary, employing rodent bait stations right away at the first sign of mice, and most importantly, conducting extensive structural exclusion to reduce reliance on rodent baiting over time is the best two-pronged approach that property managers can utilize to maintain mouse-free facilities.
Rebecca Fyffe

ABOUT THE AUTHOR: Rebecca Fyffe is a journalist and urban wildlife manager. Her firm, ABC Humane Wildlife & Pest Control Inc., in Arlington Heights, Ill., humanely manages urban wildlife and insects in the interest of human health and safety from an environmental sustainability perspective with a love of nature and a deep respect for all living things.

 

Important Reminders for Your Community Recycling InitiativesRecycling tips for your community association

Many of us regularly recycle soda cans and water bottles, but did you know that many other food and beverage containers and household items also are recyclable? Take a look at the list below for some guidelines for what you can put into your community-provided recycling bin and what should be handled by a waste management professional.

Metal. Aluminum cans, foil and bake ware all are recyclable, as well as steel and tin cans used to package food and beverage items. Ensure these items are free of any food particles prior to putting them into your recycling bin—if they’re dirty, recycling facilities may not accept them.

Paper and cardboard. Computer paper, phone books, junk mail, magazines, paperback books, newspapers and cardboard all are fully recyclable and typically can be made into other paper products like egg cartons and packaging forms. Poly-coated paperboard materials like milk and juice boxes also can be recycled.

Glass. Most clear, brown and green glass items used for food and beverage items are recyclable and can be broken down and made into other glass products. However, some glass items like ceramic dishware and ovenware, heat-resistant glass, mirror or window glass, or crystal are not recyclable.

Plastic. Clean plastic items in the shape of bottles, jars and jugs are almost always recyclable, but plastic bags are not. Typically, grocery stores collect plastic bags for recycling facilities that specialize in producing recycled plastic lumber.

Batteries and Bulbs. Car, household and rechargeable batteries are recyclable, but most waste management companies will not accept them via community recycling bins. Along with incandescent, LED and fluorescent light bulbs, these items require special handling. Check the county website for recycling information.

Electronics. Computers and computer accessories, cell phones, stereos, televisions and printers are all nearly 100 percent recyclable, but should be handled by a waste management professional rather than put out at the curb with the rest of your recycling. Check the web for local retailers and manufacturers that offer recycling programs for these items.

 

By Cyndi Sanders, Director of Marketing, AtHomeNet, Inc.

Every day, new cost-saving technology is developed to help streamline operations and make your community a better place to live. If your community wants to enhance its online presence (and do things more efficiently), here are six ways to do just that:

1. Accept Online Payments

With checkbooks rapidly becoming a thing of the past, owners have come to expect an online option to pay for almost everything. Not only do management companies want to offer these services to stay competitive, but allowing online credit card and e-Check choices for paying dues and assessments can move you one step closer to lowering collections. Whether it’s through a community bank or a national electronics payment processor, when it’s time to choose an online payment partner for your website, you’ll want to verify a few crucial aspects. Is the payment platform PCI and CISP compliant? The “Cardholder Information Security Program” is a stringent platform intended to protect cardholder data; ensuring that service providers maintain the highest information security standards. Also, does your processor work with Visa, as well as Mastercard and Discover? The majority of owners prefer to use a Visa card, but Visa’s more strict requirements have caused many payment processors to pass on offering this most popular card. When evaluating your online dues payment partner, be sure you have a clear understanding of all the fees involved and explore partners that work specifically with the community association industry. For portfolio management companies, be wary of any proposal that requires written approval from every association board – there are easier alternatives. (more…)

 

By Cyndi Rempert & Timothy J. Haviland

Do you sometimes feel like your Community Association is going around in circles? CAI’s Common Interest spent some time talking with Jerry McNamara, CMCA, board president of his condominium association and new board member to the Illinois Chapter of Community Associations Institute. He first joined his suburban association’s board around five years ago, and wanted to share his experiences and advice with our readers.
(more…)

 
 

By: Michael Baum PCAM
Baum Property Management AAMC

As in many relationships, boards and management companies part ways when things don’t work out between them. What goes wrong? Is there a common denominator?community association relationships

Usually it is because the board and management company are not “on the same page.” A termination letter is sent to the management company instead of sitting down, defining roles, and discussing expectations.

When a change occurs, a vast amount of on-the-job experience is lost and the new management company will have to begin at square one.  After terminating the management company, the board has to conduct a search for a new management company, and then spend the time and effort to bring the new management company up-to-speed on the association.  Life would be more productive and easier for both the board and the management company if they tried to get on the same page by discussing the reasons for dissatisfaction and made improvements in their relationship instead of just parting ways.

Every management company loses business from time to time. Sometimes it just isn’t a good fit, but 80% of the time, the cause for separation has a common denominator.
(more…)

 

Attend an upcoming CAI-IL Homeowner Forum and get answers!

 

Our free howeowner forums feature industry-leading experts to answer all of your questions, such as:

Get your questions answered at our Homeowner Forums

Get your questions answered at our Homeowner Forums

  • Our Homeowner’s Association keeps adding more rules — can they do this?
  • Does my homeowner policy cover everything?
  • Am I covered for water in my basement?
  • Why do I have to register my car with the homeowners association?
  • Should Board Members be paid?

 
(more…)

 

While there are plenty of benefits to joining CAI Illinois, last week we featured five of our favorite reasons.SharkWeekTeaser Whether you are an individual homeowner, a community manager, or a professional selling to and servicing the industry, Community Associations Institute (CAI) and the Illinois CAI Chapter, have something to offer. (more…)

 

9553419_sGovernor Rauner Vetoes two bills affecting Community Associations

(more…)

 
 

Another CAI-Illinois Summer Social is now in the rearview!

20150730_140922_resized

The weather was beautiful, and it was a real treat to spend time with over 200 CAI Illinois members aboard the Spirit of Chicago. As always, we couldn’t have pulled it off without the generous support of our sponsors and the volunteer committee members who helped organize the day’s events.

The fact that so many of you stayed at Navy Pier to continue networking after the conclusion of the cruise confirms what we’ve known for a long time: CAI-Illinois Chapter members are among the very best around. You support chapter events with your time, energy and participation — and for that, we thank you.

We’re still waiting on some additional photos from the event, so look for a more complete recap next week.

See you next year!

 

BILLS AFFECTING COMMUNITY ASSOCIATIONS IN THE 99TH GENERAL ASSEMBLY

INTRODUCED IN 2015

This document provides a general synopsis of various bills that affect community associations.

This list is by no means complete. Further, the information contained herein can change

throughout the legislative process. Bills can be amended and language originally proposed can

be deleted. In order to assure you have the most accurate information about any given bill, please

go to www.ilga.gov and review not only the synopsis but the actual language of the bill and any

relevant amendments. This information is provided as of July 31, 2015.

LEGISLATORS NEXT IN SESSION:

          SENATE – 8/4/15

           HOUSE – 8/5/15

Click here to view the full document

Please refer to the latest legislation for updates on dates and deadlines

 
 

By Pamela Lytle, CMCA,
of Vanguard Community Management, Inc., an Associa Member Company

We’ve all said it…”If it ain’t broke, don’t fix it.” Why is it that when a manager acquires a new property, the files are turned over from the prior manager with expired contracts and bids from the same vendors the new manager uses?

