ACTHA Public Articles

INSURANCE QUESTION OF THE MONTH

Tue, 14 Jul 2020 07:00:00 GMT

By Adam Czerwinski
Sidebar Insurance Solutions
adam@sidebarinsurance.com
(708) 942-5150

Has COVID-19 resulted in additional coverage recommendations?

Short Answer: Maybe.

Long Answer: We do not know yet. COVID is affecting our lives in ways we could not have anticipated. Insurance companies hate change and will spend the next several years making adjustments to their policies based upon COVID’s impact.

Longer Answer: “Additional coverage” depends on an association’s current policies. Minimally, homeowners associations should review and potentially reinforce the following policies:

1. Liability Coverage/Umbrella Policy - An association’s liability policy protects against third-party

claims for injuries that occur on the property (think icy steps). Potentially, there may be some claims against associations for COVID infections - and the association’s liability policy may be engaged. Having a higher liability limits ($) or umbrella coverage may provide better protection for the association should a claim arise.

2. Worker’s Compensation -If your association has a handyman or a contractor that regularly performs work - you may want to consider engaging a worker's compensation policy. Earlier during the lockdown, the Illinois Workers Compensation Commission created a rule that COVID-infected essential workers were presumed to be infected at work. This presumption was promptly abandoned - but could show a predisposition against employers/principals in future claims - and create more claims.

3. Directors & Officers Insurance - During the COVID pandemic, associations are making difficult and unpopular decisions. You may have to limit use of shared spaces, pools, gyms or cancel events. This could create an opportunity for unit owners to allege the board had disrupted their enjoyment of the property or collected funds for services that were not delivered. This claim could be covered under the Directors and Officers policy.

Additionally, Boards should review resources found on the Illinois Department of Commerce and Economic Opportunity’s website: https://dceocovid19resources.com/restore-illinois/

The site offers guidance, signage and actionable plans for all sorts of businesses that may relate to the operation of your association.

Please note that information provided in this column is educational and is not legal advice or given for purposes of modifying your association’s policy. Please contact your attorney or insurance professional directly to discuss your insurance needs, coverages, or particular claims situation.

IPC Cleaning Product Exposures Up 30%

Tue, 14 Jul 2020 05:30:00 GMT

COVID-19 Pandemic Causes Surge in Exposures reported to Nation’s Oldest Poison Center

The Illinois Poison Center (IPC) urges people to use caution with cleaning products, especially during the COVID-19 pandemic. According to IPC data, exposures to cleaning products are up 30%, compared to last year, related to novel coronavirus transmission precautions and concerns.

Examples of exposures the IPC is managing include:

People using non-traditional chemicals to wash their hands (e.g. bleach, hydrogenperoxide, wipes, etc.) instead of regular hand soap resulting in rash/irritation andcracked skin.
People using chemicals (e.g. bleach, wipes, cleaning powders) to wash their groceries,including produce and are then concerned about toxicity upon ingestion;
Mixing cleaning chemicals together and inadvertently producing toxic gas; and
Pediatric exposures to cleaning products left open/unattended.

“It is critical that consumers read all cleaning product labels carefully before use and heed any warnings,” says IPC Assistant Vice President Carol DesLauriers, Pharm.D. “While good hand hygiene and household disinfecting efforts are important in the fight against COVID-19, people must remember to use cleaning products for their intended use. If there is any doubt about the safe use of cleaning products, call the IPC for guidance.”

While many people are using the stay-at-home order to tackle spring cleaning, in conjunction with disinfecting to prevent the spread of COVID-19, the IPC offers the following tips for poison-proofing your home:

Whenever using cleaning products, always read the product label first and use the product according to the label directions;
Keep all cleaning products in their original containers with original labels;
Store cleaning products out of sight, in locked cabinets;
Keep all household cleaning products and other potentially harmful products separated from food products;
Never leave a cleaning product open and unattended;
When using cleaning products, work in well-ventilated areas; and
Dispose of cleaning products according to the instructions on the label or at your community chemical waste drop-off site.

The good news is that approximately 90% of poison exposures can be treated safely and effectively at home, by calling the IPC at 800-222-1222 and providing the name of the poisonous substance and the approximate amount involved in the exposure.

In case of a poisoning exposure, follow these first-aid steps, then call the IPC:

Swallowed: Give a few sips of water to drink. If the patient is unconscious, call 911 ortake them to the nearest hospital emergency department. Never try to chemicallyneutralize any poison.
Skin: Remove contaminated clothing and wash skin gently with soap and cool water.
Eyes: Rinse eyes with lukewarm water for 15 minutes.
Fumes: Remove patient to fresh air, taking care not to become exposed yourself. If thepatient is not breathing, call 911 and start artificial respiration and continue untilmedical help arrives.

IPC experts are available to provide information and treatment advice 24 hours per day, 365 days per year, including holidays. If you suspect that you or someone you know has been exposed to a potentially harmful substance, please call the IPC at 800-222-1222. The call is free and confidential. For more information, visit the IPC’s website: https://www.illinoispoisoncenter.org/

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The Illinois Poison Center is a nonprofit health service that provides the people of Illinois with comprehensive and trusted information and treatment advice on potentially harmful substances via a free, confidential 24-hour helpline staffed by specially trained physicians, nurses and pharmacists.

GREETINGS FROM YOUR ACTHA BOARD OF DIRECTORS - March 2020

Wed, 25 Mar 2020 15:11:29 GMT

Hello everyone,

We sincerely hope that you and your families are healthy and coping well with our "new normal" as a result of the COVID 19 Pandemic. We at ACTHA are committed to continuing to provide information and support to our members during this unusual time in our lives. Of course, Association business is most likely not your top priority right now, but we hope that you will turn to us with any concerns you are having. If we cannot provide answers, we will refer you to one of our commercial members who are devoted to serving community associations.

In this issue, you will find a link to the webinar we presented last Friday, "Implications of COVID 19 For Associations". It was our first attempt using a new program and, due to limited staffing availability, there were a few glitches. Please accept our apologies! We assure you that we will continue to fine-tune our skills. We plan to continue providing this avenue for interaction with our membership for the foreseeable future. We have decided to make this webinar available to all in our database, current members as well as lapsed members. The link is provided in this newsletter. This was a difficult decision for our Board of Directors, but we are committed to our core mission to educate and support. As you may know with the recent turnover of day to day operations of our organization to volunteer Board members, we have had difficulty with our membership software. Confusing and sometimes conflicting messages sent out last fall negatively impacted us in maintaining our membership rolls this year. We are a not-for-profit organization. Please continue to support us so that we may support you. If you allowed your membership to lapse, go online and renew. If your contact list, and most importantly, your primary contact (bundle administrator) has changed or includes a manager, management company or any other commercial contact, please correct it by going to actha.org, emailing: actha@actha.org, or calling 312- 987-1906.

https://zoom.us/rec/share/5PdnKuDX-VpOYLOW0kjbfogzGJ3vX6a82iAeqfsIn0jyjNXoJs_aUHut-wdwfOT5

Please note, if you click on the link to our recent webinar recording, you will see a series of black screens with the names of the moderator, Elizabeth Gearon, and Bill Chatt and Bob Prince, the presenters. Please go to the bottom of the screen and move the blue dot to 3:32 or later for the video and audio to begin. Once again, thank you to all who "tuned in" last Friday.

In this issue, we have included an article on the importance of organizing your space. We felt that in this time of confinement, dire reporting in the media, and continuing financial and personal stress, a diversion may, if for just a brief moment, provide some relief and a suggestion for a productive use of time.

Take care,

The ACTHA Board of Directors

Storage Cleaning & Organizing Benefits…

Wed, 25 Mar 2020 15:08:29 GMT

BY Maria Concepcion

Although it is the obvious thing to do, you’d be surprised at how many people don’t understand the full benefits of keeping their storage units well-organized and clean. Although there are many reasons, I will point out some of them. Perhaps the most important fact to consider – especially from the building management perspective is that a clean organized space is a proactive way to minimize insect and rodent problems. Prevention is cheaper and more effective than a costly cure.

The basics of a clean, safe, and organized storage / locker space, is the installation of racks with the proper material and configuration to meet your space measurements and your personal needs. Storage shelving and storage bins come in a variety of heights, widths, and sizes to allow you to maximize any available space you have

Delay Depreciation -Minimize Health Contamination - Improve Efficiency…Not only will proper organization and clean environment help keep your precious possessions clear from germs, dust, or deterioration, you will easily and efficiently be able to find what you are looking for without stress or delays.

Increase Storage Space…In addition to preventing a mess, the increased storage space offered by proper

organization will help reduce clutter and increase the available room to store additional items to further help you declutter your home or business.

If you are self-employed or need to keep work materials / documents at close reach and have limited storage in your living space…Keeping an organized and clean storage unit can improve the accuracy of your inventory. Anything that needs to be used for work can be located much more easily if everything is stored properly, labeled correctly, and easily accessible.

Keeping your storage containers labeled and organized help you determine remaining quantity, which reduces needless spending and effectively know when to replenish items.

The benefits of keeping your storage / locker space clean and organized out weights the time and effort you invest to set it up. Once the space has been configured to meet your needs, and an organization system is established, you will only need to clean the space on a quarterly basis and tweak the system when you have life changing moments in your personal of professional life.

DON'T PANIC BECAUSE OF THE PANDEMIC!

Wed, 25 Mar 2020 15:06:37 GMT

By Bill Chatt of Cervantes Chatt & Prince P.C.

Obviously, the COVID-19 pandemic has upended every aspect of everyday life and Associations have not been spared. The first piece of advice I have is take a deep breath! So much of what we are all dealing with is in the hands of others and that makes it easy to feel helpless. That is normal. The best thing anyone can do in a situation like this is just focus on what you can control as individuals and as board members. Let’s look at two things Associations can control: meetings and “rainy-day” projects.

As of this writing, the Centers for Disease Control (“CDC”) is recommending we all avoid gathering in crowds of more than 10 people. That said, there are rumors and fears of impending “shelter in place” orders that may be mandated. That may or may not happen, but, with that in mind, Associations should really think twice before conducting meetings in the foreseeable future. This is an unprecedented time in our history and with sound judgment and good intentions, boards should take comfort that not observing every possible technicality will, in all likelihood, be excused for the time being.

With this in mind, in the event an Association finds it really must carry out some board business or just wants to try and do so to maintain some sense of normalcy, what are the options? Under the Illinois Condominium Property Act, a board may ratify an action taken in response to an emergency (immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the unit owners) provided that the board gives notice to owners of the occurrence of the emergency event within 7 business days after the emergency event and a general description of the actions taken to address the event within 7 days after the emergency event. That portion concerning “health, safety or property of the unit owners” is more relevant than ever and, to the extent a board had to take an action such as an emergency expenditure to clear a lobby or laundry area because of possible contamination, this section would apply. Common Interest and Master Associations do not have the benefit of the explicit directive statutorily, rather, only emergency expenditures are addressed. Then again, but for a common facility such as a clubhouse, pool, or other gathering facility this may be less likely to be an issue for Master and Common Interest Associations. To the extent a potential situation arises, boards should consult with counsel but likely an “act now ask forgiveness later” approach would apply.

As to conducting normal business, meeting via electronic means may be an option, particularly with so many people working from home at this time. Funny thing is that with so many people staying at home for the time being getting a quorum for an annual meeting should be a cinch but for the edict against large gatherings! Section 18.8 of the Condominium Act and and Section 1-85 of the Common Interest Act give wide latitude in carrying out many routine tasks via electronic means. Of course, if any owners have not consented to communication by acceptable technological means, an Association will have to deal with those owners the old fashioned way. As to elections, provided the Association has adopted a rule to allow meeting by acceptable technological means, the board may be able to send notice and conduct meetings electronically. This may be as simple as a conference call or joining multiple callers on a mobile phone to something as sophisticated as a web-based meeting solution. Providers such as “Go-To Meeting” and “Zoom” offer a variety of plans that cater to these needs, and in fact, Zoom actually has a free membership plan that may work for associations.

For simpler issues, use of unanimous resolutions may offer a simple solution in the near term. This may be more in line for situations where a board had previously discussed an issue and was simply waiting for the next meeting to ratify a decision. With the assistance of their professionals, a board may adopt an action by unanimous resolution which memorializes the action taken and which otherwise could have been taken at a meeting of the board.

The second thing boards may want to look at during this period of down time is tackling “rainy day” projects. Items such as getting updated census information to having the declaration reviewed or revising rules may be things a Board has put off but now might have time to address. There are numerous other issues that don’t necessarily require face-to-face attendance that boards can address during the next 30 to 60 days or however long we are in this period of virtual shutdown. Many professionals such as attorneys, accountants, managers, and insurance agents while not out and about, are nonetheless open for business and getting a hold of them should be easier than usual!

So again, don’t panic because we are all in the same boat and we will make it through this just as we did the “great recession.” Keep your eyes on your emails a bit more carefully because though we all get our share of junk-mail for the time being you can count on more important reading materials to come your way as well.

Message from the Board of Directors - February 2020

Fri, 28 Feb 2020 20:45:54 GMT

We would like to express our sincere appreciation to all associations and commercial members who have renewed their membership in ACTHA for 2020. We acknowledge your "vote of confidence" and we will not let you down!

So now that 2020 is well under way, it's time to refocus on our personal and community association vision for the future. Sure, new year's resolutions are popular, but we all know that concept is not usually long-lasting and most likely not related to community association living. Visual, or, if you will, visional acuity is defined as, "sharpness or keenness; the ability to see, hear or understand something easily". In other words, it is the quality and effectiveness of your ability to "see" the details as well as the big picture. Whether you are a homeowner, Board member, or commercial provider, these skills are essential to creating or maintaining the balance in satisfaction and successful coexistence of all homeowners in a community association. We have developed a prescription to sharpen your community association acuity.

ACTHA would like to announce "Visual Acuity" our annual Spring Conference/Tradeshow to be held at Drury Lane Conference Center in Oak Brook, IL. on April 4, 2020 from 7:45 AM-3:00 PM. All association homeowners and professionals involved with community associations are invited to attend. Topics will include an overview of information and resources provided to homeowners free of charge through the IDFPR, (Illinois Department of Financial and Professional Regulation), and a focus on recent legislation that has been introduced and/or passed in the Illinois General Assembly that will impact community associations. Sessions will highlight clarification of insurance requirements, development and enforcement of effective rules, best practices for managing day to day operations, and outline other fiduciary responsibilities. We have expanded the "Ask an Attorney " session this year to enable all with questions and concerns to interact with a panel of attorneys who specialize in community association law. We have a dynamic variety of presenters. Throughout the day, opportunities to network with homeowners, Board members and professionals who provide services to community associations will also be provided for all in attendance.

Please join us for the day on April 4, 2020. We look forward to meeting you and enjoying an informative and productive experience at Drury Lane. Registration is now available at www.actha.org

Association Reserves

Mon, 30 Dec 2019 21:14:02 GMT

by: Peter Santangelo, President at Wintrust Community Advantage

When I am attending Board meetings to discuss the associations finances I am asked consistently about the associations reserves.

Specifically do you think our reserves are adequate? Or how should we invest them?

I quickly respond do you have a reserve study? Most associations shy away from obtaining one because they do not want to spend the money to purchase one. However, a reserve study is an important tool for Boards that can help document and allocate what a reasonable amount is to have in reserves and also estimate how long a timeframe they have before the funds may be needed for the repair and replacement cost of the common elements of the property which the association is obligated to maintain. The Reserve study estimates the useful life and replacement cost of the common elements; however these repairs are not typically addressed until actually needed which may occur before or after the estimate of the study. This allows the association Board the option to extend the repair(s) if so desired. The reserve study may also bring to light necessary repairs that may have been neglected that can now be allocated into the reserve budget.

The reserve study helps us work with the association in establishing a cash flow analysis chart on their reserve funds to determine an answer to their question. A cash flow analysis chart is a financial picture usually reflecting multiple years of activity showing how the association funds flow in and out of reserves. This reflects the ebb and flow of funds in the reserves also showing the estimated outflow for repair or replacement over multiple years which helps us determine if there is a shortfall during any one year in their reserve funds and can answer the question are my reserves adequate. Any shortfall during any one year would need to be addressed by asking can the repair be postponed or is it truly needed at the time designated. If the repair is needed an increase to the reserve contribution, special assessment, a loan or any combination of the three can be used to address the shortfall.

The cash flow chart will also assist in determining what excess funds the association will have in their reserve fund and when they will need the funds for

any estimated repair(s) and/or replacement of components of the association. Knowing this we can address the second question of how they should invest their reserve funds. We now can invest the associations excess funds based on when they will need to use them. The Association can have multiple investments with different maturity dates this is commonly known as “laddering”. Using a ladder approach can decrease interest rate risk and reinvestment risk. The association has a fiduciary responsibility and it is prudent for them to invest the reserves into an instrument that preserves the initial principal investment. So we recommend conservative investments like certificates of deposits (CD), U.S. Treasury funds (bills, notes or bonds) or brokered insured certificate of deposits depending on the amount being invested and maturity desired.

I have heard some horror stories of Boards that have tried to maximize yield and ended up locking up their reserve funds in investments that tied up funds longer than expected and they were unable to break the investment when funds were needed. Or the cost to get out of the investment depleted the original principal investment. So it is extremely important for Boards to be prudent and fiscally responsibly when investing their reserve funds.

It is also important for an association to set a precedent for reserve investing. Creating a reserve fund investment policy can assist in guiding current board members and also provide continuity and direction for future boards. When drafting your reserve policy you should check your governing documents to see if you can invest in anything other than a basic safe vehicle that preserves your principal investment. A simple investment policy should be in the form of a resolution that is approved by the board encompassing some of the following items:

Purpose – statement of intent to establish procedural requirements and guidelines

Scope – will this discuss only reserve funds, short term reserves, long term reserves will operating funds be included?

Investment Objective – Preservation of principal, safety, liquidity, yield?

Delegation of Authority – suggest at least two officers to approve the transfer of funds or investment. Usually the Treasurer and President. Board should approve the investment.

Authorized Investments – list of what instruments each fund can be invested like FDIC insured certificates of deposits, FDIC insured money market accounts, etc…

Safekeeping and Custody – Who will be responsible for the safekeeping and review of the investments?

These are some key components of an investment policy which can be set forth with the guidance of your management company, banker or association attorney.

All of these suggestions are not mandatory to follow however they do provide practical advice and direction for Board Members.

More blessed than any man deserves to be . . .

Thu, 31 Oct 2019 21:30:46 GMT

In October Kelley and I will celebrate our 35^th wedding

anniversary, along with my 60^th birthday. Two milestones that I am very grateful to reach. With that said, and after extremely careful consideration, I am announcing my retirement from Acres – effective November 30^th.

In no way am I running away from Acres or our clients. In fact, my decision is a very difficult one because I love being a part of our great team. I believe that it was Divine Intervention that placed me at Acres – it is one of the best things that has ever happened to me. I will be forever indebted to Jim and the Schwantz family for 19+ years of guidance, teaching, support, and friendship. I am very

It is very hard to walk away and move on to the next chapter

of a wonderful life.

What I am running towards . . . the desire to . . .

·         Be a better husband, father, grandfather, and Christian
·         Become an author and publish 2 books
·         Enjoy family time on the farm
·         Spend more quality time with friends
·         Take road trips with Kelley to enjoy new restaurant adventures
·         Work harder on physical fitness and participate in more cycling and climbing events
·         Spend many great hours afield watching a bird dog in action
·         Give fair chase to the elusive Wapiti, Alces alces, and White-Tail Buck
·         Volunteer and help some great organizations
·         Wake up on a nice day and find myself at a Cougars or White Sox game
·         Be the cool dad & grandpa accompanied by the coolest mom & grandma
·         And the list goes on . . .

On behalf of Kelley and myself, we wish

you all the best in life and all of

God’s Blessings – Peace

Success Is Working A Season Ahead

Thu, 31 Oct 2019 21:30:26 GMT

Sherm M. Fields – Acres Group

Planning and preparation are the key ingredients for success. “Chasing it” more often than not dooms you to failure.

On 11/25/18, the National Weather Service issued a blizzard warning as Winter Storm Bruce barreled his way into Chicagoland. This storm delivered heavy, wet, snow accumulations between 4 – 12” with wind gusts of 35 – 45MPH. Following the snowfall, temperatures plummeted and turned all residual moisture into ice.

Can you believe that on 11/23 & 11/24 we received numerous bid requests for a snow contract? We attempted to help where we could, but regardless of which contractor took on that work, can you imagine that it went well? It often times did not. I can share that we worked our butts off to take care of those last minute clients, but it did not go as well as we or anyone else would like. It was painful. I heard similar stories throughout the industry.

I give our team a lot of credit for never quitting and getting the job done. This came at a great cost to the team. Not to mention little to no profit for the hard work in horrible conditions.

No contractor can provide great service with no time for proper staffing, equipment management, on-site inspections, logistical planning, and client meeting. Consequently, our recommendation is that if you have not signed your snow contract – do it today! Consider this as very urgent.

Success is working a season ahead.

Moving forward, it is time to begin planning and preparation for upcoming winter and spring landscaping services. Yep – time to think spring!

In the winter months, you may want to consider having your landscaping contractor provide dormant pruning to your shrubs and trees.

Dormant shrub pruning selectively removes dead, diseased, and crossing branches -generally removing approximately 1/3 of the plant. Some shrubs benefit more from rejuvenation pruning (spireas, dogwoods, hydrangeas, weigela) which reduces the shrub to within 6 – 10” of the ground.

The pruning benefits include but are not limited to:

·         Extends the life of the plant
·         Reduces the size of plant to fit compact areas – especially important in preparation of rapid spring growth
·         Improved shrub health
·         Better branching habits & aesthetics
·         Reduces the risk of disease transmission

Dormant tree pruning is equally important and carries similar benefits as dormant shrub pruning. Factoid: Many experts recommend to extend the life and enhance the health of trees, that they should receive 5 pruning’s in the first 25 years of life.

The winter is a great time for contractors and clients to complete a landscape success plan.

Items to be reviewed and discussed include:

·         Primary and secondary contact information
·         Communication protocol
·         Special needs addresses
·         Garbage day and service day
·         Spring walk inspection date(s) “A” & “B” date to account for inclement weather
·         Executive summary of landscaping specifications
·         Discussion of client expectations and priorities
·         Transparent discussion of landscape enhancement budget with a goal of utilizing that investment on the “highest” and “best use” of that budget
·         Contract grown annual flowers ordered no later than mid-January

This pre-season work between Association Decision Makers, Property Management, and Contractor will enhance teamwork, performance, quality, and potential cost savings.

A pro-active approach will also reduce communication issues, frustration, and problems. It is also a lot more fun to be ahead of it (winning), rather than “chasing it” (losing).

In the words of World Series Champion Manager Ozzie Guillen, “Fun is winning – winning is fun”. Don’t know about you, but I am already looking forward to the season ahead! Go Sox!

ACTHA LETTER FROM THE PRESIDENT - Fall 2019

Thu, 31 Oct 2019 21:30:00 GMT

Dear Actha Members:

Fall is in full force as the leaves are turning and the temperatures continue to fall,

Association Board members are sending out budgets to their Unit owners and Community Association Managers are busy solidifying landscape and snow contracts.

The ACTHA Board members have been involved implementing new features for their members. We will be offering a full line of Fall Educational Seminars this fall in our North , South and Chicago Zones. The various topics will offer you the latest information on Legislation that concerns the Community Association scene. Insurance, a topic often overlooked and misunderstood, is another topic we will be featuring this month.

The ACTHA website continues to offer user friendly on line registration and payment features as well as access to our Online Directory.

Our Social Media presence is growing and we are posting on Facebook and as well as other social media outlets.

Our Newsletter is being revamped giving our commercial members opportunities to contribute articles featuring pertinent information to our Association members as well as contributions from top bloggers in the community association scene.

Our Commercial advertising packages are being revamped offering advertising opportunities at our Educational Seminars, Website advertising presence, Newsletter Ads, and of course our Drury Lane 2020 Event.

An important reminder to our Association and Commercial members , it is time for renewal of your Association and Commercial ACTHA Memberships. We will be sending out our renewal statements shortly, so please be on the look out for your upcoming invoices.

Along with your renewal, we would like to have your contact information updated such as current Board Members and any unit owners that you wish to contribute e mail addresses with proper consent. Please remember everyone in your Association benefits from an Association membership. All unit owners as well as Board members may be signed up to receive website access and newsletter send outs.

The Board of Directors would like to thank you in advance for your updated contact information and renewal of both Commercial and Association Memberships.

Success comes through communication and relationships. ACTHA is all about You!

All the best,

Diane F. Pagoulatos, ACTHA President

Structural pruning

Thu, 31 Oct 2019 21:30:00 GMT

By: Tom Smiley, PhD

We know many of the common causes of tree failures, and some of them can be prevented when the trees are young. One of the keys to developing strong trees is the process of structural pruning, or pruning to improve tree structure.

With young trees, our goal is to prune them to create a structure that is resistant to future breakage, won’t interfere with people, looks good, and is long lived. The earlier we start on this process, and the more regularly it is repeated, the better the results will be.

When structurally pruning a young tree, we carefully look it over and make decisions as to which branches to remove. We identify the central leader of the tree. This is the tallest, most centrally located, healthy branch. Other branches that are growing upright near it are reduced or removed. This eliminates one of the most common failure points on mature trees, the codominant stem union.

We also identify the lowest permanent branch on the tree. Many lower branches, if allowed to grow, will interfere with pedestrians, vehicles or buildings. Branches below the lowest permanent branch can be reduced or removed while the tree is developing so that large cuts won’t be needed later. Smaller cuts reduce the risk of decay moving into the trunk. Ideally, we like to see all the lower branches be half the diameter of the trunk.

While we are making these cuts, we also try to maintain as many lower and interior branches as possible. We like to have foliage on the upper two-thirds or more of the trunk. In general, lower branches are good and contribute to the development of a strong lower trunk and root system.

A lot goes into structural pruning. The exact cuts will depend on the tree species and location in your landscape. If we start the process shortly after the tree is planted and continue on as it matures, the result is a strong, long-lasting and healthy tree.

Chicago condo owner’s long-running Fair Housing case settled

Fri, 30 Aug 2019 21:44:12 GMT

By Deborah Goonan, Independent American Communities

Last week Michael Novak, a plaintiff in a fair housing lawsuit against State Parkway Condominium Association and others, distributed a news release announcing an out-of-court settlement of his 13-year-long dispute over his family’s service animal.

The Novaks, who are both deaf, live with their daughter and a service dog named Hera. Hera alerts the Novaks to doorbells, ringing telephones, alarms, and other situations that hearing people take for granted. Sometimes, Hera also accompanies the Novaks in the common areas of their condo building.

Assistance animal not a pet

Under the Fair Housing Act, an assistance animal in not a pet.Housing providers are obligated to make reasonable accommodations to allow a resident to reside with and use an assistance animal at home.

Residents generally have the right to bring the assistance animal into the common areas of an apartment or condominium community, as long as the animal does not threaten the safety of other residents.

As previously reported in a 2015 LoopNorth News article, the recently-settled legal dispute began when State Parkway Condo Association imposed fines exceeding $2,100 on Michael and Christina Novak, citing “pet violations” and noise complaints.

In response, the Novaks filed a Fair Housing complaint against State Parkway, for not recognizing Hera as an assistance animal. The Novaks also filed a legal complaint claiming that State Parkway failed to accommodate their need for a transcription service at a rules violation hearing in 2010.

Fair housing case continued

The condo association attempted to have the fair housing case dismissed, but a federal judge ruled the case could continue in October 2015.

In addition to the condo association, former management company Lieberman Management Services and former building manager, Donna Weber, were also named as defendants.

During the intervening years, as the fair housing case slowly wound its way through the legal system, Novak and State Parkway sparred in court over the condo association’s failure to provide access to financial records, in accordance with Illinois state laws, and the City of Chicago Ordinances.

Mounting legal fees

By 2017, the association’s legal costs exceeded $1 million. State Parkway’s insurers began denying claims for the condo association’s legal defense involving the Novaks.

That prompted the condo association to issue a $500,000 special assessment to cover ongoing legal fees in the protracted legal battle.

Earlier this year, the court finally informed Michael Novak of his day in court on the Fair Housing complaint. A trial had been scheduled for August 26, 2019.

Just two weeks prior to trial, the parties agreed to a confidential settlement of their disputes.

Neither party is at liberty to share the details of that agreement. ♦

Source:

Official August 13, 2019, news release, courtesy of Michael Novak:

Michael and Christina Novak, husband and wife, live in a condominium at 1445 North State Parkway in Chicago (the “Building”). The Novaks have lived in the Building since September 2003. Michael and Christina have a daughter.Michael, Christina, and their daughter are the plaintiffs in this lawsuit. Michael has a severe-to-profound bilateral sensorineural hearing loss. Christina has a profound bilateral sensorineural hearing loss.

The defendants in this lawsuit are the State Parkway Condominium Association (the “Association”, which is responsible for administration of 1445 North State Parkway, Lieberman Management Services, which was retained in April 2006 to manage the Building, and Donna Weber, who was employed by Lieberman, beginning in September 2007, as Building Manager.

Michael and Christina brought this lawsuit, on behalf of themselves and their daughter, against defendants asserting that defendants have violated the federal Fair Housing Act. They claim that defendants violated the Act by refusing to make reasonable accommodations for their disabilities, including by refusing to provide CART services, which is real time captioning, for board meetings and disciplinary hearings at the Building and for failing to make reasonable accommodations for their assistance animal, a dog named Hera, by allowing her to accompany the Novaks when they are in the Building’s common areas. They further claim that defendants violated the Fair Housing Act by retaliating against them for asserting their right to reasonable accommodations for their disabilities, including by levying unjustified fines against the Novaks and attempting to force the sale of their home. Michael and Christina claim that their daughter has suffered injury as a result of the actions defendants have taken against her parents.

Defendants deny plaintiffs’ allegations. Defendants contend that they provided plaintiffs accommodations to the extent required under the Fair Housing Act by supplying CART services and making accommodations in respect to plaintiffs’ assistance animal when reasonable. Defendants deny that any of the claimed actions were taken in retaliation for plaintiffs asserting their rights to reasonable accommodations. Rather, defendants contend that each of the actions they took with regard to the plaintiffs was for a legitimate, nondiscriminatory and non-retaliatory reason such as to ensure compliance with the Association’s Rules and Regulations. Defendants assert that they treat all of the Association’s unit owners equally regardless of whether or not they have a disability or have exercised their housing rights.

This lawsuit was scheduled for trial on August 26, 2019 before U.S. District Court Judge Edmond Chang. On August 12, 2019, following a mediation before Magistrate Judge Jeffrey Gilbert, the parties agreed to settle their disputes. The terms of the settlement are confidential.

How will changes in FHA financing affect condo homebuyers?

Fri, 30 Aug 2019 21:40:00 GMT

By Deborah Goonan, Independent American Communities

FHA to ease condo financing, claims it will boost homeownership

If you’ve been following housing news over the past several years, you’ve probably read many articles on proposed revisions to FHA financing.

The HOA-industry, including trade group Community Associations Institute (CAI) and the National Association of Realtors (NAR) have been pushing their agenda to ease mortgage qualification standards for condos for several years.

Now it looks like stakeholders have finally convinced the Federal Housing Administration to finalize new lending guidelines, subject to a 30-day public comment period.

Several policy changes will go into effect as of October 15, 2019.

FHA is bringing back “spot loan approvals” for condominiums, allowing individual unit buyers to gain FHA mortgage approval. Loans can now be approved even when the housing project is still under construction, and does not yet qualify as an FHA-certified community. The catch is, the condo project must prove it is “financially stable,” and that’s a challenge for many so-called “affordable” housing associations.

Currently, only 6.5% of condo projects in the U.S. are FHA certified. Critics of the current system complain that the certification and recertification process is costly and burdensome. In response, FHA says it will now require re-certification every three years, instead of every two years.

The current administration will now allow for a higher percentage of commercial space in mixed-use condominium projects.

Additionally, FHA will now seriously consider approval of financing for condo units in communities with only 35% owner-occupancy. Furthermore, up to 75% of units in a single condo association can be purchased using FHA mortgages.

One small bright spot: new FHA guidelines still allow the administration to adjust acceptable owner-occupancy, commercial-occupancy, and FHA concentration ratios, depending on the financial health of the community.

That’s why, as a percentage of all home buyers in the U.S., IACdoesn’t expect a huge surge in FHA financed condominiums.

But HOA-industry stakeholders are celebrating, as they have long held that easier-money policies will increase the number of eligible first-time homebuyers in the market.

The industry’s obvious goal is to sell more condos.

And, to the uneducated housing consumer, the political agenda of pushing more first-time home buyers into lower-priced condos might seem like a good idea. After all, it is one way to provide an affordable path to homeownership.

But is it the right way?

New FHA policies won’t make homeownership more affordable

Upon careful consideration, it’s this author’s opinion that new HOA/condo industry driven FHA guidelines are bad policy.

First of all, it’s deceptive and misleading to sell condos as an “affordable” entry into homeownership. For the past five years, IAC has documented hundreds of examples of condo owners who were sucked into condo life by the low purchase price.

Within a few years, these homeowners are choking on much higher condo fees, and stressing over unexpected special assessments.

And, here’s another eye opener. IAC hears from owners across the U.S. on a regular basis. Many of them tell me that their condo fees now far exceed their monthly mortgage payments, including taxes and insurance.

Ouch!

Most condo crises not reported

The vast majority of these condo horror stories never get reported in the media. That’s because most owners caught in a cycle of unaffordable payments are desperately trying to sell their units.

Many do not succeed. They’re forced to either rent their units to tenants or simply walk away and pay the consequences of bankruptcy and bad credit ratings.

The winners in this condo game are investors who have the bankroll to pick up units at rock bottom prices, often through short sales and HOA or bank foreclosures.

That’s why many condo associations have such low owner-occupancy rates. Quite often, the only people who can afford to own them are investors who operate as landlords or short-term rental entrepreneurs.

That’s why IAC thinks it’s ironic that FHA is now willing to reduce the minimum owner-occupancy requirement from 50% to 35% of total units in a condo association.

Construction defects plague many condominium projects

It’s also no secret that the last housing boom dumped a lot of poorly-built housing into the U.S. real estate market.

Condominiums were especially hard-hit with construction defects, a fact that has been documented by the HOA industry trade group itself. (See CAI’s Too Close to Home report).

Shoddy construction. Bad apartment-to-condo conversions. The all-too-common deferred maintenance of multifamily stacked and townhouse condominiums.

For all of these reasons, homeowners find that they lose money on their “affordable” housing investment.

That’s especially true when they happen to be owner-occupants outnumbered by investor-owners in the community.

For a typical case study of a condo crisis, see the recently published research paper co-published with Michael and Shelly Marshall: HOA power relationship, problem-solving, and communication patterns during a major building renovation construction crisis.

(Citation: Michael J. Marshall, Shelly Marshall & Deborah Goonan (2018) HOA power relationship, problem-solving, and communication patterns during a major building renovation construction crisis, Housing and Society, 45:3, 186-205, DOI: 10.1080/08882746.2018.1529509)

Short term rentals turn American Dream into nightmares

Enter the Airbnb mess.

For quite a few condo owner-occupants, the rise of short-term rentals using online platforms has created plenty of unexpected lifestyle challenges.

Many first-time homeowners think they’ll be living next to other owner-occupants. They hope they’ll get to know their neighbors and make a few long-lasting friends.

Starry-eyed condo buyers often assume they’ll be able to lounge by the community pool in peace, use the community room for friendly gatherings, sleep peacefully at night, and return from a hard-day’s work to a maintenance-free home.

Condos as mini hotels?

Then reality set in, as several neighboring condo and townhouse units begin operating as mini-hotels. Out of town guests arrive daily, toting luggage. In vacation mode, they can be fond of partying until the wee hours of the morning.

Condo owners complain that the guests hog up the pool. Residents can’t use the clubhouse, because it always seems to be booked for special events such as bridal showers and bachelor parties.

