Condo lifestyles 07/15 by S//94

JULY 2015 | VOLUME 19 | NUMBER 2

CondoLifestyles

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

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Chicago Condo Extinguishes All Smoking F E AT U R E S

HOW DO I DEAL WITH THESE PEOPLE IN MY ASSOCIATION? COMING TO AN ASSOCIATION NEAR YOU… DRONES TOP 10 WAYS TO GUARANTEE DISASTER IN CAPITAL PROJECTS CONDO ASSOCIATIONS FACE OFF WITH AIRBNB YOUR EMPLOYEE NEEDS WHAT? BUSINESS BASICS FOR BOARDS

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table of contents COVER STORY

03 Chicago Condo Extinguishes All Smoking By Pamela Dittmer McKuen BOARD BASICS

08 How Do I Deal With These People in My Association? By Gabriella Comstock S P E C I A L F E AT U R E

10 Coming to an Association Near You… Drones By Pamela Dittmer- McKuen GUEST EDITORIAL

14 Top 10 Ways to Guarantee Disaster in Capital Projects By Salvatore Sciacca 16 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 18 From the Editor 19 Directory Advertisements L E G A L U P D AT E

26 Condo Associations Face Off With Airbnb By Michael J. Shifrin L E G A L U P D AT E

28 Your Employee Needs What? By Laura B. Friedel & Howard S. Dakoff BOARD BASICS

32 Business Basics for Boards By Michael C. Davids

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COvEr STOrY

by Pamela Ditmer-McKuen

Chicago Condo Extinguishes All Smoking The Next Steps in Smoking Bans Include In-Unit, On Balcony and E-Cigarettes. After seven award-winning seasons, the “Mad Men” cable television show has come to a close. It was great fun while it lasted, immersing viewers into the fictional lives of those who toiled in the advertising agencies of Madison Avenue during the 1960s.

he cultural references ranged from nostalgic to off-putting: Mini-skirts and go-go boots; Multi-martini lunches; The pervasive cigarette smoking; Everyone smoked everywhere, even in movie theaters and doctors’ offices. A lot has changed since then, especially the smoking part. Society as a whole is far more health conscious, and smoking is tolerated much less. Prohibitions are common in

public places and most enclosed ones. Smokers are increasingly unwelcome in their last bastion of personal freedom, their homes, particularly when they share walls, hallways and an HVAC system with others. Considerable progress has been made nationwide in promoting smoke-free policies for multi-unit rental properties. It’s been slower for condominium associations, where issues of legality, owner support and cost

come into play. But it, too, is happening. ParkView at River East Condominium recently overcame the challenges and successfully adopted a declaration amendment that bans all forms of smoking inside the units and on the balconies. E-cigarettes also are banned. The prohibition becomes effective September 1, 2016, giving smokers more than a year to comply, stop smoking or move out. The amendment was passed with very little objection and in only two months’ time. ParkView is a 268-unit condominium building on 48 floors at 505 N. McClurg Court in the Streeterville neighborhood of Chicago. It was built in 2005 and turned over to the owners in 2008. A five-member board governs

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the association. Tricia Conway of Community Specialists has served as the community association manager for the past two years. Soon after Conway took her post, several owners began to lodge complaints about tobacco smoke permeating the building. They expressed concerns for their health and that of their children, born and unborn. Friendly attempts to resolve the issue failed. The board then passed a rule that requires offenders—not the association—to remedy the situation. Offenders must take such actions as changing air filters, sealing off windows and chases, making sure vents are closed, and purchasing and operating purification systems. Fines apply.

Stronger Measures Needed But the smoking continued, and the smoke continued to waft, and the complaints continued to come in. The board decided to take a stronger stance by becoming a 100 percent smoke-free building. David Sugar of Arnstein & Lehr in Chicago is ParkView’s attorney, although he spoke to Condo Lifestyles in general terms without discussing the particulars of the asso-

ciation’s case. According to Sugar, if a declaration does not specifically address smoking— and almost none of them do, an association theoretically could ban smoking via rule. “If the declaration is silent, arguably a rule will work,” he said. “That’s the thought process. The better way to do it is with an amendment.”

Parkview’s Approach The ParkView board chose to pursue amending the declaration. On February 9, 2015, they sent a letter to all owners asking for their support. The letter explained the harmful effects of second-hand smoke and that multiple complaints had been made. It read, in part: “The only way to fully protect non-smokers from the dangers of secondhand smoke is to prohibit smoking, and that is what we are proposing. We also believe that making our building a healthier place in which to live will maintain and improve our property values as well as our quality of life.” Included with the letter was a Special Proxy form, on which owners could vote either for or against the amendment.

The ParkView amendment: “Effective September 1, 2016, smoking is prohibited in and on all portions of the property, including but not limited to individual units, indoor and outdoor common element areas, and limited common element areas (e.g., balconies adjoining units), and no unit owner shall permit smoking in such owner’s unit or any other portion of the property by any lessee, occupant or invitee of such owner’s unit. For purposes of this subsection, smoking means the smoking, burning, inhaling or exhaling of any kind of lighted pipe, cigar, cigarette, hookah, weed, herbs, or any other lighted smoking equipment, including use of electronic cigarettes and other electronic nicotine delivery systems.” After the letter and proxy went out, the staff went about getting signed proxies. They sent emails and reminder emails and made phone calls. Conway credits assistant manager Therese Moran for her perseverance. “Therese worked very hard at soliciting people and getting their votes,” Conway said. “She would see someone in the mailroom and

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COvEr STOrY

say, ‘By the way, please stop by, we have extra copies.’ If someone called for something, she would ask, ‘Can I have your proxy?’ before she hung up.” By April 9, the association had achieved the required two-thirds supermajority of units owners, via proxy votes, to adopt the proposed amendment. By April 28, at a special meeting held solely for the purpose of voting the proxies, the percentage of units which voted was 83.684, according to the association’s certified public accountant. The percentage of units voting to adopt the amendment was 70.470, and the percentage of units voting to reject it was 13.214 percent. The amendment passed.

Education & Health Concerns “Anti-smoking education also is a factor impacting the greater acceptance of prohibitions,” said association attorney Ryan Shpritz of Kovitz Shifrin Nesbit in Buffalo Grove. He has drafted declaration amendments to ban smoking for a couple dozen of his association clients. Health concerns alone are a serious issue, but when compounded by the danger of fire and by the soot and residue left behind by smoke, “it’s easy to put together a Top Ten list

Not Everyone is in Favor “We did have opposition,” said Conway. “There were concerns about having people over (guests) who smoke. ‘My mother-in-law smokes.’ Or, ‘If I want to have an occasional cigar, I don’t want to smoke in my unit, but I want to go on the balcony.’ Two people who voted no said, ‘I don’t like anything that takes away my rights,’ even though they were antismoking.” Even the investor-owners were mostly on board. “They want to rent their units, but they don’t want them to smell like smoke,” she said.

Smoking Bans on the Rise and Facing Less Resistance Exactly how many condo associations have passed smoking bans is unknown, although managers and attorneys anecdotally say the number is rising. They also have seen less opposition to such bans. A few years ago the very idea of prohibiting an owner from smoking in his or her home evoked cries of outrage and potential litigation. Today the ranks of smokers are smaller, and their arguments are considerably weaker, although smokers have greater support in various parts of the country. “I also think those people who do smoke are more accustomed to going outside to smoke because of bans in the municipalities,” said William DeMille, president at Chicagoland Community Management in Chicago. “The big picture is more people are sensitive today to tobacco and smoke odor infiltration than they were in the past,” Sugar said. “People are more sensitive to the health risks associated with second-hand smoke. That’s what’s driving a lot of this.”

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of why you don’t want smoking in your building,” Shpritz said. “It’s definitely not shocking anymore.” Yet another factor is the increase in investor-owners. “From a business perspective, if you don’t have to repaint the walls and recarpet every time someone moves out, you’re better off,” he said. The degree to which smoking is a problem varies from association to association. DeMille has seen only a few of his client associations struggle with complaints. The

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MORE ON SMOKING:

Medical Marijuana Still An Issue Medical marijuana is legal in Illinois, but so far miles of red tape have held up its sale and distribution. Presumably, these matters will be resolved at some future point, and condo associations will have to deal with it on their premises. “If an owner has a license or permit for medical marijuana, it is a disability accommodation that associations will need to make,” said association attorney David Sugar of Arnstein & lehr in Chicago. The medical marijuana industry is still very new, and many advances will be forthcoming. Perhaps the acrid-smelling reefer will fade into the past and be replaced by tablets, liquids and even confections. “Medical marijuana is still going to be subject to nuisance restrictions,” Sugar said. “You can’t stop someone who has a license from smoking, but you can take other measures to keep smoke within the unit. You can require the person who is bothering neighbors to seal cracks, use an air purifier with an activated carbon filter, and keep windows and balcony doors closed.”