The obvious reason is that, as is the case in any industry, good vendors make names for themselves. But that doesn’t mean there aren’t better vendors out there. So why do associations continue to use the same vendors when there may be vendors who can do the job better and cheaper?

Often when I am presenting vendor options to a board to make a decision, I will ask them to approach the decision as a single family homeowner might. If a single family owner has used a cleaning service or a landscaping company for years, will they bid out that service annually as a matter of protocol? Likely not. So under what circumstances might a single family owner seek a new provider? The most obvious answer is when they are dissatisfied with the level of service. Sometimes a long-time vendor will send a new crew to provide a service. Or, perhaps the old crew, who did a great job initially, becomes complacent and begins to take your business for granted, resulting in a decline in the level of service. The owner would likely address the issue with a supervisor first and give them an opportunity to correct the issues, but if that proved to be ineffective, a vendor change might be necessary.

Another reason a single family owner may choose to replace a long-time service provider is cost. A vendor might increase their rates to a level the owner may not be able to afford, or something about the owner’s financial situation may change, requiring them to seek a vendor that charges less for the service. Although if the owners are pleased with the service being provided and feel an extreme sense of loyalty to the vendor, they may opt to change something about the service that reduces the cost so that they don’t have to change vendors. For example, perhaps the cleaning service comes every other week rather than every week.

In reference to a service that is performed periodically, single family owners will, in all likelihood, use a vendor that has provided good, reasonably priced service in the past, and will not seek bids. They will call the same plumber to rod the drain that fixed the leak under the sink last year. They will use the same HVAC company to perform annual preventive maintenance on the air conditioning unit that they’ve used in the past. For relatively small-ticket items, it’s just not worth the time and effort to find a new vendor, nor the risk of receiving poor service, just to save $50.

For larger jobs, it’s typically the cost of the job that necessitates seeking competitive bids. While certainly there are owners who will simply hire the same contractor who did an outstanding job remodeling their bathroom to put the addition on their house; in most cases, single family owners will obtain multiple bids for a project of that magnitude.

These single family scenarios, for the most part, will translate into a community association
environment. A board won’t change law firms if they are satisfied with their current attorney. They may opt to have the driveways seal coated every three years, instead of every two years, rather than using a less costly vendor if finances are an issue. But there are some differences in vendor selection for single family homeowners that don’t apply in a community association environment.

The biggest difference between a community association and a single family homeowner when it comes to hiring vendors is the number of opinions that have to be reconciled. Not only do you need to have a consensus among a board of three or more directors when selecting a vendor, but homeowners tend to be very forthcoming with their opinions about a vendor…especially those whose services with which they are not satisfied. Boards will place great weight on the opinion of a good community association manager, whose job it is to provide input about vendors so that the board can make sound decisions. Managers know what’s out there, and the grass isn’t always greener.

Managers should always speak their minds when it comes to recommending vendors or whether it’s in the association’s best interest to obtain bids. Do not be concerned that you may be perceived as “lazy” if you advise your boards that, in some cases, seeking competitive bids simply does not make the best sense. The fact is, while not obtaining competitive bids on the front end may save time, the fallout that results from working with a less expensive vendor who provides poor service ultimately increases a manager’s workload.

As community association managers, one of the most important parts of our jobs is to educate our boards. We are the experts, and we have been hired to advise our boards on the most efficient way to run their associations. Board members certainly can observe vendors during the course of doing a job, and they can see the finished product. What they don’t see is how a vendor compares to other vendors in the industry, or the level of responsiveness and professionalism the vendor provides from an administrative perspective. Some managers believe that these strengths account for at least 50% of what makes a top notch vendor. The benefits of having a vendor who is familiar with the property, whether it’s the knowledge of how to please that “difficult” homeowner, or the quirks of how the windows were installed by the developer, cannot be overlooked.

I once had a boss whom I often quote. He said, “People trust in two ways: they don’t trust anybody until they prove that they can be trusted; or they trust everybody until they show that they can’t be trusted.” It may not be that cut and dry, but generally speaking, it’s a good approach as it pertains to vendors. However a board forms its trust, once it’s been established, the benefits of testing the waters is nominal, and the risk of changing a long trusted vendor can be great. Is it really worth it?

A version of this article first appeared in CAI Illinois’ Common Interest Magazine.

 
 

By Craig Fink, Alliance Association Financial Services

Board members often feel that their job would be easier if it wasn’t for those “difficult owners”. Owners are an integral part of an association even if some of them occasionally feel like the evil stepmother who is preventing you from going to the ball. So how does a board member find a way to happily co-exist with difficult owners? Or how do you handle those owners who feel the board should be a fairy godmother and expects there to be a magic wand that can be waived to make all of the troubles go away? Going back to the basics could be the answer and the following points can help you along that path.

Communication

The most important skill when working with difficult homeowners is communication. Over the years, I have found that many issues escalate quickly because an owner has a misunderstanding about the facts. When boards have a tough issue to tackle, they may feel that giving too much information can just cause confusion and questions, and nobody wants to solicit additional questions when you haven’t answered the original questions. It is a good policy to always communicate openly and completely, weighing all sides of an issue, before ultimately communicating the position of the board. Most owners will appreciate the honesty and transparency. Sure….there will be questions. You should welcome them, and respond to them in an open and forthright matter. It’s always better to have questions answered out in the open, then to have rumors spreading behind closed doors.

When communicating with owners, it is important to remember that not everyone communicates in the same way. Some people understand by reading, some by listening, and others learn more visually. Don’t be fooled into thinking that writing out a 5 page thesis outlining all of the issues will satisfy everyone. When facing a major issue in your community, plan to communicate with owners on multiple levels. Written information is important, but pictures of the leaky roof or crumbling walls might make a better
story for a certain group. Allow owners to ask questions in an open meeting. Using their own words may make things click for them, and hearing the answers may help another owner to understand. You can keep the same consistent message, just presented in different formats for the benefit of different people.

Education

Hand in hand with communication is education. Just as board members need to be educated to understand any issue, owners also need this education to understand the decisions the board is making in the proper context. As a board member, countless hours are spent soliciting information, reviewing options, and discussing the finer points. While it is always easier to take the “I know best” approach, this attitude won’t instill a great deal of faith in a skeptical owner. When communicating with owners, be honest with yourself and remember all of the work put in to understand an issue. Look at the issue from the owners’ perspective and ask the questions they will most likely ask. Then use your communication with the owners to honestly educate them and help them understand the full perspective. No amount of education and communication is going to make everyone agree, but a good portion of the owners will appreciate the straightforward approach.

Delegation

One last point to consider when working with difficult owners is delegation. While communication and education are vital, some owners simply aren’t going to be satisfied unless they immerse themselves in the issue. You should use this curiosity to the community’s advantage. As board members, we need to realize that even the best community manager and professional team can’t do it all. Committees and Commissions can be a great way to get owners involved to help the board work through difficult issues. Since many owners have an automatic distrust of the board (whether or not they have a good reason to), hearing the perspective of another owner who has been part of a committee or commission might be all the proof they need. As a board member, we also need to consider that the difficult owner may just be right. Even though we try to be experts in everything, allowing other owners to provide input to an issue might provide the additional insight which is needed.