How will FHA’s guideline allowing even more commercial use of property improve life for owner-occupants? It’s far more likely that restaurants, bars, coffee shops, and convenience stores will serve visitors and tourists than condo buyers seeking a stable long-term home.

Condo owners can lose their life savings

And what about the very real possibility of hostile condo takeovers, the deconversion of condominiums back to apartments?

Make no mistake: a low owner-occupancy rate greatly increases the risk that opportunistic investors will take over a condo corporation, terminate the association, and then force the owner-occupants to sell their condos at artificially low prices.

In most cases, investors win, owner-occupants lose.

That fact is well-documented by the media and discussed here on IAC.

Therefore, if FHA truly wants to “help” encourage and sustainentry into homeownership, then the administration should NOT be backing mortgage financing of common interest development of any kind, especially condominiums.♦

Sources:

New FHA Guidelines Expand Access To Condo Mortgages
Brenda Richardson, Senior Contributor | Forbes
Aug 15, 2019, 08:04am

FHA to make financing easier for condo owners
Announces long-awaited changes to eligibility requirements that include individual unit approval
August 14, 2019
Jessica Guerin | HousingWire

Read the official FHA guidelines (124 pages):

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 203, 206, and 234 [Docket No. FR-5715-F-02]
RIN 2502-AJ30
Project Approval for Single-Family Condominiums

HOA news roundup

Fri, 30 Aug 2019 21:37:29 GMT

By: Deborah Goonan, Independent American Communities
Debgoonan@icloud.com

HOA dispute turns violent (TX)

Pleasant Run Estates neighborhood, in Lancaster, Texas, was recently the scene of a gun fight between the HOA President’s wife and a homeowner fighting against an assessment lien on his home.

Last week, authorities arrested homeowner Kenneth Haggerty on charges of aggravated assault with a deadly weapon. Belinda and her husband, Anthony Tucker, filed a police report after Haggerty blocked her car, then shot her in the heat of an argument.

Haggerty’s attorney says the dispute centers on the HOA’s collection of fees, to which it is not entitled.

According to two local reports, Anthony Tucker claims to be the President of the HOA at Pleasant Run Estates. And, in a cozy arrangement, his wife, Belinda, owns the company that manages the community association, Professional Property Management Services.

Conflict of interest? Haggerty and other unnamed homeowners certainly think so. Most of the residents fear the Tuckers, and don’t want to be named.

Can you blame them?

But wait, the story gets even more bizarre.

You see, Lancaster City Manager Rona Stringfellow informed NBCDFW that maintenance in Pleasant Run Estates is paid for by tax dollars, collected by a Public Improvement District (PID).

As far as the City is concerned, the PID was established in 2016, in order to replace the HOA as a “more effective way to pay for neighborhood maintenance.”

There’s absolutely no compelling need for Pleasant Run Estates to have an HOA. In fact, City Council didn’t know that an HOA was up and running.

Why, then, are the Tuckers collecting HOA fees from homeowners, and placing liens on private property when homeowners refuse to pay them?

In this context, Haggerty is accused of lashing out at Belinda Tucker, aiming to shoot her in the head.

Belinda survived the violent attack by blocking the bullet with her hand. As soon as he witnessed the shooting, Anthony Tucker ran out from his home, with his own firearm, shooting back at Haggerty.

This is a textbook example of negative social impacts of HOA governance schemes. HOAs often bring out the very worst human behavior, including inappropriate aggression and violence.

So far, no charges have been filed against Anthony Tucker, who was apparently acting in self-defense.

Haggerty has been released from jail after posting bail. He lives across the street from the Tuckers.

The environment remains very tense at Pleasant Run Estates.

Sources:

Gunfire Erupts Between Neighbors Over HOA Dues
One neighbor jailed for shooting another in dispute over HOA dues
By Ken Kalthoff | NBCDFW
Published Aug 5, 2019 at 6:15 PM | Updated at 6:49 PM CDT on Aug 5, 2019

Victim Speaks After HOA Dispute Ends in Shooting
By Ken Kalthoff | NBCDFW
Published Aug 14, 2019 at 6:32 PM

August Vendor of the Month

Fri, 30 Aug 2019 21:26:50 GMT

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Ice Dams on Condos: Who’s Responsible?

Wed, 31 Jul 2019 19:06:10 GMT

Here in Massachusetts, heavy snow in winter is common. With it comes the risk of ice dams. While for regular homeowners dealing with removal and damage of ice dams is pretty cut and dry, and the same for those who lease property, those who own or manage a condo find themselves somewhere in-between. While some condo associations are only responsible for the exterior of their condominiums, unit owners are responsible for the interior. For situations like ice dams on condos, where the problem starts on the outside but causes interior damage, where does the liability lie?

How and Where Ice Dams Form

Ice dams form when snow and ice melts on a roof, usually due to poorly insulated attic space, and then flows to the cooler edges and gutters of a roof and refreezes. As this process repeats itself, a crust of ice forms that traps water between the wall of ice and the roof. This standing water leaks through the roof, and from there can cause damage to interior walls and ceilings.

Condo Association: Roofs as Common Areas

Almost universally, condo roofs are considered a shared area and are therefore managed by the condo association board for the condo. As such, the association is liable for the maintenance and repair of these roofs. When ice dams start to form on the roofs of a complex, it is their responsibility to have them removed. If damage does occur to the roof and structure of the condo due to an ice dam, it is the condo’s responsibility to repair them.

Ice Dam Removal: Avoiding Neglect

When reporting damages to the master policy carrier or dealing with questions of liability from condo owners, it’s important to act immediately to remove the ice dams and prevent additional damage (such as performing mold prevention). Use a licensed contractor or roofer and consult with them for the best method for your complex. Make sure to save correspondence, receipts, and document all efforts to get the ice dams removed to mitigate claims of negligence: important for your insurance claims as well as potential condo owner lawsuits.

Condo Owners: Water Damage and Your Policy

While the roof and the exterior of your structure are your condo association’s responsibility, the interior (all-in) is sometimes yours, including the water damage caused by ice dams. As such it’s important to contact the carrier of your unit owner’s policy – sometimes referred to as an HO6 policy – as soon as possible to report the damages. If you’re not happy with the way the insurance settlement turns out, you may want to hire a risk management or legal firm to review the claim and settlement.

Condominium policies, for both master and units, are a complex give-and-take with common areas, limited common areas, deductibles, condo reserves, and more. At H&K Insurance our condo experts can help you review your current policies, discover gaps in your liability coverage, and work with you during situations like ice dams that affect both individual unit owners as well as condo associations. Contact us today to get started.

Brendon Kilcoyne is a licensed insurance agent who has been with H&K since 2003, who specializes in providing risk management for condominium associations and apartment complexes. He has obtained the designation of Certified Insurance Counselor (CIC) and is an active member of CAI (Community Associations Institute). Along with access to his expertise, he can provide direction in determining what kind of program best suits your needs.

5 Places to Look for Winter Damage in an HOA Community

Fri, 19 Jul 2019 17:13:10 GMT

All inspections for winter damage should be in late March or early April, depending on the location of your HOA community. It also depends if snowstorms have subsided for the spring and summer seasons.

Many community management companies keep calendars and databases that notify property managers about maintenance check-ups.

Amenities. Residents will spend more time at outdoor amenities when the weather gets warm. Inspect and repair tennis/basketball courts, tot lots, and other outdoor amenities. Check nuts, bolts, and screws on playground equipment and benches for tightness. Ensure the equipment is built to the manufacturer’s directions. Power-wash all metal structures, including swing sets, seesaws, and jungle gyms. Wooden structures need cleaning and resealing, too.

The community pool — which opens around Memorial Day weekend — filtration system and equipment must be inspected by a professional. Both the pool and equipment must be operational. Chemicals and materials for the season must be ordered. Pool furniture, signage, and safety equipment must be cleaned and set up. Winterized plumbing must be restored. Locker rooms and bathrooms must be cleaned and stocked.
Common Areas. Conduct street cleaning to remove leftover sand and salt from snowstorms. Inspect walkways, roads, and curbs for damage caused by snow removal. Fix potholes or sidewalk cracks that were created or worsened by heavy snow plows and/or frost heave.

“Areas that are accessible by snow plows and snow blowers ... [should be inspected],” Gary Wilkin of Wilkin Management Group in New Jersey, said to The Cooperator. Cracked and/or uneven pavement causes safety issues for residents, especially those aging-in-place. Ask your property manager to call a professional before September for the following spring.
Community Center. An area of immediate concern is any building, like the community or fitness center. With the melting snow and warm rain, potential flooding becomes a big concern. Property managers need to call a professional for a diagnostic maintenance check on irrigation systems, sprinklers, drainage basins, gutters, and downspouts. Maintenance should be biannual and around the drastic change of seasons (winter to spring and summer to fall).

“There shouldn't be too many [other] mechanical things you need to look at since ... you've done all your work before the winter to prevent broken pipes and things of that nature,” Wilkin said.
Landscaping. In late April and early May, greenery begins to re-bloom around your community. During this change, you can see what the community needs in regards to landscaping. Do you need replacements for damaged trees and shrubs? Does turf damage exist from snow plows or salt? How will you address garden beds for the spring?

“The association’s buildings and grounds committee, management, and the landscape contractor ... conduct a site inspection in the spring,” James Rademacher of Rezkom Enterprises in New Jersey said to The Cooperator.

“They determine what areas were damaged and schedule the necessary repairs. Ongoing tree/shrub replacement projects can be worked on, and spring flower plantings completed.”
Lighting. Lighting fixtures around your HOA community need inspection and/or replacements. The days get longer with warm weather. That means lights will be on longer. Check for bad or outdated light bulbs or broken lighting fixtures, including emergency lighting.

According to FirstService Residential, a residential property management company in Florida, check with the local utility company or consult with your property management company about available rebates. These are valuable cost-savers for switching to energy efficient alternatives.

Winter damage in your community is often handled by a community management company. These companies ensure that neighborhoods are ready for spring.

To learn more about hiring a community management company, download our Guide to Hiring a Community Association Management Company. Click on the button below to get started:

3 Tips for Keeping Your Association Safe During the Winter

Fri, 19 Jul 2019 17:09:12 GMT

The weather in most places this year has been reasonably mild for December. However, it’s always a good idea to prepare for the time ahead as the temperatures continue to drop. To err on the side of caution, HOA boards should be prepared with the best ways to protect building operations and residents. Here are some tips for keeping everyone safe and avoiding seasonal emergencies this winter.

1. Check Your Walkways

Some of the most common types of winter injuries come from trips, falls, and slips on icy or wet surfaces. Patrol your community’s perimeter looking for any hazardous routes that could need attention. Apply salt to icy walkways, and have security keep watch for any potential areas that could be missed or become a hazard. If there’s a chance of your community getting lots of snow, have a plan for proper snow or ice removal.

2. Watch for Cold Rooms

Include routine security checks in your HOA emergency management program. Your security officer can be tasked with checking for rooms that could become unusually cold without monitoring, such as mechanical or electrical rooms, sprinkler rooms, fuel storage rooms, generator rooms, and parking garages. If you work with a property management company, let your manager know about the unusually low temperature. Otherwise, note it for yourself and continue monitoring in case you need to take action. Dropping temperatures can mean a risk of false alarms going off, frozen pipes, or HVAC issues. Being diligent about checking these possible hazards up front will help you prevent or prepare for temperature-related complaints from residents.

3. Keep Residents Informed

Make sure those in the community understand the risks involved during the winter months and how to respond in case of an emergency. For example, they will need to know their options for evacuation and safety in the event of a fire. It’s best to hold information sessions for your HOA going over the details. Send out email reminders, and maybe even give residents the instructions in print format, in case they don’t or aren’t able to attend the sessions. Make sure they understand their building’s approved fire safety plan.

And to ensure this information is readily available, it’s a good idea to schedule these sessions at least once a year, not just during the winter time.

These steps can greatly assist in keeping your HOA and residents safe and prepared for any potential hazards this holiday season. No one wants to have their family and celebration time interrupted by an unwelcome safety risk, so it’s best to keep everyone informed and safe.

ACTHA RECAP May 29, 2019

Fri, 28 Jun 2019 06:15:00 GMT

May 29, 2019 Howard Dakoff and Jim Stoller : How to Deal with Difficult People?

On Thursday, May 29, 2019 hosted by the Building Group at 1221 North LaSalle St Chicago, Illinois forty attendees heard Howard Dakoff and Jim Stoller present the topic “How to Deal Difficult People?” These can be homeowners and board members alike in a community association .

The tips included:

Reaching out for assistance to your team professionals, such as your attorney.
Realize there are different personalities to deal with in a group living in close proximity.
Managing people takes skill in dealing with interpersonal relationships.
Keep all rules reasonable and sane.
Enforce all rules consistently.
Use parliamentary procedure in all Board Meetings.
Remember complainers are looking to blame everyone and everything.
See limits to managing time.
Do not let bullies take control of meetings.
Allow public comment in Comment or Homeowner Session only.

Board Members:

Set goals ; Four to five a year
Use knowledge to prove truth.
Use best practices at all times.
Learn and follow Condo Law.

In Disruptive Situations

Use peer pressure for the disruptors at Board Members.
Use team approach to work out all disagreements and challenges
Stay non emotional.
Stay objective and calm.

Question time took place after the presentation. All attendees left with tools to use in difficult

situations with difficult people. New strategies were offered enabling Association members to

proceed with Board business in an tension free atmosphere.

ACTHA RECAP JUNE 13, 2019

Fri, 28 Jun 2019 06:11:00 GMT

MARK ROSENBAUM PRESENTATION

NOT QUITE EVERYTHING AN ASSOCIATION NEEDS TO KNOW ABOUT MANAGEMENT AGREEMENTS

PATTY TURNER CENTER

DEERFIELD , ILLINOIS

On Thursday, June 13, 2019 attorney Mark Rosenbaum of the law firm Fischel, Kahn

presented the topic Management agreements and the knowledge a community Association

needs to know when choosing and contracting with a management company.

He presented the following information to issue spot an Association through this process:

Choose three management companies through self research or recommendation of professionals in the condo industry.
Choose a licensed Ilinois manager.
Check on line at the Ilinois Dept. of Financial and a Professional Regulation . Look the nameup and obtain license number and active status of the Manager.
Interview the management company and the prospective manager to be assigned to your property.
Employ your attorney in the search.
Check your Declaration and ByLaws provisions which could affect the terms of the prospective contract with the management company.
In the “jump” from one management company to the other , check what your current contract states about exit time and conditions. How much notice is required?
Assure a smooth transition with documents due to you, resident lists and records, financials etc from one management company to another. Plan this transition carefully alerting bothparties of time frame and materials due to the Association.
Check your Association documents to the terms of the agreement. Two year or three year contract permitted by your Declaration.
In the new management contract make sure the duties of the new management company and thus the manager are clearly outlined.
Make a required list of what your property needs and the scope of the responsibilities the Board believes is necessary for the property.
Determine the number of Board meetings the manager would need to attend to be aneffective manager and be in communication with the Board and the residents.

These are just a sampling of the information that was presented. Attendees were given a chance to ask questions at the end of the presentation.

The Board of Directors thanks Mark Rosenbaum for his time and expertise offered to the participants at this seminar.

ACTHA will repeat this topic next year for it is one of the most requested topics.

Pool Safety Tips for Your Association

Fri, 28 Jun 2019 06:10:00 GMT

By Matthew O'Malley

A swimming pool in a condominium or homeowner Association can be a welcome amenity to residents. However, it is important that the Association implement rules and regulations that are suited for the community and address potential legal issues.

Here are four safety tips your Association should consider that address pool upkeep and liability.

Maintenance

Check pool equipment, pool structure, water chemistry, drains, pumps, jets, first aid gear, and pool area furniture before the pool area is open. Maintaining equipment allows your Association to develop a budget for pool expenditures and replacements. Important pool related documentation such as insurance coverage, permits, and service records should also be kept up-to-date.

Fencing

Fencing can prevent pool access after-hours and when lifeguards are not on duty. Additionally, the Private Swimming Pool Enclosure Act requires that new outdoor swimming pools located on private residential property have “a protective fence, wall, or other effective permanent barrier”. This barrier must completely enclose the perimeter of the swimming pool with 42 inches or greater height. The Private Swimming Pool Enclosure Act does not apply to Jacuzzis or above ground pools with a height of 42 inches or more.

Supervision

While Illinois law does not require an Association to hire a lifeguard, Illinois public health codes govern swimming pool standards. These codes state that lifeguards are only required when an Association allows persons under the age of 16 to be in the pool area without a parent, guardian, or responsible person over 16.

If you community employs a lifeguard, they should be trained in first aid, CPR, and emergency response. The Association should keep applicable licensing and certification on file.

Signage

Clear, visible signage can reduce injuries and can mitigate liability. Pool rules addressing hours of operation, lifeguard availability, first aid, emergency contact information, guest usage, electrical devices, rain, thunderstorms, diving, food, and alcohol consumption should be posted around the pool area.

While this is not an exhaustive list, it should provide some preliminary pool safety issues your community should consider. An attorney can assist in navigating these concerns and advise on other critical issues, including: constructing a new pool; making improvements to existing rules and regulations; complying with Americans with Disabilities Act and Fair Housing Act considerations; and assessing potential risks to your Association due to changes in the law.

If you are a landlord, Board member, property manager and have concerns regarding swimming pool issues and their effect on your property, please do not hesitate to contact KSN. You can reach our law firm by calling 847-537-0500 or visiting our website at www.ksnlaw.com.

This article is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this article you understand that there is no attorney client relationship between you and the article author. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. © 2019 Kovitz Shifrin Nesbit, A Professional Corporation.

How bad has this winter been?

Fri, 28 Jun 2019 06:05:00 GMT

By Kevin T. Block

OK, raise your hand if you are one of us that feels like it is never going to stop snowing this winter. Mother Nature started us off with a bang in November with some light accumulations leading up to the big Thanksgiving blast that left seven to eleven inches on the ground in the northwest suburbs. Then she seemed to take a nap in December but woke up crabby and ready to wage weather war again in January; and she has been relentless ever since.

Snow accumulation totals for this winter are already more than a foot over our average for an entire winter, and we still have a month left before we can even start talking about spring. Along with all of this snow we have had more than our share of all of the other nasty weather elements Mother Nature keeps in her bag of tricks. Historic ice storms, a polar vortex that crushed century old temperature records, rain, sleet, freezing rain, hail, and yes, even graupel. In case you were wondering what graupel is, read on…

Ice storms don’t hit the Chicago area often because they require just the right combination of cold upper air, warm air above ground level and cold air right near the ground. But when they do happen, ice storms that leave less than an inch of ice on the ground can be much more disruptive than sleet, freezing rain, or snowstorms that leave similar amounts of precipitation.

But what exactly is the difference between rain, freezing rain, sleet, ice, etc. and why do we need so many terms for this winter precipitation. Whether or not precipitation remains snow or transitions to rain, freezing rain, sleet, hail, or graupel by the time it reaches the ground hinges on the temperature fluctuations the snowflakes may encounter as they travel through the layers of the atmosphere.

When the temperature between the ground and the clouds remains at or below the freezing mark (32F), precipitation will fall in the form of snow. It is possible for snow to fall when temperatures are above 32, as long as the layer of above-freezing air near the surface is rather shallow, not allowing the snowflakes to melt.

Sleet and freezing rain occur by a similar process but are different forms of precipitation. Sleet occurs when snowflakes melt into a raindrop in a wedge of warm air well above the ground and then refreeze in a layer of freezing air just above the surface. This results in frozen raindrops, or small ice pellets. Freezing rain occurs when the wedge of warm air aloft is much thicker, allowing the raindrop to survive until it comes in contact with the cold ground. A coating of ice then forms on whatever the raindrops contact. Freezing rain is by far the most dangerous because it forms a solid sheet of ice, as opposed to sleet that just has small ice pellets that quickly bounce off of the surface. Interestingy, sleet can even provide a little bit of traction for drivers, as opposed to the obvious dangers of a solid sheet of ice that forms from freezing rain.

And I have not forgotten, in case you were wondering what graupel is, graupel (snow pellets) forms when snowflakes are coated with a layer of ice. Graupel is typically white and opaque. Unlike hail or sleet, graupel is soft and can fall apart easily in your hand. Graupel is also usually smaller than hail, with a diameter of around 0.08-0.2 of an inch.

The demand for ice melt applications to remedy this onslaught of frequent, diverse precipitation has been high, exacerbated by the intermittent freeze/thaw cycles we have also seen that create melted runoff that refreezes overnight. The need for more salt/chemical applications has resulted in some difficulty on the part of the suppliers keeping up with the demand of contractors. Typically, suppliers are required to supply municipalities and transportation authorities first to ensure that the road ways are kept safe, leaving a high demand from contractors to take care of private properties. Higher demand can also mean higher prices, which you may see in the future.

If your budget has been blown up by the cost of clearing snow and keeping up with these applications, you are not alone. Commercial building managers, retail mall owners, and HOAs alike share in the budget pain that this winter is creating.

However, the safety of employees, residents, visitors, etc. and the ability of vehicles to effectively navigate around your property should always be paramount when balancing the cost considerations that must be confronted in the midst of a winter like this one.

Hang on though, two weeks ago, Punxsutawney Phil emerged from his burrow around 7:30 a.m. ET and did not see his shadow, predicting an early spring for us all. A member of Phil’s Inner Circle read from the groundhog’s prediction scroll to the cheers and applause from the crowd;

“Faithful followers, there is no shadow of me and a beautiful spring it shall be.”

As the legend goes, if Phil sees his shadow, he considers it an “omen” of six more weeks of bad weather and heads back into his hole. If it’s cloudy and he doesn’t, you can put away that winter coat sooner than expected. But of course, his predictions aren’t always correct. Statistically, you’re better off trying to decide what the rest of February and March will look like by flipping a coinsince Phil’s accuracy record is only 40%. At least with a coin you will be right half of the time.

Capital Projects RFP Process – Eight Steps to Success

Fri, 28 Jun 2019 06:02:00 GMT

By: Sheila Malchiodi, The Inside-Out Company, and Angela Williams Duea, LMS

Capital improvement projects are often started in the spring, and annual maintenance work is beginning now. The first step for an association is to obtain bids or proposals for the work. Some association boards have specific requirements on exactly what they want, but other board members lack industry knowledge and clarity in their request. If you do not have a streamlined system, you may not be getting the most out of your Requests for Proposals (RFPs). Here is a look at the entire process, along with some tips about how to better use RFPs in your procurement process.

1. Establish a calendar of events and project timeline.

Consider all of the projects your association plans to complete for the calendar year and list them in priority. Once you identify what projects are most important, you can start to establish individual project timelines.

Identify steps in the process that will require hard dates: RFP distribution, pre-bid meeting, proposal submission, vendor selection meeting and a preferred production timeframe.

Something to keep in mind when organizing your timeline, specifically for exterior work, is how long will the project take. The Midwest climate and variable weather plays a large role in the scheduling of projects. Planning, flexibility and realistic expectation-setting is crucial to meeting deadlines.

2. Determine if you are looking for short or long-term solutions.

Generic requests will produce a plethora of submissions, some providing short-term solutions and others long-term. To ensure that you are comparing apples to apples with your bids, make sure you tell each vendor the same list of expectations for the end result.

For example, if you have an older property with metal balcony railings that have been painted multiple times in the past and are currently failing (flaking paint, rusted posts, etc.), do you just need a quick scrape, spot prime and topcoat to make them look presentable for another year until the association can afford to replace? Or are you looking for more extensive preparation, welding repairs and a full prime coat / two topcoat systems that will ensure the railings look presentable and are protected for the next five years?

By establishing clear expectations you are more apt to receive effective proposals, which will ensure you have accurate information to match the right contactor to your community’s needs.

3. Provide a clear scope of work.

It is important that you provide vendors with a clear scope of work. This includes a full list of component and preferred products (brands and grades). Note whether repairs or work to be completed should match existing structures or change to something new. This can be a difficult task if you are not familiar with the required preparation or latest products on the market. If you are unclear of how to go about setting a clear scope of work, consider hiring an engineer or asking a product company to write the scope of work for you.

If you have a large-scale project that requires multiple contractors, has problems needing specifications, or one requiring a large portion of the association’s money, utilizing a professional in that field will safeguard your association from errors right from the start. The extra upfront cost may save you from larger additional expenses that may be incurred during the project.

As Benjamin Franklin said, “An investment in knowledge pays the best interest.”

4. Host a pre-bid meeting and over-communicate your expectations.

This meeting should be mandatory, where all potential bidders are present. The scope of work, alternative options, goals, and deadlines should be discussed. This also gives bidders the opportunity to ask questions, propose cost-saving solutions and give alternate suggestions prior to bid submission. Many times, this pre-bid meeting uncovers defects, areas of concern and a multitude of other things that could have a significant effect on the outcome of your project.

5. Ask for references.

Even though we know most companies will give their best clients as references, have a list of specific questions to ask regarding timeliness, cleanliness, reliability, and so on. Do not be afraid to ask the hard questions. This will uncover areas of concern that will affect your decision.

6. Review proposals.

Some associations choose to create a spreadsheet that includes all of the bidding companies. This is a great tool to be able to look at competitors pricing side by side. With that said, it is still important to review proposals submitted in their entirety. Things to look for and consider: additional options, areas not included, end result disclaimers, current conditions, supervision levels, warranties and products. This will assist in determining who your top three companies will be.

7. .Interview your top three companies.

Many times, the lowest price is not the best option. Use this time to discover the alternatives, suggestions and product offerings of each individual bid. Utilize your property manager and their area of expertise with selection.

8. Hire the company that best suits the association’s needs and budget.

Now that you have collected facts, created your plan and interviewed your top contractors, it is time to make your decision. Through preplanning and education, you are sure to find the right contractor for your project that will meet your needs, expectations and budget.

Not all RFPs are hard to create. When you utilize professional partnerships and their expertise, associations can accomplish otherwise overwhelming tasks without undue distress. Property managers are able to seek credible vendors, gather extensive information related to the job at hand and make help associations make hard, but necessary, decisions that will ultimately result in the success of a project.

A well-executed RFP can make the difference between a process that flows and one full of problems. If your system is not honed, consider the steps listed above and see if you can streamline your system.

1618 Sheridan Rd. Condominium Association v. Marshall Spiegel

Fri, 31 May 2019 20:33:51 GMT

In a collection of orders entered at the end of March 2019, Cook County Circuit Court Judge Margaret Ann Brennan ruled on several motions for sanctions, ultimately awarding over $1 million in sanctions against a single unit owner and his attorney. In so doing, Judge Brennan shone a spotlight on an all-too familiar phenomenon in the condominium-association setting: By: Diane Silverburgserial litigants.

By: Diane Silverburg

Judge Brennan was assigned to handle a number of lawsuits that had been consolidated into one: 1618 Sheridan Rd. Condominium Association v. Marshall Spiegel, Case No. 15 L 10817, consolidated with Case Nos. 16 L 3564 and 15 CH 18825. In ruling on the several motions for sanctions filed in the consolidated proceeding, Judge Brennan observed that the unit owner in question had filed over 60 lawsuits in Cook County and the Northern District of Illinois, alone. Together with the assistance of his attorney, John Xydakis, Spiegel had filed lengthy and successive pleadings in the three consolidated matters, often not waiting for the Judge even to rule before submitting another amended pleading. The range of claims that Mr. Spiegel sought to litigate – which grew with each amendment – ranged from purported theft and slander, to harassment and stalking, to fraud, falsification of affidavits, and ex parte communications, as well as for such picayune matters as empty water bottles left near his front door and the like.

Among the many findings the Court made in awarding sanctions against Spiegel and his counsel, Xydakis, were that they had:

filed motions that were objectively unreasonable, including motions to disqualify Kim’s counsel;
filed a duplicative lawsuit brought solely to harass, increase costs, and cause delay;
repeated misstatements of the law and evidence in their pleadings;
included numerous irrelevant allegations in their pleadings;
repeatedly displayed complete disregard for the importance of judicial economy; and
failed to dismiss obviously frivolous claims.

Spiegel and Xydakis were ordered to pay the sanctions award of over $1 million by no later than May 1, 2019.

The “Spiegel” orders reflect observations similar to those voiced by former Circuit Court Judge Mary Ann Mason in her dissenting opinion in Boucher v. 111 East Chestnut Condominium Association. There, now-Justice Mason remarked on the dysfunctionality that can occur in a condominium setting where a unit owner – despite his having voluntarily sworn to abide by the association’s “constitution” (declaration) upon becoming a member of the association – decides that the declaration simply does not apply to him. She further observed that “were courts to referee internal disputes that arise in condominium associations, they would have time for little else” and that courts should thus be hesitant about recognizing “such spurious claims as they burden associations with costly litigation that must be borne by all unit owners.”

While it goes without saying that legitimate claims deserve all due consideration in an appropriate forum, Judge Brennan’s award of sanctions in 1618 Sheridan Rd. Condominium Association v. Spiegel properly should give unit owners inclined to put their hubris, entertainment, and ego ahead of an association’s common good, goals and financial health, ample reason to pause before proceeding with trumped-up claims.

ACTHA Vendor of the Month(May): Calumet Painting & Restoration

Fri, 31 May 2019 20:31:43 GMT

An Overview of Special Assessments

Fri, 31 May 2019 20:28:15 GMT

By: Joseph Scharnak

As you’re probably well aware, Association residents pay regular assessments to cover collective maintenance expenses, based on the annually-budgeted needs of the community. Are you familiar with Special Assessments?

Let’s review the basics:

What are Special Assessments?

Special assessments are monies, in addition to the regular monthly assessment, collected by a condominium, townhome, or homeowner’s association from its members so that the Association can pay for expenditures not included in the Association’s annual budget.

An Association’s use of funds collected through a special assessment is generally restricted to the specific project for which the Special Assessment was approved as well as any ancillary costs (for example, engineering fees, building permits, construction bonds).

When an Association levies a special assessment, the board resolution may call for payment in a single lump-sum or in multiple installments – most frequently in monthly installments payable over the course of several years.

Special assessments payable in installment payments are often adopted in connection with a bank loan obtained by the Association. The interest cost incurred by the Association is passed through to only those association members that elect to pay the special assessment through installment payments.

Why Adopt a Special Assessment?

Associations may be forced to adopt a special assessment in connection with an unforeseen major expense. For example, a catastrophic loss that is not fully covered by the Association’s insurance coverage or when the Association finds itself in a position where construction defect litigation becomes necessary.

More often, special assessments are levied because an Association has elected not adequately funded its reserve account over the course of many years. Unfortunately, when the day comes where the Association is faced with a major repair cost, the reserve account doesn’t have enough money to fully cover the cost of the project.

Even when an Association’s annual budget includes a reserve fund contribution, they may find that a special assessment is still required because the board relied upon an unrealistic or outdated reserve study in connection with its planning for future maintenance, repair and replacement costs.

What Legal Restrictions Exist for Special Assessments in Condominium Associations?

Notice of the Meeting. Unlike a regular board meeting, which may be called on as little as 48 hours’ notice, a board meeting called for the purpose of adopting a Special Assessment requires written notice to each member of the association no less than 10 days and no more than 30 days in advance of the meeting.

Owner Approval. Special Assessments for additions and alterations to common elements not included in the annual budget must be approved by a 2/3rds vote of all owners.

Owners’ Right to Veto. In situations where a Special Assessment is adopted for purposes of maintaining, repairing or replacing the common elements, if the amount of the proposed Special Assessment plus the amount of all regular assessments and any other special assessments payable in the current fiscal year exceeds 115% of the sum of all regular assessments and special assessments payable during the immediately preceding fiscal year, the owners have an opportunity to veto the board’s decision by submitting a petition signed by owners owning at least 20% of the total ownership interest in the association within 21 days of the date on which the board adopted the Special Assessment.

Emergency Situations. When a Special Assessment is adopted by a board in order to comply with any law, or in order to address an emergency situation presenting an immediate danger to the structural integrity of the common elements or to the life, health, safety or property of the owners, no owner approval is required to adopt the Special Assessment and the owners do not have the right to veto the board’s decision.

If your Association is considering levying a special assessment, do not hesitate to contact our law firm. Since 1985, KSN has been a legal resource for condominium, townhome, or homeowner’s associations throughout the Chicagoland area. We have multiple offices including downtown Chicago, Mundelein, and Naperville. Call 855-537-0500 or visit www.ksnlaw.com to get started.

Are Your Proxies Valid Under Illinois Law?

Fri, 31 May 2019 20:24:35 GMT

By: Condo Law Watch Tressler LLP

In the context of homeowners and condominium associations, a proxy is a document authorizing a person to act or vote on behalf of an owner who is unable to attend a meeting. Proxies are most commonly used at board elections and owners wishing to run for a seat on the board of directors will often times go door-to-door collecting proxies ahead of elections. Although proxies are a powerful tool for board elections, both the Illinois Condominium Property Act (the Condo Act) and the Common Interest Community Association Act (CICAA) contain strict requirements for proxies. While proxies do not need to be on any specific form, if a proxy does not meet these minimum requirements set forth in the Condo Act, CICAA or the association’s governing documents, then the proxy must be deemed invalid and the vote associated with the proxy should not be counted.

Specifically, Section 18(b)(9)(A) of the Condo Act provides that unless the Articles of Incorporation or the By-Laws of an Association provide otherwise, “a unit owner may vote by proxy executed in writing by the unit owner or by his duly authorized attorney in fact; that the proxy must bear the date of execution and, unless the condominium instruments or the written proxy itself provide otherwise, is invalid after 11 months from the date of its execution.” This means that the proxy must: (1) be in writing; (2) signed and dated by the owner executing the proxy; and (3) is automatically invalid 11 months after the execution date, unless otherwise stated.

If the board opts to distribute its own proxy forms prior to an election, Section 18(a)(18) of the Condo Act further requires that the proxy must give owners “the opportunity to express a preference for any of the known candidates for the board or to write in a name.”

Section 1-25(h-5)(1) of CICAA has similar requirements as the Condo Act and provides that an owner may vote, “by proxy executed in writing by the member or by his or her duly authorized attorney in fact, provided, however, that the proxy bears the date of execution. Unless the community instruments or the written proxy itself provide otherwise, proxies will not be valid for more than 11 months after the date of its execution.”

Once a proxy is submitted to the board, it is best practice for the board or the board’s managing agent to carefully examine each proxy to ensure that it meets the requirements of the Condo Act or CICAA prior to counting the vote associated with the proxy. It is also important to review the Association’s governing documents to confirm any additional requirements for proxies are also met. When examining proxies, the board should also confirm that the proxy is signed by the record owner of the unit and not a non-owner occupant of the unit. Further, the board should ensure that the person acting as an owner’s proxy at a meeting is the same individual identified on the proxy form. Finally, the board should ensure that the proxy holder votes according to the owner’s preference if such is expressed on the proxy form.

Proxies are revocable. That means an owner can change his or her mind and issue a new proxy which would effectively invalidate the earlier executed proxy. An owner can also appear in person at the meeting and cast a ballot to invalidate a proxy.

What Type of Community is Your Association?

Mon, 01 Apr 2019 13:44:21 GMT

Dr. Brandon Hamilton, Ombudsperson for Tree Farm Estates

I grew up in Gary, Indiana. After high school and a period in the Navy, I went to colleges in Chicago, Boston, Washington, D.C. and Los Angeles. With all of this travel, I never thought about purchasing property. I also decided to stay flexible so that I could accept employment anywhere. I worked in Boston, San Diego, Valparaiso (Indiana) just to name a few cities. After completing my doctorate in business, I decided to settle in the Chicagoland area. I purchased a townhome in Tree Farm Estates, just on the southern outskirts of Chicago in the Village of Calumet Park.