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most serious one entailed engineering studies of air flow, significant mitigation efforts and threats of litigation. Ultimately, the complaining owner moved out. At FirstService Residential, vice president of property management Patricia Bialek said “discussions about smoking bans are common and recurring at most associations.” “This topic was recently brought up at an annual meeting for a large high-rise community,” she said. “The board president announced the upcoming year’s initiatives and that the new board would be working diligently to ban smoking in units. The topic was met with controversy among the attending homeowners. Although the initiative is still in the planning stage, consideration would be given to grandfathering current owners.”

Many More Bans May Not Be So Fast To Come Despite the shift toward acceptance of smoking bans, no one predicts large numbers of associations rushing to change their declarations. It’s a big job, and the results are iffy. A total smoking ban took effect last year at 2626

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COvEr STOrY

N. Lakeview Condominium Association in Chicago, but a proposed ban didn’t fly at 372 Central Park West in Manhattan. “A handful are interested, just a handful,” Sugar said. “The reality of life is you need a 2/3 or 3/4 vote of the unit owners to prohibit smoking. It’s hard to get those kinds of numbers in buildings with a lot of smokers or a lot of renters because investor-owners don’t like to limit their potential rental market.” “The situation also depends in some cases on the age of the building,” said DeMille. “Building codes today require better exhausting and air flow than they did 35 or 40 years ago. In newer buildings there may not be as much an issue with odors as with older buildings.” The elephant in the room is whether smoking prohibitions are good for market values, he said. “No one knows the answer to that,” he said. “There hasn’t been enough experience with smoke-free buildings completely to reach a conclusion about that.”

Advice for Associations Considering a Smoking Ban Interested in a smoking prohibition for your association? Consider the following advice from pros who have been through it: • Amendment, not a rule. With a rule, you have to manage complaints, enforcement and hearings.

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“How do you prove someone smoked at 5 p.m. the day before?” Shpritz said. “Eliminating smoking all together is the best solution.” • Get help. Getting the supermajority required to amend a declaration is not a simple task. “The association should contact their legal counsel to start the process,” said Bialek. • No grandfathering. “Normally the focus, when you go to amend declaration, is you need to do whatever you need to do to get votes,” Sugar said. “But to pass this amendment and still have a dozen or two dozen people in the building who are smoking would be a waste of time. You have limited the scope of the problem, but you haven’t eliminated the problem.”

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• Be sure you can get the votes. “If not, you are wasting your time, money and political capital,” Sugar said. “You don’t want to go to the well too often for declaration amendments. You want to craft it in a way of having a really good chance of getting it passed.” • Go for it. “I understand there are costs involved, but you might be surprised how many people are in favor of such a ban not only for reasons for your own health but family and guests and pets,” Conway said. “There also is something to be said for the value of your home. This could affect the value of your investment.” “Smokers don’t have rights,” Shpritz said. “There is no protected class for smokers. As long as you have a reasonable policy adopted by an amendment to the declaration, I think the association will prevail if challenged.” Y

CONDO lIFESTYlES

by Gabriella R. Comstock - Keough & Moody, P.C.

How do I Deal With These People in My Association?

e hear it almost every day in community association living—what is going on with my association? Or we hear, it is not like it used to be! It is becoming more challenging to be a board member. It is not entirely clear why it has changed and maybe there are a multitude of different reasons. Regardless of the size or type of your community, there is (or will be) a challenging person which makes it difficult for the board members to do their job. The challenging person may be an owner or a fellow board member. It can be someone new to community association living or one who has lived there for over 25 years. Yet, it happens to EVERY Association at some time. The purpose of this article is to provide board members and management with a practical guide on how to identify this person and how to prevent this owner from controlling the board.

Who are the Most Challenging People in Associations Today? The most challenging people in associations today can take several different forms. I believe there are five (5) most common types of challenging people: 1.) the delinquent owner; 2.) the owner who does not perform maintenance and denies the Association access to perform it; 3.) the compulsive complainer; 4.) the owner who wants all of the exceptions and 5.) the owner who plays a lawyer on Tv.

1. The Delinquent Owner There are two types of delinquent owners. One is the repeat offender who has learned how to work both the associations and the judicial system. The second is the obscuring and denying offender, who turns their non-payment issue into something that it is not. For example, this person is more focused on what he believes the board should be doing than on what he is (or isn’t) doing. regardless of the type of delinquent owner within your association, the best way to prevent and address repeat delinquent offenders is to adopt a collection policy. The collection policy should be created

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based on the input of the board, management and the Association’s attorney. Once adopted, the collection policy must be communicated to all owners. Most importantly, the collection policy must be uniformly enforced against all owners. By adopting such a policy, not only does it assist in collecting assessments, it also sends a message to the owners that the board is enforcing the documents and being fair.

2. The Owner Who Fails to Maintain His Property This owner may not be maintaining his property and denying the board access because there is a bigger issue, i.e. hoarder or illness. On the other hand, the owner may be denying access because the owner is just being difficult. The best way to handle this owner is to stay focused on the real issue—gaining access and seeing that the maintenance is performed. To do this, the board should submit written requests to the owner which specifically states what it is the Association wants done.

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BOArD BASICS

The Association should encourage a meeting and communication with the owner. It may be necessary to designate one person from the board or management to be the primary communicator with this person so as to diffuse the situation. If necessary, the board or the Association may need to contact the County or Municipality, to see if any assistance can be offered. As a last resort, legal action may be necessary. The key to success with this owner is to not make it personal and stay focused on the goal.

3. The Compulsive Complainer a/k/a The Entitled Owner This owner typically has a misconception as to what it means to live within an Association. This owner should be required to submit all complaints in writing. In advance of board meetings, the board should determine who is going to be designated to “handle” this owner and to keep the board on track of the business that needs to be conducted. Too often, a board does not follow strict procedures in handling this owner and then it misses a legitimate complaint by this owner.

4. The Owner Who Wants All of the Exceptions (Just Because) This owner usually has such expectations

because he knows what everyone else is and is not doing. The way to avoid this owner from living within your community is for the board to rarely grant exceptions. The board should also avoid giving too much information to “carve” valid exceptions. For example, the Association’s rules and regulations should not identify what will be deemed a valid reason to grant a hardship and allow an exception. When an exception is granted, the board should be certain it has a strong reason why and document the reason. lastly, the board should be sure to uniformly enforce the Association’s restrictions.

5. The Owner Who Plays a Lawyer on TV This owner is consistently there to remind the board, management and even the attorney that they are doing things (everything) wrong. To address this situation, the board should be educated to utilize its resources and professionals. The board should encourage the participation of this owner. Without allowing the owner to control the board, the board should respect the owner’s opinions. regardless of the type of challenging owner within the association, the board needs to maintain control. This requires the board to have a plan at the

start of the challenge. The entire Association team should be utilized in creating this plan. Management, members of the board and the association’s attorney all should be a part of formulating the plan. The actions of the board should always be documented. Creation of policies and procedures to address situations, not people, should also be created and followed. While the challenging Owner and the association do not always end up in litigation, should it go that route, the Association wants to be sure that it has the proper paper trail to defend its action. Treating all owners in the same and fair manner will not only help the board should they find themselves before a judge, but it also adds credibility to the board among the other members of the Association. After all, challenging owners are typically very vocal within the community. remembering it does not only happen to your association and continuing to run the Association like a business will enable the board to retain control while also doing what is best for all members of the association. Y Note: This article is a sample of the information provided in the seminar entitled “A Practical Guide to Dealing with the 5 Most Challenging Owners within your Association” as Presented by Gabriella Comstock of Keough & Moody, P.C. at the CAI legal Forum on May 7, 2015.