There is, of course, an ulterior motive in bringing owners onto a committee or commission. Ask any board member how they got started on their board and most of them will say it resulted from a single issue with which they became involved. Whether dealing with parking issues, noise complaints, or planning a community event, that owner felt strongly enough to approach the board to start a discussion. Once they became involved, they realized that they had more to offer the community and they chose to run for an open board position. Every board fears the new board member with the “singular focus”, but for many owners that one issue may be their first and only interaction with the board. Bringing owners into the process can help to cultivate future board members and community leaders. For those of us who don’t have a board member waiting list (and who does, really?), you’ll be fostering a process to identify and capture the interest of those potential leaders.

If your community is facing tough issues, and residents are making your life difficult, waiting for Prince Charming to bring your magic slipper is probably a waste of time. Your board meeting may not go until Midnight, but your carriage is going to turn into a pumpkin long before that. So consider your options. Engaging your community with Communication, Education, and Delegation may just allow your community to live “Happily Ever After”.

A version of this article first appeared in the Spring 2012 edition of Common Interest Magazine.

 

conference-speaker

2016 CONFERENCE SPEAKERS & PRESENTATIONS

Applications due no later than Friday, August 27, 2015
Questions? Contact Diana Lane at (847) 301-7505

Interested in getting more from your membership? Interested in educating people in our Chapter? Then here is your chance!

Each speaker must be a current member of the Illinois Chapter and complete this application in its entirety, submitting resumes/biographies, as applicable. If you are interested in speaking with a specific person (or persons) who is also a member of our Chapter, let us know. We cannot guarantee but will make all attempts to honor speaker teams.

THIS IS YOUR ONLY CHANCE TO SUBMIT YOUR APPLICATION TO PRESENT AT THE ANNUAL CONFERENCE & EXPOSITION!

Speakers selected for the Conference will be notified by September 30, 2015.

Download the 2016 Conference Speaker Application here.

Thank you to all applicants for the talents and support you offer the Illinois Chapter of CAI!

 
 

CAI Member Spotlight: CertaPro PaintersCertaPro Painters proudly serves property management companies, homeowner and condominium associations, and commercial properties throughout the Chicagoland area.

They are one of the area’s leading professional painting contractors, providing residential interior and exterior painting, restoration, custom carpentry, and property maintenance — and,
for the past three years, have been active members of CAI Illinois.

Tony Ardizzone, one CertaPro franchise owner, describes CAI Illinois as “a Chamber of Commerce on steroids for managed communities,” noting that a sales representative for the company currently sits on the volunteer trade show committee. “Our involvement has been a
positive driver for business, but it’s also about elevating the industry at large and developing key relationships between business partners, communities, and homeowners.”

As a company, CertaPro recognizes delivering industry-leading customer service is a major driver of their success and the team at CertaPro Painters embodies that ideal through every interaction with clients — initial consultation, estimating and on the job site communication. Residential and commercial projects are handled with ease and professionalism — on time and on budget.

It’s the CertaPro difference.

Education, preparation and communication helps ensure any sized painting job goes smoothly and without incident — for the best possible painting experience. Quality assurance ranks highly in the company’s culture, too. Each job is surveyed by an independent quality assurance team to ensure it was delivered to the highest levels of satisfaction in both the final results and in the customer’s overall experience with CertaPro.

When asked why CertaPro’s involvement has been so positive, Tony had this to say: “For us, it is about building brand through positive business relationships, networking and social events. For a business like ours that deals so extensively with managed communities, membership in CAI is almost a given. We’re happy to give back when we can to help elevate the industry. When that happens, we all benefit.”

 

BILLS AFFECTING COMMUNITY ASSOCIATIONS IN THE 99TH GENERAL ASSEMBLY INTRODUCED IN 2015

THIS DOCUMENT PROVIDES A GENERAL SYNOPSIS OF VARIOUS BILLS THAT AFFECT COMMUNITY ASSOCIATIONS THROUGH JUNE 2015:

In order to assure you have the most accurate information about any given bill, please go to www.ilga.gov and review not only the synopsis but the actual language of the bill and any relevant amendments.

Click here to view the full document

Please refer to the latest legislation for updates on dates and deadlines

 
 

CAI Illinois Member Spotlight: Community Advantage

CAI Illinois Member Spotlight: Community Advantage

Community Advantage began more than fifteen years ago as a niche division of Barrington Bank & Trust Company as a solution to a problem: there was a glaring absence of banking solutions geared towards community associations. Other banks simply weren’t positioned or equipped to provide insights and support to the often very specific needs of associations, their Boards and the management companies serving them.

As one of the Midwest’s leading providers of financial services to condominium, townhouse and homeowner associations, Community Advantage has been a long-time and active member of CAI Illinois. President Peter J. Santangelo’s personal involvement with the chapter reaches back fifteen years, including stints as Chapter President (2008).

He is currently serving a term as Treasurer of the Illinois Legislative Action Committee (ILAC) and remains an instrumental member of the Finance Committee, a committee he himself helped create with Boyd Briscoe and Karen Skorick to keep the chapter’s financial health in top working order.

A forward-thinking and experienced financial services provider, Community Advantage only services the community association and property management industries, tailoring their solutions to the unique needs of each association they serve.

For clients, this means a level of customer service one would expect from a community bank, backed by the security and reputation of Wintrust Financial, Community Advantage’s multi-billion dollar parent company. To better serve the needs of community associations in managing cash and operations for capital improvements and quality-of-life projects, the company offers a complete suite of financial products and services, including reserve investments, disbursement services, account management and assessment collections. Meeting the needs of community associations and the property management companies serving them can be complicated, but Community Advantage boasts over 100 years of combined expertise in banking and financial services across its senior management team.

At every turn, they fully embody their core values in every customer interaction:
Provide heroic customer service in quality and reliability
Demonstrate absolute integrity
Work hard, but keep it fun
Dedication to continual self-improvement
Commitment to being a part of something special

Being part of something special.

It’s a phrase bandied around a lot, but it carries special meaning for Pete Santangelo through Community Advantage’s continued and dedicated involvement to CAI Illinois. “Our membership and involvement has brought obvious benefits through networking opportunities and social events with those in similar industries and markets, but the real reward for us is giving back. Community Advantage staff are active in numerous committees with the chapter, providing expertise and knowledge whenever they can.”

 
 

Cog_Hill_SignWe promised in last week’s post to provide a more robust round-up on the 2015 CAI Illinois Golf Outing — and here it is!

We were blessed with some incredible weather, a far cry from the monsoon that laid its mark on last year’s Golf Outing. Mild temperatures and bright sunshine made for a great day of networking, camaraderie and, of course, golf.

The event continues to grow year over year — and this was our biggest one yet! Kudos to the hard work of the volunteer committee, our generous sponsors and, of course, all of you for supporting this annual event. It’s always tremendous fun to plan and even more fun to see our members enjoying themselves.

The 2015 Golf Outing at A Glance

This was the 26th Annual CAI Golf Outing held at the always beautiful Cog Hill Golf and Country Club in Lemont. A record number of golfers pulled on their shoes and hit the links this year — 329 in total, including three foursomes on Dubsdread.