I had never lived anywhere long enough to recognize that now, as a homeowner, I also became a part of a community. I don’t want to take that distinction for granted. Let’s talk about the word community. Some have defined a community as a group of people living in the same defined area, sharing the same basic values and sharing an organizational framework. Sociologists and geographers define a community as any set of social relationships operating within certain boundaries. The Village of Calumet Park has very small boundaries as it is just one square mile with about 8,000 residents. I knew nothing of the history and sociology and culture of this little village, so I had to learn from neighbors. I also became an active citizen, attending numerous municipality meetings. I had some vary courageous conversations with elected officials. I soon was appointed the Director of Community Relations for the Village. For those that move into a condominium or homeowner associations, your community is also a population that is geographically focused and with a collective identity and with a collective purpose. I started to get a better grasp of the word community as I read the Declaration of Covenants, Conditions, Easements and Restrictions for Tree Farm Estates Townhome Association. This was difficult to grasp at first reading because there were a lot of terms and definitions that were new to me. As I became comfortable with this governing document and my new home, I was invited by some neighbors to attend a meeting to discuss forming an association. After just a few minutes of this meeting, I realized that the current owners were actually forming an organization that would gather complaints to express to the developer’s lawyer, the person currently running the association. I was inexperienced with shared ownership, but I did not think that our community should be a complex mass of needs and problems but rather a diverse web of collaborative citizens. The developer’s lawyer informed us that we had to officially form an association and select a management company as our Board of Managers. I was elected president of the Board of Directors as the owners recognized my experience as an officer of many not-for-profit boards. We decided against a management company.

We became self-managed by combining the roles of the Board of Directors and the Board of Managers. Influenced by a tradition of 19th century romanticism, some sociologists have regarded community as necessarily beneficial to human needs and social interaction. There can be numerous community platforms for common interest communities: There are communities of action, communities of practice, communities of place, communities of interest and communities of circumstances. We knew that we are clearly a “community of place” united by geography. However, many of us moved into the townhome complex without knowing that this is a shared ownership community. You would certainly, therefore, view this association as a “community of circumstances,” united by challenges not of our making. But even this framework is not bad as we learned to focus as a community on dealing with various situations collaboratively. As I diagnosed our community socially, politically, culturally and economically, I saw a need to create a more effective community model. Some of the owners had gotten to know their neighbors well enough such that we could accept that we developed into a “community of interest” focusing on a passion for the same values and activities. Members of a community of interest generally share the same common interest focusing upon depth of passion for that interest. We realized that the Board of Directors needed to push toward more hardcore discussions about the applicability of the bylaws, declarations, rules and regulations. As leaders of the community of interest, our Board of Directors began to evolve into a “community of action,” using collective power to develop policies and make changes. We needed to understand our community and the various social groups that formed. We had to learn how to gather commitments from primary groups, secondary groups, ingroups and outgroups. Primary groups are the enduring owners. Secondary groups lack the emotional bonding or sharing of common values. Ingroups share a sense of identity. Outgroups have no sense of loyalty to the association. This community of action framework is very effective when there is community commitment. We are still struggling at Tree Farm Estates with forming committed committees to help us share best practices.

I am now the ombudsperson for Tree Farm Estates with a focus on educating unit owners and the Board of Directors about the Common Interest Community Act and complying with the laws governing common interest community property.

Whatever the definitional difficulties, all communities, both real and symbolic, exist and operate within boundaries. These boundaries serve to demarcate social membership from non-membership. Whatever framework you see in your association, there are actions that you can take to build an ideology of community in your condominium or homeowner association boundaries. You can invite your neighbors over for a meal. You can mentor a youth in the association. You can help simply by picking up litter on the property if you see it. It is my hope by sharing my leadership experiences at Tree Farm Estates that your association learns to work together to make yours a community where you are all proud to be members.

Dr. Brandon Hamilton

Treefarm.admin@gmail.com

ACTHA Vendor of the Month(April):Dickler, Kahn, Slowikowski & Zavell, Ltd.

Mon, 01 Apr 2019 06:00:00 GMT

Condo Elections: The Last Word (For Now)

Mon, 01 Apr 2019 05:30:00 GMT

By: Michael C. Kim, Michael C. Kim & Associates

Michael C. Kim, ACTHA member and ASCO General Counsel, highlights the importance of condominium elections and the steps that need to be taken to ensure a fair, legal election.

4 Steps to Take When Addressing Property Damage Within Your Association

Mon, 01 Apr 2019 05:30:00 GMT

By: Kelly Elmore, Principal at Kovitz Shifrin Nesbit

When disaster strikes your Association, are you prepared? Here are four steps to take when faced with damage to your Association’s property.

Why You Should be Wary of Roof Condensation

Mon, 01 Apr 2019 05:30:00 GMT

By: Adams Roofing

Condensation naturally occurs whenever warm, moisture-laden air contacts a cooler surface.

Similar to how beads of moisture collect on the outside of an ice-filled glass in summer, condensation can form on the underside of your roof in winter. Warmth escaping from your living space into the attic is the catalyst for condensation formation. If this is occurring in your home, it’s vital to learn about the damage it can cause and how to resolve it.

Consensus Building for Community Associations

Mon, 01 Apr 2019 05:30:00 GMT

By: Rosen Management

Community Association Board Members and Managers are responsible for carrying out businesses that protect millions of dollars worth of real estate. Daily problems arise that range in magnitude and importance, but all require sound business judgment to resolve. Many times, what is also required is the cooperation or consensus of Association residents comprised of different interests, values and personalities. Their cooperation can mean the difference between solving a problem on paper and actually solving it. It is virtually impossible to solve big or complex problems without having adverse effects on at least some interests. Consequently, almost any big or complex problem will not get unanimous support.

ACTHA Vendor of the Month: Pro Home 1

Thu, 21 Feb 2019 19:57:53 GMT

Pro Home 1 Inc. is an independent contractor with over 40+ years of combined residential and multi-family complex construction experience. Pro Home 1, what recognized and awarded by Remodeling Magazine as a BIG50 Americas top Remodeler and has received a Business Excellence award by Daily Herald Business Ledger. We provide straight talk and help our customers to understand their options, so they can make the best-informed decision. Our vision is to become the area's most trusted and respected provider of quality remodeling and be rewarded by customer's increase pride in their home.

Services include: Roofing, Siding, Soffits, Gutters, Balconies and windows/doors.

Changes in Illinois Department of Financial and Professional Regulation

Wed, 20 Feb 2019 18:06:22 GMT

Deborah Hagan will serve as Secretary of Illinois Department of Financial and Professional Regulation (IDFPR).* For over 36 years, Hagan has been a strong and exemplary advocate for consumer protection in the Office of the Illinois Attorney General. In her role as leader of the Consumer Protection Division, she advanced and defended the interests of Illinois consumers in critical areas such as mortgage origination and servicing, student loan servicing, debt collection, identity theft and other areas of financial risk. Hagan has played a critical leadership role in many groundbreaking settlements on the state and national level, helping to recover billions of dollars in restitution for victims of consumer fraud and other wrongful conduct. In addition to her current role which she has held since 2004, Hagan has served as bureau chief, deputy bureau chief and assistant attorney general. She received her Juris Doctor from the University of Dayton School of Law and her Bachelor of Arts in political science from Miami University.

Mario Treto, Jr. will serve as Director of Real Estate at IDFPR.* Treto currently serves as Deputy City Attorney for the City of Evanston where he provides legal counsel to its elected officials, departments, and staff with compliance, transactional, and corporate matters. Prior to entering the public sector, he worked at a Chicago-based law firm focusing his practice on commercial and residential real estate, corporate law and commercial transactions. Treto is a nationally recognized lawyer by various organizations, including the International Municipal Lawyers Association, the Hispanic National Bar Association, and the National LGBT Bar. He also serves as board chair of Howard Brown Health, a federally qualified health center in the Chicagoland area with ten clinics and a youth center serving 35,000 patients. He received his Juris Doctor from the Indiana University Maurer School of Law and his Bachelor of Arts in biology and psychology from Washington University in St. Louis.

Francisco Menchaca will continue to serve as Director of Financial Institutions at IDFPR.* Menchaca has held the post since his appointment by Gov. Quinn in July 2013 and previously served the department as credit union supervisor. Prior to beginning state service, Menchaca developed an extensive resume managing financial institutions and governmental agencies at the Federal Deposit Insurance Company (FDIC). He has spent over twenty years of his career in the financial industry, notably serving as the First Vice President at Bank One, where he also spearheaded the Latino Employee Network. Menchaca is a proponent of robust public-private partnerships and community outreach, citing his youth in the Pilsen/Little Village neighborhood as his inspiration in seeking to provide opportunities for educational and economic development. He received his Master of Business Administration from the University of Illinois at Chicago and his Bachelor of Arts from Northwestern University.

Jessica Baer will continue to serve as Director of Professional Regulation at IDFPR.* Baer has held the post since her appointment by Gov. Rauner in September 2016 and previously served the department as general counsel. In that role, she oversaw the entire legal department for the agency, providing input on a number of topics including pending litigation, labor issues, and legislation. Prior to joining IDFPR, Baer spent six years as an associate at K&L Gates focusing on litigation and antitrust law. Her cases involved complex contractual disputes, antitrust litigation and regulatory compliance counseling. Baer is licensed to practice law in Illinois. She earned her Juris Doctor from DePaul University and her Bachelor of Arts from the University of Illinois at Urbana-Champaign.

Click here to view the previous appointments to the Pritzker administration.

Why are your Cook County property taxes so high? Tax bills give the answer

Mon, 04 Feb 2019 21:53:17 GMT

The Cook County property tax bill due March 1, 2019, shows taxpayers the debt of every local government that levies taxes on their homes and other real estate, helping explain why taxes rise, Treasurer Maria Pappas said today.

“The financial challenges facing local governments can seem unreal because the numbers are so large,” Pappas said. “The tax bills show homeowners the problems are indeed real.”

Anywhere from five to 13 taxing districts — local governments and school districts — levy taxes on a given property, Pappas explained.

On the front of every bill is a section called “Taxing District Debt and Financial Data,” which provides detailed information for each taxing district, including:

Money owed by your taxing districts
Pension and health care amounts promised by your taxing districts
Amount of pension and health care shortage
Percentage of pension and health care costs taxing districts can pay

The First Installment for Tax Year 2018 is due March 1, 2019. The First Installment is always 55 percent of the prior year’s total taxes. About 1.7 million property tax bills have been mailed to owners of homes, businesses and land, Pappas said. Property owners can download a copy of the new bill by going to cookcountytreasurer.com.

Click here to download the article.

Guiding Homeowners through the Window/Door Architectural Request Process

Mon, 04 Feb 2019 21:45:22 GMT

By: Phil Mariotti, Woodland Windows & Doors

con·ti·nu·i·ty

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 for 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!

ACTHA Seminar Recap: Natural Areas Restoration for HOA Common Space

Mon, 28 Jan 2019 22:12:36 GMT

January 17, 2019 Patty Turner Center, Deerfeild and January 23, 2019 Countryside Bank, Countryside

ACTHA was pleased to engage with The Pizzo Group to host two seminars entitled “Natural Areas Restoration for HOA Common Space” which were held on January 17, 2019 at the Patty Turner Center in Deerfield and on January 23, 2019 at the Countryside Bank in Countryside.

Seth Crackel of the Pizzo Group was the presenter. The unique feature of these seminars was the offering of two CAMBI credits by Pizzo Group to qualified participants.

Seth Crackel presented a powerpoint presentation that engaged the audience in learning the basic terminology of ponds, the "how" and "why's" of good maintenance, problem solving of overgrowth of invasive species and stewardship of ponds.

Managers and Association Board attendees, as well as home owners attending the seminar, learned the recognition of trouble signs of pond challenges and the ways to combat these issues.

Seth explained the principle of ”chemical burns” and the need to do this procedure for the health of the surrounding areas of a pond. He stressed the need for education of homeowners and Board in pond health and maintenance. Communication is the key. Once you educate, the scene is set for formulating a plan forward.

The plan forward then includes: identifying your goals, formulating your strategies, implementing your plan, then monitoring all your steps in proper sequence.

He stressed the need to connect the community to nature. This is done by nature signage and engaging your homeowners in the value of protection and maintenance of your ponds.

Value is added to your community site when successful long range planning is put in place. This is the opposite of “whim planning” which usually yields negative results and results in a confused state of wrong plants in the wrong places.

Education is the key to pond health and successful planning.

ACTHA Vendor of the Month: Wintrust Community Advantage

Mon, 28 Jan 2019 20:27:02 GMT

Looking for a financial organization that offers it all?

Customized loans, reserves, lockbox and auto debit services, friendly, knowledgeable professionals, and up to $3.75 million of FDIC insurance for community associations?

You’ve found it!

Wintrust Community Advantage is one of the Midwest's leading providers of financial services to condominium, townhouse and homeowner associations. Wintrust Community Advantage offers a variety of products, from specialized financing to treasury management to reserve investments to online account services, paired with best-in-class client service and in-depth knowledge of the industry, products are customized and utilized with each association's needs,

Wintrust Community Advantage can serve its clients more efficiently, accurately and promptly than other financial service providers.

Meet the staff:

President: Peter J. Santangelo

Senior Vice President: Pamela E. Muller

Vice President: Anthony W. Dister

Vice President: Kimberly Myles

Relationship Officer: Matthew R. Hall

Relationship Officer: George T. Toubekis

Senior Credit Analyst: Nancy C. Taub

Senior Deposit Services Banker: Mary M. Theile

Senior Deposit Services Banker: Angela M. Johnson

Deposit Banker: Fifi F. Farad

Deposit Banker: Alexandra Diaz

Credit Administrator: Ulylana Lana Shevchuk

Credit Administrator: Daniel G. Corwin

Frozen – Flooded and Frustrated

Fri, 18 Jan 2019 17:07:17 GMT

By: Chuck Kohut of DRF Trusted Property Solutions

Courtesy of: www.cai-illinois.org

Have you ever seen what happens to an aluminum can when it freezes? Or more succinctly – have you ever seen it after it’s ruptured and the contents have thawed? The power of ice and water (or liquid) is nothing short of awesome. Ice carved the great valleys of our country – and we all know what a raging flow of water can do. In a similar way, the power of ice and water can impact properties of all types if we’re not paying attention and prepared.

A quarter of a million homes throughout the U.S. have at least one room damaged by frozen water pipes each winter according to State Farm Insurance. That’s 250,000 families disrupted by damage, lost possessions and the inconvenience repairs bring – during the coldest time of the year no less. What’s more, the Institute for Business and Home Safety reports that claim payments for losses related to water damage or freezing has exceeded $4 billion over the past decade.

It’s Not the Freeze – It’s the Thaw

Damage from frozen pipes can be significant, and expensive. The average claim for water damage due to frozen pipes is about $15,000 according to esurance.com. It’s not only the pipes that contribute to this cost – In fact – it’s not the freeze – it’s the thaw. According to the Institute for Business and Home Safety, once a frozen pipe bursts as much as 250 gallons per day can escape from a one-eighth inch rupture. And for multi-family properties, chances are the damage will not be isolated to the unit experiencing the leak. Water can quickly travel to other units on the same floor and below increasing damage and costs. Walls, ceilings, flooring, décor and anything in the path of the water can be affected. The IBHS notes that claims for frozen pipe related failures “resulted in losses that were roughly twice as severe as those caused by plumbing supply system material failures.” What do these numbers tell us? Homeowners, property managers, condo residents and even renters need to be diligent in their focus of just how important it is to be aware and prepare for the potential damage cold weather can cause.

Being aware means understanding all of the places the potential for a frozen pipe exist. Interior pipes positioned along exterior walls (especially North facing), outdoor spigots, swimming pool lines, water sprinkler/fire suppression systems, especially those in large open areas such as lobbies or vestibules, can all be affected by extreme cold.

Awareness is only the first step. Preparation is the key to prevention. Prior to the cold weather setting in it’s recommended that homeowners, and property managers, review their property for potential winter water issues. According to Mike Lawyer, Director of Plumbing for DRF Trusted Property Solutions (DRFtps.com), “It’s absolutely critical that a property be reviewed and steps taken to protect areas that are susceptible to freezing due to exposure to extreme temperatures”. Lawyer recommends checking the property two times per year. Once prior to the cold weather to prepare, and once in the early spring – just to make sure no damage occurred.

Lawyer continues: “There are actually two states to being prepared. Proactively protecting your pipes, and the response to extreme cold weather events.” As one can imagine prevention is a much less expensive proposition than the repairs and hassle a broken pipe brings. First, know what you’re insured for. Call you agent and learn what your policy protects you against. Then as you review the property take measures to insulate pipes and water lines that can come in contact with cold weather. Building maintenance staff can implement simple measures to protect against issues. Installing heat tape, foam insulation and other inexpensive products, which are available at most hardware stores, can protect pipes from freezing. Don’t forget the outside water supply as well. Turn off the water to outdoor spigots and use an inexpensive foam cover the block the wind.

Reviewing the property’s heating system is also important. Maintaining adequate temperatures is critical. Temperatures at least 65 degrees should be maintained to keep the whole property warm during extended cold spells. In fact, if a pipe bursts and suitable heat is not maintained an insurance company may not cover the damage claim. On this front it’s especially important that residents, and operators, of multi-family properties know the specifics about their policies. Apartmenttherapy.com notes that “During a particularly cold spell, it could be argued that “reasonable use” of the apartment plumbing includes renters taking precautions against burst pipes. Tenants might also be required by the lease to keep the apartment thermostat above a reasonable temperature to help prevent weather damage. No matter the type of residence, keeping the space warm is critical. While saving on the heating bill is an attractive motivation, coming home to a flooded house and expensive repair bill is anything but. Lastly – monitor the water systems. There are many options from alarms to devices that can wirelessly notify you of a problem and even shut off the main water supply in the case of a leak. Today, such systems are more affordable and feature-rich than ever – and are proving to pay for themselves many times over. Both homes and commercial buildings are susceptible to water damage in uniquely different ways according to Jim McLaughlin, President of Vital Command – one company that’s fast becoming a leader in smart home technology solutions. “Water damage from burst or leaking pipes doesn’t discriminate,” explains Jim. “It’s the number one cause of commercial property damage and over a 10-year period, 20% of homes will have a significant water damage incident.”

Be Proactive to Avoid the Freeze

Despite the amount of pre-planning that’s done – there’s always the possibility of a cold weather event overwhelming even the most diligent planning. The next level of preparation involves the steps that can be taken to avoid frozen pipes in the moment. How do you know that there may be a problem? When it’s cold walk through your property and observe your pipes. Are there obvious signs such as bulges, or frost on the pipe? Is the flow of water from a faucet significantly reduced – or not present at all? How about the toilets? Are they not flushing? It’s time to act when you encounter any of these signs. Opening the doors under kitchen or bathroom cabinets and allowing warmer air to circulate is one commonly recommended tactic. Making sure you maintain a consistent temperature bears repeating. If the residence has a water line in or adjacent to the garage or other unheated space, keep the door closed. Lastly – one bit of common knowledge – let the faucet trickle. Having the water flow protects a pipe from freezing.

Frozen Pipes – What to Do Now

Even with proactive measures taken to prevent freezing, the worst can happen. What next? If there’s no rupture the sooner steps are taken to get water flowing again the better. However, according to DRF’s Mike Lawyer, “if you see a break in the line and it’s still frozen, shut the water main off and call your plumber right away.” The ice can actually block the hole – and when it thaws water will leak through the break”. Turning the water off even if a rupture has not happened is the first step you should always take. Warming the pipes is the next step. But, never use any device that has an open flame. That’s a good way to start a fire and potentially destroy the whole property. In 2017 the Chicago Tribune reported on at least four structure fires caused by people attempting to thaw pipes with open flames in one 10-day period. Even a high wattage light bulb presents a danger. So, what can be used? The Red Cross recommendskeeping the faucet open and applying heat with an electric heating pad wrapped around the pipe, an electric hairdryer or portable space heater or by wrapping pipes with towels soaked in hot water.

The key to avoiding the costs and frustration of frozen pipes is pretty simple actually – Awareness, Preparation, and Action. Before the cold sets in be aware of what areas of your particular property could be vulnerable. Prepare for the worst by taking action to protect the property and avoid potential damage.

Click here to view the original article.

Obligations under the Condominium & Common Interest Community Ombudsperson Act

Wed, 09 Jan 2019 16:46:31 GMT

Courtesy of: www.ksnlaw.com

The Condominium and Common Interest Community Ombudsperson Act became effective on January 1, 2017. Generally, the purpose of this Act is to create a State of Illinois-operated mechanism to assist in resolving certain disputes within condominium and community associations.

It is important to recognize that certain tasks must be accomplished before the January 1, 2019 deadline.

On January 1, 2019, each association is required to adopt a written policy for resolving complaints made by unit owners. The policy must include:

A sample form upon which a unit owner may make a complaint
A description of the process by which complaints shall be delivered to the Association
The Association’s timeline and manner of making final determinations in response to the unit owner’s complaint as well as the form for such determinations

This is a limited summary of the new Ombudsperson Act and each condominium and common interest community association should become familiar with the full version of this new law.

KSN can prepare documentation that complies with the requirements of this Act and can assist Associations with the procedural steps necessary to adopt the required policy by January 1, 2019.

Please contact our law firm at 847-537-0500 or visit www.ksnlaw.com/contact.

About the Office of the Condominium and Common Interest Community Ombudsperson

On January 1, 2017, Adrienne Levatino was named the Illinois Condominium and Common Interest Community Ombudsperson by Kreg Allison, the Director of the Division of Real Estate for the Illinois Department of Financial and Professional Regulation. The Ombursperson’s website: http://www.idfpr.com/CCICO/.

The website indicates that the Ombudsperson’s goals are to:

Educate unit owners, associations and their respective boards
Publish information useful to unit owners, associations and their respective boards
Respond to relevant inquiries by providing educational materials and directing citizens to relevant resources

The website also indicates that the Ombudsperson’s does not:

Provide legal advice or advocacy services
Enforce any laws or regulations, including the regulation or registration of: Professions, Associations, Companies, People Hear, mediate or resolve: Issues between unit owners and associations, Complaints of discrimination, Complaints about Community Association Managers (“CAMs”)

This article is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this article you understand that there is no attorney client relationship between you and the article author. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. © 2018 Kovitz Shifrin Nesbit, A Professional Corporation.

Click here to view the original article.

Qualifying for a Community Association Loan

Wed, 09 Jan 2019 16:24:38 GMT

Courtesy of: www.communityadvantage.com

According to the IBOPE Zogby International 2012 survey on Community Associations:

62 million Americans live in an estimated 315,000 association governed communities
Seven out of ten residents are satisfied with their association living experience
Residents rated their community experience as positive where they believed:
- Association board members strive to serve the best interest of their communities
- The association rules protect property values and they value the return received on their association assessment payments

Elected association board members have the fiduciary responsibility to protect and enhance the association common elements and unit owner’s investments, by maintaining and preserving the property values of the community. In order for the Board to maintain the Associations property value, they may contract to have a Reserve/Engineering Study completed to define to the Board/Unit Owners the nature, timing, and cost of future capital replacement projects and assessment dollars needed for each project.

In current difficult economic times, boards and unit owners are reluctant to raise assessments for future replacement projects and frequently delay projects in order to raise the necessary funds. This increases the probability that repair costs for the later “fix” will be greater due to the problem becoming broader and deeper (or as our grandmother’s always told us; “An ounce of prevention is worth a pound of cure.”)

In a capital replacement project, boards and unit owners have the following options:

Pay for the project from the accumulated reserve dollars
Implement a special assessment
Obtain a commercial bank loan
Or a combination of any of the above options

Paying for the capital replacement project from accumulated reserves dollars based on the reserve study is the best option, as dollars are set aside over time. The yearly reserve assessment increases are smaller and less of a burden on the unit owners to pay for the replacement projects.

Special Assessments are usually implemented, when there is a shortage of reserve dollars to pay for a capital replacement project and unit owners are given a limited period of time to pay their portion of the project cost. If the Special Assessment is large, this may place a burden on unit owners that are unable to pay the onetime assessment charge and default on their payments, which places additional stress on the Association in trying to complete and pay for the project.

With a commercial bank loan, the capital replacement project is completed in a short period of time and the unit owners are not burdened with a onetime large assessment payment and are able to spread their portion of the project cost over time. There will be an increase cost to the project due to interest payments; however this still may be more palatable to the unit owners then a one time large Special Assessment payment.

If the board decides to borrow dollars to complete a capital replacement project, a Community Association Lender will look most favorably (the best loan terms) to boards and unit owners that are proactive, well prepared and meet all the bank guidelines. Community Association Lenders may require the following information:

Average unit market value
Number of units
Delinquent payment of assessments
Contingencies for bad debt
Assessment levels
Owner occupancy ratio
Insurance
Present and pending lawsuits
Repayment plan
Reserve funding

An Association should surround itself with qualified professionals to ensure the project goes smoothly and is completed correctly.

The lender will need to understand how the scope of work was identified, the duration of the planned repairs, and the process for selecting the professionals to complete the projects. Prior to loan approval, the lender will require copies of the executed contracts for the work to be performed.

Depending on the size of the project, an independent engineer or architect may be required to supervise the project and approve all advances on the loan and payouts to contractors.
Average unit value and number of units is taken into consideration to determine if the size of the loan requested, meets the bank’s guidelines. For example:

A 50 unit building requests a $1,000,000 loan
The units are valued at $100,000 each
The assessment per unit would be $20,000 (20% of its value), which the bank might consider this high.

Assuming a 5 year repayment, the monthly amount due per unit would be about $333 per month, which does not include interest, regular assessment or mortgage payments. Such an expense has the potential to monetary stress unit owners, which may increase delinquencies and cause the association to default on the association loan.

To prevent this, it is imperative that associations reserve funds for future capital expenses to reduce or eliminate the need for a loan. If an association has reserves and is able to fund 50% of the project, this reduces the financial impact to owners and increases the probabilities of acquiring a loan.

Collateral for a community association loan is the assignment of future assessments of the association. Most lenders have internal guidelines regarding delinquent assessments that Associations must meet, to both qualify for a loan and maintain, while the loan is in place. Typically no more than:

5% - 10% of the total number of units can be delinquent on assessment payments
5% - 10% of the annual assessment income

Prior to obtaining a loan an association should establish a delinquency collection policy and adhere to it. The Association’s assessment income is the Bank’s source of repayment so the Association must be diligent about collecting all assessments. Delinquent accounts should be turned over to the Association’s attorney as the Association’s delinquency collection policy allows. Associations with high delinquencies may not be able to secure a loan.

Associations considering whether or not to take out a loan should incorporate a reserve for bad debt into their operating budgets. In the event of non-payment or late assessment payments, this reserve will help to ensure the association has sufficient cash flow to meet debt and operation obligations.

The Board should determine the number of non-owner occupied units and what is currently allowed by Association policy. The lender’s guidelines for non-owner occupied units range from 20% to 30% of the total number of units.

The lender will require proof of adequate insurance as a condition of the loan. Insurance will be required to be maintained while the loan is in place and the lender will require that they are added to the policy as additional insured or loss payee. Boards should review their insurance levels annually with a qualified association insurance professional.

Litigation against the association is also reviewed by the bank. As plaintiff or defendant, an association that is a party to a lawsuit complicates matters for owners trying to buy or sell units and can inhibit an association’s ability to obtain a loan. Lawsuits against the association may impact the ability to repay its loan due to increased or unbudgeted legal fees and the potential for a monetary settlement payout not covered by insurance or reserves. Association boards should act to resolve lawsuits in order to focus on day to day operations of the association.

Community Association Lenders vary in documentation they require, their evaluation processes, and loan terms. Lenders with dedicated association staff, broad experiences, and strong portfolios are generally the easiest to work with and can guide you through the process. Associations considering a capital replacement project should contact a Community Association Lender early in the process, to acquire guidance and options in financing. This will aid in ensuring the loan is acquired in an expedient manner.

Community Association Lenders know that Association Boards with strong leadership, that are well managed and proactively plan, demonstrate to the unit owners that the Board members are exercising their fiduciary duty to ensure the financial integrity of the Association and property values.

(Wintrust Community Advantage®, with offices in IL and MN, is a division of Wintrust Financial Corporation, which has over 100 banking offices in IL and WI, with assets of $16 billion dollars.)

Click here to view the original article.

Funding Your Next Major Project: The Costs & Benefits of an Association Loan

Wed, 09 Jan 2019 16:11:28 GMT

By: Anthony Dister, VP, CMCA, Community Advantage

Courtesy of: www. CommunityAdvantage.com

During the 1970s, the weekly news television show “60 Minutes” introduced a Point/Counterpoint debate segment in which journalist Shana Alexander provided a liberal point of view on a controversial topic against conservative James Kilpatrick. The shows popularity led to a parody skit on Saturday Night Live with Jane Curtin providing one point of view opposite conservative Dan Akroyd. When it comes to people’s homes and money, the debates can often become heated. In an effort to keep the discussion at board meetings from taking on the decorum of the latter, it is important to consider the options available to an association when planning for its next common element repair project.

COMMON CHALLENGES FACING COMMUNITY ASSOCIATIONS

Board members have the fiduciary responsibility to maintain, preserve, and protect the association’s common elements. Unit owners want the price of their home to appreciate. The board is often trying to balance the demands of competing pressures.

Real estate brokers have indicated that the primary drivers for buyers continue to be location, price, and curb appeal so maintaining the common elements and the overall appeal of the community will continue to be the most important aspect to boards, homeowners and potential buyers.

Many associations are more than 20 years old and are showing signs of deteriorating infrastructure and deferred maintenance. Communities are often in competition with nearby properties for potential buyers. As a result, many boards wish to keep monthly assessments low in order to be more attractive to buyers. This can lead to the replacement of certain components that may have reached their useful life to be delayed or deferred. Alternatively, boards may choose to make recurring repairs to common elements or stretch a project out over time in an effort to avoid the large replacement cost and keep assessments low. The downside is that over time, the recurring repairs can add up to more than the replacement cost, and by spreading the repair project out over time the cost significantly increases due to repetitive set-up and staging costs. Community associations tend to receive more competitive bids and can save money by doing all the work at once.

FUNDING OPTIONS

The board has several options when it comes to funding a large project. The first is reserve balances. Having sufficient reserves set aside is the best choice for funding a large capital replacement project. The downside is that having sufficient reserves means the board has to adequately fund its reserves, which can mean increased assessments.

The second option (and most unpopular) is to pass a special assessment. The benefit is that it’s a means for the association to collect cash at one time to pay for the project without taking out a loan. The downside is that the large one time payment may be difficult for some or all of the unit owners. Special assessments may also have a negative impact on the owners’ ability to sell units within the association.

The third option would be for the board to increase regular assessments and build reserves to fund the project. The downside for increasing regular assessments is that it may take years to contribute sufficient reserve funds for the pending project and once assessments have been increased they typically never return to their prior level.

The fourth option is outside financing or an association loan. The loan could be used to fund the entire project or in combination with any of the above funding options. It is important for the board to explore all options and be creative when formulating an approach to select the option which is best for the overall association.

BENEFITS OF FINANCING

The proceeds from an association loan can help to fund immediate common element repairs. The bank can work with the board to put in place a repayment plan tailored to best suit the association’s needs. There are many options available other than a lump sum payment or special assessments. The association loan can allow member assessments to increase slightly because the loan payments can be spread out over a longer repayment schedule. Repayment can go out to 15 years, however, a shorter term is recommended. The typical loan amortization is three, five, or seven years, depending on the useful life of the components being replaced, or the cash flow requirements of the association.

In today’s economic environment, interest rates are at historical lows. Low interest rates are not good news for savings or reserve accounts. However, it is good news for association’s that are in the market for a repair or replacement loan and may have deferred maintenance. These associations can take advantage of today’s low rates and complete all needed projects with minimal interest expense.

There are advantages to completing a project or multiple projects at one time. Associations will usually receive preferred pricing from contractors if the work is completed at once as opposed to spread out over time. If multiple projects are being considered, the association may have cost saving in work permits and one time setup costs such as scaffolding for roofing as well as masonry work. The association also avoids lengthy construction site issues by completing projects in a timely manner.

The loan proceeds can be used for common element repairs, capital improvements, purchasing units within the association, as well as to replenish reserve balances.

THE COSTS RELATED TO FINANCING

The loan is a debt obligation that must be repaid with interest. The association will have a monthly principal and interest payment to the bank amortized over the term of the loan once the project is complete. The monthly loan payment will be included in the association’s annual budget with a line item or sufficient contributions to the reserves to cover the payment. While the loan is made to the association, the loan is ultimately repaid by the individual unit owners.

The association may incur one-time setup costs associated with the loan which include bank loan documentation fees and attorney review fees. Loans made to community associations typically do not have commitment fees, non-usage fees or penalties for early payment.

As part of the loan agreement, the association will be expected to provide annual financial reporting items and maintain certain standards or covenants for the duration of the loan depending on the financial institution. These include annual financial statements, budget, tax returns or other such information as required by the bank. For example, the repayment of the loan is based on the association having sufficient cash flow. One of the covenants that the bank will rely on to help measure the strength of the cash flow is the association’s delinquency ratios.

Delinquency is typically defined as monthly assessments that are more than 60 days past due. The rate of delinquency commonly used by lenders is 10 percent or less in terms of number of units and/or dollars past due as a percentage of the annual budget. Having a relatively high delinquency rate may impact the association in receiving a higher interest rate for a loan or being charged a fee if the ratio is not maintained during the loan period. While maintaining a satisfactory delinquency rate is required for obtaining a loan, it is also in the best interest for the association in order to have sufficient cash flow to pay its bills on time. This ratio is also looked at by mortgage companies for owners buying/ selling units within the association.

MEETING TODAY’S CHALLENGES

Funding a major project requires a proactive board and advance planning. While funding a project with replacement reserves is recommended, most associations are not in a position to fund a project entirely with reserve funds. One of the options available to an association is outside financing. A common element repair loan can help the association address its major challenges.

By providing funds to complete necessary projects in a timely and cost effective manner.
At the conclusion of the project, property values typically increase.
Special assessments may be financed with an association loan or increases in monthly assessments may spread out over time to repay a loan.
With a properly structured loan, the association is typically in a stronger financial position at the completion of the loan due to its ability to maintain or build reserve balances.

When considering outside financing for your association it is important to consider a combination of all options as well as opinions from all board members and committee volunteers. Boards should consult with professional teams early when planning a capital repair project. If considering a loan, it is best to consult with your financial institution to ensure the association meets all requirements for a loan. Similar to Point/ Counter Point there may not always be a right answer. The solution just has to make sense for your association.

Click here to view the original article.

Tips of the Month: Common Mistakes Boards Make

Tue, 18 Dec 2018 20:12:36 GMT

By : Tom Skweres of ACM Community Management and ACTHA Board Member

Failure to educate. It’s essential that Board Members read and understand their governing documents, rules and State law. The board should know what is expected of them including how meetings should run.

Fiscal irresponsibility. Board members not taking time to read and understand the financials can cause problems. It is imperative that board members not fall into a false sense of security and assume that everything is running smoothly. There should be proper checks and balances including obtaining two signatures on checks.

Selective enforcement or failure to uniformly enforce governing documents. Often boards are accused of playing favorites. This would include board members attempting to institute new policies and ground rules. Over regulating can pose a problem. Rules should be reasonable. It is important to be fair and consistent.

Failure to maintain confidentiality or generating gossip. There are often times when boards discuss confidential items. It is wrong for board members to knowingly disseminate confidential items to residents. In doing so they are opening themselves as well as the association to possible litigation.

Micromanaging and abusing power. It is important that the board works with their management company for the daily operations of the property. Board members should not be making decisions in their self-interest. Failure to disclose personal interest can create conflict.

Failure to collect overdue assessments. While boards sympathize with owners during hard times, delaying assessment collections hurts the cash flow of the association, making it difficult to fulfill its financial obligations and setting a precedent for other owners to make late assessment payments without fear of legal action. Boards should have a collection policy whereby owners, at a certain period when past due, the board pursues legal action.

Contributing to the Security of Your Environment

Tue, 18 Dec 2018 20:01:23 GMT

By Steven Siegel of First Call CSS

We need to be concerned about what goes on around us. How can we approach and handle situations and how can we assist our communities in becoming safer areas to inhabit? As you choose to live where you do, it is your responsibility to love and care about your family and community and to respond to situations whenever persons, situations or incidents arise or occur that could pose harm.