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by Pamela Dittmer McKuen

Coming To An Association Near You: Drones…

It’s Not Too Early For Associations to Make Rules For These High-Flyers That buzzing noise overhead is not the sound of confused cicadas. The Northern Illinois brood, better known as “17-year locusts,” is not due again until 2024. A very different creature is infiltrating the skies: the unmanned aerial vehicle, or UAv. You probably call it a drone.

n the not-distant future, community associations will launch camera-equipped flying machines to perform myriad tasks. Drones can examine building surfaces, pinpoint insect and wildlife invasions, check on the progress of contractors, and verify rules violations. “The technology is very exciting,” said Lou Lutz, Executive Vice President at First

Community Management in Chicago. “We’ll see better, faster, more accurate results for all sorts of services.” Although drones have long been enlisted by the military for wartime purposes, commercial usage is largely prohibited. The Federal Aviation Administration, which regulates their operation, has been doling out a limited

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number of exceptions while figuring out how to best integrate the devices into the airspace. Proposed rules for small (under 55 pounds) non-recreational drones are undergoing an extended public review and comment period, a process expected to go into 2017. Among those who received go-aheads is Bloomington-based State Farm auto and home insurer, which envisions drones assisting in the assessment of damage claims. Another is the Illinois State Police, which foresees the ability of drones to investigate major traffic crashes and help locate missing persons. Although exemptions typically have

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S P E C I A l F E AT U r E

required drones to remain within eyesight of the operator (among other restrictions), this spring the FAA partnered with three companies to experiment with extended distances: CNN is working on enhanced aerial photography; BNSF Railroad is inspecting track conditions in remote areas; and PrecisionHawk, an aerial data collection company, is testing crop surveillance. “We are trying to be progressive and see what technology will make our lives more efficient and provide a better customer experience,” said Joshua Connell, managing partner at Lakeshore Recycling Systems in Morton Grove. The company has equipped its truck fleet with tablet computers to maintain route records and real-time communications. It also is testing GPS-tagged waste containers with the goal of billing customers based on usage, similar to the Illinois Tollway I-Pass system. Connell agrees a drone would be helpful for conducting inspections and taking aerial

photographs on corporate grounds, but so far he hasn’t looked into it. Perhaps someday.

Any Hobbyist Can Fly A Drone Recreational drones are another matter entirely. Anyone can operate a small drone as a hobby without FAA regulation as long as it does not interfere with air traffic. Prices are affordable, with entry models at about $100. The Consumer Electronics Association predicts 2015 sales will reach $130 million, or about 400,000 units, for an increase of 55 percent

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over the 2014 numbers. If that pace continues, sales could reach $1 billion within five years. It’s not too early for associations to consider the reality of drones flying around their properties. Association attorney and author Marvin Nodiff of St. Louis has done just that. In his 2014 mystery novel, “The Dark Condos” (Condo Tales Publishing LLC), a hard-nosed board president sends his drone in search of rule-breakers. He finds them, but

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he also gets sued for invasion of property. “When I began working on (the book) four years ago, drones were mentioned in the news only occasionally, but I found the opportunities intriguing for community associations,” Nodiff said. “What beneficial functions could be performed? What mischief could occur?” Both commercial and recreational drones offer benefits and challenges to associations. On the plus side, the ability to conduct inspections such as Chicago’s high-rise façade ordinance will be safer and less expensive when conducted or aided by a drone, said attorney Jeffrey Antonelli of Antonelli Law in Chicago. “You don’t take the chance of having people going up there as often,” he said. “There are drones that take high-definition video, and drones with special sensors that allow you to look for structural flaws where heat is leaking out.” Antonelli, a drone hobbyist and safeflying activist, is one of a handful of attorneys nationwide to form a drone practice group within his office. Its purpose is to assist business users and drone manufacturers successfully petition for FAA exemptions. “Drones can be used for fire safety inspections, but also they can probably be a great tool in actual fires,” Lutz said. “In a highrise fire, they can get right up next to an apartment window and see what is going on.” He listed more possibilities: For associations with sprawling land mass, drones can efficiently inspect road conditions, parking violations, and snowplow and landscaper performance. They also can augment security patrols. On the other hand, homeowners won’t be happy seeing a picture-taking drone hovering outside their bedroom windows. Crash landings may cause property damage and bodily injury. As for inspecting for illegal barbecue grills and marijuana plants on upper-level balconies, not so fast. “If the association were to use drones to ferret out violations, this would be greeted with the same enthusiasm as stop-sign cameras, radar guns and surveillance flights by police,” said Clifford Treese, an association insurance and risk management researcher, consultant and author based in Mountain

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S P E C I A l F E AT U r E

House, California. Insurance coverage for drone-inflicted damage and injury is limited, although it is simultaneously contracting and expanding. Carriers are quickly excluding drone-related incidents from their general liability policies, but they are increasing the availability of endorsements, Treese said. Although some associations and managers may embrace drone-assisted property inspections, they may be better off hiring experienced third-party operators and shifting the liability to them, he said.

The Association Response Associations might be tempted to prohibit drones rather than deal with complaints and liability threats. That’s the knee-jerk reaction. Remember the satellite television dish fiasco of the 1990s? Throngs of associations banned them for reasons of perceived unsightliness. Some spent money on attorneys to write new rules or amend declarations. But homeowners roared in protest. The Federal Communications Commission settled the

argument by adopting the Over-The-AirReception-Devices (OTARD) rule, which allows associations to regulate the dishes— within certain parameters—but not to outright ban them. The same scenario could be replayed if associations get too restrictive about drones, Lutz said. A better approach is for associations and their leadership to figure out how to co-exist with both commercial and recreational drones. To do so, they must stay informed about developing drone technology (and its abilities and frailties) and relevant legal and legislative decisions. They can enact reasonable rules and policies that consider safety, convenience, intrusion, noise, liability and the rights of drone operators. For example, an association might designate certain areas for deliveries, take-offs and landings as well as no-fly zones. They could establish permissible hours of operation much like those for construction crews. They could require recreational drones to maintain a specified distance from buildings.

A cautionary note from Nodiff: If a board decides to employ a surveillance drone for such tasks as inspections, security or enforcement, to protect against abuses it should make sure that operations are subject to clear guidelines implemented by a committee rather than a single person. This advice was not heeded by the fictional “Dark Condos” president. Some questions of “reasonableness” may have to be decided in the courts, Antonelli said. Privacy, for one, is a murky area. “If someone is flying a drone 25 feet from a window, and it’s sticking around, I can see that as a problem,” he said. “My guess, based on court cases from a long time ago, is that if the drone is flying 500 feet and up, there is no expectation of privacy.” Another question is whether the recordings of an association’s drone are subject to inspection by owners under “open records” requirements, Nodiff added. Despite the many unknowns, one fact is certain: Drones are taking off. Y

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by Salvatore Sciacca, Chicago Property Services

Top 10 Ways to Guarantee Disaster for Your Next Capital Project Now that the warmer weather is upon us, it is time to take on capital improvements projects for your community association. As a result, I would like to share some thoughts on ways that WIll guarantee a complete disaster for your capital repair and/or improvement project. So sit back, relax, and follow these step by step instructions for a most assured complete failure. 10. Short Term Planning is BEST. Capital planning is for the birds. And a reserve study is a COMPlETE waste of money. Besides, you are probably planning on selling within 5 years so why should you help build the association reserves if you’re on the way OUT.

9. Spontaneous Capital Planning and Decorating is FUN. In fact, it’s much better to wake up on July 4th and decide as the board president that the hallways WIll get repainted and that the stairwells WIll get re-carpeted by the end of August at a cost of $250,000.

8. Lump Sum Special Assessments are the ONLY way to Pay for Capital Projects. We need the money TODAY to pay for the hallway and stairwell renovations. So why not just ask the homeowners to pay their share of the special assessment in one HUGE lump sum. Doesn’t everyone have $15,000 laying around for flash cash purposes?

7. Cheaper is BETTER. Since we’re asking all the homeowners to pay for the capital project in one lUMP SUM, it is probably best to go with the cheapest bid. Who cares if all the other bids are 50% higher. Besides, the vendor who is the least expensive said they have been around for the last 10 years under 20 different company names. So that is probably a good sign.

14 C O N D O l I F E S T Y l E S 07.15

6. Confusion on Who is the Project Manager is BEST. Why appoint a specific project manager? Besides, since we have a management company, I’m sure that the property manager will just handle it. That’s what we pay them for. I’m paying $500 in monthly assessments and I think it is reasonable to just expect things to get taken care of as the board president. We certainly don’t want clarity for the contractor and the homeowners on the proper channels of communication.