Forty-two additional people joined those golfing for happy hour and nineteen registered for a little friendly bean bag tournament. The bean bag tournament was a new addition to this year’s event — and by the looks of things, it will continue to grow. A new tradition had been created!

Photos of the 2015 Golf Outing

Kimberly Fivelson, Chair of the Golf Committee, awards the CAI Traveling Cup to John Santoro. His foursome had the lowest combined score on Dubsdread.

Golf_Outing1

And they’re off!

Golf_Outing2

Tossing bean bags during the Tournament. Competition was fierce!

Golf_Outing3

Diamond Partner sponsors Community Advantage golfers enjoy the course and the camaraderie.

Golf_Outing4Diamond Partner sponsor CertaPro Painters enjoying the Happy Hour and Banquet.

Golf_Outing5

Photos courtesy of Bruce Powell Photography. You can view the entire gallery here.

 
 

That’s a wrap!

Our 2015 Golf Outing has come to a very successful close, and we couldn’t have pulled it off without the generous support of our sponsors, our volunteer committee members and those of you who pulled on your golf shoes and dusted off your clubs for a great day of networking and fun at Cog Hill Golf and Country Club.

This year’s event boasted the single largest number of golfers ever, too!

The Golf Outing is one of our favorite networking and social events of the year — for good reason! A day spent on the course enjoying the conversation with homeowners, property managers and business partners in support of the work CAI Illinois does is great reminder that our volunteers and members are among the best around.

You can expect a lengthier write-up of the event (including official photography) next week, but in the meantime, enjoy these photos captured by staff yesterday.

Thank you again for your continued support — and we’ll see you next year on the links!

IMG_20150603_183434232_HDR

IMG_20150603_165530288_HDR

IMG_20150603_162433474_HDR

IMG_20150603_060843294_HDR

 
 

An organization is only as strong as its people – and it’s certainly true here at CAI Illinois.

We’re starting a new series on the blog to introduce you to the faces behind CAI Illinois, staff and personnel who keep events, socials and continuing education programming on track and always improving. As a member, you may have met the team in the past, but here’s a unique way to learn more about each of them individually — including a few things you probably never knew.

In this first installment, meet Executive Director Cheryl Murphy.
CAI Illinois Executive Director Cheryl Murphy
What is your history with CAI Illinois?

My background is sales/marketing, and I previously served as marketing director for one of the business partners of CAI Illinois. During that time I served for four years as a volunteer member for our tradeshow committee. As I was pursuing other positions, the director position became available at this chapter and I jumped at the chance. I’ve been with CAI Illinois now for eight years total, four as a volunteer and four in this role as executive director. The biggest benefit to members is the relationships they will make, regardless whether they are a homeowner, a community owner, or a business partner. Every relationship leads to a chance to learn.

What drew you to this industry and position?

The relationships I had made with the tradeshow committee. I could immediately see the camaraderie that existed between members, even those who are supposed to be “competitors” by serving the same market of service. When a new member joins CAI, we all work to bring them into the fold and provide meaningful networking, learning and business opportunities through the association. CAI Illinois really works very hard to give homeowners, property managers and business partners as much value as possible, and we’ve been rewarded with very engaged and passionate member volunteers serving on a wide variety of committees.

What do you find most rewarding about working with CAI National and CAI Illinois?

At the National level, I really enjoy the opportunity to connect with other chapters of all sizes and demographics. We have so much to learn from one another, each of us coming from different geographies but sharing a common goal.

At the local level, I greatly enjoy the relationships I’ve continued to establish and grow through our network of homeowners, property managers and business partners. The people make my job fun!

What is one thing about yourself that would surprise most people?

I am a would-be inventor and tried out to be on the TV show that ultimately became Shark Tank. Obviously that idea was not picked up because I am not retired on an island in the Caribbean now, but my mind never stops imagining ways to make life better.

What’s your favorite thing to do in Chicago?

Catch a game at Wrigley Field. Go Cubs!

You can connect with Cheryl on LinkedIn, via email or say hello to her at the Golf Outing on June 3rd.

 

Memorial Day is just days away – signaling the onset of summertime activities for most community associations. Covers get pulled off the grills, the pools open, and common areas start booking up for parties and community gatherings. Your community’s residents are eager to get out and enjoy the sun – and enjoy each other’s company.
Prepare for Summer with CAI IL
Are you ready?

Long sunny days virtually guarantee more usage of your community’s shared amenities – especially outdoor favorites such as swimming pools, playgrounds and walking trails. If your community boasts common areas such as picnic pavilions, you can bet those will start booking fast – if they haven’t already.

Why not take the time now to make sure all of your facilities are thoroughly inspected? Small repairs now will mean less downtime – and far less hurt feelings and resident resentment – once the summer season is fully under way.

Updating facilities now also demonstrates to your residents the importance you place on everyone’s safety and well being.

This is also a great time to communicate with your residents. Policy changes, rules updates, hours of operations – every resident needs this information. Be sure to include all of this important information on your community website – and let your residents know where they can find answers to their questions and concerns.

Does your community host summertime celebrations like pool parties or block parties? The key to great gatherings is participation – and the key to participation is information! Be sure to share dates and times OFTEN, via newsletter, website, even posters at the pool and clubhouse. There really is no such thing as sharing too much good information with your residents.

And speaking of good information to share, we hope you can make it to our annual Golf Outing! This year’s event will be held at the beautiful Cog Hill Golf and Country Club in Lemont on June 3. You can register, or check out some excellent sponsorship opportunities, by visiting our website, cai-illinois.org.

Be sure to check out the summer issue of Common Interest magazineCAI Illinois Prepare for Summer in late June for more information on preparing for summer!

 

Register Online

This free roundtable discussion brings board members, current volunteers and unit owners together to ask questions and learn from one another. Participants will have the opportunity to learn about board structure, operations, association management procedures/protocols, and recent legislative items which impact CAI partners and members.

Communication between boards, volunteers and unit owners is important on many levels, so bring your questions and walk away with answers.

When
Wednesday, May 13, 2015
7:00 PM – 9:00 PM

Where
White Eagle Owners Club
4265 White Eagle Drive
Naperville, Illinois 60564

Please note that while this is a free event, advance registration is required.

Register Online

 
 

Board Members, Homeowners, and Property Managers: Don’t miss this opportunity to learn the latest legal updates, ask legal questions, and interact with attorneys and community association colleagues.

Register Online.

Benefits of attending:
•Eight law firms will present ‘Hot Legal Topics’ which affect community associations
•Attend 4 Sessions
•Hear from the panel of Attorneys at 2 Q&A session
•Breakfast & lunch included
•Efficient Seminar Schedule to maximize your education
•Up to 8 CAI Continuing Education Credits
•Early Bird Registration Discount if you register by April 17 $125–CAI Members / $150–Non-Members
•Registration from April 18 – April 25 $150–CAI Members / $175–Non-Members
•Day of Registration $175.00 for CAI Members & CAI Non-Members

CAI-Illinois’ Legal Forum is a nationally recognized award-winning program.
After the Legal Forum there will be a “Happy Hour” right down the block at Bar Louie. Please keep a look out for that registration.