The pertinent question for most is not how, but what will happen should you encounter a situation where life or property is threatened. In truth, if we prepare before the situation occurs, we may be able to eliminate the opportunity for the situation having a negative outcome.

Use of the following options are integral in helping secure your community and surroundings more effectively.

Crime Prevention through Environmental Design (CPTED)

Is your property neat and clean? Are your trees and shrubbery trimmed? Do you eliminate places where the “bad guys” can hide? A clean environment says that you care. Do not create areas where people can hide and wait for an opportunity to pounce. By not cleaning and maintaining your property you are sending a message that you don’t care. You are subconsciously inviting the “bad guys” in.

Lighting

A well-lit area is a huge crime deterrent. Make sure you lights work. Change burnt out bulbs immediately.

Security Cameras. Traditional cameras and monitors are common. Home security systems are available and inexpensive. Professional companies can remotely monitor your property via cameras. Cameras are great; but, they need to be monitored in order for a quick response should a situation occur. The ability to record and store video for a minimum of 30 days is also very beneficial.

Cellular/Smart Telephones

An advantage of smartphones is that they take photos and also record video and audio. It’s quite simple to learn how to use these features. These capabilities can help prevent a situation from occurring and can provide proof that there is/was a problem, which should be addressed. Use your telephone to call the police, security or manager when the situation presents itself.

Gates/Fences/Locks/Windows

Any deterrent is better than none. Keep doors and garages closed and locked. Use a security bar or piece of wood to keep your sliding door secured. A security brace will keep your door from being forced in. Close the door behind you in common areas. If you see an open door, close it. If it should be locked and isn’t, lock it. Don’t allow someone to gain unauthorized access by “piggybacking” in. Don’t allow a crime of opportunity. Take away the easy opportunities, and make it more difficult for the “bad guy.” Close and lock windows. If you can use security bars and you feel you need to, before installing, refer to your association documents, board or manager to see if they are permissible.

Fences

As long as fences are maintained with no breaks or areas that have fallen, they help to provide an additional deterrent. They slow the “bad guy” down and help to protect the areas inside the perimeter.

Timers

Timers are an excellent way to turn lights on/off when you are not home. Utilize three of them and think logically as you place them in your home. Move them around week to week. Unpredictability is key. Bad guys look for patterns—don’t be predictable. Change the time and locations, Opportunity and predictability are the bad guy’s friends—don’t make their lives easier.

Common Sense

Common sense is a valuable commodity; good judgment is gold. Always be thinking “if—then “ and not “what-if”. If you see someone lurking around your car, do not approach, but stay back and prepare to call security or the police. Take mental notes regarding the person’s features (height, skin color, mustache/beard, weight, hair length, glasses, clothes, time, etc.). Snap a photo if intentions are nefarious, note how fast they turn and leave. If they are just admiring your car, they won’t act in a strange manner. Always think common sense—it will keep you from placing yourself or those near you in a dangerous situation. Don’t forget—most people will respond when they hear a person yell, “FIRE!"

Security Officers/ Lobby Attendants/Patrol Officers/ Door Staff

Not only do these trained professionals monitor your property, but they are also specially trained to observe, report and take appropriate action. They provide a visual deterrent, and can respond to many different situations. An individual in a clean crisp uniform is a prime example of pride and can deter situations from happening through visibility and attentiveness. There are many functions security officers provide in varying capacities depending on your property’s need and requirements.

Alarms/Motion Detectors/ Card Access and FOBs

Many different types are available. Choose one that makes the most sense for you and your property. Motion detectors are very efficient for in-home use; models that are connected to lighting are even better. Loud alarms are great. All can be monitored on – site or tied to a central station for remote monitoring. They can also be connected to your smart phone to alert you immediately.

In conclusion, there are many types of security methods available. Whether inexpensive or expensive, simple or complicated, security professionals and/or monitors, you can find a product or service that fulfills your needs and budget. Research—the internet is a wonderful tool. Network— ask others what has worked for them. If we all do our part—we all stay safe. Together we are the solution. Let’s not let neglect or carelessness lead to disastrous consequences.

Get Involved in Your Community

Tue, 18 Dec 2018 19:54:27 GMT

By: James M

Courtesy of hoa2hoa.com, click here to view the original article

One of the first steps in making a difference is becoming involved in your community. Because association living is the most noticeable and accessible to most homeowners today, this community involvement will often begin with your association.

So how do you become involved in your community? One way to become involved in your association is to submit your name to serve as a volunteer board member for your association. The first step in this process is to review your association’s governing documents to determine any qualifications for service on the board of directors.

Qualification for service on an association board is often as simple as being an owner within the community. Other qualifications may include being in good standing (i.e. your dues are not delinquent; you are not in violation of any of the association’s governing documents; etc.). If you meet the qualifications for service on the board of directors, you can submit your name as a candidate.

Different associations handle candidate nominations differently. Some associations merely request names from the membership and place all of these names on the ballot. Other associations have a nomination committee that reviews potential candidates and submits the official candidate list. Before submitting your name, you should review your association’s governing documents so that you can follow all of the appropriate steps for becoming a qualified candidate for possible election.

Once you have submitted your name, you might be thinking, “What in the world have I just done?!” Don’t be discouraged! You have taken the first step in becoming involved in your association. Yay!

The next step in the process is to get your campaign going so you can be elected by the membership. This might involve sending out a candidate statement describing yourself or it might involve walking around your community knocking on doors to meet your neighbors and requesting that they vote for you. You should view this process as an opportunity to get to know your neighbors at the same time as collecting votes.

If you are elected to the board you will spend the next year or more serving your community as a fiduciary. Congratulations! If you are not elected do not despair, all is not lost!

Service on the board is not the only manner by which you can serve your community. If you are not elected to the board at the annual meeting you should immediately approach the board and volunteer to serve on a committee. It is often difficult for a 3, 5 or even 7 member board of directors to do everything necessary to run an association. Volunteer board members will likely welcome the assistance you offer. If there are particular issues which concern you, make sure to identify them to the board and offer to serve on a committee designed to address the issues. You will be most effective when working to address an issue that you find to be important.

If the committees are full or the board declines your offer, you can still be involved in your community. Attending board meetings will offer insight into the issues facing the association and will permit you to offer comments (during open forum) to the board and to discuss issues concerning the board with your neighbors. Many owners are unaware of the hundreds of issues facing the board on a monthly basis. By attending board meetings, you will understand that it is not as easy to run the association as it might seem from the outside. Consider attending board meetings as your homework for election to the board in future years.

If you have computer skills, you can offer your expertise to the board by offering to create and/or maintain an association website or draft a newsletter for the association. If you have an accounting background, you can offer your assistance in preparing the association’s budget or serving on a finance or budget committee. If you have a knack for planning parties, offer to organize a social event for the entire community. If you have contracting or landscaping knowledge, you can offer your assistance to review landscaping plans or proposed construction to provide your advice to the board of directors.

Remember that your skills are valuable and offering them to the board will work to the betterment of the entire community. Personal involvement is the first step towards understanding the issues facing your community and making a positive difference in resolving those issues!

http://www.hoa2hoa.com/2017/04/12/get-involved-community/

How to Successfully Live Under a Homeowners Association

Tue, 18 Dec 2018 19:51:49 GMT

By Teresa Mears

Courtesy of usnews.com, click here to view the original article

If you buy a condominium, townhouse or single-family home in a newer development, you’re likely to become a member of a community association.

About 20 percent of Americans live in a community governed by a condo association, homeowners association or co-op board, according to the Community Associations Institute, which educates volunteer board members and association management professionals. The number of communities covered by associations has grown from about 10,000 in 1970 to more than 333,000 today.

Community associations come with rules that determine everything from the number of pets you can own to what color you can paint your front door. Some include amenities such as pools, clubhouses and golf courses, while others provide services such as road maintenance and streetlights.

The associations are set up by developers and then turned over to a volunteer board of homeowners once all the units in the development are sold. Those volunteers are responsible for making sure facilities are maintained, collecting maintenance dues and enforcing the rules.

“This is the ultimate form of democracy,” says Frank Rathbun, vice president of communications for the CAI.

While stories of homeowners associations that deny permission for kids with cancer to build a playhouse or veterans to fly a flag on the wrong kind of pole may steal the headlines, CAI statistics show that 64 percent of residents are satisfied with their community association experience and 26 percent are neutral, with only 10 percent dissatisfied, according to a 2014 survey.

But the same survey shows that almost a quarter of residents have experienced a significant disagreement with their association, with landscaping and parking being the two most common causes, followed by finances and architectural issues.

Whether you like or hate the rules that come with community association life, once you’ve bought or rented in an association, you’ve signed on. Being a member of an association ties your fate to your neighbors’ in ways that living in a traditional subdivision does not.

“You have to overcome that ‘my home is my castle’ issue,” Rathbun says.

Rules are designed to protect property values, and 70 percent of the respondents in the CAI survey believe they do, while 26 percent believe they make no difference. Disagreements over which rules are required to protect property values often leads to conflicts that can cost residents both time and money if they’re handled poorly.

“People ought to know that being in a condo is a give-and-take kind of thing,” says Patrick Hohman, author of “Condos Townhomes and Home Owner Associations: How to Make Your Investment Safer” and a longtime volunteer board member who is now a part-time, on-site manager at a condominium near Louisville, Kentucky. He also runs an educational website called www.CondoHOAinfo.com.

“It’s a nonstop process of building trust and maintaining trust,” Hohman says. “You learn to be forgiving of others and forgiving of yourself. You deal with people where they are and as they are. It’s kind of like dealing with your extended family at Thanksgiving.”

One challenge for associations is that volunteer board members with no property management experience are charged with maintaining hundreds of thousands of dollars' worth of property. About two-thirds of associations hire professional managers, but the rest are managed by the residents themselves.

“Board members are almost never trained in property management,” says Richard Thompson, who publishes The Regenesis Report, a weekly newsletter for board members and developers. He also writes a syndicated column for Realty Times and just published the book “Trade HOA Stress for Success.” He recommends professional management – hiring trained and experienced property managers to oversee operations – for most associations. “If the board hires competent people, they’re going to stay ahead of the curve and not put fires out,” he says.

Communities are dependent upon the skills and personalities that residents and board members bring to the table. Some people are better than others at working with their neighbors, and residents with poor people skills can create problems for everyone, especially if they get on the board.

Experts say that communications and transparency – being very clear about where the money goes, welcoming residents and board meetings and sharing information about how decisions are made – go a long way toward building community harmony.

“There is no substitution for communication between the association and the residents,” Rathbun says.

Here are seven tips getting along in a homeowners association.

Know the rules before you move in. Too few prospective residents understand the rules before they buy or rent. It’s particularly important to be able to live with policies on pets, parking, collection, rentals, noise and architectural guidelines. “Folks buy into a homeowner association without any clue of what they’re obligated to do,” Thompson says. “Few prospective buyers research these things before they close the deal.”

Follow proper procedures. Boards should set up clear procedures for everything from getting permission to paint your front door to rental applications to installing a satellite dish, and homeowners should expect to follow those procedures.

Go to your neighbor before you go to the board. The board is there to make sure the rules and regulations of the development are followed, but if your neighbor’s loud music annoys you, talk to your neighbor first before taking your complaint to the HOA board.

If you don’t like a rule, get your neighbors together to change it. Changing circumstances may make some rules outmoded, and boards should review the rules every few years to make sure they’re all serving the community. If you don’t like a rule, talk to your neighbors and petition the board collectively for a change.

Volunteer to help your community. It’s not always evident from the outside exactly what work the board of directors is doing and what issues the community faces. Once you move in, volunteer to help with a project or serve on a committee, and expect to serve on the board at some point. “Get involved. Don’t wait until you’re dissatisfied about something,” Rathbun says.

Try to stay out of court. Every community has a few people who think the rules don’t apply to them, and some would rather fight than comply. A court battle can be costly, both in money and in emotional turmoil within the community. “Win, lose or draw, we are still talking about neighbors who have this bigger wall between them,” Thompson says. Adds Rathbun: “Be reasonable: That applies to both the homeowners and the volunteer homeowners who serve on the board.”

Have a long-range plan. State laws regarding reserves and planning vary, but it always makes sense to plan for items you know will have to be replaced or repaired, such as roads, roofs and pools. If the community has no reserves and no plan, a roof leak at a condominium complex could mean a surprise assessment of thousands of dollars for each homeowner. “If the board had been collecting money and planning for this … every member along the timeline would have been paying some portion,” Thompson says.

https://loans.usnews.com/how-to-successfully-live-under-a-homeowners-association

Pappas: There’s Help for Senior Citizens Struggling to Pay Cook County Property Taxes

Mon, 17 Dec 2018 22:40:57 GMT

With prescription prices and utility bills rising faster than Social Security payments, a tax-relief program can help senior citizens who are hard-pressed to pay their property taxes, Cook County Treasurer Maria Pappas said today.

Seniors whose annual household income is $55,000 or less can apply to the Senior Citizen Real Estate Tax Deferral Program for loans to cover property tax payments.

“When property taxes are due, too many of our elderly are forced to make difficult choices about which bills to pay,” Pappas said. “This program is one way to ease their worries.”

The State of Illinois issues the loans, which do not have to be repaid until the property is sold or the homeowner dies. An interest rate of 6 percent per year is charged by the state. The maximum loan is $5,000 per year. To qualify, homeowners must be at least 65 years old by June 1 of the year in which the application is made.

To apply:

Download the application from cookcountytreasurer.com
Submit the completed application and copies of the required documents to the Treasurer’s Office
The deadline is March 1, 2019. Applications after that date cannot be accepted
Homeowners must reapply every year

Download the original article here

Pappas: March 1st Cook County Property Tax Bill Is Online If You Want to Pay This Year

Mon, 17 Dec 2018 22:37:30 GMT

In response to a high volume of requests by taxpayers, accountants and tax advisors, Cook County Treasurer Maria Pappas said today she has posted next year’s First Installment property tax bill to cookcountytreasurer.com, nearly three months before the due date.

This is the earliest that First Installment payments have been accepted. Property owners should consult with a tax professional about income tax deductions for 2018.

Tax Year 2018 First Installment taxes, due March 1, 2019, are 55 percent of the prior year's total tax.

You may look up your tax bill on cookcountytreasurer.com by using your address or 14-digit Property Index Number (PIN). Here’s how to pay:

Go to cookcountytreasurer.com and select “Make an Online Payment”
Download and print your bill from the website and either:
Mail it to the Treasurer’s Office, or
Pay in person at a Chase bank branch or the Treasurer’s Office

Download the original article here.

Meet Tom Skweres and Marcia Caruso, ACTHA's Newest Board Members

Mon, 03 Dec 2018 22:02:05 GMT

Tom Skweres

Tom has been in the property management industry for over 35 years. Tom is currently the Vice President for ACM Community Management and is responsible for marketing, sales, Board member education and monthly manager training. Tom is a licensed community association manager through the State of Illinois.

Tom was an Adjunct Faculty member at the College of DuPage for twenty-five years in the facility and property management department and is an Advisor at DePaul University in their School of New Learning.

Tom is an active committee member of ACTHA (the Association of Condominium and Townhouse and Homeowners Associations), a member of CAI (Community Associations Institute) and a Past-President of ABOMA (the Apartment Building Owners and Managers Association). Tom is also an Advisory Committee member for CondoLifestyles magazine.

Tom was the Board Secretary for his former condominium association and a past Board member of the Hinswood Homeowners Association, where he and his family currently live.

Tom is an industry article contributor, seminar presenter and published author.

Marcia Caruso

Marcia Caruso began her career in accounting in an apartment community in Pittsburgh and worked her way up to the position of comptroller while attending nightly college classes. She received her degree in accounting shortly after from Lehigh University.

Once having completed her education, she moved on to become the first woman senior financial analyst. From there she began her 46 year long career in property management and became one of the “grandes dames” in the industry. Her career included working in the states of Connecticut, Florida and then on to Illinois managing a Chicago retirement community in 1984.

As Marcia worked her way up the chain of command in management she began training others in the field of property management beginning in 1986.

In 1990 Marcia started working in condominium management. She received her CPM number 7529 which designates an early number when it was a male dominated industry.

As a woman pioneer in the industry, she has been a real estate broker in the three states of Connecticut, Florida and Illinois specifically in the metropolitan Chicago land area. She also holds her LCAM certification.

Marcia came to Illinois in 1990 and opened up Caruso Management Group in 2002. Since this time, Marcia has been very active in both ACTHA and CAI. Marcia fostered and facilitated the Learn and Lead program for ACTHA, which trains Board Members in Community governance and Illinois Condo Law. This training started a chain reaction in the industry as others went on to duplicate her efforts in educating Board members and Managers in Community Association living.

Additionally Marcia expanded her mentoring and training of others to include the responsibilities of budgeting, overseeing maintenance projects and all areas of management through the channels of ACTHA and CAI.

In 2015 Caruso Management Group was sold to RealManage. Marcia continues working at RealManage as well as mentoring and training other managers throughout the industry.

Featured Vendor of the Month: Countryside Bank

Wed, 28 Nov 2018 22:26:48 GMT

Countryside Bank specializes in Property Management, Condominium, Townhome and Homeowners Association banking. We work with associations of all sizes and have the products to fit your different needs. We understand the demanding day-to-day operations of your business. Our Business Bankers help associations like yours meet their treasury management and financial needs. Let our team of experts show you how we can be the key to your success!

Free Operating Account
High Yielding Reserve Account
HOA Financing
Lockbox
Remote Deposit/Mobile Banking
Treasury Management
Free Onsite Training for Staff
Educational Seminars offered throughout the year, go to ACTHA.org for more information

Call Kristin Walker today to discover how partnering with Countryside Bank is the smart choice for your association.

Kristin Walker

Countryside Bank

708-485-9371

Kristin.Walker@bankcountryside.com

www.bankcountryside.com

ACTHA Seminar Recap: Community Building, How to End Apathy

Wed, 28 Nov 2018 16:29:46 GMT

Patricia Bialek, Vice President of First Service Residential, was the speaker on November 27, 2018 at the Countyside Bank, 6734 Joliet Rd, Countryside, Illinois. Kristin Walker was the bank official that hosted the event. The topic was Building a Better Community, How to End Apathy?

The interested crowd was given a myriad of ideas on how to “pep up” the community. A power point presentation accompanied her energetic presentation.

Her main points included:

Community Apathy is a bad habit .
Community members need a “push cultivated by the Association leaders.
Survey the community
Employ the community website
Newsletters and establishment of website with unit owners contributions.
Constant Communications with unit owners.
Establish Committees and Volunteers after points of interest are known through the results of the survey.
Tap into the community “beavers” :Those who wish to contribute time.
Listen to the suggestions and value each contribution.
Have picnics, pool get-togethers organized by the committees.
Tap into the community interests. Organize clubs of interest. Start traditions.
Use the Community Clubhouse for social purposes as well as Association Meetings.

She gave not only suggestions but concrete examples on how to implement the suggestions.

Another resource was community businesses, realtors and local, state and Federal Officials and involvement in the ACTHA and CAI organizations.

The attendees walked away energized and eager to implement the ideas Patricia Bialek offered.

In conclusion one would summarize the plan for community building . Actions bring results. Involvement of all members of the Community is the formula. Reaching out to the community is the starting point of success. Using the talents of the community and seeking to value the contributions of the volunteers causes a cycle of involvement. Who wouldn’t want to try out these ideas?

The ACTHA Board of Directors wants to publicly thank Patricia Bialek for her contributions to ACTHA . Also ACTHA Board of Directors would like to thank Kristin Walker, of Countryside Bank for providing our members the location, dinner and refreshments for the evening.

ACTHA Seminar Recap: Doing What's Right for Your Association

Wed, 28 Nov 2018 16:14:42 GMT

On November 15, 2018 the ACTHA membership had the privilege of hearing Kathryn Formeller speak on the topic of DOING WHAT'S RIGHT FOR YOUR ASSOCIATION: WHEN OWNERS DON’T PAY ASSESSMENTS, collection of Delinquent Assessments and Foreclosures at the Tahoe Village Condominium Association in Wheeling, Illinois. A gathering of Association members attended the seminar during an evening of inclement weather. Kathy Formeller is partner at Tressler LLP.

Kathryn regularly represents condominium associations as creditors in both Chapter 7 and Chapter 13 bankruptcy proceedings seeking to modify the automatic stay so that they can pursue their state court remedies. Kat is the lead attorney for the Condominium & Common Interest Community Association Law practice. Her practice includes representing condominium associations and common interest community associations in a variety of areas, including rule enforcement, interpretation of governing documents, review and negotiation of contracts, and collection of assessments. She also provides advice to clients on their rights and responsibilities under the Condominium Property Act, Forcible Entry and Detainer Act, General Not for Profit Corporation Act and the Common Interest Community Association Act. Furthermore, Kat practices in the area of commercial litigation nationwide and counsels clients with respect to a wide variety of business disputes.

In her presentation she explained the need for community association assessments, foreclosures and their threat to the collection of assessments. She focused on sections of the Condo Act 9 (g) 4 and 9 (g) 5 that provide condo associations with an avenue to collect delinquent assessments and attorney fees in foreclosure cases. She explained how to proceed in the collection of delinquent assessments using the Condo Act as your guide.

She explained the six month rule and the various case laws which shaped the collection and foreclosure process. Seminar attendees were given the opportunity to ask questions pertaining to their association’s challenges and problems.

The ACTHA board appreciates the expertise of Kathryn Formeller and is grateful for her participation as a presenter at the Seminar monthly series. Our members and guests gained much knowledge on the featured topic.

Audit, Review and Compilation Comparison and Taxes

Tue, 27 Nov 2018 20:28:07 GMT

By: Brad Schneider of Condo CPA

INTRODUCTION

Most homeowners and managers understand that Certified Public Accountants (CPAs) can perform audit services and issue an audit report on a community association’s financial statements. However, some may not be familiar with the alternatives to an audit. CPAs can provide other levels of services such as a Review, Compilation or an Agreed upon procedures engagement. The purpose of these engagements is to add credibility to and enhance the reliability of the Association’s financial statements. All audit and review engagements must be performed by an independent CPA. A compilation can be performed by a CPA that is not independent from the association but must state that fact in the accountant’s report included with the financial statements.

COMPILATION ENGAGEMENT

The compilation, which is the lowest level of service that a CPA can provide for a client’s financial statements, requires substantially less time than a review or audit engagement because fewer procedures are required. Various states allow a CPA to perform a compilation without having a Peer Review for their firm. Unfortunately there is a wide variance in the quality of the financial statements and accountant’s work papers for compilation engagements since firms that have not followed the Peer Review quality standards generally have not developed a system of quality similar to those firms that follow the standards included in the Peer Review membership program of the American Institute of Certified Public Accountants (AICPA).

Compilation standards do not require the accountant to perform any procedures to verify or corroborate the financial statement information provided by the Association’s management. However, the accountant must address significant questions that arise in the course of the compilation engagement. If the accountant has reason to believe the information supplied by the Association’s management is inaccurate, incomplete or otherwise unsatisfactory, the accountant is required to obtain revised or corrected information before reporting on the financial statements. The AICPA compilation standards require the accountant to possess an adequate level of knowledge about the accounting principles and practices of the Community Association industry and have a general knowledge about the nature of the Association’s business. The accountant is required to read the compiled financial statements and consider whether they are in appropriate form and free from obvious material errors. Because of the limited scope of compilation procedures, the standard Compilation report disclaims any degree of assurance on the financial statements. The report also states that the accountant has “not audited or reviewed the financial statements and accordingly, does not express an opinion or provide any assurance about whether the financial statements are in accordance with the applicable reporting framework.”

At a minimum, a compilation engagement with the accompanying accountant’s report is required anytime an external CPA is associated with the financial statements of the Association.

REVIEW ENGAGEMENT

A review engagement requires the limited procedures included in a compilation engagement as well as other procedures that enable the accountant to provide limited assurance on the financial statements. These additional requirements are inquiries of the association’s management and analytical procedures. Inquiries are typically directed to knowledgeable persons having responsibility for financial and accounting matters. Please note the questions are being asked of the client’s management and accountants without outside verification. Accountants exercise their professional judgment to determine the extent of inquiries that are needed. Although specific inquiries are tailored for each Association, the inquiries should, at a minimum, relate to: the accounting practices and principles used by the organization; the procedures for recording and accumulating financial information; and the actions taken at meetings of the Board.

Analytical procedures include:

Comparison of current year financial statements with the budget and prior year’s statements
Study of the financial statements to identify items or relationships between items that do not conform to expectations based on earlier reports or budget or other information
Review and consideration of adjustments made to the financial statements of prior years.

The purpose of analytical procedures is to identify account balances or relationships that appear unusual so that additional inquiries or review of financial data can be made to determine the cause of the unexpected results. Based on these inquiries adjustments to the financial statements may be necessary.

Because of the inquiry and analytical procedures included in a review engagement accountants are able to express limited assurance on the Association’s financial statements. Remember in the compilation report the accountant disclaims any assurance on the association’s financial statements. The standard Accountant’s Review Report states that a review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole and that, accordingly, the accountant does not express such an opinion. However, a review report does state that “we are not aware of any materials modifications that should be made to the financial statements.”

AUDIT ENGAGEMENT

An audit engagement provides the highest level of assurance on the Association’s financial statements, because many important audit procedures are performed. Some of the more important auditing procedures are:

Consideration and evaluation of the internal control system of the Association, which may include testing the effectiveness of the system
Tests of the underlying documentation to support the account balances
Outside confirmation of bank and investment accounts, loans, insurance coverage and legal status.

In addition, the auditor is specifically required to obtain reasonable assurance that the financial statements are not materially misstated due to fraud. In a compilation or review engagement the accountant is not required to document any assessment of fraud risk, nor are they required to consider fraud or search for fraud in the course of the engagement. However, in a compilation or review the accountant is required to report any significant deficiencies in internal control or fraud that comes to their attention. The possibility of this happening is less likely in a review and even less in a compilation since the procedures are less comprehensive in these levels of service. The audit report reflects a higher level of assurance based on the more extensive procedures performed. The standard audit report states, “In our opinion, the financial statements referred to above prevent fairly, in all materials respects, the financial position of your association as of December 31, 20xx and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the U.S.

AGREED UPON PROCEDURES

ENGAGEMENTS

When special circumstances are present it is often more beneficial to have an Agreed Upon Procedures engagement performed. This type of engagement is often performed when there is either a suspected fraud or a specific issues(s) that the association is trying to address. It is a way to efficiently assist in obtaining evidence and minimize cost by focusing only on those areas of concern to the board. For example, perhaps the association wants to address a garage employee that was suspected of theft, or reconcile special assessment billing. In these cases the procedures to be performed would be designed to test the areas of concern in order to gather any relevant evidence.

TAXES

For calendar year-end Associations, (December 31st), the corporate tax returns will be due on March 15th. The Illinois tax returns are due on the same day. The IRS allows you to extend the filing of the tax return to September 15th and Illinois allows the extension to October 15th of 2019. The extension does NOT grant you any additional time to pay the taxes. Fortunately with the low interest rates offered on investments it is more the rarity that an Association owes taxes. Most condominiums, townhomes and homeowner associations can decide which federal form to file each year, the regular corporate tax return, (1120) or the homeowners association tax return, (1120-H). If they are a cooperative they should be filing the 1120-C. The decision to file the 1120 versus the 1120-H is based on a number of factors. If they owe tax the 1120 begins at the 15% rate versus the 1120-H which has a flat rate of 30%. Since most Associations do not pay income taxes, we usually recommend the filing of the 1120- H. It is much safer to file this form with the IRS. Filing the 1120 has numerous issues to deal with that upon IRS audit can trigger the assessment of a large amount of tax. One Association in the Southwest was told that they had painting and other non-capital items going through the reserve fund and that the entire reserve was to be considered taxable. The IRS has attacked the Reserve accumulation in a variety of ways for various Associations across the US. The bottom line is that generally speaking the 1120-H is a better form to file if there is no tax due.

CONCLUSION

There are various levels of service that may fit the needs of the various associations. Each association is unique and may have substantially different expectations of what they are trying to accomplish with the CPA firm they select. There are even different levels of CPAs and CPA firms: those that are Peer Reviewed and those that choose not to be Peer Reviewed. Some CPA firms specialize in Community Associations because they love them while others see Community Associations only as a means to supplement their revenue. Whatever your Association’s circumstances, we hope you choose a CPA that is best suited for you based on your specific needs and level of service that you deem appropriate.

Yes. Associations Do File Taxes.

Tue, 27 Nov 2018 20:12:56 GMT

By Steve Silberman

As a CPA, one of the most frequently asked questions I get from Board members is: Are we a not-for-profit corporation and if we are, do we have to file an income tax return?

First of all, most associations are usually incorporated as not-for-profit corporations by the developer. If this did not happen to your association, I recommend hiring an attorney to incorporate your association as a not-for-profit corporation, even though you could go to the Secretary of State's website yourself to incorporate. Once incorporated, you must remember that each year your association has to file an annual report with the Illinois Secretary of State and pay an annual fee in order to stay incorporated.

Residential condominiums, townhomes, and homeowners' associations are not-for-profit corporations that generally do not qualify for Federal income tax-exempt status. Residential associations may be taxed under Internal Revenue Code (IRC) Section 277 or may elect to be taxed under IRC Section 528. Under IRC Section 277, associations file Federal Form 1120 and under IRC Section 528, associations file Federal Form 1120-H. An association can decide annually which form it would like to file. So let's discuss which form is right for your association and the differences between each form.

FEDERAL FORM 1120-H

Federal Form 1120-H was developed so that associations would not be taxed for carrying out its main function of managing and maintaining the common elements. Commercial condominium associations cannot file Federal Form 1120-H. IRC Section 528 states that income and expenses must be allocated between exempt function activities and nonexempt function activities. Associations are only taxed on its net non-exempt function income at a Federal tax rate of 30%. (Timeshare Associations are taxed at a Federal tax rate of 32%). So what is exempt and non-exempt function income?

Exempt Function Income is:

Operating income received as assessments from owners of condominium, townhome or HOAs. They also can be assessments received from developers on unsold units or lots. These assessments must be assessed ratably to be exempt function income.

Non-exempt Function Income (or taxable income) is:

1) Income from non-association property - commercial operations and interest and dividends. 2) Income from non-members for use of association property. 3) User charges to association members for special services unless the user charge is assessed once in a twelve month period and the benefit lasts for the entire 12 month period. An example of a user charge is laundry income.

The advantages of Federal Form 1120-H are as follows:

1. Associations are not taxed on exempt function income.

2. The tax form is a one page form, with supplementary schedules, so it costs less to prepare.

3. The form has less risk than Federal Form 1120. There are four tests that have to be met to file Federal Form 1120-H, but most residential associations will qualify.

4. Fund accounting is not required since capital or reserve assessments are not taxed.

5. No election forms are required like on Federal Form 1120.

6. As long as you keep filing Federal Form 1120-H, no estimated taxes are required.

FEDERAL FORM 1120

The key advantage of Federal Form 1120 is that an association could pay tax at a lower rate than Federal Form 1120-H. Income tax rates start out at 15% on the first $50,000, however, the risk of compliance is far greater since an association must follow certain required procedures. Also, since the form is much longer and more complex it costs more to prepare than Federal Form 1120-H.

IRC Section 277 states that income for Federal Form 1120 should be allocated between membership and nonmembership income. An association can be taxed on both if there is net income, however, an association can make an annual election to defer net membership income.

Revenue Ruling 70-604 allows associations to defer net membership income for one year but if the association has net membership income in the next year then the association would have to pay tax in the next year on the deferred income. An association can also make an election under Revenue Ruling 70-604 to refund net membership income, but in my 30+ plus years of working with associations, I have never seen an association refund money. A question that I get asked about all the time is: Can our association transfer excess net membership income to reserves and then not have to pay taxes on this excess? The answer is NO if you are filing Federal Form 1120.

IRC Section 118 states that an association cannot transfer excess net membership income to reserves to avoid paying taxes since you cannot re-characterize what the assessments were for originally. In order for Revenue Ruling 70-604 to be valid, the election has to be made annually by all members (usually at the annual meeting) and it should preferably be made before the end of the year. The dollar amount does not have to be specified.

Capital contributions (reserve assessments) will be treated as non-taxable on Federal Form 1120 if certain guidelines are followed:

1. The purpose of the assessment must be capital in nature. The reserve study supports the purpose of the capital assessment. However, painting, even if it was included in your reserve study, is an operating assessment, not a capital assessment.

2. Members must have advance notice. Distributing copies of the budget to the members is considered advance notice.

3. The assessment must be accounted for as a capital contribution and held for that purpose. The books and records, along with the budget should segregate operating and reserve (capital) activities. Therefore, the association should use fund accounting.

4. Reserve (capital) assessments should be deposited into a separate account and reserve expenditures should be paid out of this separate account. An association can pay for capital expenditures out of the operating fund account as long as the reserve account reimburses the operating account in a relatively short period of time.

Now that you have a brief understanding of the two forms, you might be wondering which form should your association be using? This is a hard question to answer unless your CPA knows the facts and issues associated with your association.

Usually if your association has little interest income and no (or minimal) user fees you will file Federal Form 1120-H. As interest income grows, your association should look at filing Federal Form 1120 as an alternative. If your association has minimal interest income, but you have a net loss from your net membership (for example due to a painting project) you may want to file Federal Form 1120 since that loss gets carried forward. If your association files Federal Form 1120 because of the large amount of non-membership income, you want to make sure that you do tax planning ahead of time to minimize your net membership income.

You now should have a better understanding about the different types of Federal income tax returns and which Federal income tax return is right for your association.

ACTHA Seminar Recap: Getting Along on the Board (Without Necessarily Going Along)

Fri, 26 Oct 2018 14:24:34 GMT

On Wednesday, October 3, 2018, Mark Rosenbaum of Fischel and Kahn Law Firm gave a presentation on the topic of Getting Along on a Board (Without Necessarily Going Along) at The Book Market at Hangar One at the Glen, Glenview, Illinois. The host, Barbara’s Book, provided a splendid venue for the presentation.

The seminar was well attended with a topic that has perplexed many Board member volunteers as well as unit owners attending Board meetings.

Mark Rosenbaum, in a comfortable arm chair manner, discussed the mechanics of a Board Meeting and the requirements of a Board Meeting in regards to Illinois Condo Law. He introduced the “gadfly” personality. Who is that? A gadfly is a unit owner who is not on the Board and who insists on complaining about what the Board does or does not do. The personality of the gadfly was explored; the complainer in the audience; one who complains and follows up and the gadfly who complains and never follows up. The Board has to deal with all unit owner personalities and tips were given how to deal with this “gadfly”. The speaker continued with the makeup of the Board. The harmonious Board and the fractured Board and how they affect the functioning or non-functioning of the Board progress and success.

Various stereotypes of Board members were analyzed. They are the project manager, the gadfly, the controller, the reluctant warrior and the regular. All aspects of these types were explored.

The final segment was why some boards cannot make any progress. What impedes them? Disputes about money, esthetics, big picture impasse, small picture impasse and a bad blend of temperaments all contribute to a non-performing Board. Mark Rosenbaum was open to questions from the audience and graciously gave real life situations and solutions to common Board interpersonal relationship struggles and road blocks that happen during the Board interactions. This includes Board meetings, neighborhood interaction and time on task. The attendees appreciated Mark’s calm manner and his professional expertise in the Condo world.

The ACTHA Board of Directors thanks Mark Rosenbaum and looks forward to inviting him to speak at future seminars.

Perhaps It Is All “Much Ado About Nothing”: Illinois Ombudsperson Act January 1, 2019 Compliance Deadline

Tue, 23 Oct 2018 19:22:52 GMT

By: Kristofer Kasten

MICHAEL C. KIM & ASSOCIATES

ATTORNEYS AT LAW

19 South LaSalle Street, Suite 303, Chicago, IL 60603

T: 312.419.4000 - F: 312.419.4008 - www.mkimlaw.com

By now, most, if not all, community association managers and board members, as well as attentive owners, of condominium and common interest community associations are aware that there is a January 1, 2019 deadline to adopt a complaint resolution policy under the Illinois Condominium and Common Interest Community Ombudsperson Act (the “Ombudsperson Act”). Although that deadline is quickly approaching, it does not mean that “the sky is falling” or that associations must hastily adopt a one-size-fits all form policy. Let’s all just take a deep breath and give some thought to the matter to understand what is required and what best suits each individual association.