5. Poor Communication Rocks. Homeowners should know that the common areas need to be renovated. It’s common sense and as a result, there is NO need to send out any notices or waste money on printing pieces of paper to post on bulletin boards. Besides, no one ever reads the notices anyway. In addition, we don’t have to tell the homeowners about the special assessment. We’ll just add it to everyone’s assessment statement next month. And in terms of the start date of the project, once the dust starts flying in the hallways, the homeowners will get the picture, so to speak.

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GUEST EDITOrIAl

in order to get things done, it’s MY WAY or the HIGHWAY. I love bullyng other board members into submission and I really enjoy telling homeowners who is the BOSS of our community. It’s so much fun and especially given the fact that I have been the board president for the last 20 years. And the best part is that I have a property manager that just does whatever I ask him to do. It’s the perfect relationship for me and for the community association. Everyone does what I say and no one questions what I am doing. And as far as complying with the Illinois Condo Act and Palm II is concerned, I simply say it’s a fool’s errand. right?

4. Bid Specifications are Unnecessary. There is absolutely no reason to define the scope of work for a capital project. It would seem fair to assume that the vendor solutions are all based on industry best practices. right? In addition, it’s better to get 5 bids that all have different solutions to the problem. That way the board can spend hours and hours trying to determine the difference in the solutions and costs. That is a wonderful way to serve on the board. Spinning your wheels while trying to figure out differences in proposals. No wonder no one ever wants to serve on the board in our community. Then again, that is great news for me as it allows me to serve on the board indefinitely.

3. Chaos is a Sign of a Thriving

Summary

1. Overspend on Band Aid Capital

Community. Drama and chaos is part of a thriving community. Confrontation with fellow board members and homeowners keeps things exciting! Planning ahead and running smooth capital projects sounds BOrING! Dropping the ball left and right is just part of the normal day to day experience of a community association. Besides, it gives the board something to yell about when speaking with the property manager.

2. Bullying Board President Knows BEST. As the board president, I enjoy taking charge and making this happen. I get things DONE. And

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asking the board for approval. Once the check is received by the contractor, the company then dissolves into never never land and pops up under a different company name for the 6th time over the past 5 years. At this point, every homeowner who lives on the top floor starts to experience water infiltration issues because the “new roof layer” has failed. At this point, the association now goes ahead and actually listens to the property manager and hires a new roofing company who actually installs a new roof layer and charges the association $100,000 to get the job done rIGHT. Now that is what I call smooth sailing!

Projects. The best part about hiring the cheapest contractor for capital repairs and improvements is that the repairs usually only last a few years. Besides, who wants a roof to actually last 15 years? It is much better for the association to hire a roofing company (against the recommendation of the management company) that has changed names 5 times over the last 5 years that can’t provide any references. The benefit is that this company then bills the association for a new roof layer that was not actually installed. Then the management company pays the bill without checking that the work was done or didn’t bother

07.15

Summertime is best spent blowing tons of community association reserves on wasteful projects. The aforementioned 10 steps are a detailed guide to ensure that your projects are as problem ridden as possible. In addition, you are guaranteed to cause headaches and stress for each and every member of your community association. Of course, maybe that was your intention after all. :) Y

CONDO lIFESTYlES

industry happenings

First Community Management

In June of 2015, Michael Rutkowski, President of First Community Management announced that Lou Lutz joined their firm as Executive Vice President Vice and Chief Operating Officer. “Lou’s experience and commitment to the community association management industry enhances First Community Management’s goal to continue providing the high quality management service we began offering in 1998. Our stable history and reputation of integrity create a platform for Lou to help us offer quality personalized management from our corporate office in Chicago’s West Town neighborhood.” Lou Lutz has been a fixture in Chicago community association management since the inception of condominiums in Illinois. He is an Illinois licensed Real Estate Broker, Community Association Manager and Insurance Producer. Prior to joining First Community Management, Lou lead two property management companies to prominence in the Chicago and suburban markets as their president and operating partner. Lou Lutz said “Illinois ranks fourth in the US in number of community associations (with 10,000) and we know that many of those associations are still looking for the right management. Our niche is community association boards that believe the right management company will improve property values and enjoyment of their homes.”

Levenfeld Pearlstein, LLC

Levenfeld Pearlstein has been named to The National Law Journal’s 2015 Mid-Size Hot List. This is the second consecutive year that LP appears on the list of the 20 finest mid-sized law firms in the country. According to LP Managing Partner Rob Romanoff, “since our founding in 1999, LP has been built around the idea that all of our actions should point toward a single goal: making the experience of being an LP client as rewarding as possible. Our singular focus on the client experience is the LP Way. We take the LP Way so seriously that it’s detailed in a guiding document shared with every person in our firm.” Levenfeld Pearlstein is headquartered in Chicago and is comprised of approximately 60 attorneys.

J. Hershey Architecture

Associa National Summit Inspires Chicagoland Employees

On May 15, 2015, J. Hershey Architecture celebrated their new Illinois office space and their 60th anniversary with an Open House. Over 75 guests attended the celebration at the company’s new offices located at 28835 North Herky Drive, Unit 104 in Lake Bluff, Illinois.

“We are all under one roof now, one Associa, and its’ great to see the employees from our Schaumburg, Plainfield and downtown offices all come together to cooperate, communicate, and collaborate,” says Associa Chicagoland President Don Kekstadt. “The leadership team just came back from the national Associa Summit and we were able to share our renewed company vision with the entire branch.”

Smart Elevators Co. recently announced that the company has moved to a new office location at 661 Executive Drive in Willowbrook, Illinois.

Associa Chicagoland and it’s nearly 100 Illinois employees recently came together for the first ever company-wide conference since the unification of the two former Associa branches Legum & Norman Mid-West and Vanguard Community Management.

Smart Elevator Co.

The group discussed sales and marketing, communication efforts, the new company website, standardization processes, future goals and company-wide initiatives. Awarded at the conference was the 2014 Technician of the Year Joseph Cefali who works for the company’s maintenance division Associa OnCall.

Smart Elevators Taking Care of Chicagoland the Smart Way!

Try the Smart Way, Choose Smart Elevators Smart Elevators is a full service elevator maintenance and repair firm that operates with honesty, integrity and pride. Our business is built on referrals, with safety and reliability our foremost concern. Services Include: » Systematic and comprehensive maintenance service. » Modernization and ADA upgrades » Pressure Testing and Annual State Safety Testing.

P. 630.544.6800 661 Executive Drive Willowbrook, IL 60527

www.smartelevators.com

» We repair all brands and types of escalators, freight, Lifts, dumbwaiter and private residence elevators. Mention this ad and receive 10% of your first year maintenance service

16 C O N D O l I F E S T Y l E S 07.15

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INDUSTrY HAPPENINGS

ACTHA

Owners in condominiums, townhomes and HOAs are being offered educational seminars in two locations this fall: Sat., Sept. 19 at the Renaissance in Northbrook and Sat., Oct. 3 at the Tinley Park Convention Center.

And the seminars being offered at the South Expo are: • Insurance: Changes in the law, D & O, general liability, replacement cost

The seminars being offered at the North Expo are:

• Elections: E-voting, mail-in ballots, proxies, nomination procedures, do’s and don’ts of campaigning

• Lifestyles of Today: language barriers, concealed carry, companion animals, smoking, medical marijuana, visitor parking, social media, elder care

• Conflict resolution: communication, when to use, how it is used, a mock demonstration

• Post Palm and Legislative Update: new legislation passed and its effect on associations

• Tax Appeals: process, tax bills and savings, individual vs association, out-outs, budget vs bill-back, special assessment appeals

• Security: criminal activity, cameras, vandalism, gated vs open access, trespassers, access to amenities • Communication and Social Media: methods of communication, pro’s and con’s of websites, responding to false allegations, overcoming bad publicity, electronic notification

Reserve Advisors

Corinne Billingsley has joined Reserve Advisors, Inc. as our Chicago Operations Manager. Billingsley graduated from the Illinois Institute of Technology with a B.S. in Architectural Engineering and a Minor in Architecture. She also received her MBA at Northwestern’s Kellogg School of Management. Most recently, Billingsley was an Enterprise Project Manager for strategic initiatives at U.S. Cellular. Reserve Advisors conducts reserve studies and insurance appraisal services for clients throughout the Chicagoland area and across America.

