CondoLifestyles

O CTOBER 2018 | VOLUME 22 | NUMBER 3

©

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

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COVER STORY

NONE OF YOUR BUSINESS

...or is it?

F E A T U R E S...

Good Board Members & Bad Residents …Keeping Your Association on Track

Homebased Businesses in Associations: 6 Things You Should Know

TIRED BOARD? Let the Experts Help Installing Fake Security Cameras is Legal... but That Doesn’t Make it a Good Idea

10 Best Board Member Budget Practices Revealed Conducting Executive Sessions and Assessing Fines After Boucher V. 111 East Chestnut Condominium Association, Inc.

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table of contents COVER STORY

03

None of Your Business... or is it?

By Pamela Dittmer McKuen

S P E C I A L F E AT U R E

10 Good Board Members & Bad Residents …Keeping Your Association on Track

By Michael C. Davids 17 Industry Happenings Compiled by Michael C. Davids & Sherri Iandolo 20 From the Editor 21 Directory Advertisements BOARD BASICS

28 Homebased Businesses in Associations: 6 Things You Should Know

by Amy Peterselli 29 State of the Industry Registration Form EVENT HIGHLIGHTS

30 MCD Golf Invitational 31 MCD Showcases the Races BOARD BASICS

32 Tired Board? Let the Experts Help

By Ken Bertolucci L E G A L U P D AT E

33 Installing Fake Security Cameras is Legal, but That Doesn’t Make it a Good Idea

by Nicholas Bartzen M O N E Y M AT T E R S

34 10 Best Board Member Budget Practices Revealed

By Salvatore Sciacca L E G A L U P D AT E

37 Conducting Executive Sessions and Assessing Fines After Boucher V. 111 East Chestnut Condominium Association, Inc.

By Benjamin Rooney

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COVER STORY

by Pamela Dittmer McKuen

None of Your Business... or is it?

An Owner’s Right to Privacy: What’s the Right Amount When You Live in a Condo or HOA? For me, it all started back in the early 1990s with Caller ID. How ridiculous, I thought, to know who is on the other end of the telephone before I picked up the receiver at home or work. In those days, a call was still something of an honor rather than an inconvenience. No one was dialing my number to claim the computer I didn’t yet own was malfunctioning or that it had been hijacked for ransom.

C

aller ID quickly became the norm and is now integrated into most calling plans.

Then, the Health Insurance Portability and Accountability Act was passed in 1996-and since strengthened--to limit the sharing of my health status and treatment by health care providers. Again, I wasn’t sure why this was a big deal. Then I had a condition I don’t care to tell you about. I had to sign a paper

that allowed practitioners to leave messages regarding test results with my husband.

Even more recently, we heard about how Facebook, that fun little app we all use to wish our friends Happy Birthday and share cat photos, allowed political consulting firm Cambridge Analytica to analyze the personal data of up to 87 million users to possibly help elect Donald Trump as president of the United States.

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Maybe you’ve heard of GDPR, or General Data Protection Regulations, a regulation put in place by the European Union to protect personal data. So far, this law impacts only EU organizations or anyone doing business with entities in the EU. It does not apply to Amer-

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ican businesses doing business only with Americans, but similar or parallel regulations on the way. For example, the California Consumer Privacy Act of 2018 requires that by 2020 any company that collects personal information will be required, upon consumer request, to reveal exactly what data they have and what they use it for. Consumers can demand their data not be sold to third parties and that their information be deleted. Consumers can sue if unencrypted data is stolen by hackers.

Privacy and Community Associations So, what does this have to do with condominium and homeowner associations here in Illinois? Plenty. It’s all led up to the general climate of the day. In every aspect of their lives, people are becoming increasingly protective of--and skittish about sharing--information about themselves, which could be anything from their bank routing number, preexisting medical conditions, vehicle license plate numbers, photographs of their children,

birth dates, favorite movies and the names of their ferrets. Much of it may be innocuous or readily available in public records, but the overall sentiment leans toward “It’s none of your business.” Some fears may be unfounded, but probably everyone has gotten warnings from companies and service providers we do business with to change our passwords because their websites were hacked and our data is at risk.