Many associations may already have procedures under their declaration, bylaws, or rules and regulations pursuant to which owners may file complaints about other owners. Those procedures are typically part of the association’s enforcement policy because they relate to the association addressing an owner’s alleged violation of the declaration, bylaws, or rules and regulations. The complaint resolution policy under the Ombudsperson Act is different than those procedures because it deals with an owner’s complaint about the association, not other owners.

To assist associations in understanding what is required of them, we provide the following questions and answers:

Q: Is my association required to comply?

A: If your association is a condominium or a non-exempt common interest community, then your association must adopt a complaint resolution policy.

An exempt common interest community association is one that is exempt from the provisions of the Illinois Common Interest Community Association Act (the “CICAA”); specifically, such association has either (a) 10 units or less or (b) annual budgeted assessments of $100,000 or less, unless that association voluntarily elects to be covered by the CICAA.

Q: What must the policy include?

A: Section 35 of the Ombudsperson Act provides that the “policy must include: (1) a sample form on which a unit owner may make a complaint to the association; (2) a description ofthe process by which complaints shall be delivered to the association; (3) the association’s timeline and manner of making final determinations in response to a unit owner’s complaint; and (4) a requirement that the final determination made by the association in response to a unit owner’s complaint be: (i) made in writing; (ii) made within 180 days after the association received the unit owner’s original complaint; and(iii) marked clearly and conspicuously as “final”.”

Note that the Ombudsperson has published a sample policy and complaint form on itswebsite, which can be found under the “Publications” tab. The website URL is: https://www.idfpr.com/ccico/.

Q: Is the policy published on the Ombudsperson’s website mandatory?

A: No. The Ombudsperson has published a sample policy that includes the basic requirements under the Ombudsperson Act, as well as additional provisions for consideration. An association may (1) use the sample policy as published or (2) may modify it for their particular association or (3) use their own existing policy (typically a rules enforcement policy) as long as it generally complies with the Ombudsperson Act and provides for a final determination within 180 days that is marked “final”.

Q: Is the complaint form published on the Ombudsperson’s website mandatory?

A: No. Similar to the policy, the complaint form is a sample that the association may use, (either as published or modified for their particular association) or the association can modify/adapt its existing enforcement policy to include the required elements.

Q: Can the board adopt the policy without a unit owner vote?

A: If the policy only establishes a procedure pursuant to which owners can submit complaints about the association to the association, without the imposition of any type of sanction or adverse consequence (such as monetary fines or denial of privileges) to any party, then the board can adopt the policy via a board resolution. In such a situation, no meeting of the unit owners would be required to discuss the policy before the board can adopt it by resolution. However, the board must still adopt the resolution at a duly noticed open board meeting at which a quorum is present. Also, the board must still provide notice of the policy to all owners.

If the policy goes further than simply establishing a procedure for making complaints to the association and also provides for the imposition of some type of sanction or adverse consequence against any party, then the policy is more akin to a rule and the procedure for adopting rules should be followed. In either case, the board can adopt the policy without a unit owner vote.

Q: What happens if the association does not adopt the policy by January 1, 2019?

A: The Ombudsperson Act does not provide for any specific consequence or penalty if the policy is not adopted by the prescribed deadline.

That said, boards should be mindful that they are required under Illinois law to strictly comply with their respective governing statutes. Section 35 of the Illinois Condominium Property Act incorporates the Ombudsperson Act by reference. Section 1-90 of CICAA does the same. Accordingly, the association should adopt the policy regardless of whether or not there are consequences for not doing so.

If your association has not already done so, it must adopt a complaint resolution policy by January 1, 2019 because that what the law requires. However, there is no need to freak out about it. Should you have any questions about what your association should do to comply, please contact us and we will assist you in meeting the January 1, 2019 deadline.

This document has been prepared by Michael C. Kim & Associates for informational purposes only. Michael C. Kim & Associates is a law firm representing community associations. Download a PDF of the article here. Visit us at www.mkimlaw.com.

Best Practices: Capital Planning Guide

Tue, 09 Oct 2018 18:12:38 GMT

By: Sal Sciacca of Chicago Property Services

Now more than ever, associations must spend money wisely and plan ahead to ensure that their reserves are properly funded. Proper reserve funding will allow the board of directors to properly maintain the association and maximize the real estate values of the owners.

Duties and Obligations of Board Members

One of the fundamental obligations of board members is to maintain the common elements. In fact it is their fiduciary duty to maintain the common elements as stated in the law. The common elements consist of physical characteristics that involve regular maintenance as well as capital replacement. The focus of this article is on capital items. Which capital items should be replaced and when should they be replaced are the most important questions to ask. It is not a question of whether the items should be replaced. All capital items have a finite life expectancy.

Reserve Studies are Recommended

One of the questions that board members should ask is who determines what are the capital items, how long will they last and how much will it cost to replace the times. To answer those questions, associations should ideally hire a company that specializes in reserve studies. The reserve study is a document generated by experts that incorporates the life expectancy of all capital items over the span of 30 years into a detailed report. The report will indicate what items need to be replaced, when they need to be replaced, and how much it will cost to replace them. It will also detail how much the association will need to save to fund the capital item replacements on an annual basis. In principle, this sounds like a very sound idea. A reserve study is generally at least $3,000 for a 30 unit community association to over $10,000 for a larger community. replacement.

Reserve studies are recommended

Practically speaking, many associations cannot afford to pay for a reserve study. In Illinois, there are over 40,000 communities and about 30,000 are under 25 units. Most of the associations under 25 units probably don’t have the funding to afford a reserve study. In addition, there are associations that have paid for reserve studies and have not followed the recommended plans. Certainly, this is not recommended but it is the reality for many associations based on their financial constraints.

5 Year Capital Plans are Essential

Regardless of whether an association has a current reserve study or not, it makes the most financial sense that ALL associations large or small, well funded or underfunded, have a 5 year capital plan. The capital plan needs to incorporate the reserve study data if available and create a road map of exactly what capital items will be addressed during which calendar year.

Capital Planning Saves Money

Planning ahead and proactively addressing capital projects actually saves money. This is especially applicable to exterior facade, masonry and tuck pointing issues. Simple masonry issues can easily escalate into major expenditures. Costs associated with exterior masonry issues typically raise exponentially and not linearly. This means that the longer associations hold off with repairs, the more costly the repairs become. It is cheaper to make the capital improvements sooner than later. Given this fact, the best approach for a board is to have a capital plan and to plan ahead. It is always best to plan long term and to keep the homeowners informed of expenditures especially larger ones. As a result, it is quite important for the board of directors to create and maintain a 5 year capital plan.

Capital Planning Cycle

The capital plan is a guide and a road map detailing exactly what capital items will be addressed over the next 5 years. The capital planning process should start in the spring and finish up with the plan that the board will present to the homeowners at the budget approval meeting which is typically held in October or November of each year. Ideally there is a capital committee that reviews the capital plan every year and submits the recommendation to the board each year in September. This allows the board to incorporate the capital planning process into the operational budget planning process that typically starts in September. Once the operating budget and capital plan is approved, the cycle starts all over again in the spring. It is an ongoing process that continues on through the life of the association.

Proactive Planning or Deferred Planning

It is best when associations plan ahead and pre-fund the reserves for capital projects. But what happens when associations don’t plan ahead? The answer is simple. It costs MORE money. The project costs are higher and the board is often forced to pass special assessments and raise more through bank loans. In addition, there is typically more frustration among the homeowners as the amount the homeowners are asked to pay is often larger than the regular monthly assessment amount. It is much cheaper to raise regular assessments and save over time and have the funds necessary for capital projects versus raising funds for capital projects as necessary. The following sections discuss the most common capital funding scenarios.

Funding Options – Reserves Only

In this best case scenario, the association has planned ahead and has built up the reserves sufficiently over the years and has enough to pay for the capital projects as necessary per the capital plan. This is the ideal situation. This means that the assessment levels are sufficient to build long term reserves. The association can move forward with the capital project at any time in this scenario and does not have to wait to collect additional funds. This scenario is the least stressful to the association and to the homeowners.

Funding Options – Reserves and Special Assessments

In this scenario, the association can only partially fund the capital project from reserves and it is necessary to raise additional funds through a special assessment to fully fund the capital project. In this scenario, the association will need to wait until the special assessment funds are collected before proceeding with the project. This scenario would only apply in cases where there is low urgency in the project completion timeline.

Funding Options - Special Assessments Only

In this scenario, the association is severely underfunded and must raise funds completely through a special assessment. This is a viable option only if the project is not urgent in nature and can wait until the special assessment funds are collected. This scenario is the least common and would only apply in cases where there is low urgency in the project completion timeline.

Funding Options – Special Assessments & Bank Loans

In this scenario, which is the least desirable scenario, the association is seriously underfunded and urgently needs funds to complete a capital project. This can be attributed to an unexpected event that has created the need to complete a capital project. Other scenarios include poor planning, deferment of capital projects, and/or under funding of the reserves. There are banks that do lend to community associations which allow associations to access the capital necessary to complete the capital projects in this scenario. In this case, the association applies for a bank loan and at the same time will need to pass a special assessment to cover the cost of the project. The bank loan will allow the association to take on the project fairly quickly as a loan approval usually takes about 6 weeks to complete. Once the loan is approved, the association has the funding available to take on the project. The payback period of the loan is usually over 3 to 5 years. The special assessment is also usually drawn out over the same period of time. This is the most expensive scenario due to borrowing money and it creates the most stress on the association and homeowners.

Communication is Key

In the end, the best approach is to communicate information to owners on a regular basis. By communicating the information, they will know the issues and not be surprised to hear about upcoming capital improvement projects. In addition, if additional funds are needed, the owners will not be surprised by the need to pass a special assessment or obtain a bank loan. The way to do this is by holding regular quarterly board meetings that are officially noticed and distributing meeting minutes to all the homeowners so that information is shared to those who were not able to attend the board meetings.

Summary

In summary, associations are encouraged to plan ahead especially regarding capital expenditures. These are the greatest expenditures that associations will undertake. As a result, it is advised that an association obtain a reserve study if financially affordable and to incorporate this information into a 5 year capital plan. Each year, the association should revise the 5 year plan and every 3-5 years the association should get an update to their reserve study. This proactive approach will result in the lowest amount of operating costs for the association Conversely, associations that wait until the last minute to make capital repairs will often times need to pass special assessments, obtain bank loans, spend greater amounts of money to complete the projects and create the greatest stress and strain on the association and homeowners.

Chicago Property Services

3634 W. Wrightwood, Chicago 60647 - 773-455-0107

ssciacca@chicagopropertyservices.com

www.chicagopropertyservices.com

ACTHA Seminar Recap: How to Deal with Difficult People

Wed, 19 Sep 2018 17:41:52 GMT

There were over 30 attendees at the Thursday, September 13, 2018 Deerfield Library Seminar, "How to Deal with Difficult People".

Presenting the topic, “How to Deal With Difficult People” was Jim Stoller, President of the Building Group, Jim presented strategies on how to manage conflict between the Board members and the unit owners. He presented a packet of resource materials that provided “take home strategies” that will be useful long after this seminar ended.

Some techniques to encourage a positive and productive environment included: 1) Having specific goals timetables and priorities 2) Preventing discussions from becoming personal; 3) Distributing accurate information to all board members and unit owners, 4) Setting up fact finding committees to obtain information 5) Using independent experts to provide technical information.

He gave tips on how to reduce conflict at the Board Meetings with communication with unit owners being the key component. If Boards create and consistently enforce rules and regulations, a board meeting atmosphere of fairness and predictability occurs. If Boards respect their managers, the unit owners see a team effort at Board meetings and harmony at the meetings exist. Involving the unit owners and providing an inviting atmosphere, the unit owners are prone to attend where they feel welcome. A win win situation is inevitable.

When conflict does arise, Jim Stoller provided ways to approach a conflict situation. He stated that knowing the ways people approach a disagreement will assist you to choose the best tactics for resolving conflict. These ways were: 1) Direct aggression 2) Collaborative 3) Compromising 4) Accommodating 5) Avoiding .

The tips that he stated for resolving the Conflict and Handling Difficult People were:

Be Proactive
Listen and Stay Calm
Encourage the people involved to share their perspective
Discuss possible solutions
Be empathetic

The attendees had a chance to share their Board experiences and get tailor made answers to their questions. Boards and unit owners have to take an objective look at all parties’ behavior and seek common ground for a harmonious outcome which will be beneficial for all parties involved.

This task involves time and effort to analyze, diffuse heated discussions, using techniques as Jim Stoller advocated.

The ACHA Board of Directors are grateful for the expertise in the subject matter Jim Stoller provided.

How Does an Association Amend Its Budget?

Mon, 17 Sep 2018 17:39:46 GMT

By: David Hartwell
KEOUGH & MOODY, P.C.

Updated By: Lauren Peddinghaus
Haus Financial Services, LLC.

Question: Last fall our condo board approved the association’s annual budget, which included a special assessment to cover expenses for a painting project. At that time the board was still reviewing bids and, for budget purposes, included the higher-end bid of $120K and special assessment model of $70K in the budget. (The rest of the project was being funded through reserves).

Since the time the budget was approved, the board ultimately accepted a lower bid of $70K and special assessment model of $45K.

Is it appropriate to amend the budget with the new figures? What are the ramifications of changing the budget once it’s approved?

Answer: If a budget contains a line item for a capital improvement project to be started in that year, then a special assessment would not be necessary. However, if the board sought funding for a project that was not previously budgeted for, then a special assessment would be necessary and must be passed consistent with Section 18(a)(8) of the Illinois Condominium Property Act (“Act”).

If the cost of the painting project was part of the budget, then theoretically under this set of facts, there would exist an operating surplus at the end of the year due to the significant disparity of the lower project cost. If this occurs, the board should then consult the declaration to determine how operating budget surpluses are to be addressed for that association.

Depending upon the fiscal year of the association, I would likely recommend that the board consider amending its budget to reflect the actual cost of the painting project. The board should also consult with its accountant during this process. Alternatively, if the painting project is being funded from a special assessment, the board should first look to the special assessment resolution to determine if it only specified the painting project or also addressed other maintenance, repair and replacement of common elements. If the latter is true, the additional sums collected could be used for other contemplated projects and the board would need to vote on the additional expenditures at an open meeting; otherwise, the special assessment should be amended to reflect the actual cost of the project. The Act allows owners to petition for a vote on any adopted or special assessment if it would result in the sum of all assessments payable in the current year exceeding 115% of the total of all assessments payable in the prior year. When calculating the threshold, the amount need only exceed 115% of all assessments issued in the prior year.

For example, If an association had a $98,000 annual budget in 2017 as well as a $5,000 special assessment, the total of the annual assessments would be $103,000 for 2017. If the 2018 annual budget is $100,000 and a $16,000 special is considered, the special would have to exceed $18,450 in order to meet the threshold (115% of the $103, 000 total assessed in 2017).

As set forth in 18(a)(6) of the Illinois Condominium Property Act, the board must send out the new amended budget at least 25 days prior to the date of the meeting at which the board intends on approving it.

Maintenance of Common Elements

Wed, 12 Sep 2018 17:36:37 GMT

By: Maya Ziv-El of Keough & Moody, P.C.

Common Elements-What are they and why should they be maintained?

One of the primary responsibilities of a Board of Directors is maintaining the common elements. Every Association defines a common element a little differently, but generally speaking, it is any part of the Association that is beyond the unit itself and not otherwise defined as a limited common element. Common elements can include roofs, exterior walls, landscape, utility areas, hallways, among other items.

Maintaining the common elements is important on many levels. It is important at minimum to maintain the property value, and may even increase the resale value of your unit. It is also important to maintain the aesthetics of the property as well as the integrity and safety of the structure. If common elements are not being maintained properly, not only does the Association suffer through the disrepair, but the situation may lead to loss of revenue of assessments, costly lawsuits, and an unhappy community overall.

The Costs of Failure to Maintain the Common Elements

In June of 2012, the Illinois Appellate Court held that in a lawsuit to collect common expenses from an owner (through seeking an order for possession,) the owner could raise as a defense to not paying assessments the issue of the Association’s failure to maintain common elements. Spanish Court Two Condominium Ass’n v. Carlson, No. 2-11-0473 (Ill. App. Ct., June 27, 2012). In practical terms, this means that in certain instances an owner can lawfully withhold assessments if the Association is not maintaining the common elements. This recent law makes it more important than ever for an Association to make maintenance of the common elements a top priority.

Besides the potential for lost assessment income, a Board’s failure to maintain common elements can also open up the Association to various forms of liability. For example, a failure could result in damage to an Owner’s unit, or maybe even cause injury to an owner because of unsafe conditions. Depending on the situation, the Association may find itself in court defending against claims for negligence, injury, breach of fiduciary duty, etc.

An Association may also have to defend against a lawsuit for breach of contract. Besides being outlined in the Illinois Condominium Property Act, the duty to maintain common elements is also usually found in the Association’s governing documents. Therefore, an owner may attempt to bring an action against the Association for breaching the governing documents (the “contract”) by failing to maintain the common elements.

So What Should We Do?

There are no winners when common elements are not properly maintained. The owners can suffer because of maintenance issues that may affect individual units and lost value of their units. Associations suffer collectively because of the costly repercussions of owners withholding assessments, defending expensive lawsuits, risking unsafe structures, and overall disgruntled members.

A concerned member can start by attending a board meeting, contacting the manager, or even running for a board position. An Association should begin by ensuring that its management company has the knowledge and foresight to keep the property at its best.

*Also contributing Rosario Spaccaferro of Keough & Moody, P.C., 1250 E. Diehl Rd., Naperville 60563 630-245-5068 ^ www.kmlegal.com

Featured Association: Oak Grove Condominiums

Tue, 28 Aug 2018 19:35:31 GMT

An Interview with Oak Grove Condominiums

ACTHA: Give a brief description of your subdivision, location, size, type, method of governance, self-managed or Management Company?

We are a condominium complex in Midlothian, IL. about 30 miles south of Chicago. We have 12 buildings with 144 units total. We are self-managed.

ACTHA: Give a description of your Association Board; number of directors, master, sub-association.

We have 5 Board members no master or sub-association.

ACTHA: What does your Board do that makes your Association function smoothly? Name three factors.

Our Board runs smoothly because all of the board members want to make our complex a great place to live. Even if there may be a difference of opinion everyone is respectful and hears out any ideas. We have set meetings 4 times a year already scheduled by our November voter’s meeting, so all board members are aware of the date well in advance. The board has the meeting at a local pizza place on half price day, so it is economical and provides a more relaxed environment to hold meetings over dinner.

ACTHA: What have you implemented at your Board Meetings that works well during Homeowner Sessions?

For a long time, our Board meetings had a lot of interruptions and questions while the Board was discussing business. Once we were all on board with reminding owners this is a meeting for the Board to discuss business and we are very happy to take questions after the meeting we had a much smoother meeting. Once owners knew we wanted to hear what they had to say, and we would answer questions at the end everyone was happy with that. We always have a table set up as you walk in to sign in the meeting, we have last meeting’s minutes and the nights agenda set out. We also found serving pizza during the board meeting rather then after gave the owners something to do while they listened to Board discussions. The Board not only answers any owner questions, but 2 or 3 Board members usually stay after most people have left and chat with owners still there to get a feel of how they things are going.

ACTHA: What are your most recent accomplishments? Projects for example.

Our Board has been busy! In the last few years we have put on 96 new balconies. We have 10 new roofs and gutters with the last two roofs going on this fall. We had to repair a huge sink hole between two of our buildings that cost as much as 3 or 4 roofs! We are also FHA approved and that was a lot of work.

ACTHA: What are your challenges in your community you as a Board deal with?

Our biggest challenge right now is the age of our buildings. They were built in 1974 and converted to condominiums in 1981. We have the best maintenance person and without him, it would be very difficult to keep up with repairs. We worked very hard the last few years to get the bones of the buildings sound, now we are taking the piping repairs and age-related problems as they come up. The challenges in the community mostly stem from trying to get people that do not live in the complex to stay off the property. While we want to be good neighbors, we have a lot of people in the community walking through our property to get to businesses on the other side of us. They cut through our property and throw trash and break our fence regularly. Dog owners on and off the property are a big issue also. We have many dog owners that do not clean up after their dogs and cause a mess.

ACTHA: What do you do for community “buy in”?

We do have a “buy in”. We call it a Capital Contribution and it has been in effect since 1993. We explain to the buys that they have a new balcony and new roof that all owners have paid for and they will have the benefit of all the improvements made.

ACTHA: Tell us about the most rewarding part of your volunteer run.

I think in talking to Board members the most rewarding part of the job is keeping our complex a wonderful place to live and being involved in how that gets done.

ACTHA: What advice would you give new Board members?

To a new Board member, I would be honest and tell them it’s a lot of work for which many homeowners are not very grateful. The upside is they are helping maintain the place they live and have a vested interest in seeing do well. Their opinion matters! Read the By-Laws and Rules & Regulations and be familiar with them. If you listen to an owner and they feel heard that is a great start on resolving an issue.

ACTHA: Who are your most valuable resources? Attorney, Manager, Accountant, Management Company, Community officials, Police, Fire Depts.

Our most valuable resources are many. Our maintenance person can do just about anything. Our attorneys Kovitz, Shifrin & Nesbit always keep us on the right path, we are in contact with them a lot. We have a great accountant that we depend on for Quarterly statements and tax work.

ACTHA: How do you foster harmonious Board relations?

I really believe when someone serves on the Board it is to keep our community a great place to live and protect their investment along with all the other owners’ investments. When everyone has the same goal in mind it makes it easier to work as a team. We all have different opinions and ways to do things, but with the same goal.

Who is the Ombudsperson and what does she do?

Tue, 28 Aug 2018 15:40:48 GMT

Adrienne Levatino was appointed by Kreg Allison , the Director of the Division of Real Estate for the Department of Financial and Professional Regulation, as the Condominium and Common Interest Community Ombudsperson as of January 1, 2017.

The mission of the CCIC Ombudsperson is to provide information to unit owners, condominium and common interest community associations and their respective boards in order that they all may better understand their rights and obligations under the Condominium Property Act and the Common Interest Community Association Act.

The Role of the Ombudsperson is under the Division of Real Estate for the Department of Financial and Professional Regulation .

What does the CCIC Ombudsperson do?

The role is to educate unit owners , associations, and their respective boards. There are two publications available for this purpose provided on the Department of Financial and Professional Regulation’s website.

The other role is to respond to relevant inquiries by providing educational materials and directing citizens to relevant resources.

What does the CCIC Ombudsperson not do?

The Ombudsperson does not provide legal advice or advocate services; The Ombudsperson does not enforce any laws to regulations, including the regulation of registration of profession, associations, companies, or people. The Ombudsperson does not hear, mediate, or resolve issues between unit owners and associations, complaints of discrimination, complaints about community association managers also known as CAMS.

What has been happening ?

During the period beginning January 1, 2017 and ending June 11, 2018, the Ombudsperson received 140 written inquiries. Of the persons submitting inquiries, 118 provided his or her address and 136 identified their “status” (attorney, board member, unit owner or “other”). The vast majority of those submitting inquiries (83%) were unit owners, while only 13 (approximately 9%) were individuals who identified themselves as board members. Among those who submitted written inquiries, only 118 (84%) identified the municipality within which they resided. Of these, 39 (33%) lived in an association within the City of Chicago.

The Ombudsperson was able to identify a specific subject for 128 inquiries. More than onethird of the inquiries raised governance issues—whether a board provided adequate notice of meetings, whether the board improperly conducted business in closed session and other claimed instances of lack of adherence to the Condominium Property Act or an association’s governance documents, for instance. Ten percent of the inquiries, most of which were received shortly following the effective date of the Act, questioned whether or when their association needed to have a written complaint process or whether or when associations were required to register with the Department. The Ombudsperson received nine inquiries concerning deconversion, nine questions relating to the imposition or collection of regular or special assessments, eight inquiries regarding the maintenance or availability of association records and eight questions related to the adoption or enforcement of rules.

The Ombudsperson role is not a full-time position and the Ombudsperson also serves as the Associate General Counsel in the Department’s Division of Real Estate. The Ombudspersonhas no additional staff. Approximately thirty-five percent of her time is devoted to serving as Ombudsperson.

The ombudsperson Adrienne M .Levatino’s office is located at 100 West Randolph, 9th floor, Chicago, Ilinois, 6060.1

The website is http://www.odfpr.com/CCICO/ You may reach her at : 1 (888) 473-4858.

The Roles of Officers and Directors

Tue, 28 Aug 2018 15:37:52 GMT

By: James A. Slowikowski, Dickler, Kahn, Slowikowski & Zavell, Ltd.

All condominium, master, and community associations have directors and officers, but the roles of directors versus officers are often misunderstood. The officers, while also directors, have distinct, additional functions and duties. Many times there is a mistaken belief that the officers have some decision making authority, but they do not.

The directors are elected by the association membership. The board of directors is responsible for the operation and management of the association and all of the property. The directors, as a board, make all of the decisions necessary to operate the association. All decisions must be made by the board at an open board meeting. When a quorum of the board is present, the decisions are made by the vote of a majority of the board members present. Generally, no single director has any legal authority to make decisions for the association. These decisions must be made by the board. In some instances, the board may authorize and direct certain officers or directors, or management, to take a specific action, but the board must have first approved the authorization and direction at the board meeting.

The officers of the association are generally elected by the directors, from among the board of directors. The officers do not make decisions, that is the function of the board. The Condominium Property Act and the Common Interest Community Association Act require that each association must have a president, a secretary, and a treasurer. Some bylaws may provide for other officers, such as a vice-president or an assistant secretary. The officers have specific functions which are identified in the Acts and in the bylaws.

Maul Paving/Sealcoating/Concrete has been named to Pavement Maintenance and Reconstruction’s 2018 Top Contractors List

Mon, 27 Aug 2018 15:36:21 GMT

PLAINFIELD, IL – Pavement Maintenance & Reconstruction, the leading magazine in the pavement industry with over 30 years of publishing experience, has chosen Maul Paving/Sealcoating/Concrete as one of the nation’s Top Contractors of 2018.

For over 30 years, Maul has provided paving, concrete, and sealcoating services to businesses of all sizes: from national to local retailers, and industrial to commercial properties. Their unique mix of expertise and grit makes a strong impression. Respect for the work and the client is the foundation of everything they do. As a 2018 Top Contractor, Maul was chosen by the Pavement Maintenance & Reconstruction editorial staff for meeting a high set of standards.

“As a team, we always look forward to announcing the Top Contractors of the year,” stated Amy Schwandt, publisher of Pavement Maintenance & Reconstruction magazine. “The industry segmented lists showcase companies that have put in a lot of hard work to be where they are today. Congratulations to this year’s winners!”

Allan Heydorn, editor of Pavement Maintenance & Reconstruction commented, “It is a great honor to be awarded the recognition of Top Contractor in the nation. We received many great entries, all of which show impressive growth moving forward in the industry.”

“With over 30 years of expertise under our belt ourselves, it sure feels good to be named. Since that summer of ’86, we’ve been working to give people’s ground the Respect it deserves,” remarks Maul President Eric Maul. “We didn’t get into this business for awards. But going forward, this great honor is going to strengthen our resolve for Respect. Here’s to sealing the deal for 30 more years.”

About Maul Paving/Sealcoating/Concrete

For over 30 years, Maul has provided paving, concrete, and sealcoating services to businesses of all sizes: from national to local retailers, and industrial to commercial properties, no job is too big or small. Your parking lot is your businesses’ first impression, and Maul makes it last. It’s time your ground gets the Respect it deserves. For more information visit www.maulasphalt.com.

About Pavement Maintenance and Reconstruction’s 2018 Top Contractors List

Additional information on Top Contractors can be found on the 2018 Pavement Top Contractor landing page of ForConstructionPros.com. Construction professionals can follow pavement news via Twitter and Facebook.

Senior Citizen Homestead Exemption

Mon, 02 Jul 2018 19:44:44 GMT

According to a press release from Cook County Treasurer Maria Pappas, as many as 31,000 senior citizens could save a total of $43 million on their property tax bills due August 1, 2018, by applying for exemptions they received in the previous year.

Those homeowners received the Senior Citizen Homestead Exemption last year but have not reapplied, according to an estimate by the Treasurer's Office. Of those seniors, roughly 21,000 received the Senior Freeze Exemption last year but also have not reapplied, Pappas added.

To verify tax exemptions going back four years, visit cookcountytreasurer.com and:

Select the purple box, which says "Your Property Tax Overview"
Enter your address or Property Index Number (PIN)
Check the results under "Have You Received Your Exemptions in These Tax Years?"

State law requires that senior citizens reapply every year for these exemptions, which are available to homeowners who are 65 years of age or older. The Senior Freeze, which prevents increases in the taxable value of a home, is limited to seniors with annual household incomes of $65,000 or less. Some of the homes may no longer be eligible for the exemptions.

Applications for tax exemptions are available from the Cook County Assessor's Office. If the Assessor's Office grants the application, it will issue an adjusted bill for the Second Installment of Tax Year 2017, due August 1, 2018.

July 11 Seminar Provides Attendees with Valuable Information on How to Build Community

Sun, 01 Jul 2018 19:44:24 GMT

Patricia Bialek , Vice President of First Service Residential , was the speaker on July 11, 2018

at the Deerfield Public Library, Deerfield , Illinois. The topic was Building a Better Community ,

How to End Apathy? Upon doing research , Patricia stated that this topic has never been dealt

with before in a seminar by any organization in the condo world.

The interested crowd was given a myriad of ideas on how to “pep up” the community. A power

point presentation accompanied her energetic presentation.

Her main points included:

Community Apathy is a bad habit.
Community members need a “push cultivated by the Association leaders.
Survey the community.
Employ the community website.
Newsletters and establishment of website with unit owners contributions.
Constant Communications with unit owners.
Establish Committees and Volunteers after points of interest are known through the results of the survey.
Tap into the community “beavers”: Those who wish to contribute time.
Listen to the suggestions and value each contribution.
Have picnics, pool get togethers organized by the committees.
Tap into the community interests. Organize clubs of interest. Start traditions.
Use the Community Clubhouse for social purposes as well as Association Meetings.

She gave not only suggestions but concrete examples on how to implement the suggestions.

Another resource was community businesses, realtors, and local, state and Federal Officials and involvement into the ACTHA and CAI organizations.

The attendees walked away energized and eager to implement the ideas Patricia Bialek offered.

In conclusion one would summarize the plan for community building . Actions bring results. Involvement of all members of the Community is the formula.

Reaching out to the community is the starting point of success. Using the talents of the community and seeking to value the contributions of the volunteers causes a cycle of involvement. Who wouldn’t want to try out these ideas?

The ACTHA Board of Directors wants to publicly thank Patricia Bialek for her contributions to ACTHA .

Association of the Month Interview: Tahoe Village Condominium Association

Thu, 03 May 2018 19:43:31 GMT

ACTHA wants to give all of their associations the chance to learn more about one another, so this month we interviewed Tahoe Village Condominium Association in Wheeling!

ACTHA: Give a brief description of your subdivision, location, size, type, method of governance, self-managed or Management Company?

Tahoe Village: We are Tahoe Village Condominium Association located ½ mile south of Dundee Rd. off of Buffalo Grove Rd. in Wheeling, IL. We are a 435 unit townhome community that is self-managed by the Board of Directors.

ACTHA: Give a description of your Association Board; number of directors, master, sub-association.

Tahoe Village: The TVCA BOD is made up of 7 Directors including President, Vice President-Internal Affairs, Vice President-Exterior Modifications, Treasurer, Secretary, Sergeant-at-Arms and Director-Special Projects.

ACTHA: What does your Board do that makes your Association function smoothly? Name three factors.

Village Tahoe:

1)       The Board of Directors treats each homeowner with respect and we are comprehensively consistent with how we handle problems and resolve issues with all of them.
2)       We meticulously select vendors and outside contractors and negotiate long term contracts to ensure quality service and advantageous pricing.
3)       We have a dedicated, professional and efficient Maintenance Staff, and an excellent Office Manager who makes sure all homeowner’s questions are answered to their satisfaction and all paperwork, correspondence and communication is timely and thorough.

ACTHA: What have you implemented at your Board Meetings that works well during Homeowner Sessions?

Tahoe Village: Our meetings are well organized and orderly. If a homeowner has a question or subject they would like to discuss at a meeting, we ask them to fill out a form with their name and topic/question. At one point during the meeting we have a “Homeowner’s Forum”, where each homeowner that completed a form can present their issue to the BOD for discussion.

ACTHA: What are your most recent accomplishments? Projects for example.

Tahoe Village: Our current capital project is a complete roof tear-off and new roof application for all 453 units in Tahoe. This is being funded completely with reserves and there is no need for a special assessment or loan. Tahoe Village is an ACTHA Certified Learn & Lead Association, whereby all Directors are Certified Association Community Leaders. We are also a certified Wheeling Crime Free Multi-Housing community, as well as voted “Best Community” for National Night Out 2009, 2010 and for best theme in 2011-2016.

ACTHA: What are your challenges in your community you as a Board deal with?

Tahoe Village: Tahoe Village is a “melting-pot”, with a multi-racial, multi-ethnic and multi-cultural homeowner population from all over the world. While diversity brings a healthy mixture of customs, music, ideas and practices, it can often times be challenging in an environment where we strive for continuity and consistency in both exterior appearance of our units and grounds, as well as the rules and regulations that govern unit owners’ behavior. Our challenge is walking the thin line between being homeowner friendly, yet strict and stringent when it comes to exterior home modifications and adherence to association governing documents and rules.

ACTHA: What do you do for community “buy in”?

Village Tahoe: Tahoe has two major social events during the year which give the opportunity for homeowners to come out, mingle with their neighbors and get to know each other. In early August we sponsor the TVCA National Night Out, which last year saw some 300 residents attend an evening of music, food, games and comradery. During National Night Out, the Board stresses calling 911-Emergency for anyone who sees unknown strangers or witnesses anything unusual that could result in illegal activity in our community. We offer raffle prizes, fun for the kids, a DJ, pizza, popcorn and ice cream! Then, at the end of October, we have our annual Halloweenfest with prizes for best costume, music, games, pizza and candy for all. We also utilize this opportunity to invite an officer from the Wheeling Police Department to talk to the kids about door to door trick or treat security and candy safety. These events are co-sponsored by our thankful and loyal vendors!

ACTHA: Name a funny incident that occurred to your Board during a Board Meeting.

Village Tahoe: A homeowner that was caught sleeping and snoring loudly during a meeting, had a “rude awakening” by the sound of the President’s gavel!

ACTHA: Tell us about the most rewarding part of your volunteer run.

Village Tahoe: Constantly working on behalf of each and every homeowner, to improve quality of life, value for our assessment dollar and overall pride of ownership in Tahoe Village.

ACTHA: What advice would you give new Board members?

Village Tahoe: Don’t take anything PERSONALLY!

ACTHA: Who are your most valuable resources? Attorney, Manager, Accountant, Management Company, Community officials, Police, Fire Depts.

Village Tahoe: Yes--all of the above (minus the Management Company)--as well as our vendors, in-house maintenance staff, board members, concerned residents….and of course…..ACTHA J

ACTHA: How do you foster harmonious Board relations?

Village Tahoe: Each Director is always allowed to speak their mind and we don’t judge each other--everyone’s opinion matters and is taken seriously. In the end, after everything is hashed out--when we decide to take action…it’s as a Board--we present a united front.

Management Focus: Managing Board Conflict

Wed, 02 May 2018 19:42:37 GMT

By Jim Stoller, President-The Building Group

Association board members often disagree. As with any type of board, conflicts that escalate can interfere with the ability to function effectively. Just because people cannot agree on all issues, conflicts should never be allowed to get to the point where they stop critical decision making, adversely affect building systems or an owner's property values.