Details
When: May 7, 2015 7:45am – 3:45pm CT.
Where: University Center
525 S. State Street
Chicago, Illinois 60605

Register Online

 
 

Provided by CAI National

Finding a contractor who will perform quality work at a reasonable price can be a daunting task. It’s always a good idea to ask for and check references and to contact the Better Business Bureau and your state licensing bureau to see if there are complaints against a prospective contractor.

In addition, the following warning signs can alert you to unscrupulous, disorganized, inexperienced or financially troubled contractors who may deliver broken promises, bad work and blown budgets rather than professional results.

First Impressions: In any business, first impressions are important. How a contractor presents himself and maintains his truck, tools and equipment are good indicators of how well he’ll take care of you and your job. He should look neat and professional, and his vehicles and equipment should be clean and in good repair.

Beware Low Bids: Price is always an important consideration when selecting a contractor, but don’t let a low price or a special deal blind you to a potential problem—both can be signs that you should be wary. A bid far lower than others may indicate the contractor isn’t experienced enough to know the actual cost of the job or he never intends to finish the work. Disreputable contractors may bid low to secure a contract and then tack on extra charges as the job progresses.

Take Your Time: If you are pressured during the bidding process by tactics such as “limited-time offers,” look for a different
contractor. Hiring a contractor is not a split- second decision; for this reason, many states give homeowners three days to cancel a home improvement contract — without obligation — after signing it. A prospective contractor should take his time as well, carefully reviewing the specifications of your job before submitting his bid. If he doesn’t take notes and measurements and make material and labor calculations, or if he simply names a price based on a similar job, he may not be detail-oriented or thorough enough to do a good job. Make sure you also understand the relationship the contractor has with the management company. This can factor into how the bids are presented.

Beware Materials Discount: A prospective contractor may offer you a discount, hoping to earn your future business following a job well done, but be wary if a contractor offers materials at a discounted rate. Small contractors rarely buy materials in the high volumes necessary to yield big discounts, and unless they severely overestimated quantities for a previous job, they rarely stock large inventories of material. Discounted materials are usually seconds, ungraded or below-grade minimums for code, any of which would compromise the quality of your project.

Only 20% Up Front: While the price may be right, what about the terms of payment? In general, don’t choose a contractor who asks for more than 20 percent of the total cost of a job up front. While some projects require a large initial payment to cover a deposit for products like cabinets or special order ceramic tile, it doesn’t apply to commodity materials like roofing and lumber, which a legitimate contractor will
usually purchase on account with at least 30 days to pay.

Beware Cash-Only Jobs: Finally, a contractor who works on a cash-only basis raises a big red flag. Not only does paying in cash limit your financial recourse if problems arise, the contractor is likely not operating a legitimate business, which includes paying taxes and insurance. Look elsewhere for a professional to perform the work.

 
 

Published by the Foundation for Community Association Research, the 2013 Community Association Fact Book is the most comprehensive compendium of state and national community association statistics ever assembled. Chapters are encouraged to link directly to the online state summaries from your chapter websites.

About The Foundation

The Foundation for Community Association Research is a national, nonprofit 501(c)(3) organization devoted to common interest community research, development, and scholarship. Incorporated in 1975, the Foundation supports and conducts research in the community, homeowner, and condominium association industry.

See here for a list of the 51 state summaries (including the District of Columbia).

Why You Should Use the Fact Book

The Fact Book is the most extensive collection of community association facts and statistics combined into a single resource. The three-part online PDF documents the history, status, trends and future issues of U.S. community associations. The publication includes state summaries and provides top-level association housing data for other countries.

Developed in large part by CAI Past President Clifford J. Treese, CIRMS, president of Association Data, Inc., in Pleasanton, CA, the document supports the Foundation’s mission of providing research-
based information to all community association stakeholders: homeowners, board members, management professionals as well as attorneys, accountants, developers, mortgage lenders, federal regulatory agencies, public officials and others.

The Fact Book is available on the CAIRF website.

.

 
 

To help offset the costs of legislative lobbying, CAI Illinois and the Illinois Legislative Action Committee is hosting an online auction through April 16, 2015.

CAI ILAC exists to be the voice of community associations, community association members and CAI business partners, lobbying the state legislature on legislative and regulatory matters.

The Committee reviews all House and Senate bills passing through the Illinois legislature and sends a legislative alert to CAI members encouraging them to contact their local officials when necessary.

We hope to raise $50,000 with the auction.

Bid Now!

A few featured items include:

  • Attendee Pass at CAI’s National Conference
  • One course registration for CAI’s Professional Management Development Program
  • A pairs of tickets to The Book of Mormon
  • An autographed Jonathan Toews jersey
  • An autographed Andrew Shaw hockey stick

You can access the online auction here.

Happy bidding and thanks for your support!

 
 

By Salvatore J Sciacca aka CondoBoss

I get it. Board of directors are looking for ways to cut costs especially in times like today where there are higher delinquency rates due to non paying homeowners. And even historically, associations and board of directors have thought that saving on property management services for their community association is a great way to tame the budget.

Besides, the line item for condo management is usually one of the biggest costs and sometimes might be the biggest operational expense line item. The reality is that there are many other line items at stake when associations hire the cheapest property management provider.

So what are the risks when hiring a CHEAP management company. And when I use the word cheap, I mean it in the way that the attached graphic indicates. You REALLY can’t have CHEAP, GOOD, and FAST all at the same time. Studies have shown that you will sacrifice QUALITY and SPEED if you
want CHEAP.

If you sit on the board of directors, the million dollar question that you need to ask yourself is simple: “How can a property management company afford to charge so little and provide the
exceptional service that the salesperson promised the board during the presentation”. The answer is even simpler:

They CAN’T.

So let me give you some real world examples of what associations and board of directors sacrifice when going for CHEAP condo management:

  • Overpay for contract services You can pretty much guarantee that the property management won’t pay attention to these line items.
  • More Homeowner headaches The homeowners will be told to deal with issues on their own or to work it out with the other neighbors.
  • No return phone calls The property manager may not even return your phone call.
  • SLOWWWWW to return phone calls If the property manager does call you back, it might be a while so sit tight!
  • Poor advice or wrong advice The property manager won’t give you helpful advice and sometimes will give you the wrong advice.
  • Longer board meetings The board meetings will last much longer than 1 hour and you should not expect any guidance or advice from your property manager. You can bet your bottom dollar.
  • Large number of complaints Rest assured that there will be a large number of complaints from both homeowners and board members of how there is a lack of response from the property manager.
  • Bills paid incorrectly With a cheap management company, you can rest assured knowing that bills will get paid that should not get paid.
  • Overpay for projects You won’t even realize it but you will pay about 25-50% more for projects which is the BIGGEST cost to maintain an association.
  • HIGH STRESS. FRUSTRATION. HEADACHES. Bottom line. You will need lots of Advil to deal with all the headaches you will experience.

So are you really saving by hiring a CHEAP condo management company? Hmmmmm.

 
 

By Steven Silberman, CPA
Frost, Ruttenberg & Rothblatt, P.C.

Many small associations (less than 50 units) and some larger associations feel that they do not need year-end financial statements prepared by a CPA firm. I recently spoke at a seminar where three board members shared the exact same feelings. One board member said, “We already pay our management company a fee to prepare our financial statements.”