Ladies Night Out

In conjunction with both events there will be a trade show and 20 minute “hot topic” sessions. ACTHA is a statewide not-for-profit organization whose mission is to provide information and education to board members and owners. Space is limited. For more information or to register: 312-987-1906 or online at www.actha.org

Former Chicago Condo Manager Sentenced

The former co-owner of a Chicago property management company Regent Realty was sentenced Tuesday to three years in federal prison for stealing about $2 million from condominium associations. Jay Strauss, 76, pleaded guilty to one count of fraud in November after his business partner, Donald Doering, 64, agreed to a 51-month sentence as part of a deal to cooperate with prosecutors. A date for Doering’s sentencing hearing has yet to be scheduled.

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07.15

On April 23, 2015, more than 120 female community association managers and management company representatives attended the 3rd Annual Ladies Night Out, hosted at Abbington Banquets in Glen Ellyn. This event was a joint effort by sponsors Dakota Evans Restoration, DuBois Paving Co., Keough & Moody, P.C. and Mutual of Omaha Bank. The purpose of the event is to “pamper” the ladies who work so hard for the community associations that we are all proud to have as clients. Ladies Night Out has included massage, nail, makeup and hair styling services each year with a variety of other activities made available during the evening. The event has improved each year with new additions in 2015 including live music, a gourmet pasta station, henna tattoos, tarot card readings and a shopping expo. More than 15 door prizes were raffled off, in addition to U2 tickets and the grand prize, a COACH purse. The event also includes an annual bra donation for charity. More than 125 bras were donated this year. Thank you to all of the ladies who attended our 2015 event!

CONDO lIFESTYlES

From the Editor

hile we had above average precipitation in Spring and

thus far into Summer, the managers and contractors we spoke with said that there have been enough pleasant

days to get much of the work underway for exterior projects at their properties.

CondoLifestyles

Y Mike Davids

They did indicate that it has been a significant challenge for landscape contractors to keep pace with the excessive precipitation. let’s hope we enjoy some more favorable weather as Summer moves along. Our cover story profiles how Parkview at riverEast Condos implemented a total smoking ban that in-

JULY 2015 | VOLUME 19 | NUMBER 2 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis Special Events Coordinator Mary Knoll Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker Circulation Arlene Wold Administration Cindy Jacob and Carol Iandolo Condo Lifestyles Magazine is published quarterly by MCD Media, a wholly owned subsidiary MCD Marketing Associates, Inc. For editorial, advertising and subscription information contact: 935 Curtiss Street, Suite 5, Downers Grove, IL 60515. 630-932-5551 or 630-202-3006. Circulation: Condo Lifestyles is available for a single issue price of $8.95 or at a $30.00 annual subscription. Distribution is direct mailing and delivery direct through authorized distributors to over 5,000 officers and directors of Common Interest Communities, 800 property managers, 400 realtors, 400 developers and 400 public officials. Total Circulation is 9,500. Condo Lifestyles attempts to provide its readership with a wide range of information on community associations, and when appropriate, differing opinions on community association issues. All material herein is copyrighted 2015. No part of the publication may be reproduced whatsoever without written consent from the publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is issued with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice is required, services should be sought. Advertisers assume liability for all content of advertisements printed, and also assume personal liability for any claims arising therefrom against the publisher relating to advertising content. The publisher and editors reserve the right to reject advertising or editorial deemed inappropriate for the publication.

cludes prohibiting smoking in units, on balconies and the use of electronic cigarettes. This article also offers some general advice for other properties that may be considering a smoking ban. A sidebar article on this subject touches on the issue of medical marijuana in community associations. Every Association has one of more individuals that are a real challenge to deal with. Our second story provides some practical ways to identify different types of difficult people and how to prevent this type of owner from controlling the association board and manager. like it not, drones and their proponents are trying to integrate into our society and there is a wide range of useful applications for these devices in the operations of community associations. While the drone industry is still in its infancy and there is much to be wary of, it’s not too early for Associations to consider the reality of drones flying around their buildings and grounds. Pam McKuen offers a special feature in this issue that discusses the potential uses and concerns of implementing drone usage in community associations. This issue also includes two articles that address current legal issues that Associations are facing. ShortTerm renters are increasingly causing Association boards and managers problems that most are not well equipped to handle so we have an article that provides advice how to deal with these issues. Another current legal concern relates to an Association’s obligation to reasonably accommodate special needs of its employees. Our article on this subject discusses employee needs based on a disability, pregnancy or religion. Our Board Basics column this issue offers board members with an overview of what it means to approach running your association as a business. This article highlights the importance of running effective meetings, taking financial and other board responsibilities seriously and organizing your board around various business functions. Our Guest Editorial column features a tongue in cheek list of things that boards should do to guarantee that an association will incur problems when undertaking capital improvement projects. For those who are in the planning stages of a major project, this article should particularly helpful. Inside this issue we again offer our regular Industry Happenings column and highlights from a variety of special events. Upcoming Special Events Upcoming MCD special events include our annual golf outing, which will be held on July 17 and a luncheon in the Million room at Arlington International racecourse on August 27. If your association(s) has a special need or challenge, there will be a variety of experts specializing in community association issues including many members of our advisory board who will attend these events. MCD special events provide a terrific forum for association leaders to get questions answered, meet new vendors, share a story idea, or socialize with other volunteers and professionals. Thanks to the many new subscribers that have found our publication useful and informative. Special thanks to the firms, associations and groups that are Authorized Distributors of Condo lifestyles. Those of you who are not current subscribers can find subscription information at www.condolifestyles.net We encourage you to take this opportunity to make your association and your community all it can be. If you have an idea that would benefit other Community Associations, a success story to share, or some advice on how to avoid a problem or failure, please call our office at 630-932-5551. You can also send us an email (mdavids@condolifestyles.net). Y

Michael C. Davids Editor and publisher

18 C O N D O l I F E S T Y l E S 07.15

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SErvICE DIrECTOrY

ACCOUNTANTS CANTEY ASSOCIATES, CPA’S (630) 681-9400 ANNUAL ACCOUNTING SERVICES:

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

ARCHITECTS/ENGINEERS

ATTORNEYS

FULL CIRCLE ARCHITECTS, LLC (847) 432-7114

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

Daniel Baigelman, AIA dan@fullcirclearchitects.com Capital Improvements • reserve Studies Engineering reports www.fullcirclearchitects.com

www.canteycpa.com

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

pcostello@keaycostello.com www.keaycostello.com

Evaluations/Bid Repair Specifications/Reserve Studies

KOVITZ SHIFRIN NESBIT (855) 537-0500

www.jhersheyarchitecture.com

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

CONDO CPA (630) 832-2222 EXT 113

Investigations and repair Documents for: Exterior Walls, Windows, roofs, and Parking Garages Condition Surveys and reserve Studies www.kghpc.com

CONTACT BRAD SCHNEIDER Brad@CondoCPA.com CERTIFIED PUBLIC ACCOUNTANTS

CUKIERSKI & KOWAL, LLC

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

J. HERSHEY ARCHITECTURE (847) 549-5900

Specializing in Accounting Services for Homeowner Associations.

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

legal representation for Community Associations www.kmlegal.com

SUPERIOR RESERVE ENGINEERING & CONSULTING (888) 688-4560

CERTIFIED PUBLIC ACCOUNTANTS

Advising and Consulting with Business Owners, Community Association law & Collection Services, Construction Defects, real Estate Assessed valuation reduction, litigation, Commercial restructuring, Bankruptcy & Creditors' rights, real Estate, Business ,Estate Planning www.ksnlaw.com

LEVENFELD PEARLSTEIN, LLC 312-476-7556 Howard Dakoff / hdakoff@lplegal.com www.lplegal.com

www.superiorreserve.com

(847) 496-7180

BALCONY REPAIR

A full-service accounting firm specializing in the unique needs of homeowners’ associations.