Not all conflict is bad. Airing disagreements is one way to get various viewpoints on the table, as well as, to examine issues that may otherwise be overlooked and to consider new ways of approaching problems.

However, when a disagreement turns into a major battle, the productiveness of a board can be destroyed. A conflict can develop to the point where board members become divided-into camps in which each side attempts not only to stop decision making, but to undermine the other side as well. Like a negative political campaign, the attacks often get personal and distort the real issues. Such a situation wastes the time and energy of the board. lt drives good board members to resign and discourages other unit owners from becoming involved for fear of getting caught in fruitless battles.

A quarrelsome board can also keep the management company from best serving the needs of the property. Consequently, when management encounters conflict, they must try to minimize it and continue to provide a high level of service. Creating an ahnosphere in which owners can reach a consensus is absolutely essential to the process of good management and the ultimate goal of maximizing property values.

Techniques to encourage a positive, productive environment include:

Establishing specific goals, timetables and priorities;
Preventing discussions from becoming personal;
Distributing accurate information to all board members and unit owners;
Setting up fact finding committees to obtain information;
Using independent experts to provide technical information.

Goals and priorities

The first job when board members are at odds with each other is to agree upon a specific set of goals and priorities. Board members should list their goals for the association and then vote on them. If major projects are being planned, or board members want to ensure general support, the vote can include all association owners.

Never let conflicts get personal

It is easy to get carried away in moments of dispute and bring up personalities and irrelevant information. The more disciplined and business like discussions are at board meetings, the less likely they'Il dissolve into mudslinging about things that are beside the point. If the foyer needs redecorating, keep the discussion to budgets and timetables and choosing a committee, not commentary on who does or doesn't have good decorating taste

At board meetings, if personal attacks are made (The fire lane is always blocked by your old beater when you unload groceries!), the board president or management company representative must step in and steer the conversation back to the critical issue (The fire lane must always been kept clear for emergency vehicles.). If the parties cannot stick to the real topic at hand, the conversation should be ended. An excellent safeguard is to make all parties aware that personal attacks are not allowed and cannot be used at meetings or in any material distributed to owners.

Distribute accurate information

Never withhold data! Two great sources of contention within a group are ignorance and exclusion. If all board members, and under many circumstances, owners in general are not well informed about a specific matter, speculation and poor decision making can follow.

Furthermore, if any individual feels that they do not have access to the same information as others, they may get the impression that there is an inner group, which knows something that it does not want others to know. Worse, they may conclude that someone on the inside is getting a kick back for using a particular vendor or benefiting in other ways. Make complete and honest information available to everyone so that no one can claim that they have been excluded.

Fact-finding

One way to encourage a genuine sense of collaboration between board members, unit owners and the management company is to create committees to investigate specific issues. For example, when a lobby needs to be redone, a committee can gather information on various designers and prices and present it to the board so that everyone has the same material when making a decision.

Bring in the experts

Board members are very often not qualified to evaluate many aspects of property management, be it selecting a new roof or replacing a boiler. It is therefore important to figure out when to bring in technical specialists, even though this may involve an added expense. Paying a consulting fee today cart often save much more money down the road if an engineer or accountant can provide useful guidance.

Many times I have heard a board member suggest replacing an old item with the identical product, not realizing that advances in technology often provide better and less expensive alternatives.

Case in point

A loft building had been poorly renovated several years earlier. The developer never properly finished the project and many items still needed attention when the first owners moved in. However, the initial boards and the first management company failed to tackle these problems, which eventually worsened to the point that the city cited the property for code violations.

The building suffered from the classic board dispute. A few members serving on the association board took it upon themselves to conduct their own investigation of the problems left behind by the developer. They put together their own repair budget and then submitted it to the rest of the board for approval.

Because the proposal was regarded as the work of only a few, other board members who had not been involved in the process disputed the needs and costs. Word got out to unit owners that one group was attempting to foist their plans on everyone, and the issue exploded throughout the building. At the next board election, the members who had worked hard on this proposal were voted off the board. Ironically, the proposal they had done was sensible and its recommendations ultimately were similar to those used later on.

It took close to a year after this fateful election to get the property back on track. First, management worked with the board to create both a needs list and a wish list. Management also brought in engineers to review all building systems. Big issues were broken down into smaller more manageable topics and committees were formed to explore various options. All items on these lists were priced and prioritized. A finance committee was also set up to make recommendations on loans or special assessments. Progress reports and other information were distributed, as they became available to every unit owner. Thus, no owner could claim they did not know what was happening at their property.

Since it was determined a special assessment was required lo pay for the work; all owners had to disclose if they were in the process of selling their unit. The Board asked unit owners to vote on priorities and later to approve the special assessment, which passed with little objection.

Making decisions and running an Association does not have to be stressful. Keep a clear set of goals that the board has agreed on, encourage all parties to get involved, or at least make information readily available, and never let issues get personal. While conflicts are inevitable, use them positively to create board and ownership consensus.

The Do’s and Don’ts of Protecting Association Funds: Reserve Strategies and Investment Planning

Tue, 01 May 2018 19:42:03 GMT

ACTHA Seminar March 22, 2018

Nearly 30 attendees were present at The Do’s and Don’ts of Protecting Association Funds and Reserve Strategies and Investment Planning Seminar held at the Deerﬁeld Public Library , Deerﬁeld, Illinois on Thursday, March 22, 2018.

The speakers for the evening were Brad Schneider of Condo CPA, Elmhurst, Illinois who spoke on the Do’s and Don’ts of Protecting Association Funds. Brad presented how to protect Association Funds using best practices and how to avoid risk situations. Using a power point presentation, he educated attendees on ways to insure your Association provides safe and sensible habits and best accounting practices in handling Association’s funds.

Anthony Pacione, ﬁnancial advisor for Edward Jones, in Schaumburg, Illinois presented the topic Reserve Strategies and Investment Planning. He presented resources to provide and meet long term ﬁnancial goals through diversiﬁcation and laddering techniques of your Association’s CD portfolio. He presented a unique program whereby Edward Jones provides a service that oﬀers ﬁnancial solutions tailor made to your Association providing long term investing while managing the risk factors as well.

With ample time to address questions, all attendees left with knowledge and the tools to assure their Association unit owners best practices in handling their corporation’s assets.

ACTHA attendees travelled as far as Tinley Park, Rockford, Evanston, Barrington, Arlington Heights, Orland Park, and Chicago to attend this Seminar.

Seminars are planned every month in the North Suburbs with topics of importance to Homeowners and Association Board Members. These seminars are free to ACTHA members and registration is available on the ACTHA website. Look for seminar topics on our Events Calendar for the coming months.

We welcome newcomers from all areas of the Metropolitan Chicagoland area.

2017 Legislative Roundup Affecting Condominium and Common Interest Community Associations

Mon, 25 Sep 2017 18:02:52 GMT

By: Michael C. Kim
Michael C. Kim & Associates
ACTHA Legislative Committee Co-Chair
Chicago

The 2017 legislative session produced only a handful of new laws that affected community associations (condominium, master and common interest community associations). All bills were signed into law by the Governor and, except for one, take effect on January 1, 2018.

A summary of the bills (and applicable Section references to the Condo Act or CICA Act) is set forth below:

HOUSE BILL 189 (now Public Act 100-0292, effective January 1, 2018) amends the Condominium Property Act (“Condo Act”) and the Common Interest Community Association Act (“CICA Act”) as follows:

BOTH CONDO AND CIC’s

1. Mortgagee/lienholder deemed consent. If the declaration/by-laws or other governing documents require approval of a mortgagee or lienholder of record, and if that mortgagee/lienholder receives a request to approve or consent to an amendment to those governing documents, then that mortgagee/lienholder shall be deemed to have approved or consented to the request unless it delivers a negative response to the requesting party within 60 days after mailing of the request by certified mail.
(Condo Act Sec. 27(a)(ii); CICA Act Sec. 1-20(e))

2. Requirement to use GAAP. An association subject to either the CICA Act or the Condo Act and having 100 or more units, must use generally accepted accounting principles when fulfilling any accounting obligations under the CICA Act or Condo Act, as the case may be.
(Condo Act Sec. 18.10; CICA Act Sec. 1-45(i))

CONDOS ONLY

1. Handling Year End Surplus/Deficits. If at the end of its fiscal year, the association has approved an end-of-year fiscal audit (if applicable), and if the fiscal year ended with a surplus of funds over actual expenses (including budgeted reserve fund contributions), then “to the extent that there are not any contrary provisions” in the association’s declaration/bylaws, the board of directors (managers) has the authority in its discretion to dispose of the surplus in one or more of the following ways;

(i) contribute the surplus to the reserve fund, (ii) return the surplus to the unit owners as a credit against the remaining monthly assessments for the current fiscal year; (iii) return the surplus to the unit owners in the form of a direct payment to them; or (iv) maintain the funds in the operating account, in which case the funds shall be applied as a credit when calculating the following year’s annual budget. If the fiscal year ends in a deficit, then “to the extent that there are not any contrary provisions” in the association’s declaration/by-laws, the board has the authority in its discretion to address the deficit by incorporating it into the following years’ annual budget. However, if 20% of the unit owners deliver a petition objecting to the board’s action within 30 days after notice to the unit owners of such action, then the board must call a unit owner’s meeting within 30 days of the date of delivery of petition and at that meeting, the unit owners may vote to select “a different option than the option selected by the board.” Unless a majority of the total votes of unit owners are cast at the meeting to reject the board’s selection and select a different option, the board’s decision is ratified (Condo Act Sec. 9c(5))

2. Sale of entire condo property. A unit owner who does not vote in favor of such a sale and files a written objection within 20 days after the meeting at which the sale was approved, shall be entitled to receive from the sale proceeds an equivalent to the greater of (i) the value of his/her interest as determined by an appraisal (less the amount of any unpaid assessments or charges due and owing from that owner) or (ii) the outstanding balance of any bona fide debt secured by that owner’s interest which debt was incurred by the owner in the purchase or refinancing of the unit owner’s interest (less the amount of any unpaid assessments or charges due from that owner). The objecting owner is also entitled to receive from the sale proceeds, reimbursement for “reasonable relocation costs, determined in the same manner as under the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and any implementing regulations under the Act. This change applies to any sale that is pending or commenced on or after January 1, 2018. (Condo Act Sec. 15(a) and (b))

3. Petition for unit owners’ referendum vote on special assessment or budget increase. The time period for delivery of a petition to the board of directors (managers) is increased from 14 to 21 days. (Condo Act Sec. 18(a)(8)(i))

4. Petition for unit owners’ referendum vote on board of directors’ (managers) adoption of rule for absentee ballot voting to elect directors. The time period to delivery of a petition to the board is increased from 14 to 30 days. (Condo Act Sec. 18(b)(9)C))

5. Petition for unit owners’ referendum vote on intention to contract with director/director’s immediate family. The time period for delivery of a petition to the board is increased from 20 to 30 days. (Condo Act Sec. 18(a)(16))

6. Unit Owners list. Under Section 19 of the Condo Act, a current list of unit owners to be provided to a requesting owner must include e-mail addresses and telephone numbers. (Condo Act Sec. 19(a)(7))

7. Books and records available to Unit Owners under Section 19 of the Condo Act. Under Section 19 of the Condo Act, a unit owner’s right to inspect/copy books and records is not limited to “books and records of account” but now includes all books and records of the association, including all account records. No “proper purpose” need be given by an owner to inspect or copy contracts, leases or other agreements and the association’s other books and records to the requesting unit owner is reduced from 30 days to 10 “business” days. Failure to make the requested record available within 10 business days shall be deemed a denial by the board. A unit owner’s right to inspect and copy the unit owners’ list (names, addresses, e-mail address, phone numbers and weighted vote) and ballots and proxies for matters voted on by the membership must be for a purpose “that relates to the association” and not for a “commercial purpose” (defined as use for “sale, resale, or solicitation ro advertisement for sales or services”). The association or its management agent “may require the member to certify in writing that the information contained in the records shall not be used by the member for any commercial purpose or for any purpose that does not relate to the association” and for a false certification, the board may impose a fine on the violating unit owner (after notice and opportunity for a hearing). Finally, the charge back of actual costs of retrieving, making available or copying the records, to a requesting unit owner is not mandatory but only permissive. (Condo Act Sec. 19(a)(9), (d-5), (e), and (f))

8. Combinations of units. It is now made clear that if there is a combination of units (being reflected in a amended plat of survey), then the exclusive use of adjacent common elements to and by that combined unit is expressly permitted. Such exclusive use would be as a limited common element, provided that area in question is “not necessary or practical for use by the owners of any other units.” Such creation of a limited common element does not require unanimous consent of all unit owners or any other percentage requirements in the declaration/by-laws or any amendment under the Condo Act apart from Section 31. (Condo Act Sec. 31(a), (e) and (f))

HOUSE BILL 3359 (now Public Act 100-0173, effective January 1, 2018) amends the Illinois Code of Civil Procedure (and other statutes) to change references to “forcible entry and detainer actions” to “eviction actions” (which is the more commonly understood terminology). The term “eviction” replaces “terminate the right of possession” and “eviction order” replaces “judgment for possession”. In addition, a standardized residential eviction order form is to be determined by the Illinois Supreme Court for statewide use. Overall, no substantive changes are made.

HOUSE BILL 3855 (now Public Act 100-0201, effective August 18, 2017) amends the Community Association Manager Licensing and Disciplinary Act and the Common Interest Community Association Act by making various stylistic changes and corrections, but no substantive changes.

SENATE BILL 885 (now Public Act 100-0416, effective January 1, 2018) creates a new “Installment Sales Contract Act” , and changes the Condominium Property Act’s reference to “installment contract” to “installment sales contract” (as defined in the new statute); those sections of the Condominium Property Act deal with the ability of contract purchasers to be counted toward a quorum for membership meetings, voting in election of board members and serving on the board of directors (manager), unless such rights are reserved in writing by the contract seller. This change affects condominium and master associations. To determine whether an installment contract qualifies for this treatment, the association needs to check the definition of “installment sales contract” under that new Installment Sales Contract Act. (Condo Act Sec. 18(b)(11) and 18.5(e)(5))

The results (especially in House Bill 189) are quite a mixture of good, bad and mediocre, and obviously a curious sausage produced by the efforts of the House Judiciary Committee.

Upcoming Legislative Dates

Election Day: Nov. 7

Veto Session: Oct. 24-26 and Nov. 7-9

New Illinois Condo Owner’s Handbook Now Available Online

Mon, 25 Sep 2017 17:58:33 GMT

Easy-to-read guide available at http://www.idfpr.com/CCICO

Illinois condominium owners now have a comprehensive, educational guide at their fingertips thanks to a recently compiled handbook by the Illinois Condominium and Common Interest Community (CCIC) Ombudsperson, Adrienne Levatino. The Condo Unit Owner’s Rights and Responsibilities Handbook provides an unbiased, objective look at Illinois law governing condominium unit owners and marks the kick-off of the Ombudsperson’s education program aimed at informing condo owners of their rights and responsibilities. Future publications will address the rights of condominium and common interest association boards and the rights and responsibilities of owners living in common interest communities.

“Living in a condominium community presents its own unique set of challenges that are starkly different from those in a single family dwelling”, said Kreg Allison, Director of the Division of Real Estate for the Illinois Department of Financial and Professional Regulation (“IDFPR”). “Individual rights and obligations can often be confused in the condo setting, leading to disputes between unit owners and associations. By providing an easily accessible, inclusive handbook for condo owners, we strive to education everyone involved, set reasonable expectations and minimize disputes.”

The Condo Unit Owner’s Rights and Responsibilities Handbook may be found in the Publications tab on the CCIC Ombudsperson webpage at
http://www.idfpr.com/CCICO.

Commercial Member News

Wed, 16 Aug 2017 16:15:16 GMT

The Building Group, which manages over one billion dollars in real estate along Chicago’s Lakefront, has moved to 1221 North LaSalle Street. Now more centrally located to serve its portfolio of luxury condominium, cooperative, rental and mixed-use properties, The Building Group’s new home is also a testing ground for green techniques. The redesign and repurposing of the building – which includes apartments, commercial and retail space – signals the firm’s continued pursuit of earth-friendly tactics that save money for clients.

President Jim Stoller explains that The Building Group’s commitment to maximizing the value of its clients’ real estate complements the firm’s commitment to sustainability. “The new facility is our ‘innovation laboratory’ where we explore ways to reduce the overall carbon footprint as well as the operating costs of a building.”

The building’s interior has all LED lighting and VOV-free paints, plus other green features such as an indoor bike rack and uses eco-friendly cleaning supplies. Lowering our environmental impact, however, takes many forms and “doesn’t necessarily mean installing windmills,” says Stoller. “It means being smart about resources.” For example, rather than a single temperature for an entire office, there are multiple zones for heating and cooling, resulting in more targeted control. And instead of traditional carpeting, carpet tiles are used which can be replaced individually if stained or damaged.

Ultimately, the systems and techniques that are successful at 1221 N. LaSalle are added to The Building Group’s toolbox of client services. Cost-saving green methods have been used for years throughout the Building Group’s real estate portfolio, concentrated primarily in the Streeterville and Gold Coast neighborhoods. These include paperless electronic communication and assessment/rent-collection systems; sophisticated recycling programs for paper, electronics, batteries and light bulbs; using high efficiency equipment; and roof gardens.

A licensed architect and MBA (Northwestern), Stoller founded The Building Group, Inc., over 20 years ago. Today, the firm is Chicago’s most technically and service oriented property management company. Its team of over forty in-house experts provide its many clients with rigorous and secure financial controls, extensive educational resources, superior communication and ethical and transparent operating procedures.

When Unpleasant Conflict Arises in Your Association

Wed, 16 Aug 2017 16:12:55 GMT

By: John Cabral, Conflict Specialist
Oak Park Mediation and Conflict Support
Oak Park

Lots of different, very uncomfortable behaviors can start happening in the most peaceful association. One phenomenon we see now and then is an aggressive email campaign seemingly designed to discredit or intimidate the Board. An owner uses the association listserv to send frequent complaining emails to the whole community.

What to do?

Some boards just vote to change the “rules and regs” so that now, posting to the whole community is a “privilege” that can be rescinded if an owner is sending “abusive” messages.

But everybody will know who the new rule is directed at. Depending on the level of antagonism going on, this measure might soon bring attorneys into the picture. Discriminating against certain owners is illegal. And actually removing the offending owner from the listserv will be messy and awkward. The owner’s sense of victimhood will intensify.

This is the “legislative” method. You can improve the odds it will succeed, without leading to bigger problems, if the Board consults with the community first. The Board can take a survey of the owners to gauge support for restrictive measures: a high favorable response rate will legitimize the new measures considerably.

Better yet is if the Board consults directly with the angry owner about the proposed new rule.

In my experience, underneath this kind of behavior there is something else going on. Usually the person actually has a deep need to contribute their knowledge or expertise to the community but believes from previous experience that “nobody ever listens to me”. They would love to be seen as a valuable member of the community but have decided beforehand that nobody cares.

Therefore, it might lead to a real transformation if somebody—a board member, another owner who gets along with the offending emailer, a people-oriented property manager, or a professional conflict specialist-- approaches this owner and asks her or him to please join the Parking Lot committee or the Tax Appeal committee or the Financial Committee. “We need more people and it’s obvious from your emails that you have some expertise.”

Whether you follow this course or not, it never hurts to make concrete requests for the behavior that you would like to see the owner adopt. And be sure to couch the requests in the needs the Board is ultimately trying to fulfill. For example, “We’re trying to build trust and safety and neighborliness in the association: would you be willing to send only one email message per day to the list”?

It always pays to assume the best, not the worst. This owner may actually want recognition and validation, not necessarily the destruction of the whole association.

Question of the Month: Can Minutes Be Changed Once Approved?

Wed, 16 Aug 2017 16:08:53 GMT

By: Scott A. Rosenlund, Attorney
Fullett Rosenlund Anderson PC
Lake Zurich | Chicago

Q: I recently joined the board of my townhome association and discovered that the previous secretary redacted meeting minutes, providing edited versions for real estate transactional purposes. Is this legal? If not, is there any recourse against the secretary/association?

A: Illinois statutes applicable to community associations and most association governing documents provide that the duties of association secretaries include keeping meeting minutes. If the association is subject to the Illinois Common Interest Community Association Act (“CICAA”), Section 1-25(f)(2) of CICAA requires election of a secretary “who shall keep the minutes of all meetings of the board and of the membership.” With respect to condominiums, similar language appears in Section 18(d) of the Illinois Condominium Property Act (“Condominium Act”). However, notwithstanding the division of labor amongst different association officers, an association secretary should not unilaterally revise or redact board-approved meeting minutes. Board meeting minutes and other association communications generally should be approved by the board as a whole at open board meetings.

Whether there is legal recourse against the secretary or the association will greatly depend upon any number of factual variables. For example, there could be potential exposure to claims if the minutes were, without disclosure, intentionally falsified to conceal material financial decisions (e.g., a large special assessment or association expenditure), a unit purchaser reasonably relied on the altered minutes when deciding whether to purchase a unit and the purchaser could prove that he or she incurred damages based on this reliance. Alternatively, if the minutes were redacted simply to omit information which might be considered sensitive or embarrassing to an individual (e.g., information regarding the name or address of a unit owner who was fined for a minor rule violation), such action might have been technically improper, but the purchaser would find it very difficult to establish that he or she somehow incurred damages due to the omission.

A more common concern would be ensuring that the association furnishes accurate and complete copies of approved minutes to unit owners who make proper written requests to review minutes under (depending on the type of association) Section 1-30(i) of CICAA, Section 19 or 18.5(d) of the Condominium Act, Section 107.75 of the Illinois General Not For Profit Corporation Act of 1986, municipal ordinance and/or the governing documents.

The board also should make sure that board meeting minutes follow a proper format. The purpose of board meeting minutes is to create an official record of formal corporate actions (i.e., board decisions), rather than to serve as a transcript of a board meeting or to convey information more suitable for newsletters, websites or other types of communications. If the board meeting minutes have been approved by the board, are accurate and complete, use a proper format and tone and do not contain extraneous information, well-intentioned, responsible board members should have no motivation to edit or redact the minutes prior to dissemination.

Getting to Know Joe Fong

Fri, 02 Jun 2017 18:17:44 GMT

1. How did you get to become involved with ACTHA?

I always like to do the best job at whatever I do. When I joined my association in the 1970s, I began to seek knowledge by attending workshops, seminars and conferences in the field. I attended most of the educational offerings at CAI and later attended educational programs through ACTHA. I found that ACTHA provided quality education sessions locally. Members at both organizations continually asked me to participate in its leadership. I have served on ACTHA’s Education, Membership, Bylaws and Executive Committees. I was elected to the ACTHA Board of Directors in 2013, served as V.P. and was just elected President.

2. Tell us about your association. What issues is your association currently addressing?

My association, Westgate Terrace C.A., is a 48-unit community located in a park like setting with over 160 trees located in the University Village neighborhood on the Near West Side of Chicago. We have engaged owners and have never had a problem getting owners to serve on our nine-member board!

The main issue facing my association is the lack of operational knowledge amongst the board members. Board members need a foundation of knowledge to make good decisions, and many lack knowledge in construction technology, accounting, budgeting, planning, landscaping, aesthetics, meeting rules, laws and much more in order to make wise decisions. Other factors such as personality/ego issues, personal agendas, lack of understanding of fiduciary responsibility and, most importantly, the unwillingness to seek knowledge through consultants or education, can result in contentious board meetings and impede progress. Boards need training, and ACTHA offers such training! The problem is getting board members to recognize the need for training in order to serve well in their respective roles.

Additionally, my association is working through a transition of a newly-hired manager. Outlining expectations and responsibilities for management can help provide for a successful transition. Like many other newly-formed boards, we acted without utilizing the wealth of available operational information.

3. What’s in store for ACTHA in the coming year?

ACTHA faces many challenges for the immediate future. Our major initiative is getting the message out to all the owners who live in association environments that we exist and serve as a valuable resource. Like most non-profits, we have a tight budget as well as membership growth challenges. We are experimenting with different venues and offering new and different, meaningful experiences at our conferences to help owners, leaders and board members make better decisions. We also need to continually add to our assortment of vendors to best serve community associations and to help support ACTHA. We need a proper mix of vendors that will attract homeowners as well as board members. We are located in the Chicago metropolitan area and have access to a wealth of quality vendors and opportunities. We must think positively and big!

4. What trends to you see in our industry?

Due to economic feasibility, I see continued growth for people living in community association environments. I see many boards abdicate their board responsibility role to lawyers or community managers. Sometimes there is mismanagement and money wasted, and the board isn’t always aware of it. All owners need to realize that they live in an environment where they have a mini-government and that their active participation is needed to help maintain their properties properly and keep property values up. Owners need to be the drivers of boards.

Owners must expect boards to learn to lead instead of letting others (e.g. attorneys or managers) do their jobs for them. We certainly need legal and management guidance; however, Board members should make policy decisions for the owners, managers should execute the Board’s decisions and lawyers guide the Board in meeting their objectives. In order to be effective, owners and board members need to be educated. ACTHA offers such education. In some states, newly elected board members must attend a training session to learn of their responsibilities in an association environment. Remember, association boards run a business, many with multi-million dollar budgets! I look forward to ACTHA serving as the source for such education and becoming more recognized and even accredited.

5. What’s the best piece of advice you’ve received through ACTHA that helped your association?

ACTHA opens you up to a vast world of leadership knowledge in a community association environment. I learn something worthwhile at every event offered by ACTHA. Learning and growth never ends!

How to Be a Great Board Member

Fri, 02 Jun 2017 18:14:03 GMT

ACTHA recently conducted a seminar on “How to Be a Great Board Member in 90 Minutes or Less” in Olympia Fields. Below is a recap of a few lessons learned from our presenters, attorney Bob Prince of Cervantes Chatt & Prince P.C. and manager Chris Berg of Independent Association Managers, Inc.:

1. As a board, surround yourself with a solid team of advisors. An attorney, financial professional, manager, etc; can provide vital information to help a board make educated decisions. This may also limit liability in any litigation against the association.

2. Get it in writing. Professional opinions, advice and analysis should always be provided in writing. Don’t rely on hearsay or assertions.

3. The board speaks with one voice. Each board member has equal decision-making authority. The President has no more authority than the Treasurer or a board member at-large. Once a decision is voted on, all board members should support the decision externally in their community.

4. Be prepared. Review materials prior to meetings. It’s okay to discuss issues with board members outside of a meeting—just be sure it doesn’t meet a quorum and that no decisions are made.

5. Communicate. Not only with fellow board members, but with the community. Printed newsletters and/or consistent email updates keep owners engaged and aware of what’s going on in the association.

How to Access Important Community Association Documents

Wed, 31 May 2017 17:04:49 GMT

By: Charles Keough
Keough & Moody, PC
Naperville and Chicago

A community association’s declaration, plat of survey/subdivision, bylaws, rules and regulations, and Articles of Incorporation are important documents that members may be interested in reviewing. In the case of a declaration, bylaws and rules and regulations, members should have a working knowledge of such documents. Failure to comply with these instruments may result in serious consequences. Yet commonly, unit owners do not have copies of these documents or even know where to find them. This article provides simple instructions for members of condominium or common interest community associations interested in locating these important materials.

Written Request to the Board

Every member of an association has the right to examine and make copies of the association’s declaration, bylaws, plat, rules and regulations, and Articles of Incorporation. After submitting a written request to the Board or its authorized agent identifying the documents sought for examination, the Board will typically make the requested records available within thirty days. Be prepared to pay a fee however; the Board is permitted to charge for the actual cost of retrieving and copying these records.

Additional Options

Alternatively, if an owner would like to locate and review one of these documents without submitting a written request to the Board, the process will depend on the document sought:

Declaration, Plat, and Bylaws: In order for a property to be legally considered a condominium or common interest community association, the declaration, plats of survey, and bylaws (either embodied in the Declaration or attached as an exhibit) must be recorded in the office of the recorder of the county where the property is located. There, it is easy for a unit owner to find any documents recorded against their property using their name and Property Index Number (PIN). Though a plat may be difficult or impossible to locate online, generally declarations and bylaws are available online (but may be date-restricted).

Rules and Regulations: Unfortunately, you will not typically find these recorded in the county recorder’s office. These you may obtain on your association’s website or from management and/or the board of directors.

Articles of Incorporation: To obtain copies of an association’s Articles of Incorporation, the Illinois Secretary of State’s Office requires: 1) a request by mail sent to “Secretary of State Corporations Division, 501 S. Second St., 3rd Fl., Springfield, IL 62756” along with a $25.00 check, or 2) a request by telephone to 217-782-6875 with a $27.50 credit card payment. However, much of the important information contained in the Articles of Incorporation—such as the legal name, status, date of incorporation, or names and addresses of the registered agent, president, and secretary—is available for free on the Secretary of State’s website at https://www.ilsos.gov/corporatellc/CorporateLlcController.

What steps can a board take to obtain proof of insurance coverage for each individual owner?

Wed, 31 May 2017 17:03:03 GMT

Answers provided by:

Karyl Dicker Foray, CIRMS, CRIS
Rosenthal Brothers, Inc
Deerfield

Joel Davis, CPCU, CIC, CIRMS
Community Association
Underwriters of America, Inc.
Hoffman Estates

Foray: There are various ways that an Association can require unit owners to provide proof of insurance. They can 1) make it a requirement under their Rules and Regulations or 2) through an amendment to their Declarations and Bylaws or 3) through a Board Resolution. Condo associations can only require proof of liability insurance (since the Association really doesn’t care if they have insurance to replace clothes, furniture, etc). See Section 12 (3)(h) of the Illinois Condominium Property Act for exact wording. If it is a townhome association and the association doesn’t insure the units at all then they can require that proof of property and liability be provided. Associations may fine unit owners who fail to provide proof of insurance, on a monthly basis, until the Certificate of Insurance is provided.

Davis: Section 12(h) of the Illinois Property Condominium Act addresses this issue. Once a rule has been adopted by a condo association requiring owners to provide proof of coverage, the board has the authority to impose fines for owners who don’t comply. Outside of fines, I suggest an informational meeting be held with owners to explain the importance of verifying unit owner coverage. Owners can easily request that his/her insurance agent set up their policy so automatic policy renewal information is sent to the Property Manager or member responsible for verification.

Question of the Month: Should a ballot box only be opened during an election?

Wed, 19 Apr 2017 16:35:08 GMT

By: David Bendoff, Attorney
Kovitz Shifrin Nesbit
Mundelein | Chicago | Naperville

Question: Our association utilizes mail in ballots for elections to the board. The association’s accounting firm (which also tallies our election results) opened the ballot box before last year’s election with only their personnel present in order to ensure a quorum before the annual meeting. Shouldn't that ballot box be sealed until, and only opened at, the election?

Answer: One of the purposes of having an independent third party act as an election inspector is to ensure a fair election; this involves maintaining the security of the ballots and ballot box. The practice of opening the ballot box, and the actual ballots prior to the annual meeting, can jeopardize that purpose and may give rise to an appearance of impropriety.

And even the most unintended of consequences can result when ballots are removed from the ballot box prior to the election. For example, a ballot can be inadvertently lost or misplaced.

The Condominium Property Act (Section 18(e)) does provide that “a candidate for election to the board of managers or such candidate's representative shall have the right to be present at the counting of ballots at such election.” The Illinois General Not for Profit Corporation Act (Section 107.35) authorizes the appointment of election inspectors, and provides in relevant part:

“…..the chairman of the meeting may, or upon the request of any members shall, appoint one or more persons as inspectors for such meeting……” Such inspectors shall ascertain and report the number of votes represented at the meeting, based upon their determination of the validity and effect of proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the members.”

I infer from these statutes that the ballots are to be opened, for all purposes, at the annual meeting, and not before.

Other states do have regulations in place that expressly provide that no person shall open or otherwise review any ballot prior to the time and place at which the ballots are counted and tabulated.

Many associations adopt, or their governing documents expressly require them to follow, Robert’s Rules of Order. The 11^th Edition provides that “(t)he person designated as addressee for the returned ballots should hold them in the outer envelopes for delivery, unopened, at the meeting of the tellers where the votes are to be counted.”

Moreover, a quorum is determined at the annual meeting, not prior to the annual meeting. There may be some administrative convenience of having the election inspector review ballots before the annual meeting. However, I don’t believe it is the best practice, and may open the door to attacks on the election procedure by those that might claim that this practice involves a nefarious purpose. It just doesn’t seem like a practice whose benefit is outweighed by the risk. The inspector could certainly keep a count of the ballots received as they are placed in the ballot box, and this would give a general sense of whether there is quorum. However, I would not suggest opening the ballot box and reviewing any ballots prior to the annual meeting.

Can We Adopt a Rule? The Scope of Community Association Rulemaking Authority

Wed, 19 Apr 2017 16:18:31 GMT

By: Scott A. Rosenlund, Attorney
Fullett Rosenlund Anderson PC
Lake Zurich and Chicago

Community associations seeking to make additions to their governing documents often ask whether the changes may be implemented through revised rules and regulations or whether they must be adopted via an amendment to the declaration or bylaws. Depending on the nature of the contemplated revisions, analysis by association legal counsel may be warranted. But an association in any event should ask itself the following questions before adopting a new rule.

Does the proposed rule directly contradict the declaration and bylaws?

If the answer to this question is “yes,” a declaration or bylaw amendment is most likely required. Limited exceptions to this general principle exist when applicable laws clearly override the declaration or bylaw provision at issue and authorize the rule. For example, Subsection 12(h) of the Illinois Condominium Property Act expressly provides that a condominium board, by rule, may require unit owners to obtain individual liability insurance coverage.

Does the proposed rule indirectly conflict with the declaration and bylaws?

By way of example, until recently, there were differing viewpoints amongst community association professionals regarding an association’s authority to adopt leasing restrictions by rule. Many professionals took the position that leasing restrictions can be adopted via rule only on the very rare occasions when the declaration and bylaws are completely silent as to leasing or when the declaration and bylaws expressly allow such rules. Others employed a more aggressive approach and supported adoption of rules restricting leasing so long as there was not a direct, obvious conflict between the declaration and bylaws versus the rules. The latter, more aggressive approach was rejected in the 2016 court decision Stobe v. 842-848 West Bradley Place Condominium Association. In the Stobe case, the Illinois Appellate Court (First District) held that a condominium association rule imposing a 30-percent cap on leasing was invalid because the declaration mentioned the leasing of units and did not expressly allow the association to impose further restrictions on leasing by rule.

Do the declaration and bylaws expressly mention the board’s authority to adopt rules relating to a particular subject?

If the answer is “yes,” then a rule probably will be valid. For example, condominium declarations for multi-story buildings often clearly state that boards may by rule implement guidelines requiring sufficiently sound-absorbent floor coverings. If this type of express language appears in the declaration, a properly-adopted, reasonable rule relating to floor coverings would be enforceable.

What is the scope of the association’s rulemaking authority in general?

Subsection 18.4(h) of the Illinois Condominium Property Act provides that the purpose of condominium rules and regulations is to cover the details of the operation and use of the property. Meanwhile, non-condominium common interest community associations and master associations must consider the scope of rulemaking authority conferred by their governing documents. Some governing documents for non-condominium associations expressly empower boards to adopt rules regulating the use and operation of individually-owned lots, while other governing documents only discuss the adoption of rules relating to the common areas. In the 2013 court decision Ripsch v. Goose Lake Association, the Illinois Appellate Court (Third District) held that a common interest community association had the implied, inherent authority to adopt rules regulating the use of common areas, even though the covenants did not expressly grant such rulemaking authority.

Does the proposed rule restrict basic use and occupancy rights?

As a general matter, restrictions upon the use and occupancy of, or behavior within, individually-owned units or lots are best implemented by amending an association’s declaration and bylaws, rather than through the rulemaking process. Under a well-established body of case law in Illinois and other states, such restrictions contained in recorded covenants will be granted greater deference by a court and generally should not to be subject to a judicial inquiry as to their reasonableness, but a restriction established by rule can be invalidated if a court deems the restriction to be unreasonable.

Question of the Month: Who’s Responsible for Foundation Cracks?