Another board member said, “We have a financial statement from our management company, why should we pay for a second one?” Finally, an additional board member said, “They are too expensive!!”

These board members need to be educated on the importance of CPA prepared financial statements.

When an association is making a decision on whether to have CPA prepared year-end financial statements, they have to answer the following questions:

1. Are CPA prepared financial statements required by the association’s by-
laws or declaration? These are the association’s most important documents. All associations must first review these documents before making any decision. These documents may require an independently prepared year-end financial statement. The documents might even be more specific and require a compilation, review or audit.

2. Are CPA-prepared financial statements required by the association’s lending institution? Depending on the amount being borrowed by the association, the lending institution may required a compilation, review or audit. The board should review the loan documents to see if there is a requirement. If the association has previously had financial statements prepared by a CPA, the lending institution may be more apt to approve larger loans for capital projects.

3. Is the Board of Directors performing proper due diligence? As part of board members’ due diligence, they should use an independent third party to review management company records. If the board feels the management company is doing good work, financial statements prepared by a CPA will only reaffirm their findings. If the CPA firm finds inconsistencies with the management company’s financial statements, the board can respond according. This also applies to self-managed associations where a single board member maintains financial records.

4. Are the management company’s financial statements prepared in the preferred format? The association’s management company may prepare cash-basis financial statements while the board would prefer accrual basis reporting. Are reserve assessments actually deposited in the reserve fund? Are reserve expenses paid out from the same account? A fund financial statement will tell you for sure, but non-fund financial statements will not.

5. Will a potential buyer of an association unit trust internally prepared financial statements? Third party prepared statements, especially those prepared by a CPA, will give more assurance to a potential buyer. The level of service (compilation, review or audit) will determine the level of trust a buyer has in the accuracy of those statements. Most financial statements prepared by a CPA firm will have notes to provide the most accurate information regarding the association’s financial health.

6. Are CPA prepared financial statements too expensive? Again, the level of compilation will determine the cost of preparation. Cash-basis non-fund financial statements will be the least costly. While some boards may feel any fee is too expensive, the additional assurances provided by these statements are worth the expense.

Does your association feel year-end financial statements prepared by a CPA firm are still unnecessary?

 
 

Register Online

The CMCA is the only national certification program developed for managers of homeowner and condominium associations and cooperatives. The CMCA recognizes individuals who have successfully demonstrated the core knowledge, skills and abilities required to manage a community association.

This review session will prepare community managers to take the CMCA exam, a three-hour, 120-question multiple choice exam. Candidates are allowed to retake the examination as many times as necessary until they achieve certification.

Managers will review:

  • Meetings
  • Governance & Legal Issues
  • Budgets
  • Reserves
  • Investments and Assessments
  • Risk Management and Insurance
  • Property Maintenance
  • Contracting
  • Human Resource Management
  • Test Strategies (including sample exam questions)

Light breakfast and beverages will be served

Event Details

When: Saturday, April 11, 2015

Where: CAI-Illinois Chapter Office

1821 Walden Office Square, Suite 100

Schaumburg, Illinois 60173

 

 

 
 

By John Butler, Managing Partner of Pavement Solutions

Replacing asphalt pavements can be an expensive, inconvenient and time-consuming
headache for property managers and building owners alike. By utilizing proper
pavement maintenance principles, you can double the life of your pavements and save
thousands of dollars in the process.

Proper Crack Sealing

The most important process involved with proper pavement maintenance is crack
sealing. Crack sealing prevents the infiltration of water into your pavements and
aggregate base. Proper crack sealing is your first line of defense and helps eliminate
pot holes and buckling pavements.

Crack sealing preparations start with the existing cracks being routed to a consistent
width and depth of 1/2″ by 1/2″. The routing forms a reservoir or a saddle for the sealant
to bond in. The heat of the router cutters also seals shut the bottom of the crack and
eliminates the possibility of the hot sealant running into the aggregate base. Pavement
Solutions feels so strongly about the positives of routing that we do not offer non routed
crack sealing in our service lines.

High-pressure compressed air is then used to completely clean the reservoir of dirt and
debris. In the event that the reservoir is damp, a heat lance should be used to dry the
area to insure the proper bonding of the sealant. The hot rubberized sealant is then
injected in the reservoir and struck off with a squeegee. The finished material should dry
approximately 3/8″ below the existing asphalt to insure that the material isn’t hooked by
a plow or heavy vehicle.

Routed crack fill that is still in the reservoir can do its job after 8 or 9 years. Non routed r over banded cracks can fail after the first winter and can be a poor investment for the owner. Spend more money up front and demand cracks are repaired properly.

Choosing a Coating

The two most basic and affordable coatings are coal tar and asphalt based emulsions. Commercial coal tar emulsions have been on the market since the 1950s and are still regarded as the most durable and cost effective product for sealing asphalt. Coal tar is resistant to water, gas, and chemical infiltration. The negatives for coal tar are a strong creosol odor and the burning of skin if you are around the product for an extended amount of time.

Asphalt base sealers have many of the same qualities as coal tars and dry a very dark,
rich black color. The negative for asphalt is that it is hard to place in cooler temperatures and wears a little quicker than conventional coal tars.

Pavement Solutions has started to shift away from predominately using coal tar sealers.
We are finding that some of the hybrid polymer modified asphalt sealers are wearing
great and drying super black in color, which accents the striping.

Pavement Markings

There are dozens of paints offered for many different installations. The most common
paints used over seal coats are water based or latex based paints. Latex paints are
inexpensive, easily applied with airless equipment and easy to clean. The big downside
is that the paint dulls soon after placement. Acetone paints on seal coat are solvent-
based paints with more pigments and the color stay crisp longer.

Another very versatile paint we like to use on oxidized asphalt or concrete surfaces is
chlorinated rubber. This paint is flexible and last a long time. It works great for painting
concrete curbs or car stops.

The Proof is in the Pudding

A great customer in northern Illinois who owns a large car dealership and who is a real
proponent of asphalt pavement maintenance recognized early on that he had to protect
the huge investment he made in his parking lots when he built the dealership. We meet
every year to discuss a comprehensive plan to protect and extend the life of his
pavements. By following the principles in this article, the owner has replaced less than
5% of his 20 year old pavement to date.

Any property manager or building owner can share in the same success by committing
to a yearly review of the property and stick to a maintenance plan with a trusted
pavement maintenance partner.

 
 

Register Online

This course is part of the DCAL (Dedicated Community Association Leader) recognition course series. You may take this course as part of the recognition program, or as an individual course.

The Insurance and Risk Management course is designed to assist associations in the process of making and carrying out decisions that minimize the adverse effects of accidental losses. From assessing risk control and types of coverage to policy descriptions, attendees will develop an understanding of the mechanics of insurance and how it relates to association living.