WALDMAN ENGINEERING CONSULTANTS (630) 922-3000

www.ckwcpa.com

24 HOURS

www.waldmaneng.com

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

THE RESTORATION GROUP (630) 231-5700

ATTORNEYS

Structural repair Services Balcony repair/replacement Stair Tower repair/replacement Fire and Water response/restoration dwells@trgrestore.com www.trgrestore.com

Contact: Steve Silberman, CPA

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

ARCHITECTS/ENGINEERS

www.dicklerlaw.com

BANKING

CODER TAYLOR ASSOCIATES

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

ALLIANCE ASSOCIATION BANK (815) 342-4228 / (888) 734-4567

CERTIFIED PUBLIC ACCOUNTANTS

coder@codertaylor.com

(847) 382-4100 “We Specialize in Emergency Repairs” Architects • research • Engineering Specifications • reserve Studies

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Full service banking and lending solutions for management companies and associations. cfinck@AllianceAssociationBank.com www.AllianceAssociationBank.com

www.frapc.com

07.15

CONDO lIFESTYlES

BANKING

BUILDING RESTORATIONS

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

GOLF CONSTRUCTION (219) 933-3420

loans, reserve Investments & lock Box Services www.communityadvantage.com

www.golfconstruction.net

CONCRETE SUNDEK OF ILLINOIS (847) 392-3939

FIRSTMERIT BANK (847) 223-7920

Masonry repair Services, Tuckpointing, Caulking and Concrete restoration

Email: Martin.Klauber@firstmerit.com

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

We resurface Concrete We remove & pour Concrete Waterproof Membranes Pool Decks • Balconies • rooftops Shower & locker rooms “The Only 1 Stop Service since 1967” JaykZ33@yahoo.com www.Sundek.com

John@holtonbrothers.com www.holtonbrothers.com

CONCRETE RAISING

HOLTON BROTHERS, INC.

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

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

MUTUAL OF OMAHA BANK (866) 800-4656

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

THE REAL SEAL, LLC (847) 756-7987 austinwerner@therealsealllc.com

DONE JUST RIGHT INC. 630-893-0757

QUALITY RESTORATIONS (630) 595-0990

www.djrcleaning.com Email: mcorliss@djrcleaning.com

DOORS

SITE MAINTENANCE, INC. (847) 697-1077

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

www.sitemaintinc.com

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

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

FORUM GROUP, INC. (773) 732-3051 www.ForumGroupInc.com

CONCRETE HARD SURFACE SOLUTIONS (630) 916-8005 / (847) 838-6610 Concrete Flatwork Specialists | Asphalt Paving Curbs & Driveways | Sidewalks Footings & Foundations Colored Concrete | Stamped Concrete Aggregate Finish Concrete Parking Structure Maintenance & Repair Contact Tom Frye

www.hsshardsurfacesolutions.com

We Save Concrete, You Save Money! www.SaveConcrete.com

CARPET CLEANING

HOA Banking • Internet Cash Management HOA loans • Online Payment Services www.mutualofomahabank.com

BASEMENT WATERPROOFING

CRC CONCRETE RAISING & REPAIR (847) 336-3400

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

DUCT CLEANING AIRWAYS SYSTEMS, INC. 630-595-4242 Cleaning: Air/laundry/Toilet Exhaust Ducts, Coils, Trash Chutes, Parking Garages. Also Air Filters, Belts www.airwayssytems.com

F&J PAVING, INC. (708) 544-6700

DONE JUST RIGHT INC. 630-893-0757

Concrete & Asphalt Paving Pavers & Color Stamping Drainage Systems & Sewer repairs Sealcoating, Crack Filling & Striping jeff@f-jpaving.com www.f-jpaving.com

www.djrcleaning.com Email: mcorliss@djrcleaning.com

20 C O N D O l I F E S T Y l E S 07.15

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SErvICE DIrECTOrY

ELEVATORS/CONSULTANTS

FIRE/FLOOD RESTORATION

FIRE SAFETY & PROTECTION

SMART ELEVATORS CO. (630) 544-6829

GENESIS CONSTRUCTION, INC. (847) 895-4422

NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB) (866) 2NIFSAB (866-264-3722)

www.smartelevatorsco.com smartin@smartelevatorsco.com

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

ENERGY USE/BENCHMARKING

www.genesisconstruction.com

708-403-4468 www.firesprinklerassoc.org

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

FLOORING

www.QCIrestoration.com

THE RESTORATION GROUP, LLC (630) 870-0658

MR BAMBOO 1(888) 672-2628 www.mrbambooflooring.com

www.trgrestore.com

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

ENERGY SOLUTIONS CENTERPOINT ENERGY SOLUTIONS (630) 795-2594

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

(708) 396-1477 www.bbsteamatic.com

Fire Detection & Signaling Systems Fire Alarm Systems Chicago life Safety Evaluation Solutions Security Systems/CCTv Card Access Systems www.contechco.com

Natural Gas & Electric Energy reliable Service. People You Trust. Contact: Vickie Farina Vickie.Farina@centerpointenergy.com www.CenterPointEnergy.com/CES

EMCOR SERVICES TEAM MECHANICAL FIrE PrOTECTION DIvISION (847) 229-7600

OCEANS ENERGY (312) 870-0580

SIMPLEX GRINNELL (630) 948-1235

info@oceanscc.com www.oceanscc.com

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

FIRE/FLOOD RESTORATION

www.emcortmi.com

HVAC ALTHOFF INDUSTRIES (312) 332-5700 Mechanical - Plumbing - Electrical - Building Automation www.althoffind.com

EMCOR SERVICES TEAM MECHANICAL (847) 229-7600 www.emcortmi.com

BROUWER BROS. STEAMATIC (800) CLEAN54 All types of environmental cleaning. (708) 396-1477 | www.bbsteamatic.com

AMS MECHANICAL SYSTEMS, INC. (800) 794-5033 24 Hour Service HvAC • Industrial refrigeration Service/Maintenance • Systems Integration Energy Management • Electrical Process Piping • Plumbing www.amsmechanicalsystems.com

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

For Display or Professional Services Directory Advertising Info, Call (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher. All material herein is copyrighted 2015©.

BROUWER BROS. STEAMATIC (800) CLEAN54

07.15

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

CONDO lIFESTYlES

HVAC

LANDSCAPE CONTRACTORS

LAWN CARE

THE YMI GROUP, INC. (847) 258-4650

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

SPRING-GREEN LAWN CARE (800) 830-5914

Mechanical - Plumbing Building Automation - Service www.ymimechanical.com

Professional landscaping and Snow removal www.acresgroup.com

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

H V A C CLEANING BROUWER BROS. STEAMATIC (800) CLEAN54 All types of environmental cleaning. (708) 396-1477 | www.bbsteamatic.com

www.spring-green.com

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

www.alanhorticultural.com

BALANCED ENVIRONMENTS, INC. (847) 395-7120 | (630) 916-8830

large variety of Commercial and residential Mailboxes Intercoms and Tele-Entry Address Signage & Engraved Nameplates Installation Services Since 1989

www.MailboxWorks.com

www.BalancedEnvironmentsInc.com

INSURANCE

NON PROFIT/EDUCATION CHRISTY WEBBER LANDSCAPES (773) 533-0477

HOLLINGER SERVICES, INC. (847) 437-2184

ABOMA1@aol.com www.aboma.com

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

ILT VIGNOCCHI (847) 487-5200

MESIROW FINANCIAL (312) 595-8135

www.iltvignocchi.com

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

OCEANS ADVISORS (312) 508-3032

INTERIOR DESIGN

ACTHA (312) 987-1906 Association of Condominium, Townhouse and Homeowners Associations

actha@actha.org | www.actha.org

Nancy Ayers www.condorisk.com

info@oceansadvisors.com www.oceansadvisors.com

ABOMA (312) 902-2266

www.landscapeconcepts.com

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SUDLER PROPERTY MANAGEMENT (312) 751-0900

B.T. LAKESIDE ROOFING (630) 628-0093 www.lakeroof.com

CSR ROOFING CONTRACTORS (708) 848-9119

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07.15

CONDO lIFESTYlES

by Michael J. Shifrin, Kovitz Shifrin Nesbit

Condo Associations Faceof The buzz surrounding “short-term rentals” has been ever increasing over the past year thanks, in part, to websites such as Airbnb, Homeaway.com or VRBO.com. Websites such as these provide a platform for condo owners to rent their units on a short-term basis (sometimes as short as one or two nights). The ease with which they bring landlords and tenants together, coupled with their high profit margins, has driven their popularity.

hile converting condo units into profit centers without much effort may be alluring to unit owners; condo associations, boards and management companies do not share in the excitement. Short-term rentals present a plethora of challenges most condo associations are ill-prepared to manage.

Inadequate Resources to Monitor

increased pedestrian traffic and activity. Safety and the security of association members are placed at increased risk with an upsurge in nonresident visitors and guests. Not to mention that many associations lack the equipment and personnel (luggage cart, doormen, concierge, and

Many associations do not possess adequate security, be it cameras or twenty-four hour security guards, to monitor the

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ff with Airbnb maintenance staff) required to assist short-term visitors with their stay.