Mon, 27 Feb 2017 15:55:28 GMT

By: Michael DeSantis, Attorney
Gardi & Haught, Ltd.
Schaumburg, IL

Question: "Is a crack in a garage floor the responsibility of the Association or unit owner? We are assuming, as based on reading our Declarations, that the unit owner is. Garage floors are not specifically mentioned, just "...foundations, structural parts of the Building....", (unless the floor is considered part of the foundation)."

Answer: In this response, I am assuming you are referring to a crack in your garage foundation. You are correct to assume that your answer lies in your community’s covenants, conditions and restrictions (“CC&Rs”). CC&Rs detail what responsibilities belong to the Association and what responsibilities belong to you, the individual homeowner. In your case, you must discover whether your CC&R’s define garage foundations as a limited common element or designate it as something else, specifically whether your garage is defined as being part of your individual unit. If your garage is defined as being part of your unit, then it is your responsibility to maintain. If your garage is defined as a limited common element, the Association is likely responsible for its maintenance.

However, even if your Association is responsible for its maintenance, there is a possibility that your Association will make you pay for the repair depending on what your CC&R’s read. If your unit is governed by the Illinois Condominium Property Act (the “Act”), the Act provides that an Association may assess the cost of maintenance, repair and replacement of limited common elements back to the homeowners who have use of those amenities, if the CC&R’s provide for such a charge back. Carefully reading your CC&Rs will help you clarify who is responsible for your garage foundation maintenance and whether such costs can ultimately be charged back to you.

Who is Managing Your Association?

Mon, 27 Feb 2017 15:48:02 GMT

Did you know Community Association Managers must be licensed through the State of Illinois? Make sure your manager has the proper license to manage your community association. Below is an explanation of the difference between Community Association Managers and Property Managers.

Who:	Community Association Manager	Property Manager
Reports to:	Association Board	Owner or General Manager
License Type:	Community Association Manager	Real Estate
Scope of Work:	Manages community associations	Manages Properties

Community Association Managers: Managers may work for a management company or directly for one or more community associations. They may work for condominium, townhome, homeowner, recreational, marina, equestrian or other community associations. They may maintain financial records including receiving funds and making deposits, paying bills, obtaining proposals for projects, issuing work orders for routine items, responding to owner questions and complaints, maintaining records, communicating with board members, assisting with budget preparation, etc. They may not manage properties unless they have a Real Estate Broker or Managing Broker license.

Property Managers: Brokers and/or Managing Brokers list properties for sale or rent in order to procure buyers or tenants for clients. They also assist buyers and tenants in finding properties. Types of properties include, but are not limited to, residential, vacant land, multi-unit/apartment residential, industrial, office, retail, institutional, mobile homes, deeded parking, mixed use, businesses with real estate, etc. and they may manage properties, but not community associations unless they also have a CAM - Community Association Manager License. A Broker will work for a company under the direction of the Managing Broker.

All Community Association Managers must be licensed under the Community Association Manager Licensing and Disciplinary Act. It would be wise to ask for a copy of the manager’s license or you may go online to check: http://www.idfpr.com/profs/cam.asp.

Illinois Condo and Common Interest Community Ombudsperson Named

Mon, 02 Jan 2017 17:06:55 GMT

Kreg Allison, the Director of the Division of Real Estate (the "DRE") for the Illinois Department of Financial and Professional Regulation ("IDFPR") named Adrienne Levatino to be the Illinois Condominium and Common Interest Community Ombudsperson (the "CCIC Ombudsperson"), effective January 1, 2017. As the CCIC Ombudsperson, Ms. Levatino will serve as the lead community liaison and educator for condominium and common interest community property issues in the State of Illinois.

Unit owners, condominium and common interest community associations and their respective boards desire clear and easily accessible information that can help them better understand their respective rights and responsibilities. The CCIC Ombudsperson was created with this in mind.

"The goal is that everyone involved in these communities can better know what laws and rules apply so that they can have realistic expectations about processes and outcomes, and peace of mind that they are being treated fairly under the law. Adrienne Levatino is uniquely qualified in both her professional and life experiences to serve as the first CCIC Ombudsperson in Illinois," said Kreg Allison, Director of the DRE.

While the CCIC Ombudsperson cannot provide legal advice or advocacy services, enforce regulations, or resolve disputes, the CCIC Ombudsperson can publish useful information and direct citizens to resources to better inform their understanding of the laws and rules governing condominium and common interest communities and the resulting rights and responsibilities.

"I look forward to educating associations, boards, and unit owners on their rights and responsibilities here in Illinois and will ensure that the resources published or provided help them make well informed decisions," said Ombudsperson Adrienne Levatino.

No additional or new fees, taxes, or personnel are required for the CCIC Ombudsperson which solely utilizes existing state resources in its current education and outreach only mission.

For more information on the CCIC Ombudsperson, please visit http://www.idfpr.com/CCICO.

Keeping Safe During the Holiday Season

Tue, 20 Dec 2016 19:10:57 GMT

By: Joshua Mailey
Signal 88 Security
Arlington Heights, IL

The Holiday Season is upon us! Thoughts of spending time with family and friends, the smells of the season filling the air and the overwhelming sense of joy that returns to our hearts as we remember our childhood holiday experiences. Our schedules begin to get packed with list making and shopping, on top of our regular daily responsibilities, and we start to forget about simple things to keep the holiday season safe.

The 2014 Bureau of Justice Statistics study, “Seasonal Patterns in Criminal Victimization Trends” reports that overall crime has been reduced between 1993-2010, but indicates some crimes show no significant fluctuation from traditionally higher crime summer months. The study identifies robbery as occurring frequently in winter as in summer, and identified crimes against persons and motor vehicle thefts seeing an insignificant reduction in winter as it does in summer, while personal assaults occur more frequently in the fall months.

Conversely, the United States Fire Administration reports that cooking, heating and electrical fires were some of the top causes of structure fires during the winter, especially during the holidays. The American Red Cross reports that nearly 47,000 fires occur during the winter months, claiming over 500 lives per year! Structure fires leaves families devastated, and in multi-family structures, a single fire event can lead to direct damage and smoke damage to the extent of leaving all the units in a building to be evacuated for extended periods of time.

When considering the safety of ourselves, property, and our homes, there are some simple things we can do to keep ourselves and loved ones safe.

Making yourself less of a target

When leaving home, keep strategic lights on to make the appearance that someone is home.
Keep package deliveries indoors or dropped off in places out of public view.
Don’t keep a lot of packages in cars in busy parking lots.
Ask close neighbors that you trust to watch out for your house and do the same for them.
Keep doors and windows locked. Leave TV or radio on.
Never leave house keys, purses, or valuable items in cars. Leave garage door transponders locked up and out of view.
Keep all firearms secure on your person or in a heavy duty safe. (if you have a license to do so legally. Always follow local and state laws regarding firearm use and carry)
Keep an eye out for strange cars and persons in the area. If you believe someone entered your house, DO NOT GO INSIDE! Go somewhere safe and call 911.

Winter Season Home Safety

Power outages can occur during nasty winter storms.
Keep flashlights and extra batteries available.
Only use space heaters that are appropriate for indoor use.
Keep your cell phones fully charged and have portable charging devices for them.
Electrical fires caused by circuit overloads and space heaters kill many people during the winter months. Keep a fire extinguisher available on every level of your home and have an evacuation plan.
Change batteries for smoke and carbon monoxide detectors every year.
Never leave open flames or burning candles unattended.

If you have a security system or security service, notify them that you will be out of town and inquire about premise checks if available. Update you contact information so you can be notified if there was an emergency. Being situationally aware of your surrounding is critical to staying safe and preventing accidents from happening. Shopping during the Holiday Season keeps us out of the house more and into areas that are crowded with fellow shoppers. Keep these tips in mind when travelling about.

New Year, New Laws

Tue, 20 Dec 2016 19:09:03 GMT

By: David Hartwell, Esq.
Penland & Hartwell, LLC
Chicago, IL

The Condominium and Common Interest Community Ombudsperson Act (765 ILCS 615/1) – The Ombudsperson Act has been amended again, requiring the Department of Professional Regulation to post a new website to provide owners with information resources. The amendment has extended the deadline for an association to adopt a written policy for resolving unit owner complaints to January 2019. Effective July 1, 2020, owners may make written requests to the Ombudsperson for assistance. At this time, no Ombudsperson has been appointed.

Changes to Open Meetings (765 ILCS 605/18(a)(8) and 765 ILCS 160/1-40(b)(5) – In response to the Palm v. 2800 Lake Shore Drive ruling addressing meetings of board members, effective January 1, 2017, board members may now meet in closed session (sometimes referred to as “Executive Session”) to discuss: (1) pending, probable or imminent litigation; (2) third party contracts or information regarding the appointment, employment, engagement, or dismissal of an employee, independent contractor, agent, or other provider of services; (3) interview a potential employee, independent contractor, agent, or other provider of services; (4) violations of rules and regulations; (5) unit owner’s unpaid share of common expenses; and (6) consult with legal counsel on any matter. Any action taken by the board in a closed meeting must be ratified by a majority of the board at a properly noticed meeting.

Pledge of Assessments for Condominiums (765 ILCS 605/18.4(m)) – Effective January 1, 2017, this amendment deletes the first clause of Section 18.4(m) which states “Unless the condominium instruments expressly provide to the contrary…”, thus giving all boards of directors the authority to pledge and assign the right of future income from common expenses and to mortgage or pledge substantially all assets of the association. This will help associations obtain financing for special assessments and capital improvement projects.

More Technological Means for Common Interest Communities (765 ILCS 160/1-5) – Effective January 1, 2017, the Common Interest Community Association Act expanded the definition of “Acceptable Technological Means” to include “without limitation, electronic transmission over the Internet or other network whether by direct communication, intranet, telecopier, electronic mail, and any generally available technology that, by rule of the association, is deemed to provide reasonable security, reliability, identification, and verifiability.”

Assignment by Successor Developer (7765 ILCS 605/9.5 and 65 ILCS 160/1-47) – Effective January 1, 2017, the ICPA and CICAA will be amended to add: “Successor Developers. Any assignment of a developer’s interest in the property is not effective until the successor: (i) obtains the assignment in writing; and (ii) records the assignment.”

CICAA adds Conformity Clause (765 160/1-60) – Effective January 1, 2017, CICAA is amended to now provide that for any provision of the governing instruments which do not conform with the Act or other applicable law, the association may correct such inconsistency by an amendment, adopted by two-thirds (2/3) of the board of directors, without a membership vote.

Not for Profit Act Requires Three Directors (805 ILCS 105/101.01) - Effective January 1, 2017 the Secretary of State may dissolve any corporation administratively if it fails to maintain at least three directors.

How Does an Association Amend its Budget?

Fri, 18 Nov 2016 14:26:27 GMT

By David Hartwell, Esq.,
Penland & Hartwell, LLC
Chicago, IL

Since the time the budget was approved, the board ultimately accepted a lower bid of $70K and special assessment model of $45K.

Is it appropriate to amend the budget with the new figures? What are the ramifications of changing the budget once it’s approved?

Depending upon the fiscal year of the association, I would likely recommend that the board consider amending its budget to reflect the actual cost of the painting project. The board should also consult with its accountant during this process. Alternatively, if the painting project is being funded from a special assessment, the board should first look to the special assessment resolution to determine if it only specified the painting project or also addressed other maintenance, repair and replacement of common elements. If the latter is true, the additional sums collected could be used for other contemplated projects and the board would need to vote on the additional expenditures at an open meeting; otherwise, the special assessment should be amended to reflect the actual cost of the project. A potential ramification in amending the special assessment is that it may reopen the unit owners’ opportunity to attempt to reject it, as set forth in the procedures of Section 18(a)(8)(ii) of the Act, if the proposed new amount exceeds more than 15% of the budget. If the amount does not exceed the 15% threshold, then no challenge can be made.

Lastly, the board could consider levying the original special assessment thereby avoiding the need to draw on reserves. As a practical matter, every board should act consistent with its governing documents and should act in the best interests of all of its owners. In my experience, most owners want to see the board acting in a fiscally responsible manner, especially when it pertains to a special assessment.

As set forth in 18(a)(6) of the Illinois Condominium Property Act, the board must send out the new amended budget at least 25 days prior to the date of the meeting at which the board intends on approving it.

The Value of Teamwork

Fri, 18 Nov 2016 14:18:57 GMT

By Mark Swets, CAE, Executive Director
ACTHA
Chicago

The Chicago Cubs are World Series Champions! (That still sounds great!)

As a lifelong baseball fan, this dramatic postseason provided numerous storylines of curses, long-term futility, perseverance, performing under pressure and the magic of an impassioned rain delay speech. From a business perspective, the 2016 Chicago Cubs are a classic case study in the value of teamwork. Much of my joy this season has been watching the Cubs successfully perform as a true “team”. They seemed to contain all of the elements of a winning team: hard work, focus, resiliency and enjoyment. And they won!

As quoted by Wikipedia:

“A team is a group of people or other animals linked in a common purpose. Human teams are especially appropriate for conducting tasks that are high in complexity and have many interdependent subtasks.”

“A team becomes more than just a collection of people when a strong sense of mutual commitment creates synergy, thus generating performance greater than the sum of the performance of its individual members.”

Our focus on successful teams tends to resonate most in the field of sports, but easily could be transferred to the role of an association team. A successful community association “team” starts with a committed board of directors who establishes the culture, vision and goals for the association. In the case of the Cubs, the goal was clear: win the World Series. It seems everything they did during the season was in support of achieving their goal. What goals does your association have? Are they clearly identified (preferably written down) and shared with the community?

Another vital component is the actual assembling of the team. Certainly the 2016 Chicago Cubs “team” was assembled over several years and included a combination of new ownership, general management, player development, homegrown talent and free agent signings. Who comprises your association “team”? The board of directors, committees, staff and the property manager are obvious choices, but what about your banker, accountant, attorney and insurance broker? Whomever you choose, make sure they are qualified and committed to achieving the association’s goals.

Once the team is assembled, it’s important to clearly define roles between team members. This was a key cog in the Cubs’ success throughout the year, and especially during the World Series. From the starting pitched to the pinch runner to the flame-throwing closer, each team member understood their role and was able to execute it effectively. Establishing roles allows each member to perform to the best of their ability and develops a pattern for success. Take a moment to document your association team and the role each team member plays, and share this amongst everyone on the team.

Lastly, take time to validate and support team members. The Cubs encountered multiple setbacks during the season, including injuries and slumps in individual player performance. But the team continued on, keeping faith in their abilities and “picking each other up”. Throughout the season, team members publicly supported each other in interviews and community events. In community associations, a little encouragement goes a long way! Recognize the skill set of your association “team” and support them as you work together to achieve common goals.

Watching a successful team perform never gets old! It starts with assembling committed members with clearly-defined roles, working towards a common goal. It continues with validation and support between team members while overcoming setbacks. And it culminates with the satisfaction and celebration of a mission accomplished! May your association establish and embrace its team and achieve the success of the 2016 Chicago Cubs!

North Expo to Feature Stellar Education and Networking Opportunities

Thu, 06 Oct 2016 21:31:56 GMT

Join us in Northbrook for our next ACTHA event! Connect with board members, unit owners and quality vendors who serve community associations as well as leading industry experts addressing topics impacting today’s condo, townhome and homeowners associations.

Exchange ideas with association board members

Find Solutions to the biggest issues impacting community associations

Meet representatives from legal, financial services, construction firms and more

North Expo | Sat., October 15 | 8am-1pm | Renaissance Chicago North Shore Hotel

Schedule of Events:

7:30 a.m.: Registration and Breakfast
8:00 – 9:00 a.m. Concurrent Education Sessions

Condo Act for Dummies – Get Smart
This session will dissect the basics of the ACT and reinforce the items of major importance. Since the Palm decision it is more critical than ever to understand the proper procedures for governance, meetings, notices, and more. Also covered will be learning the difference between the ACT, your declarations, bylaws and rules and regulations and their order of authority.
Are You Ready for Winter?
It’s time to refer to your checklist and make sure your snow contract is in place, your insurance is renewed and covers all the nasty weather problems like slip and falls, systems are winterized and such. What do you do about those vacant units, gutters clogged with leaves, avoiding ice dams, for starters?

9:00 a.m. - 11:30 a.m.: Trade Show

10:00 a.m. – 10:20 a.m.: Mini Education sessions (on trade show floor)

Reducing Liability for the Multi-Family Property

10:45 a.m. – 11:05 a.m.: Mini Education sessions (on trade show floor)

Benefits of Native Landscaping

11:30 a.m. – 1:00 p.m. Concurrent Education Sessions

Don’t Be a Fool – Rules & Regs
Board members need to carefully review and do an assessment of your association’s Rules and Regulations. Board members frequently assume things are in the Rules only find out they are not. How do you amend them? Are they consistently applied and enforceable? Have they been updated to conform to changes in the law?
How to Fund Your Project – It’s Always About the Money
Whether planned or unexpected, there comes a time when you are faced with a large project to renovate, improve, or replace. Various methods of funding large projects include items, such as, raising regular assessments over time to build reserves, approving a special assessment, and applying for a bank loan. Each involves different conditions and requirements and should consider the needs of the owners.

ACTHA Welcomes New Members - September 2016

Thu, 06 Oct 2016 21:24:00 GMT

Association Members

Riviera Condo Assn, Glen Ellyn

Canterbury at Carillon HOA, Plainfield

Indian Ridge Lakes Condo Assn, Indian Head Park

Townhomes of Russet Oaks HA, University Park

Commercial Members

A. Schoeneman & Co. – is one of the oldest and most respected family-owned public adjusting firms servicing the Chicago area, exclusively representing policyholders in insurance claims.
Contact: Ron Schoeneman, 773-539-7446 (Chicago), 224-251-8446 (Suburbs), ron@aschoeneman.com

Custom Installations – A family owned business located in Lake Forest, providing full service exterior remodeling in Chicagoland including roofing, gutter, siding and window installations.
Contact: Brad Hironimus, 847-932-4500, brad@custominstallations.com

Letter to the Editor

Thu, 06 Oct 2016 21:22:38 GMT

Received September 12, 2016

Thank you for including our problem (What’s a Board to do About Abandoned Vehicles) and attorney's answer in the July/August Newsletter. Between the time of my contact to you and the publication of the newsletter, our association attorney responded with a similar answer and specific language to adopt. We sent the proposed rules amendment to the owners, and less than a week later the offending homeowner removed his car. The board officially approved the amendment after waiting the requisite 30 days.

Thank you again for your action!

Editor’s Note: Special thanks to Michael DeSantis of Gardi & Haught for providing legal response for the article referenced above.

Looking for guidance regarding an association issue? Email actha@actha.org and your question (and answer) may be published in a future issue of the ACTHA Newsletter.

Important Change Regarding ACTHA Membership Dues

Thu, 06 Oct 2016 21:19:06 GMT

A MESSAGE FROM THE EXECUTIVE DIRECTOR

Dear Association and Commercial Members,

I want to make you aware of a recent administrative change impacting your association/company’s
ACTHA membership moving forward.

Effective January 1, 2017, all ACTHA memberships will cover the calendar year (January 1 – December 31) instead of the anniversary date of when your association/company joined. This change will align all ACTHA members to the same dues cycle while streamlining our internal business operations. It also allows members to submit dues payments early in their fiscal cycle, which for most members runs on the calendar year.

As part of this transition, the primary contact from your association/company will receive a modified dues invoice that will adjust the membership to the calendar year. For example, if your membership is due April 1, 2017, your association/company will receive a pro-rated invoice for 75% of your total dues rate to cover the period through 12/31/17. Moving forward, all ACTHA members will receive dues invoices for the following year in December, with additional reminders in January and February. The deadline for members to renew is March 1.

Please note that dues rates will not increase in 2017. Through strong financial support from our commercial members, ACTHA is able to extend affordable membership rates and nominal event pricing for association members. Did I mention that all owners may be included with your association membership, regardless if they serve on the board of directors?

Additionally, the ACTHA directory (which typically distributes in late fall each year) will now distribute in spring after our dues cycle is complete.

If you have any questions regarding this change or membership in general, please contact our office at 312-987-1906 or via email at actha@actha.org.

Thank you for your continued support of ACTHA!

Mark Swets, CAE

Executive Director

Election Season is Upon Us: Regulating Political Signs

Thu, 06 Oct 2016 13:35:03 GMT

By Benjamin J. Rooney, Attorney
Keay & Costello, P.C.
Wheaton, IL

Whether we like it or not, over the past few months it has been impossible to escape the onslaught of political ads for the upcoming presidential election. These ads bombard us from every angle, whether it be from television, radio, or online. But for many of you, it does not end there. Owners in your community association are displaying political signs to show their support (or disapproval) of one candidate or another.

For community association boards looking to regulate these political signs, it is important to keep two principles in mind. The first is that any rule it adopts must be reasonable, nondiscriminatory and applied uniformly. Secondly, displaying a political sign, whether it be for a national, state, local, or community association election, is a form of speech. In this country, we have a long history of going to great lengths to protect all speech, particularly political speech. This is not only evidenced by both the United States and Illinois constitutions (which typically only apply to governmental actors), but by the Illinois Condominium Property Act, which specifically prohibits a board from adopting or enforcing a rule or regulation that “may impair any rights guaranteed by the First Amendment to the Constitution of the United States or Section 4 of Article I of the Illinois Constitution.” While most agree that community associations can regulate signs, associations need to make certain that its rules are not unreasonably infringing on an owner’s right of political speech.

While other states have adopted laws defining how a community association may restrict political signs, Illinois has not. With the above principles in mind, we are left to speculate as to what types of political sign restrictions a court would deem reasonable. When it comes to common elements or property owned by the association, outright prohibitions against erecting signs would likely be reasonable. As for restrictions concerning the display of political signs on the owner’s property, or in areas exclusively controlled by a single owner (i.e., balcony or yard), the answers become less clear. An outright prohibition of political signs in these areas would almost certainly be deemed unreasonable. Most likely, reasonable restrictions concerning when political signs can be posted would be deemed reasonable. For Example, Arizona law states that an association may not prohibit the display of political signs 71 days before the day of an election or later than 3 days after an election. Similarly, a reasonable restriction on the size and number of signs an owner may display on their property (or property the owner exclusively controls) would likely be enforceable.

Due to the great protections afforded to political speech, the lack of guidance in Illinois, and the passion that owners can have for, or against, the display of political signs, I highly recommend that any community association considering the adoption of rules concerning political signs to consult its attorney prior to adopting them.

Best Practices for Adopting Rules and Regulations for Electronic Voting

Thu, 06 Oct 2016 13:31:11 GMT

By Kat Formeller, Senior Counsel
Tressler LLP
Bolingbrook, IL

Legislation was enacted in January 2015 (Illinois Public Act 98-1042) which made changes to both the Illinois Condominium Property Act (“Condo Act”) and the Illinois Common Interest Community Act (“CICAA”) to allow for electronic notice and voting. Previously, in order to bypass the archaic way of voting, associations had to amend their Declaration and By-Laws which requires membership approval. Now, the board can adopt the appropriate rules to allow the association to use “technological means” to issue notices and collect votes from members. This article addresses some “best practices” for drafting, adopting and implementing rules for electronic voting.

In order for an association to conduct its voting electronically, the association must first draft and adopt a rule which authorizes the board to send out electronic notices to members of the association as well as allows members to vote electronically. CICAA does not specifically address the adoption of rules and regulations. Thus, for common interest community associations, the association’s declaration and bylaws will determine the appropriate process. As for condominiums, Section 18.4 of the Condo Act provides the procedures for adopting rules and regulations.

A rule for electronic notices and voting should define the “technological means” that the board deems will “provide sufficient security, reliability, identification, and verifiability” - - i.e. Electronic Mail (“email”) - - as required by Section 18.8(b) of the Condo Act and Section 1-85(b) of CICAA. The rule should also provide that the “technological means” of communications adopted by the board affords the association sufficient means of creating a record of those communications and collecting and tallying votes which the association can maintain, as required by Section 18.8(d) of the Condo Act and Section 1-85(d) of the Act.

A rule for electronic notices and voting should also be specific and include detailed procedures for how notices are to be sent as well as how voting is to be conducted. For example, the rule should state that voting by proxies is prohibited in board elections that are conducted electronically pursuant to Section 18(b)(9(B) of the Condo Act and 1-25(i) of CICAA. Additionally, it may be helpful to include in the rule how the board will handle the receipt of both a paper ballot and an electronic ballot from the same member. If a member appears at a meeting and casts a ballot, the electronic ballot submitted by the member should be voided.

Pursuant to Section 18(b)(9(B) of the Condo Act, Condo associations must adopt their rules for electronic voting at least 120 days before the board election. Common interest communities, however, do not have such a restriction. Once the rule is adopted, the association must obtain written authorization from its members who agree to participate in conducting elections via email or other technological means. If a member does not provide such written authorization, the association must, at its expense, conduct business with the person without the use of electronic transmission or other equivalent technological means.

Finally, the Condo Act and CICAA provide certain provisions for the issuance of notices and instructions regarding electronic voting to members. Instructions for electronic board elections are to be issued to members not less than ten (10) and not more than thirty (30) days before the election meeting pursuant to Section 18(b)(9)(B-5) of the Condo Act and Section 1-25(h-5)(i) of CICAA. Section 18(b)(9)(B-5) of the Condo Act and Section 1-25(h-5)(i) of CICAA further provide that the notices/instructions should include the names of all candidates and must give the member voting through electronic or other technological means the opportunity to cast votes for candidates whose names do not appear on the ballot.

You should contact your association’s attorney with any questions regarding electronic voting and the proper procedures for same.

South Expo to Feature Stellar Education and Networking Opportunities

Mon, 12 Sep 2016 01:50:01 GMT

In less than two weeks, the first of two ACTHA fall events will commence bringing together board members and unit owners with quality vendors who serve community associations as well as leading industry experts addressing topics impacting today’s condo, townhome and homeowners associations.

Exchange ideas with association board members

Find Solutions to the biggest issues impacting community associations

Meet representatives from legal, financial services, construction firms and more

South Expo | Saturday, September 24 | 8am-1pm | Tinley Park Convention Center

Schedule of Events
7:30 a.m. Registration and Breakfast
8:00—9:00 a.m. Concurrent Education Sessions
CICAA for Dummies—Doug Sury, Attorney, Keay & Costello
Palm Today: It’s Still a Hot Topic—Dawn Moody, Attorney, Keough & Moody Martin Stone, Vice President, HSR Property Services

9:00—11:30 a.m. Trade Show
10:00—10:20 a.m. Mini Education Sessions (on trade show floor)
Navigating the Tax Appeal Process
Top 5 Things for Boards to Consider When Reviewing Contracts

10:45—11:05 a.m. Mini Education Sessions (on trade show floor)
Disaster! Preparation, Response and Aftermath
How to Kill a Tree

11:30 a.m.—1:00 p.m. Concurrent Education Sessions
Don’t Be a Fool: Declarations & Bylaws—Bill Chatt, Attorney, Chatt & Prince
Collecting Assessments: Money Matters—Jim Arrigo, Attorney, Chuhak & Tecson

Register by 9/21 and save $$! Visit www.condoeducation.org

Click here to view the current list of exhibitors.

Welcome New Members - August 2016

Mon, 12 Sep 2016 01:34:28 GMT

Association Members
Carillon Club in Naperville Condo Assn, Naperville
Edgewater Beach Apartments Corp, Chicago
Hills of Palos Condo Assn, Palos Hills
Park Tower Condo Assn, Chicago
Piers II, Woodridge
Roger Wiliams Condo Assn, Highland Park
St. James Condo Assn, Arlington Heights
Steeples Town Homes, Lemont
Twin Gables Condo Assn, Chicago

Commercial Members
Signal 88 Security – Provides a full suite of world-class, industry-leading and budget friendly security services for homeowner associations and multi-family residential communities Contact: Joshua Mailey, 815-261-0110 jmailey@signal88.com

Connected Property Management – Located in the Lakeview neighborhood of Chicago, a stellar team of 30+ professional managers dedicated solely to the management of condominiums. Contact: Paul Houillon, 773-913-2569
paul.houillon@connectedmanagement.com

The Habitat Company – As one of the largest multi-family property developers and managers, Habitat provides an array of services including project management, master insurance program, volume purchasing, budget program and preventative maintenance Contact: Diane White, Senior Vice President,
312-527-7453, dwhite@habitat.com

Making the Most of Your ACTHA Fall Expo Experience

Thu, 08 Sep 2016 20:58:55 GMT

By ACTHA’s Events Committee

Whether you’re a first-time attendee or a seasoned regular, small preparations can make for an effective use of your time at ACTHA’s fall expo events. Below are 3 easy tips for both association and commercial attendees to help maximize their event experience, courtesy of ACTHA’s Events Committee:

Association Attendees

Divide and Conquer. Savvy associations will register multiple people and assign each to attend various education sessions or meet with specific vendors. Since sessions run concurrently, this allows the association attendees to experience all aspects of the event, and then regroup and exchange notes.

Think about your Association’s Needs. Make a list of the top 5 needs for your association in the near future. Then review the exhibitor list prior to the event and identify which companies offer products/services that may meet your needs.

Keep the Big Picture in Mind. Although you may not need a new roof anytime soon, it doesn’t hurt to develop a relationship with a roofing company now. You’ll be able to identify potential companies the association could work with once a need arises.

Commercial Attendees

Promote Your Support. Let your customers know you’re exhibiting at our event. It allows you to maintain relationships with the ones that attend, and your best customers will provide positive word of mouth to other attendees during the event.

Think About Your Customer’s Needs. Nobody wants to hear the same canned sales pitch. With ACTHA, the relationship comes first—then the sale. Take time to understand your customer’s specific needs and describe how you can help them. It may not be today, next month or next year, but establishing strong relationships will benefit your business in the long-term.

Learn about the Industry. The world of community living is ever-changing, and vendors who understand and adapt to our unique needs will be more successful. Aside from participating in the trade show, consider attending the education sessions. Not only will you learn more about the industry, you may meet potential customers!

A Guide to Smoke Free Housing

Thu, 08 Sep 2016 20:08:43 GMT

By Kristina Hamilton,
Senior Manager, Tobacco Control

American Lung Association in Greater Chicago

If someone smokes in your property, you know how serious the damage can be: burned carpet, stained walls, and the residual smell. Secondhand smoke is hard on your investment, so imagine what it does to your residents.

In a multi-unit building, 35 to 65 percent of the air in any given unit is shared from other units and common areas. That means if just one resident smokes, all other residents in that building share the consequences, including an increased risk of heart attacks, stroke and lung cancer. If children are exposed to secondhand smoke, they will have an increased risk of asthma attacks, infections, and SIDS (crib death).

You can protect your residents’ health and your investment by making your properties smoke-free. Going smoke-free doesn’t mean that you don’t accept residents who smoke. Simply put, a smoke-free building is one in which smoking is not permitted indoors, including in any units or common areas. Adopting a smoke-free policy is legal, profitable and easy.

Smoke-free policies are legal. Just like your policies regarding noise and pets, you can enact policies to prohibit smoking to create a better, safer living environment for your residents. In fact, the U.S. Department of Housing and Urban Development is in the process of transitioning all of its properties to smoke-free and strongly encourages private property owners and managers to do the same.

Smoke-free policies are profitable. Compared with a unit where smoking is allowed, smoke-free units can cost two to six times less to turn over. In addition, a poll commissioned by Cook County Department of Public Health found that more than two-thirds of suburban Cook County renters would be more likely to rent in a smoke-free building than a building that permitted smoking in units. One out of five renters even said they would be willing to pay more to live in smoke-free housing.

Smoke-free policies are easy. Developing and implementing a smoke-free policy takes minimal effort and produces maximum results for you and your residents. Once implemented, smoke-free policies are generally self-enforcing and require little staff time. Check out this step-by-step guide to implementing smoke-free housing for rental properties. Community associations who wish to become smoke-free would require a bylaws update.

When you’re ready to get started, Healthy HotSpot is here to help. We work with property owners and managers, public housing agencies, private developers and community organizations to transition properties to smoke-free. We can provide free technical assistance, including help with sample lease language, resident surveys, smoke-free signage, smoking cessation resources and fact sheets.

For more information, visit www.healthyhotspot.org or contact Aesha Binion at the Cook County Department of Public Health: abinion@cookcountyhhs.org or 708-633-8342. Property owners/managers outside of Cook County may find resources here.

2016 LEGISLATIVE ROUNDUP Affecting Condominium and Common Interest Community Associations

Thu, 08 Sep 2016 19:30:48 GMT

By Michael C. Kim
Attorney, Michael C. Kim & Associates
Chicago
ACTHA Legislative Committee Co-Chair

As in past years, the Illinois General Assembly ultimately passed legislation affecting the operations of condominium and common interest community (a/k/a townhome and homeowners) associations. Having been passed by the Legislature, the bills have now been signed into law by the Governor.

A synopsis of these bills is set forth below:

HOUSE BILL 4658 (HB 4658) (now Public Act 0776, effective August 12, 2016) amends the Condominium and Common Interest Community Ombudsperson Act (the “Ombudsperson Act”) by changing the definition of “condominium association” in accordance with Section 2(o) of the Illinois Condominium Property Act (as well as a similar reference for the definition of a “master association”); placing the Ombudsperson’s office within the Real Estate Division of the Department of Financial and Professional Regulation; precluding the Ombudsperson from having any authority to consider matters subject to the Illinois Human Rights Act or brought before the Department of Human Rights or the Illinois Human Rights Commission or comparable local governmental body or a federal agency or commission; changing the date on which the Ombudsperson can offer outreach and educational courses to July 1, 2017 (originally July 1, 2018); including in the Ombudsperson’s website information concerning alternative dispute resolution programs and contacts; permitting use of a statewide toll-free number to provide information and resources; specifying that the association’s policy for resolving complaints by unit owners must include a requirement that the determination of the dispute be made within 180 days after receipt of the original unit owner’s complaint; extending the deadline for establishing and adopting the unit owner’s complaint resolution policy to January 1, 2019 (if the association is created after January 1, 2019, it must establish and adopt its policy within 180 days after its creation); eliminating the potential penalty of an association’s not being able to enforce its common expense/assessment lien rights for failure to adopt a complaint resolution policy (note that the statutory reference to Section 65(g) is probably erroneous); postponing until July 1, 2020 (and subject to appropriation of funds), the Ombudsperson’s assisting a unit owner in resolving that owner’s dispute with his/her association involving either the Condominium Property Act or the Common Interest Community Association Act; providing that the Department shall establish rules describing the time limit, method and manner for dispute resolution by July 1, 2020; stating that a request for information to the Department of Ombudsperson is not a request under the Freedom of Information Act; stating that the confidentiality provisions of the Ombudsperson Act do not extend to educational, training and outreach material, statistical data or operational material maintained by the Department under the Ombudsperson Act; requiring the Department to submit its first annual report to the General

Assembly by July 1, 2018 and thereafter by October 1 of each year, which reports shall include the number of requests for information, the training, education and other information provided, the manner in which education and training was provided, and the time required to provide training, education or other information, and analysis of concerns within condominium and common interest communities; and providing a new effective date of January 1, 2017 (previously July 1, 2016) for the Ombudsperson Act, as well as a “sunset” (repeal) date of July 1, 2022 (previously July 1, 2021).

COMMENT: The Ombudsperson Act is a “work in progress” with good intentions but hampered by lack of state funding.

HOUSE BILL 5696 (HB 5696) (now Public Act 99-0612, effective January 1, 2017) amends the Common Interest Community Association Act and Condominium Property Act to expand the definition of “acceptable technological means” to include “any generally available technology that, by rule of the association, is deemed to provide reasonable security, reliability, identification, and verifiability.”

COMMENT: Essentially a restatement and reorganization of previously stated concepts in the statutes. No material changes

SENATE BILL 2354 (SB 2354) (now Public Act 099-0567, effective January 1, 2017) amends the Condominium Property Act and Common Interest Community Association Act and represents a significant “push back” against the 2014 Palm II appellate court ruling. SB 2354 confirms that an executive session can be held either as a part of an open meeting OR as a “stand alone” event “separately from a noticed meeting”. Presumably, as a “stand alone” event, there would not be a notice requirement. Also, SB 2354 expands the subject matter of executive session to include discussion with or about independent contractors, agents or other providers of goods and services. Thus, the board can interview and meet with contractors or other third party providers in private. In addition, SB 2354 expressly acknowledges that the board’s consultation with association legal counsel can be had in executive session.