  • When
    Tuesday, March 24, 2015 6:30 PM – 9:00 PM
  • Where
    CAI Chapter Office
    1821 Walden Office Square
    Suite 100
    Schaumburg, Illinois 60173
  • Register Online

     
     

    By: Rachel Kegley, CMCA, AMS, PCAM – Phoenix Rising Management Group

    Nightmare Board MeetingsWe have all been there at some point…a nightmare board meeting. This is the meeting that never seems to end. It is unorganized and chaotic. A nightmare meeting is the meeting where Ms. Smith, the long – time resident , shows up with a laundry list of complaints and completely derails the board’s meeting agenda . It is the meeting where the Treasurer shows up to the meeting and reviews the financial statements for the first time when the meeting begins. They then start pinging their property manager with questions in front of the rest of the group with no warning. This is the meeting where the board cannot agree on an agenda item and start personally insulting each other instead of moving on to the next topic.

    Nightmare board meetings can have a detrimental effect on a homeowners association. Not only are they unproductive but they are also demoralizing to everyone involved. Board members who allow meetings to spin out of control are not only creating more work for themselves, but also deterring future association leaders from wanting to volunteer their services and run for the board in the future.

    The purpose of a board meeting is to allow board members to meet and conduct business in an open forum. Conducting business means the board discusses and votes on agenda items in an open session. When meetings spin out of control, it is often because the attendees of the meeting don’t understand how they are supposed to “conduct business”. Homeowners feel the need to participate even though the items they are bringing up aren’t on the agenda. Board members who allow this type of participation are too intimidated to stop it because they want to keep the association “casual or informal”. All the while, the meetings drag on to over two hours with little or nothing accomplished.

    Keep in mind that your association volunteers and homeowners have many other commitments including family and careers. Out of respect for this time, keeping meetings concise and timely is key to an efficient meeting. As a rule of thumb, association meetings should not extend beyond two hours on the high end. If things are on track, members should be able to easily accomplish the meeting agenda items in an hour or less.

    If you find that your nightmare meetings can use some work, consider the following tips to get them back on track:

    Set Time Limits on Agenda Topics In order to keep meetings on track, consider limiting each agenda topic to a designated time. This time can be pre – determined when the agenda is set and can be adjusted depending on how many items are up for discussion at the meeting. For example, assign ten to fifteen minutes for each agenda item for discussion and decision. Nominate a timekeeper at each meeting to keep the agenda moving to the next topic. If a decision is not made during the designated time, table the discussion until the next meeting . If a decision cannot be accomplished in ten to fifteen minutes, it is likely because more information is needed before a decision can be made. Quickly get to that point and table the discussion until all the information is confirmed.

    Include a Time Limit on Home Owner Forums Too often, association members forget that a board meeting is intended for the board only to conduct business. This means homeowners may attend meetings to hear the board conduct business, but should not take part in discussion. Allowing a “ Home Owner Forum ” at the beginning or after the board meeting has concluded will give homeowners the opportunity to bring their concern to the board . This session should be limited to 15 – 20 minutes and each owner should be given a limited amount of time to voice their concern. Board members shouldn’t feel obligated to provide a response immediately once an issue is voiced by an owner. Often times, these items require consideration or research before an action can be taken. In order to keep with the time, simply acknowledge the request and thank the owner for bringing it to your attention. It may either be a simple fix or follow up from your manager at a later date, or something the board needs to consider against its current priorities to see if they should add this to the agenda at the next meeting for decision .

    Utilize Parliamentary Procedure (Roberts Rules of Order) Parliamentary Procedure provides basic guidelines for conducting business. These guidelines are universally recognized as a fair, orderly and democratic system for discussion, debate and voting. A great book for board members and managers to use a guide is Roberts Rules of Order Newly Revised In Brief, 2nd Edition by Henry M. III Robert, Daniel H. Honemann and Thomas J. Balch. More than just a guide for voting, Roberts Rules will give guidelines for how the board should discuss agenda topics equally among all members. This is especially important if there is a divide among the board and discussion on agenda items can get passionate or emotional.

    Adopt a Board Resolution on Meeting Conduct Associations who are serious about keeping their meetings on track should consider adopting a resolution for meeting conduct on the suggestions discussed above. A key component t o ensuring these standards are kept is educating boar d members and homeowners on the purpose and expected conduct of association meetings. Announcing “Ground Rules” at the beginning of each meeting will set the expectation of when everyone in the room will have the opportunity to participate. Having ground rules set ahead of time will help curb getting off track , e specially at those heavily attended meetings where a hot topic is being discussed and decided on. Ensuring all meeting attendees know when and how they can voice their concerns will reduce the constant disruptions and getting off topic.

    Be Prepared and Stick to the Agenda Meeting agendas should be set several days in advance of the meeting. I prefer at least one week but know there are exceptions. At the most , agendas should be finalized a minimum of three days before the meeting. This allows board members and managers to prepare and research all the relevant material for the agenda items in anticipation of making a decision. Adding agenda items last minute unnecessarily mean s managers and board members may appear unprepared for the discussion and often it is something that can wait for the next meeting. Sticking to the agenda is easier said than done. There will always be more priorities for the association than the board has time to handle at one time. Ensuring the board sticks to their agreed upon priorities will help keep agendas on track and avoid last minute additions that often can lead t o long, unproductive tangents. Most importantly, being prepared to discuss agenda items at a board meeting means reading and researching the material ahead of time. Managers should prepare and deliver board packets well in advance of the meeting ensuring the board has the opportunity to review all relevant materials prior to the meeting beginning. Board meeting sessions should not be used to read contracts, financial packets or other material up for decision. In order to keep meetings on time, board members should take the time to review the material prior to the meeting.

     

     

    Save the Date for Our 2015 Summer Social!

    FB_SummerSocial_2015

    When:
    7/30/15
    11:00am – 2:30pm

    Where:
    Spirit of Chicago
    Navy Pier
    600 E Grand Ave
    Chicago, IL
    Map of Navy Pier

    Registration will be available at a later date

    Sponsorship     Company Name   
    40/40 Raffle Prize Sponsorship (1)
    SOLD OUTRCN
    Bar Sponsorship (6)SOLD OUTCertaPro Painters
    Community Specialists, Inc.
    CSR Roofing Contractors, Inc.
    M&J Asphalt Paving Company
    RevoPay
    The Restoration Group, LLC
    Birthday Lounge VISTA Deck Sponsorship (1)SOLD OUTCommunity Advantage, A Wintrust Company
    Birthday Video Sponsorship (2)SOLD OUTLandscape Concepts Management
    Platinum Poolcare Aquatech, Ltd.
    Bon Voyage Treat Sponsorship (4)SOLD OUTAcres Group Professional Landscape & Snow/Ice Management
    Bruning & Associates, P.C.
    Kovitz Shifrin Nesbit
    Nania Energy
    Dessert Table Sponsorship (6)SOLD OUTAdams Roofing Professionals, Inc.
    Bluestem Ecological Services
    Complex Painting & Carpeting, Inc.
     CRC Concrete Raising & Repair
    Waldman Engineering Consultants, Inc.
    Woodland Windows & Doors
    Door Prize Sponsorship (6)SOLD OUTAAA Painting Contractors, Inc.
    Advocate Property Management
    Genesis Construction, Inc.
    Levenfeld Pearlstein, LLC
    Pro Home 1, Inc.
    Response Team 1
    Escapade & Horizon Deck Sponsorship (2)SOLD OUTFirstService Residential Illinois
    XFINITY Communities
    Lakeside Table Sponsorship (10)SOLD OUTAlliance Association Bank
    American Building Contractors, Inc.
    Braeside Condominium Management
    Cantey Associates
    Countryside Bank
    Dickler, Kahn, Slowikowski & Zavell, Ltd.
    Rabine Paving
    Site Maintenance, Inc.
    Sperlonga Data & Analytics
    Union Bank HOA Services
    Lunch Sponsorship (6)SOLD OUTAlliance Disaster Kleenup
    BrightView Landscape Services
    CAU Insurance
    Concierge Plus Inc
    Mutual of Omaha Bank
    Sebert Landscape
    Name Badge Sponsorship (1)SOLD OUT
    Property Specialists, Inc., AAMC
    Observation Deck Outdoor Patio Bar Sponsorship (1)SOLD OUTItasca Bank & Trust Company
    Party Favor Photography Sponsorship (8)SOLD OUTAll American Exterior Solutions
    Cukierski & Kowal, LLC
    DuBois Paving Co.
    Elliott & Associates Attorneys, PC
    Keough & Moody, P.C.
    Reserve Advisors
    Rowell, Inc. AAMC
    Summit Property Services, Inc.
    Rock the Boat Music Entertainment Sponsorship (10)$ 300ALMA Property Management Services, Inc.
    Caruso Management Group
    FirstMerit Bank
    Ground Pros, Inc.
    Keay & Costello, P.C.
    Pool Guards, Inc.