How to Handle? Concern among the community association industry about the negative impact of short-term rentals has forced boards to face this issue head on. What boards can and should do is unique to each association and largely dependent upon their governing documents.

Check Governing Documents Is short-term leasing already prohibited within your association’s declaration, bylaws, or rules and regulations? For most associations, the answer is yes. Most condominium declarations prohibit leasing for terms less than thirty days. Nonetheless, many unit owners unknowingly violate this provision. Associations can protect their community from shortterm rental pitfalls with a well-

drafted provision. Such a provision may include a minimum lease term, penalties and fines for noncompliance, and imposition of association legal fees against the violating unit owner.

More Living. Less Worrying.

Safeguarding Property Value Part of a board member’s fiduciary responsibility requires safeguarding property value and protecting the safety of association members at large. With the increase in short-term rentals nationwide, it is critical for condo association boards to proactively address this issue. If you serve on a board of directors for a community association, it is important that you immediately take the following three steps: 1) review your association’s governing documents to confirm they contain a provision prohibiting short-term rentals; 2) Implement a policy to effectively enforce and communicate such provision; 3) Consult with an experienced attorney to review your documents to ensure the provision and policy is appropriately enforced. Thoughtfully drafted and consistently enforced short-term rental policies will enable condo associations to win the short-term rental battle. Y

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07.15

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

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CONDO lIFESTYlES

by Laura B. Friedel, Esq. and Howard S. Dakoff, Esq. - Levenfeld Pearlstein, LLC

Your Employee Needs What? Associations’ Legal Obligation to Reasonably Accommodate Employees Associations are able to function – at least in large part – because their employees do the job they are hired to do. So when an employee says that they need a policy or procedure relevant to their job changed for them alone, the first instinct may be to simply say “no.”

nfortunately, that simple answer can land the association in legal hot water, as employers have a legal obligation to provide a reasonable accommodation to an employee (or applicant) who requires it due to disability, pregnancy or religion. On the most general level, an accommodation is a change to job duties or expectations that allows an employee or applicant to perform their essential job functions. However, what constitutes a “reasonable accommodation” — which legally must be provided —

varies significantly based on the specifics of the job, the realities of the workplace, and the law under which the accommodation falls.

How is the Accommodation Obligation Triggered? It’s generally pretty obvious when an applicant or employee requires an accommodation – because they ask for it. However, there aren’t any magic words required. An employee who notes an issue in performing their job because of a bad back or

who says they’re having trouble getting to work because of medication may not have explicitly said that they require an accommodation, but they have said enough to trigger the employer’s obligation to accommodate. On the other hand, an employee who simply says that his chair is uncomfortable – without giving the employer any reason to believe the request is linked to a medical condition – has not triggered the obligation to accommodate. Take care, though, not to get too technical with the request itself. As the Supreme Court recently found with respect to religious accommodation, an employer who has reason to believe that an employee or applicant requires an

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Standards for Different Types of Accommodations Part of what is so confusing for employers is that the standards for accommodation – and what is required of employers with respect to accommodation – varies depending on the type of accommodation being requested. In the following paragraphs, we briefly discuss the types of accommodation and the standards for each.

Accommodating Disability

accommodation can’t plead ignorance simply because the employee didn’t specifically say that she required a religious accommodation.

The most common type of accommodation request relates to an employee or applicant’s disability. And while the Americans With Disabilities Act (“ADA”) only covers employers with 15 or more employees, the Illinois Human Rights Act (“IHRA”) covers all employers. Associations most frequently see requests for modifications to the work environment, modifications to work schedules, and modifications to job duties. Modifications to the work environment may include providing a chair or stool for an employee who has diffi-

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07.15

culty standing, installing a lower front desk for a doorman in a wheel chair or any of a number of other physical changes to the work environment that would allow an employee with a disability to do the job at hand. Modifications to work schedules could include more frequent breaks, variations to start or end times, time off work to attend medical appointments or procedures, only scheduling during specific shifts, an extended unpaid leave of absence or other changes to an employee’s schedule. Finally, modifications to job duties could include reassigning certain tasks, providing special equipment, or changing how tasks are to be completed. The key, though, is whether the disabilityrelated accommodation is reasonable. Under the law, an accommodation for a disability is reasonable unless it would cause an “undue hardship” to the employer. “Undue hardship” in the disability context is a high standard, requiring significant difficulty, expense, or disruption or a fundamental alteration to how the employer conducts its operations.

CONDO lIFESTYlES

Whether an accommodation would cause an undue hardship is a case-by-case, fact-specific determination. Legal counsel should always be consulted before determining that a requested accommodation would cause an “undue hardship.”

Accommodating Pregnancy and Related Conditions Associations also have an obligation to accommodate employees who are pregnant or have pregnancyrelated conditions. This obligation arises to some extent under the federal Pregnancy Discrimination Act (which requires that pregnant employees not be discriminated against) but more clearly applies to all Illinois employers under amendments to the IHRA that became effective in January 2015. Under the IHRA, employers are required to provide reasonable accommodations to pregnant applicants and employees who request them. Examples of pregnancy accommodations include time-off, more frequent or

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longer breaks, seating, transfer to a less strenuous position or light duty, acquisition or modification of equipment, job restructuring and assistance with manual labor. As with disability accommodation requests, employers are required to provide an accommodation unless they can establish that the accommodation would be an undue hardship.

Accommodating Religious Observance, Practice and Belief

critical that they engage in an interactive process with the employee or applicant to determine what type of accommodation, if any, needs to be provided. Failure to engage in the interactive process, in and of itself, can form the basis for a discrimination charge. So what does it mean to engage in the interactive process? It means that you work together with the employee collaboratively to determine what accommodation, if any, would allow the employee to perform the essential

job functions without causing the employer a burden that exceeds the level required under the law at issue. Of course, the fact that you have engaged in the interactive process is only as good as your ability to prove that you have engaged in it. For that reason, it is essential that you have more than one employer representative present during meetings regarding accommodations and confirm all conversations by email or letter. Y

In addition to disability and pregnancy accommodations, employers with 15 or more employees are required to provide reasonable religious accommodations. Religious discrimination laws protect all aspects of religious observance, practice and belief and define religion broadly to include not just traditional organized religious but also newer, less common sincerely held religious beliefs, so the types of accommodation are quite broad. Most frequently, religious accommodation requests relate to scheduling or facilities (such as not working on certain days or granting specific breaks or space for prayer), variations to dress codes (such as allowing employees to cover their heads for religious reasons, wear certain jewelry or have certain tattoos), or exceptions from certain work rules (such as allowing an employee to display religious objects or permitting an employee to refrain from certain activities that they consider contrary to their religious beliefs). On a positive note for employers, the standard for determining whether a religious accommodation is “reasonable” is far more employer-friendly than the standard imposed for disability-related requests. A religious accommodation will be deemed “unreasonable” if it poses more than de minimis cost or burden. Still, as this is a fact-intensive analysis, and especially given that the Equal Employment Opportunity Commission seems to be trying to move the needle more in employees’ favor, it is important to consult with counsel in considering a request for religious accommodation.

The Interactive Process It’s important to emphasize that, when it comes to accommodation, the process is just as important as the accommodation itself. Regardless of whether an association may be correct in thinking that a reasonable accommodation is impossible or unnecessary, it is

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07.15

CONDO lIFESTYlES

by Michael C. Davids

Business Basics for Boards After the usual exchange of pleasantries by participants at the outset of an association board meeting, the president can set the proper tone for the balance of the time by saying, “alright ladies and gentlemen let’s get down to business.” Most effective association presidents utilize robert’s rules of Order to run their board meetings.

f taking care of business is not at the forefront of the minds of your board of directors, an association will likely find itself in a stagnate situation or likely even financial difficulties at some point. Most associations have just come through some very difficult times financially. Many weathered their economic challenges with relative success by taking their associations’ business seriously, making adjustments, and staying focused on

and guidance or because a board does not want to spend the money to resolve the problem they’re faced with. Whatever the reason for inaction, failure to make sound decisions in a timely manner will often have negative consequences.