COMMENT: SB 2354 does not amend Section 18.5 of the Illinois Condominium Property Act which applies to master associations; so master association board meetings are NOT affected. Note that SB 2354 did NOT amend either the Illinois Business Corporation Act or General Not for Profit Corporation Act, both of which corporation statutes have “open board meetings” sections. It is likely that the overlooked Section 18.5 and the corporation statutes will be addressed in future legislation to make them all alike in this aspect.

SENATE BILL 2358 (SB 2358) (now Public Act 99-0567), effective January 1, 2017) amends the Condominium Property Act and the Common Interest Community Association Act to state that any assignment of a developer’s interest in the property to a successor is not effective until such a written assignment is recorded (presumably with the local recorder of deeds).

COMMENT: Good idea.

SENATE BILL 2359 (SB 2359) (now Public Act 99-0569, effective January 1, 2017) amends the Condominium Property Act to expressly allow the board of directors to pledge the association’s future income (assessments and other sources) and to mortgage other association assets to secure a loan.

COMMENT: Those declaration/by-laws that require unit owners’ approval of pledge of income (assessments) and other association assets are overridden by this statute, making it much easier to effectuate association borrowing.

SENATE BILL 2741 (SB 2741) (now Public Act 99-0627, effective January 1, 2017) amends the Common Interest Community Association Act to allow correction of errors, omissions or inconsistencies in the governing documents in order to conform with the Common Interest Community Association Act or other applicable law, by only a vote of 2/3 of the board of directors, and negates any provision that requires vote by or notice to the membership.

COMMENT: Assumes that the board of directors is acting properly, but why eliminate notice to the owners?

Overall, the passed legislation is positive and helpful. Of course, legislation is a continuing process year after year. Some good and bad ideas from the past sessions may come back in 2017.

Provide Your Board With The Tools for Success

Thu, 28 Jul 2016 19:51:55 GMT

ACTHA's fall events offer opportunities to move your association forward

Make plans to attend ACTHA’s educational expo & trade shows this fall! Exchange ideas with association board members, find solutions to the biggest issues impacting community associations and meet representatives from legal, financial services, construction firms & more.

South Expo
Saturday, Sept. 24
8am—1pm
Tinley Park Convention Center

· How to review/amend your Declarations & Bylaws

· Overview of the Common Interest Community Association Act and how it differs from the Illinois Condominium Property Act

· Everything you need to know about collecting
assessments

· The PALM decision today: why it’s still a hot topic

North Expo
Saturday, Oct. 15
8am—1pm
Renaissance Chicago North Shore (Northbrook)

· Introduction to The Illinois Condominium
Property Act

· Managing your Association’s winter checklist

· Understanding rules & regulations

· How to fund your next project

All ACTHA education sessions are presented by leading experts in community association management. Registration is now available at www.illinioscondoexpo.com.

Abandoned Vehicle Question

Thu, 28 Jul 2016 12:40:53 GMT

By Michael DeSantis, Attorney
Gardi & Haught, Ltd.
Schaumburg, IL

All homeowners in our townhouse complex have either a 1 or 2 car garage. In addition there is street parking and 2 small parking lots.

One homeowner is renting his unit and moved elsewhere approximately 2 years ago, but left a car parked in one of the lots. He claimed that he intended to fix up the car for sale. It has expired license plates and city sticker (which certainly means it is not insured), and flat tires. Neighbors have complained that this not only occupies a parking space, but is an eyesore. The car appears to be unlocked, potentially inviting homeless occupancy or children to play inside.

We have requested the homeowner to remove this vehicle, but he refused and claimed that his rights would be violated if we had it towed. I'm not sure what rights he has to leave an abandoned vehicle on our property. What options does the Board have?

The authority to tow a homeowner’s vehicle must come from the association’s declaration and covenants, bylaws, or the associations’ rules and regulations. Many condominium associations’ governing documents provide board members the express authority to tow vehicles from the common elements for any number of reasons: violation of parking restrictions, expired tags, the blocking of fire lanes, an inability to operate, etc. However, in the event an association’s governing documents do not expressly provide a board the authority to tow a problem vehicle, a board can establish an express rule via its power to promulgate reasonable rules provided by the association’s declarations.

When purchasing a condominium unit, homeowners agree to comply with the association’s governing documents. In this case, if your association’s governing documents do not provide you the explicit authority to remove the vehicle, the board may want to pass a rule prohibiting the parking of unregistered or inoperable vehicles from parking in the parking lot. Because homeowners agree to comply with association rules when one purchases a condominium, the association will not violate the homeowner’s rights once you’ve given him or her proper notice that the vehicle will be towed.

It’s a good idea to also establish a notice requirement for the association, so that homeowner’s are given an opportunity to make arrangements to remove a vehicle and avoid sanctions. This will have the secondary effect of ensuring the association provides for a period of due process, so as to not run afoul of the rights afforded homeowners in the declaration or bylaws. Of course, this notice requirement may not be necessary when a vehicle needs to be moved on an emergency basis.

Private Communications Now Permitted for Board Members Outside of Open and Executive Session

Thu, 28 Jul 2016 12:37:45 GMT

By: Nicholas Bartzen, Howard Dakoff and Patricia O’Connor, Attorneys
Levenfeld Pearlstein, LLC
Chicago, IL

On July 15, 2016, Governor Rauner signed a bill which became Public Act 99-0567. The new law amends the Illinois Condominium Property Act ("Act") and the Illinois Common Interest Community Association Act ("CICAA") to allow board members of both condominium associations and common interest community associations to meet and discuss certain association business outside of open meetings and executive session (in private gatherings, workshops or even via phone or e-mail).

Whereas boards have been restricted due to the 2014 Illinois Appellate Court Palm II decision, which prohibits boards from having certain discussions outside of open and executive sessions, this new law expands those topics which the board can discuss in a number of different forums, thus significantly moderating the restrictive effects of the Palm II decision.

By way of refresher, the Palm II decision prohibited "working sessions" and discussions by board members over e-mail or phone in condominium associations as well as casual discussions where more than a quorum of board members met to discuss topics related to association governance outside of the designated executive session of a properly noticed board of directors' meeting. Moreover, Palm II limited those topics which the board was permitted to discuss during executive session to: (i) pending or potential litigation, (ii) issues related to employment, and (iii) issues related to unit owners' violations of governing documents.

The amendment to the Act and CICAA, which will become effective on January 1, 2017, will greatly enhance the board's ability to work effectively and efficiently outside of the confines imposed by the Palm II decision. After January 1, 2017, board members may privately discuss the following topics without providing notice to unit owners (private discussions may be conducted in person, via phone or via electronic communication):

(i) pending or probable litigation;

(ii) third party contracts or information regarding appointment, employment, engagement or dismissal of any employee, independent contractor, agent or any other provider of goods and services;

(iii) to interview any potential employee, independent contractor, agent or any other provider of goods and services;

(iv) violations of rules and regulations of the association;

(v) discussion of any association members' unpaid share of common expenses; or

(vi) consultation with the association's legal counsel.

Finally, the new law not only allows boards to meet outside of executive session or open session to discuss the above issues, but it also gives boards the power to close any portion of a noticed meeting in order to discuss the aforesaid issues. LP welcomes this change and strongly feels that these amendments will enhance the board's ability to effectively manage its association.

Palm is a Four-Letter Word

Thu, 28 Jul 2016 11:37:16 GMT

By Martin Stone, PCAM

HSR Property Services, LLC
Tinley Park, IL

Yeah, yeah, just what you needed, another article on Palm, right? We’ve seen a lot of articles about Palm, mostly written by learned attorneys, some written by experienced Managers, and one, I’m told, that was written by an emu. The latter, unfortunately, was not as widely distributed or published as the others, which is a great tragedy, as I’ve heard emus have wonderful senses of humor as well as a flare for the dramatic.

In any case, what we haven’t yet seen-or at least what I have not yet seen-is a very straight forward, no holds barred statement (rant?) from someone willing to go on record and give the whole Palm situation a big slap in the face (see what I did there?) So, here you are. I am your emu.

To clarify for those who have not read or heard the many lectures pertaining to Palm, “Palm” refers to a, now, infamous court ruling more formally known as Palm v. 2800 Lake Shore Drive. This court ruling establishes ‘case law’, which is the interpretation or reinterpretation of an existing statute. In this case, that existing statute was the Illinois Condominium Property Act, particularly Section 18(a)(9) which states (and always has stated) that the Board must conduct all Association business in an open meeting. And because the Common Interest Community Association Act or CICAA (the condo Act for non-condo associations) has the exact same language in it pertaining to Meetings, the Palm ruling affects CICAA in the same way.

Up until 2014 BP (before Palm), the big question had always been: What constitutes conducting ‘business’ at meetings? Furthermore, the consensus (again, before Palm) had always been, quite simply: Voting. Workshops, walk-throughs, emails discussing repairs or proposals, violations, exterior modification requests, etc… it was all just talking or addressing routine maintenance needs, not conducting business.

Whether a vote before an action was taken (voting at an April meeting to replace roofs in June), or voting to ratify a decision already made (voting at a June meeting to approve the plant replacements completed in April), so long as that voting was done at an Open Meeting, it was argued quite successfully for decades that the Board was being transparent and providing full disclosure of all business being conducted.

But then Palm happened, and now the definition of ‘business’ conducted at meetings has been expanded and redefined as any voting or discussion involving a quorum of the Board. In short, it means that any instance where a majority of the Board members discuss any association-related matter, whether by phone, electronically (email), or in person, for which the owners are not previously given notice and the opportunity to be present, the Board of Directors is breaking the law.

‘But that’s ridiculous!’ we have all said. ‘How do we avoid this?’ we have all asked. As your trusted and faithful emu, I’m giving it to you straight, and I’m here to tell you that it is not only ridiculous, but complying with the Palm ruling is downright impossible.

Emus are nothing if not controversial in their opinions, but let me first say that Palm ruling was a good thing in that the Board of Directors that was sued was doing very naughty things, including but not limited to repeatedly voting in closed sessions and refusing to provide owners access to Association documents (minutes, contracts, etc.). This was clearly a Board that needed to be reprimanded for such bad conduct.

But, as mentioned, fully complying with the requirements set forth by the Palm ruling is not possible as it would mean that a Board of Directors would have to either a) have a meeting every 2 weeks or b) not talk to each other at all about anything Association-related except for those 4 times per year when they get together for a meeting. And let’s face it, neither is the slightest bit realistic.

Even if an Association could find Board members willing to give up 2 nights per month for meetings, what facility short of an Association’s own clubhouse would be available that frequently? Most Association’s do not have clubhouses, so their Board meetings are held at libraries, town halls, community centers, and police stations. But if you took the number of community associations in any given City or Village, and multiplied it by 2 meetings per month… you would run out of availability pretty darn fast!

What’s that you say… have the meetings in someone’s driveway? What about November-March, and in this year’s case, the collective better half of April? What’s that you counter… have it inside someone’s garage? Okay, aren’t we getting a little silly now?

What do the Attorneys have to say about all this? I’ve spoken to many attorneys ever since Palm happened, mostly venting my incredulity, but also trying to wrap my head around how to help my associations adapt to this new world order.

Let me just say, Attorneys are very good at pointing out all of the things that would constitute a violation of the Palm ruling, but they seem just as flummoxed as I when it comes to the question, how does a Board comply with Palm? Here are the most straight-forward suggestions that I’ve heard:

#1: Assign more spending and decision-making authority to Management. This will eliminate micromanaging by the Board and allow the manager to make judgment calls and decisions consistent with the policies and procedures adopted by the Board. I love and admire the attorney who suggested this, but I must admit, I laughed out loud when I heard this one. The Board of Directors giving their Manager cart blanche when it comes to maintaining the property is just not going to happen for 2 reasons:

1) Boards don’t trust their manager to this extent, nor are they able to give up this much control over where the money goes. Speaking from personal experience as a Manager with a $1,500 spending authority in most of our Management Agreements, I still get questioned by a Board when I cut a $1,300 check for roof repairs without checking with them first, or asked why I couldn’t find someone cheaper. Can I justify my actions? Absolutely. But do I really want to spend all my time doing that if my spending authority was increased to, say $5,000? Would it really make anything easier? No.

2) This suggestion essentially puts Managers in a position of decision maker. And most Managers do not want to be (nor should they be) the decision maker because, while a Board member cannot generally be held personally liable for their actions (i.e. decisions), a Management company most certainly can be. And why would a Manager take on additional risk and liability? A manager, first and foremost, carries out the decisions and directives of the Board, who can delegate tasks, but cannot delegate responsibility

.#2: Assign more decision-making authority to the Board president or another designated Director, and eliminate unnecessary Board discussion.

Second verse, same as the first. While there are some Boards out there whose directors are more than happy to sit back and let that designated Director call most of the shots, the majority wish to be involved in the decisions making process. So I strongly believe this suggestion would fail for much the same reasons the first suggestion would... most Board members aren’t going to give up all the control to someone else, whether it’s another Board member or their Manager.

#3: Have monthly Board Meetings, and Board members should refrain from any discussions of any kind outside of said monthly meeting.

While this suggestion comes closest to plausible, it doesn’t quite hit the mark. Though some associations have monthly meetings, most do not. Whether it’s because they aren’t able or willing to give up more of their free time to have more meetings, or that it’s simply too difficult to coordinate all of the different Board members’ collective personal schedules in order to do so, monthly meetings just aren’t going to happen for many Associations. And if the solution isn’t applicable to all Associations, then it isn’t a very effective solution.

So, what do you do? How do you comply with the Palm ruling? More accurately, how can you avoid violating Section 18(a)(9) of the Condo Act now that it has been filtered and interpreted by the Palm ruling? First, let’s keep in mind the following:

1)    There is no Board of Review or governing body that enforces Palm or issues fines for violations.   “There is no Palm Police,” says Dawn Moody of Keough & Moody, but adds quickly with a chuckle “…at this time.” Therefore, in order to be found in violation of Palm, someone would have to be so disgruntled that they sue you and a judge would have to rule that you are indeed a stinker.

2)    Since this type of case would not be for personal damages, no attorney would take the case for a percentage of a monetary judgment, because there would not be any monetary award or judgment. Meaning, the disgruntled owner would have to flip the bill if he wanted to sue. According to Stuart Fullet of Fullet, Rosenlund, Anderson, the first year of litigation will cost anywhere between $25,000 and $50,000, and that’s on the low side, meaning a 14-year litigation would cost somewhere in the neighborhood of $400,000. You know anyone willing to cough up $400,000 because you ratified the Board’s approval of the sealcoating contract a month after the parking lot was sealed?

3)    In said lawsuit, in order to be entitled to monetary damages, said disgruntled owner would have to prove that they suffered a loss by the Board’s alleged non-compliance with Palm. I don’t see how ratifying the renewal of your Lawn Maintenance contract can cause anyone a loss, but maybe I’m too insensitive to people’s feelings.

4)    The Association’s Directors & Officers insurance policy would generally cover the cost of the Association’s or Board’s defense in the event that the Board is sued for violating the Act. In other words, the plaintiff needs a whole heck of a lot more money than the Defendant would.

5)    “Palm” was the end result of a 14-year lawsuit, filed by an Association member by the name of Gary Palm (who happened to be an attorney), against his Association and its Board of Directors for what were clearly violations of the Condo Act. This was not a Board that signed a snow removal contract in late October and waited until their November Board meeting to ratify the approval. This was a Board that repeatedly had closed sessions at which they did all their voting and stonewalled Gary Palm when he requested copies of Association records the Act clearly entitled him to examine. And Mr. Palm (now deceased, by the way) was not an individual who spent hundreds of thousands of dollars of his own money, which 14 years of litigation would most certainly have cost him. This was a disgruntled owner who happened to be a lawyer with enough time and energy to handle the suit himself.

So, keeping these things in mind, what should you do about Palm? Now we come to the most controversial part of the article. My suggestion…

Do nothing.

To confirm, do nothing provided you have always been sure to make all votes in an open meeting (4 per year is just fine), so that all owners know every decision you are making on their behalf. Continue to be as transparent as possible. Schedule your meetings, albeit 4 of them, around the main decision making times of the year (plant replacements, painting projects, paving projects, roof projects, contract renewals, etc.) so that, as often as possible, the Board is discussing and voting before the actions are taken.

And in the event you are in a situation where you need to sign a contract before the next meeting, maybe to avoid a lapse in service or missing out on a significant cost savings, then make sure you ratify that decision at the very next meeting. Truth be told, I’m not a big believer in ‘emergency meetings.’

Make sure any owner hearings you have for violations are scheduled for the same night as a Board meeting. Be sure you host an open forum for all owners present as the last agenda item of every Board meeting.

To confirm, this is just one Manager’s opinion, and I don’t necessarily expect too many others to share it. But I am nothing if not brutally honest and blunt. And it is with that honesty and bluntness that I say to my Boards: If you’re truly not doing anything wrong or inappropriate, what can anyone do to you? Form everything I’ve seen and heard over the past 2 years since we all got smacked with Palm (see? I did it again), the answer is ‘nothing.’ So, to the question, ‘What should we do about Palm?’… I give the same answer: Nothing. Again, just one fed up Manager’s opinion.

Finally, what about all of those ‘illegal’ email discussion threads among the Directors that eventually end with a Board consensus? (shrugs) The world is different than it was 14 years ago, when Gary Palm first got his britches twisted enough to file suit. There were no smart phones. Email in offices wasn’t as prevalent as it is now. Faxing was the quickest way to put printed word in someone else’s hand and now faxing is an antiquated joke. Many offices are completely paperless! The result… People are now accustomed to and therefore demanding of instant gratification. So to try to tell a Board of Directors to deny themselves that instant gratification, and to keep it all bottled up until the next meeting … you’d have better luck trying to put lipstick on an emu.

The Ombudsperson: Any Closer to Reality?

Wed, 08 Jun 2016 13:19:28 GMT

By Douglas J. Sury, & Member of ACTHA Legislative Action Committee
Keay & Costello, P.C.
Wheaton, IL

For many members of ACTHA, Pat Quinn’s signing of the Condominium and Common Interest Community Ombudsperson Act in December 2014 was a pleasant surprise. While different versions of ombudsperson legislation had been introduced in several previous legislative sessions, there wasn’t much hope that the concept of an ombudsperson would ever become a reality. That, however, has changed...somewhat.

The dynamic in Springfield between the executive and legislative branches is obviously different than when the bill originally passed. At the time the bill was passed, both houses of the legislature and the governor’s office were under the leadership of the democrats. That is no longer the case. Discussions with the new executive branch leaders continue over the true role of the ombudsperson and the office. Should it be solely educational and a resource for owners and boards? Should it take a more active role in assisting in resolving disputes? Should the office do both? Representatives from ACTHA were involved in meetings during the current 99th General Assembly with legislative leaders, the Department of Financial and Professional Regulation (which is the department under which the ombudsperson will operate), and other stakeholders in an attempt to reach consensus as to what the ombudsperson office should be. As of the authoring of this article, House Bill 4658, which makes several changes to the original Act, has passed both houses of the General Assembly. Since the bill was a bipartisan effort, there is expectation that it will ultimately be signed by Governor Rauner. This article will therefore attempt to highlight certain portions of the Act and the current state of the ombudsperson, in light of the changes contained in House Bill 4658:

The Current Role of the Ombudsperson

No later than July 1, 2017, the ombudsperson is to be offering training, outreach and educational materials to the public and it may also offer courses related to the management and operation of community associations, the Condominium Property Act and the Common Interest Community Association Act. The ombudsperson is to also offer a toll-free number for contact and inquiry purposes in addition to providing information regarding alternative dispute resolution providers (arbitrators, mediators) and methods available to communities and their members. The ombudsperson does not have authority to consider any matters involving claims under the Illinois Human Rights Act or that are properly brought before the Department of Human Rights or the Illinois Human Rights Commission.

Reporting to the General Assembly

The Department of Financial and Professional Regulation is required to provide its first written report of the ombudsperson’s activities to the General Assembly no later than July 1, 2018 and beginning in 2019, annual reports of the office’s activity are to be filed no later than October 1st.

It is expected that the General Assembly and administration will use these reports to evaluate the proper, future role of the ombudsperson.

Registration of Community Associations

The requirement that all community associations register with the Department has been removed.

Association Internal Dispute Resolution Policies

All associations subject to the Condominium Property Act and the Common Interest Community Association Act must adopt their own policies for resolving complaints made by owners no later than January 1, 2019. The original bill required the policies to be in place by January 1, 2017 so associations have been afforded two additional years to develop these policies. The Act currently provides that these policies must include a form on which an owner may make the complaint, a description of the process by which the complaint must be submitted, the timeline in which the Association will resolve the complaint, and the requirement that the Association make its “final” decision within 180 days.

While House Bill 4658 still offers opportunities for the ombudsperson to directly assist owners and boards in resolving disputes, the funds for such services have yet to be provided. ACTHA leaders stressed to legislative leaders that education should be a primary responsibility of the ombudsperson. House Bill 4658 is a step in that direction, but the final complexion and role of the office has still not been determined. Stay tuned…

Legislative Update. June 2016

Wed, 08 Jun 2016 11:13:03 GMT

By John Carr, ACTHA Lobbyist and Legislative Committee Member

2016 will be remembered as one of the most challenging legislative sessions since the Governor Blagojevich impeachment proceedings from 2008-2009. In addition, the General Assembly had far fewer session days in 2016 which substantially limited the number of measures legislators could consider during the year. Overall though, ACTHA opposed several bills that could have harmed condominium associations statewide (HBs 4489, 4490 and 4491) and was instrumental in amending HB 4658, a bill lessening the powers and duties of the Illinois Condominium Ombudsman.

The ACTHA bill tracker follows:

HB 2642 (Cassidy-Passed the General Assembly on 5/31/2016.) ACTHA supported this bill as championed by the Chicago Bar Association. It requires written notice procedures for storage fees in a lien situation. The bill amends the Illinois Labor and Lien Act.

HBs 4489, 4490, 4491 (Drury). These bills sough to overturn the Illinois Supreme Court ruling in the Spanish Court case. ACTHA opposed the bill, offending both the sponsor and another member of the House Judiciary Committee. The sponsor held these bills for the remainder of the session. Note the defendant for the Supreme Court case resides in Drury’s district.

HB 4658 (Nekritz-Breen. Passed the General Assembly on 5/31/2016). This bill amended the Condominium Ombudsman Act. The proponent of the legislation was the IL. Department of Professional and Financial Regulation. The Department sought a less aggressive version of the Act because existing law would have become effective on July 1, 2016, without any funding sources from the State. The bill requires the Ombudsman to engage in primarily a consumer education role that promotes methods of alternative dispute resolution for solving association disputes. ACTHA was engaged in amending the law based upon suggestions obtained during the February Legislative Meeting.

HB 5927 (Fine) was Doug Sury’s initiative that we are holding over until 2017.

SB 2354 (Haine-Passed the General Assembly on 5/18/2016). The Illinois Lake Communities Association was the chief proponent of this legislation. ACTHA also supported the measure in House and Senate committee hearings. The bill makes a technical change to CICCA regarding association board meetings and closed sessions.

SB 2358, 2359 (Mulroe-Passed the General Assembly on 5/18 and 5/30, 2016. CAI was the chief proponent of both bills. 2358 was a technical change to CICCA regarding developer assignment responsibilities. 2359 amends the Condominium Act to allow a board to assign income by a simple majority vote. ACTHA was neutral on both measures.

Vacation Rentals: What to Know

Mon, 06 Jun 2016 14:30:06 GMT

By David C. Hartwell, Attorney
Penland & Hartwell, LLC
Chicago, IL

This US economy is changing rapidly and one segment that is growing faster than most is the relatively new concept of a shared economy where individuals can engage in informal business opportunities without having to succumb to the formal business model. Popular examples of these shared services are UBER, LIFT, AirBNB, VRBO. Because these services have become so popular and dynamic in their explosive growth, it is often difficult to identify and assess their impact and effect. In regard to services such as AirBNB or VRBO, a person can easily and efficiently utilize an internet based platform to engage in the short term rental of their apartment, condominium or house, which are commonly referred to “vacation rentals”. However, such uses often times violate provisions of a lease or the covenants and rules and regulations of a condominium or homeowners association. This article shall examine the proliferation of vacation rentals in the Chicagoland area and how associations are addressing them.

Recent news of the proliferation of vacation rentals in Chicago has illuminated the fact that for certain neighborhoods or buildings, vacation rentals are significant and are having a substantial impact. The Chicago City Council has sought to address these types of rentals because of the negative impact on hotel room rental and hotel tax to the City. While legislation is still pending, how effective it will be remains to be seen because identification of rentals and enforcement of code provisions will be difficult at best. Boards of directors for condominium associations have also sought to address vacation rentals because such rentals frequently violate the covenants, the declaration and rules & regulations; and many have argued that these types of rentals downgrade the livability of the building. Readers should note however that some high rise condominium buildings allow for such vacation rentals and have adopted strategies to embrace it.

Typically, declaration covenants for a condominium association prohibit short term leasing of a unit in several ways. The declaration may ban unit leasing altogether, or if leasing is allowed, may prohibit short-term leasing, requiring units be leased for a minimum of six or twelve months. Secondly, most all declarations include a covenant that disallows an owner from utilizing his/her unit for business purposes. Despite creative arguments to the contrary, it is indefensible that use of a unit for vacation rental is not a business purpose. Additionally, many associations have enacted rules & regulations prohibiting short term rentals and prohibiting subleasing of units. Therefore, boards are generally equipped with remedies to address vacation rentals.

If a board does not consider the association’s governing documents to be sufficient, it can seek to amend the declaration or alternatively enact additional rules prohibiting such rentals. Amendments are often challenging because to successfully pass one, a super majority of either two-thirds or 75% of the unit ownership is required. Enactment of rules is a more streamlined process, requiring only a vote of the board; however the Illinois Appellate Court has recently created a new wrinkle in the February 3, 2016 decision of Stobe v. 842-828 West Bradley Place C. A. The Court invalidated a percentage leasing restriction rule on the basis that the covenant allowing for leasing did not also specifically authorize the Board to enact additional rules to restrict leasing. Therefore, boards will need to carefully review the leasing covenant in the declaration to determine if it can successfully enact rules to curtail or eliminate vacation rentals of units.

As stated above, most associations already have sufficient prohibitions and remedies to address vacation rentals; but identification of such rentals is difficult. Typically, rental websites do not state the address of building on the initial advertisement. To obtain this information, a person would need to sign up with the service and pay a fee. Undertaking this level of investigation would be burdensome for most associations. Usually identification of vacation rentals arises form vigilance. A random traveler entering a building with luggage is indicative of a vacation renter and doorpersons should be able identify these people and make a simply inquiry of the nature of their stay. Often times, vacation travelers make inquiries with doorpersons and property managers as if they were a concierge, again another good sign of a vacationer. For those building which do not have a doorperson or security, the vigilance must come from fellow unit owners.

Once a vacation rental operation is suspected, the board should undertake reasonable investigation to ascertain a likelihood of its occurrence and engage in the rule enforcement process. Gathering evidence is important, such as a screen shot of an advertisement, a statement of a neighboring unit owner, or a statement of a doorperson or property manager. In my experience, once a unit owner has experienced the rule violation process and been assessed a fine (which is often significant) the practice stops.

Lastly, it is important for boards to understand why this is a critical issue. While livability in a building is always important for boards to address, there are more significant considerations. Unit owners renting to vacationers almost never inform door staff, property management or security of an incoming vacationer, thus raising security concerns of unidentified people entering the building. Second, general liability insurance policies may not cover losses occurring from vacation rentals, which would open the association to uncovered liability. Third, an argument could be made that the short-term rental of unit or rooms to vacationers could cause the building to be viewed by officials more as a public accommodation instead of a private residence, which could implicate the association to follow provisions of the Americans With Disabilities Act, additional building code and fire safety provisions, and other codes and regulations.

Vacation rentals are not likely to disappear and therefore boards need to understand their impact on the building and owners, how to identify the rental, and how address them. Boards should work in conjunction with property management and their legal counsel to have a protocol for attending to vacation rentals and being prepared should vacationers begin showing up in your building.

By: David C. Hartwell

Penland & Hartwell, LLC

1 N. LaSalle Street, 38^th Floor

Chicago, Illinois 60602

312-578-5610

Dhartwell@penhart.com

So Whose Castle Is It Anyway?

Wed, 01 Jun 2016 18:02:15 GMT

By Stephen Daday, Attorney
Klein, Daday, Aretos & O'Donoghue
Rolling Meadows, IL

We have all heard the old adage that "a man's home is his castle." But whose castle is it in the context of community living and condominium ownership?

The competing interests of individual privacy collide with the association's interest in security on an almost daily basis. Where do those interests compete and where do they intersect?

The individual’s right to privacy is time-honored and engraved in principles that the United States Supreme Court has articulated in many cases and is codified in the Illinois Constitution.

Section 6 of the Illinois Constitution guarantees the right to privacy. “'The people shall have the right to be secure in their persons, houses, papers and other possessions against unreasonable searches, seizures, invasions of privacy or interceptions of communications by eavesdropping devices or other means.”

Two Illinois statutes have particular importance in the context of condominium living and governance. The Illinois Eavesdropping Act 720 ILCS 5/14-1 et seq. prohibits the recording of "private conversations." The statute defines private conversations as “oral conversations transmitted under circumstances reasonably justifying the expectation that the conversation would remain private” and further prohibits surreptitious recording of conversations without all parties to the conversation consenting to the recording.

The legislature has also enacted the Video Recording Act 720 ILCS 5/26-4. The law protects against the intrusion by video recording where an individual has a reasonable expectation of privacy, without that person’s consent.

What if the association has an issue with criminal activity on the premises? Do those circumstances permit the association to act to protect members by videotaping activity?

Despite the existence of various statutes, the prohibition against intruding on an individual's expectation of privacy does not extend to the common areas of the association where an expectation of privacy simply does not exist.

By its very definition all owners have an interest in the common areas of the association like parking lots, hallways, laundry areas, pools, and similar areas which do not intrude on the individual unit owner’s areas of seclusion such as his own unit.

The association has the right to record by video common areas of the property. It does not have the right to record by video any part of an individual owner’s unit or record audio conversations or audio transmissions even in the common areas without all parties’ consent.

The association has the obligation to protect all of unit owners and provide a safe and secure environment for those owners.

The association’s obligation does not trump the individual’s right to be secure and free from intrusion within their own units, the association clearly has the right and the obligation to secure the common areas of the property, which may include video recording.

It is very clear that although a man's home is his castle, his castle does not extend beyond the walls of his unit.

Mark Swets Named New Executive Director of ACTHA

Wed, 04 May 2016 15:44:51 GMT

The Value of Relationships

April 16 marked a special day for me. Professionally, it was my first official day as ACTHA’s Executive Director. Personally, it was a bit overwhelming meeting hundreds of people who will undoubtedly become a valuable resource in my new role.

As a first-time attendee at the ACTHA Spring Conference, I was impressed with the variety of education topics, the quality of the presenters and the level of engagement between attendees and vendors during the tradeshow. It was a welcoming environment conducive to learning and networking—something not always found at other industry events!

It takes a team effort to move an association forward, and after my short time here I can tell you this: We have a GREAT team! Thank you to all of the members who serve on ACTHA’s board of directors, committees and as event volunteers. Your time and dedication to our association has not gone unnoticed. Thanks to our commercial members, who continually support the association financially through sponsorships, advertising and participation in ACTHA tradeshows. Thanks to all of our event speakers, who serve as subject matter experts while sharing their passion and knowledge to educate attendees on various subjects regarding community living.

Like most trade associations and professional societies, ACTHA is very much a relationship business. There is a “speed of trust” that takes place within our association, and members take comfort knowing that they can share issues big and small with each other and get reliable, honest feedback. After witnessing this exchange firsthand between members during the conference, I had an epiphany. It is this level of relationship that delivers unique value to ACTHA members and keeps your commitment to the association each year. There are only a few opportunities each year to not only connect with fellow associations but also a wide-range of vendors to address the needs of those involved with Community Living. ACTHA will always be committed to serving the needs of unit owners and board members throughout Illinois.

I look forward to seeing you at a future ACTHA event!

South Expo – Saturday, September 24
Tinley Park Convention Center, Tinley Park

North Expo – Saturday, October 15
Renaissance Chicago North Shore, Northbrook

ACTHA Public Articles

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IPC Cleaning Product Exposures Up 30%

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Storage Cleaning & Organizing Benefits…

DON'T PANIC BECAUSE OF THE PANDEMIC!

Message from the Board of Directors - February 2020

Association Reserves

by: Peter Santangelo, President at Wintrust Community Advantage

More blessed than any man deserves to be . . .

Success Is Working A Season Ahead

Sherm M. Fields – Acres Group

ACTHA LETTER FROM THE PRESIDENT - Fall 2019

Structural pruning

By: Tom Smiley, PhD

Chicago condo owner’s long-running Fair Housing case settled

Assistance animal not a pet

Fair housing case continued

Mounting legal fees

How will changes in FHA financing affect condo homebuyers?

FHA to ease condo financing, claims it will boost homeownership

New FHA policies won’t make homeownership more affordable

Most condo crises not reported

Construction defects plague many condominium projects

Short term rentals turn American Dream into nightmares

Condos as mini hotels?

Condo owners can lose their life savings

HOA news roundup

HOA dispute turns violent (TX)

But wait, the story gets even more bizarre.

August Vendor of the Month

Ice Dams on Condos: Who’s Responsible?

How and Where Ice Dams Form

Condo Association: Roofs as Common Areas

Ice Dam Removal: Avoiding Neglect

Condo Owners: Water Damage and Your Policy

5 Places to Look for Winter Damage in an HOA Community

3 Tips for Keeping Your Association Safe During the Winter

1. Check Your Walkways

2. Watch for Cold Rooms

3. Keep Residents Informed

ACTHA RECAP May 29, 2019

ACTHA RECAP JUNE 13, 2019

Pool Safety Tips for Your Association

By Matthew O'Malley

How bad has this winter been?

By Kevin T. Block

Capital Projects RFP Process – Eight Steps to Success

By: Sheila Malchiodi, The Inside-Out Company, and Angela Williams Duea, LMS

1618 Sheridan Rd. Condominium Association v. Marshall Spiegel

By: Diane Silverburg

ACTHA Vendor of the Month(May): Calumet Painting & Restoration

An Overview of Special Assessments

By: Joseph Scharnak

Are Your Proxies Valid Under Illinois Law?

By: Condo Law Watch Tressler LLP

What Type of Community is Your Association?

Dr. Brandon Hamilton, Ombudsperson for Tree Farm Estates

ACTHA Vendor of the Month(April):Dickler, Kahn, Slowikowski & Zavell, Ltd.

Condo Elections: The Last Word (For Now)

By: Michael C. Kim, Michael C. Kim & Associates

4 Steps to Take When Addressing Property Damage Within Your Association

By: Kelly Elmore, Principal at Kovitz Shifrin Nesbit

Why You Should be Wary of Roof Condensation

By: Adams Roofing

Read More

Consensus Building for Community Associations

By: Rosen Management

ACTHA Vendor of the Month: Pro Home 1

Changes in Illinois Department of Financial and Professional Regulation

Why are your Cook County property taxes so high? Tax bills give the answer

Guiding Homeowners through the Window/Door Architectural Request Process

ACTHA Seminar Recap: Natural Areas Restoration for HOA Common Space

ACTHA Vendor of the Month: Wintrust Community Advantage

Frozen – Flooded and Frustrated

It’s Not the Freeze – It’s the Thaw

Obligations under the Condominium & Common Interest Community Ombudsperson Act

Qualifying for a Community Association Loan

Funding Your Next Major Project: The Costs & Benefits of an Association Loan

Tips of the Month: Common Mistakes Boards Make