     

    Register for eventRegister Online

    New Law changes in 2015!!  Come discuss the hottest topics for 2015 including electronic communication to your communities and additional powers granted to the Board of Directors.  Attorney Ryan Shpritz and PCAM manager Jeanette Catellier will help you navigate the new law changes and updates. Practical information including how to implement these new items into your communities will be discussed along with other vital information key to the success of your Association.

    Discussion will include:

    • Expansion of Board powers
    • Electronic delivery of notices and other communications
    • New leasing regulations
    • Changes to insurance requirements for condominiums
    • Other impactful changes for community associations

    2 CAI Continuing Education Hours

    • When:
      Thursday, March 12, 2015 4:00 PM – 6:00 PM
    • Where:
      CAI-Illinois Chapter Office
      1821 Walden Office Square
      Suite 100
      Schaumburg, Illinois 60173
      847-301-7505
    • Register Online
     

    green_buildingMark A. Waldman, SE, PE, LEED AP

    Waldman Engineering Consultants, Inc.

    Today there is lots of chatter about sustainability, green building issues, and reducing our personal carbon footprints. There is also lots of talk about stimulus money and tax credits. Does that mean homeowners associations and condominium boards should be approving the installation of roofmounted solar panels or wind turbines? Or how about a program to replace all of an association’s windows and put a garden on the roof? Whereas these would all fit the description of green building improvements, many of these are not realistic, economical, or just plan not practical.

    We all make choices every day that affect our consumption of energy, water, and air. Being green is really about making a conscious effort to find ways to reduce, conserve, or improve the way we use these resources. It does not mean that boards need to be performing gut rehabs on their existing infrastructure or building exteriors. The purpose of this article is to present some ideas about ways in which condominium and homeowners associations can take a green approach to their building maintenance and repairs. (more…)

     

    Comments on Rules for the Community Association Manager Licensing and Disciplinary Act

    Dear Mr. Cellini:

    We are pleased to submit comments on the Rules for the Community Association Manager licensing and Disciplinary Act on behalf of the Community Associations Institute (CAI) international headquarters and the Illinois Chapter.

    CAI is the only international organization dedicated to fostering competent, well-governed community associations. For nearly 40 years, CAI has been the leader in providing education and resources to the volunteer homeowner leaders who govern community associations and the professionals who support them. CAI’s more than 33,000 members include homeowners, professional managers, community management firms, and other professionals and companies that provide products and services to community associations.

    Please accept our sincere appreciation for the privilege of providing comments the Department.

    Below we have listed our comments in order of section number. We list our primary recommendation followed by our rationale for comment.

    In the event the Department does not accept our primary recommendations, we also list alternative recommendations in certain sections.

    Click Here to View the Full Document

    Please refer to the latest legislation for updates on dates and deadlines

     

    BILLS AFFECTING COMMUNITY ASSOCIATIONS IN THE 98TH GENERAL ASSEMBLY INTRODUCED IN 2014

    THIS DOCUMENT PROVIDES A GENERAL SYNOPSIS OF VARIOUS BILLS THAT AFFECT COMMUNITY ASSOCIATIONS THROUGH AUGUST 31, 2014:

    THE FOLLOWING BILLS PASSED BOTH HOUSES AND HAVE BEEN SIGNED INTO LAW:

    HB 4782 (Rep. Cassidy) LEASE OF UNITS AFTER POSSESSION.
    This bill amends the Illinois Forcible Entry and Detainer Act regarding leasing of units by associations. The bill provides that an association may enter into a lease at any time within 8 months of expiration of the stay on its possession order.

    The lease entered into may not exceed 13 months. Currently the statute provides that the term of a lease entered into by an association cannot exceed 13 months following the expiration of the stay of the order of possession.

    This amendment to the Act will aid association in leasing units by affording more time to complete any necessary repairs and locate tenants.

    This bill signed into law on August 18, 2014 as Public Act No. 98-0996.

    Click Here to View the Full Document

    Please refer to the latest legislation for updates on dates and deadlines.

     

     

    ILLINOIS REGISTER

    DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

    NOTICE OF PROPOSED AMENDMENTS

    Click Here to View Full Document

    Please refer to the latest legislation for updates on dates and deadlines

     

    On September 11, 2013, the Chicago City Council passed the ordinance on energy benchmarking requiring landlords to show how much energy their buildings use. The new law requires the owners of commercial, residential and municipal buildings in Chicago to track energy consumption and report the findings to the city. The ordinance does not require buildings to improve energy consumption, just report it. Mayor Rahm Emanuel supported the measure and the opposition block was not able to stop it. The ordinance passed the City Council in a 32-17 vote.

    The measure was criticized by some members of the local commercial real estate industry, like BOMA, which made it clear in a statement that public disclosure of low scores will only put low scoring buildings at a further disadvantage and potentially jeopardize their ability to attract and retain tenants.

    While other local commercial property executives supported the bill, Ald. Brendan Reilly proposed a new ordinance to exempt residential properties from the rule. The proposal was sent to the Finance Committee, where it is unclear if it will receive a hearing. As part of a compromise from the mayor’s office, it was announced that residential building owners were given an extra year to collect and disclose the information after some building owners expressed concern that collecting energy information from individual tenants could prove onerous.

    Buildings larger than 250,000 square feet must start reporting energy use by June, 2014 and structures that are between 50,000 and 250,000 square feet will start reporting in June 2015. Residential buildings that fall within both size ranges will have an extra year to comply with the law.

    Any parties interested in supporting Ald. Reilly’s proposed new ordinance should contact Matthew Link, Legal Counsel for the Finance Committee, in Finance Committee Chairman Ed Burke’s office and request working with them on moving it forward. Anyone wishing to contact the mayor’s office should contact Matt Hynes, Director of Intergovernmental Affairs.

    Please refer to the latest legislation for updates on dates and deadlines.