Business Minded Board their financial situation. Others that did not fare quite as well either had circumstances beyond their control or they did not make good business decisions. “Some associations take the attitude that if an issue or problem is ignored, it will eventually go away,” said Tairre Dever Sutton, long time Community Association Manager and President of Tairre Management. The problem may be due to bad advice or a lack of advice

32 C O N D O l I F E S T Y l E S 07.15

A business minded board is one that will identify the issues and problems, include it on their agenda and tackle it in order of priority. It’s safe to say that many associations operate in this manner. Dever Sutton has handled the affairs of many associations over the years and could recall only one, in the suburbs, that conducted itself more as a social club than as a business. She has managed associations primarily in Chicago throughout her career and

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BOArD BASICS

most of them either possessed a strong business sense from the beginning or developed one under her guidance. “I have always stressed the fact that an association is a business and should be operated as such,” she said, an effort that requires getting board of directors and others to put aside their individual feelings or differences when entering the meeting room. “I try to get owners and the board of directors to leave their emotions at the door and make decisions based on fact. Personal agendas get in the way of the actual decision making process.”

Business Acumen Generally it is dedicated association owners with a passion for their community and an open mind that are fortunate to have good candidates running for board of directors positions. They will also have owners with various abilities who offer their services to the association for no other reason than to ensure their investments are protected. “Ideally each board member should have at least one particular skill they can bring to the

board to help manage and monitor operations,” said Tom Skweres of ACM Community Management. If an association has board members’ abilities spread out with backgrounds in finance, landscaping, management, maintenance, engineering, the law, etc., it would be a great reality for an association to strive for.

Need Foundation and Good Tools That near perfect situation, while true for many associations, is, however, far from a universal reality, especially for associations built to serve the housing needs of different personalities, and some may not have a business or professional background. Others may not care to be involved in the tasks of running an association. It is not a requirement for a Board member to come with a business or professional background, although without it, one must be open to learning the key tools that will help make their board experience successful. “There are many business professions that can be helpful to an association such as Community Association Managers, associa-

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07.15

tion attorneys, CPAs, engineers, architects and various construction professionals,” said Mydraine Janvier of ALMA Property Management. “There is also a wide range of educational seminars to help board members learn and make more informed decisions. Associations are best served by owners who care about their community, are fair minded in their decisions, work as a team along with the professionals and make decisions that are in the best interest of the corporation as a whole,” continued Janvier. Also, “the willingness to learn and implement knowledge in making decisions will lead to a well-run and successful association.”

Qualifications and Time to Handle Money Skweres feels that there is at least one key position that should, if at all possible, be filled by someone who knows how to handle money. There should be, “a treasurer who is qualified and has the time to do the job right,” he said. But all is not lost in the business world of an association, as Janvier noted just

CONDO lIFESTYlES

can seriously impact the investments of others in addition to their own investment wellbeing. “Their decisions affect everyone who lives in the association, not only themselves.”

above, if such a person or others with the preferred backgrounds noted above are not available for board membership. Lacking such individuals, a board should be willing, “to spend whatever time is necessary to get educated by the various professionals willing to share their knowledge, either by attending educational seminars or tradeshows.” Such measures will better enable them to implement ideas and decisions with a broader prospective.

Take Service Seriously Unit owners who choose to serve on the board should take their jobs seriously. Board members should not be casual in fulfilling their fiduciary responsibility placed on them by the voting members of the association. Under Illinois Condominium Law, board members are obligated to exercise sound business judgment in providing for the protection and upkeep of the common assets of their associations. “Although associations are not-for-profit and board members running them are volunteers, the Board of Directors can be managing a multi-million dollar business and must take their volunteer position seriously. Without the dedication and willingness to provide one’s “free time,” associations could not thrive as a viable business, as they are the “decision makers.” Board members should be com-

Using Common Sense There are other ways for an association to proceed if they lack individuals with business and/or professional background, one of which is to develop the necessary skills. They can learn by listening to the experienced colleagues at board meetings, the Community Association Manager can educate them and the association’s attorney, CPA, consultants and various web sites and publications offer business insights, noted Dever-Sutton. Beyond that, “much of it is common sense,” she said, and an awareness that what they do

mended by their fellow owners for their efforts and contributions,” said Janvier.

Techniques and Tools Now let’s delve into various ideas, techniques and tools for improving board performance. The foundation of a well-run association business can be put in place early by forethought of outlining the various known functions needed in operating the association with the concept that any new board member can pick up exactly where the other left and not skip a beat. “You do it by building good solid systems that predecessors put in effect,” observed Skweres. This means establishing solid and stable organizational and financial systems as well as creating appropriate policies and procedures to implement them. These tools form the framework of a good association.

Organize Around Functions What defines the functions to be performed, the various roles to identify who does what which includes; not just the board members and owners but also the vendors and pro-

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BOArD BASICS

Assign Essential Functions “The best plan is to have essential functions assigned to particular board members,” said Skweres. “It would be their responsibility to carry out the board’s directives, suggest courses of action and to report to the board.” Understanding the overall current financial needs as well as the financial needs of the future are key in laying the foundation of a fiscally sound community. A full property inspection by the Community Association Manager to identify the current condition of the common element / area components, hiring a qualified person to perform a Reserve Study and the implementation of all information gathered from these services will assure the community of fiscal success and stability. The Reserve Study will identify all components the association is responsible for: repair/replacement, the current conditions of the components, the expected useful life and remaining life of the components and the replacement costs for these components. “This is an essential tool to have,” said Janvier. There are several sectors that should be addressed and a good community association manager can explain them in detail to their board clients. Let’s go over some of the more important ones.

debit program, processed electronically through the Automated Clearing House (ACH) network, is available through their bank for owners who may increasingly be accustomed to paying their mortgages, utility bills and insurance premiums by pre-authorized monthly debit. A direct payment program can serve to reduce delinquencies and increase the predictability of cash flow, reduce the risk of fraud and reduce or eliminate banking costs.”

Banking A board should be sure that, among other things, funds of the association are held in a separate account in its name and the treasurer receives and reconciles bank statements. Banks are able to provide many more services than a depository and it’s up to the treasurer to investigate all the possibilities. For example, owner assessments can be collected through a bank’s lockbox service, which should facilitate collections, the gathering of information and enhance audit control and productivity, noted Pete Santangelo of Community Advantage, A Wintrust Company. But, he added, “associations as businesses might be better served by determining whether a direct

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Shaping the future!

fessionals who serve associations. All are expected to comply with: the Illinois Condominium Property Act, the Association’s governing documents (declaration, by-laws, rules and regulations), contracts and agreements entered by the Board and generally accepted industry practices.

On-Line Reports Associations can take advantage of online balance and activity reporting on its accounts as well as their reconciliation and make use of sweep accounts that maximize returns on surplus operating funds that might otherwise be sitting idly in the depository. Paperless electronic statements, which contain images of all canceled checks can be e-mailed to an association within 48 hours of the end

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of a month. “This information is in common formats such as Quickbooks as well as several other accounting software programs and will enable an association to effortlessly update cash forecasts on a timelier basis,” explained Santangelo. Banks also provide investment services. FDIC insurance covers the first $250,000 of an association’s deposits. “For amounts above that, Associations have the option of entering into a contract with the Certificate of Deposit Account Registry Service (CDARS). Banks all over the country are members of the CDARS network.” said Martin Klauber of FirstMerit Bank. According to the CDARS website: “When you place a large deposit with a CDARS Network member, that institution uses the CDARS service to place your funds into CDs issued by other members of the CDARS Network. This occurs in increments below the standard FDIC insurance maximum ($250,000) so that both principal and interest are eligible for FDIC insurance. By working directly with just one institution, you can

receive coverage from many. And, you receive just one regular, consolidated account statement.” Klauber points out: “It is important for board members to follow the Association’s investment policy which usually requires that all reserve funds be insured. CDARS accomplishes that goal while providing competitive returns. Receiving a single statement makes it easier to prepare monthly board reports.”

Planning A business minded association will engage in both short-term and long-term planning. The essential step is the former, which would carry an association over its next fiscal year, developing realistic income and expense projections. A major characteristic of an association that is more business than social oriented, “is a well-planned budget,” said Skweres and to assure careful regard for accuracy in its preparation there should be, during the course of the year, “good explanations for significant variances.” Putting together the annual budget should not be a casual, hurried process.

Budget Projections Projecting out three to five years in the future, an association should also attempt to anticipate budgetary needs for that period, tailoring assessment increases to cover expected operating expenses and reserve requirements. This is all part of the process of cash flow forecasting which all businesses do and one which associations should also despite the fact they are not in business to make a profit. It’s imperative that the association strives to achieve a balanced budget. “Thoughtful cash flow forecasting is a seemingly mundane convention that is nevertheless a critical success factor for any business and particularly important to the community association as a form of business,” said Klauber. Y

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