Fresh on our minds are the amendments to Section 19 of the Illinois Condominium Property Act, effective January 1, 2018. That new law, Public Act 100-0292, added owner telephone numbers and email addresses to previously mandated names, addresses and percentages of ownership that associations are required to maintain and distribute to owners who ask for them. The owner outcry was deafening. The City of Chicago exercised its Home Rule authority to pass a privacy ordinance nullifying the portion of Section 19 that addresses dissemination of owner information unless 2/3 of the total unit ownership votes to opt out.

Several bills were introduced earlier this year to the Illinois General Assembly to modify the new amendments, but they did not pass. Maybe this year, maybe not.

Condo Lifestyles asked several industry veterans their thoughts about privacy and community associations. Following are their responses, which may have been edited for clarity: Q: How much privacy can an owner in a condominium or homeowners association expect to have?

Diane White, vice president at Alliance Association Bank: When living in a Chicago multi-family community, the expectation should be that the association/management agent will respect the wishes of the resident as provided for in the governing documents of the association and as protected through law. In general, the phone numbers and email addresses would not be provided to anyone without the expressed acknowledgement and approval of the resident. Residents would be expected to be provided with a document that would indicate their approval for any such disclosure.

David Hartwell, association attorney, Keough & Moody: People who live in condominium associations need to remember that when they purchased a unit, they agreed to live in a communal setting, which is something materially and significantly different than living in a free-standing home. People also need to distinguish between their unit and the common elements. There is no right of privacy in the hallway or the lobby or the

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COVER STORY

parking garage or those areas. Despite being indoors, they are not part of your unit. They are common area’s for everyone’s use.

Scott Rosenlund, association attorney at Fullett Rosenlund Anderson, PC: The scope of association control over use and occupancy issues largely depends upon what restrictions are contained in the association’s governing documents.

Often, the original developer-drafted covenants do not address these issues in much detail, but homeowners vote to amend the covenants to impose more restrictive or nuanced guidelines.

Marshall Dicker; association attorney; Dickler, Kahn, Slowikowski & Zavell Ltd.: Telephone numbers and email addresses are not protected or privileged information. I can find almost everybody’s telephone number, including your cell phone number, and even if it is listed as a nondisclosed number. You just have to know how to do it. Email is even easier to find. In many cases, these people who don’t want their email addresses known have sent emails to the very people they want to prohibit getting email from.

Kerry Bartell, association attorney, Kovitz Shifrin Nesbit: Physically, an owner has a reasonable expectation of privacy inside their unit, but does not have a reasonable expectation in the common elements of the property. They also have an expectation of privacy to the documents related to their unit only. However, this is always tempered by the association’s need to comply with court orders or if such information is necessary to protect the association or the property.

Q: How much control does the association have over an owner’s personal contact information, financial information, voting records for association elections, or lifestyle within the unit?

White: The association would be expected to not disclose any of this information unless that ability is expressly granted via the governing documents.

Voting records in elections is governed typically by state law as noted in the Illinois Condominium Property Act or similar documents for other communal living arrangements. Associations/management agents use strict controls to protect financial information of residents.

Each association will have rules and regulations that will govern lifestyle issues like in-unit smoking, window covers, use of patios or decks, and so forth. For garages, nothing flammable would be allowed to be stored.

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10.18

For example, many condominium associations in recent years have amended their declaration to prohibit smoking inside the units. To provide another example, to help alleviate a shortage of common parking spaces, some associations will amend their governing documents to require that homeowners use their garages for the parking of vehicles rather than for storage purposes or as additional living spaces.

Many of these more restrictive guidelines actually are approved by a supermajority of the homeowners.

Hartwell: Section 19 has gotten blown out of proportion. It has always struck me that people get tons of emails from people or businesses you never asked to get email. Everybody has the ability to capture email addresses, but somehow it’s gotten more personal. It’s OK that Target knows my email but God forbid my neighbor wants it.

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If a disgruntled owner emails me about something, I don’t have to look at it. I can just delete.

It’s simpler than opening a piece of mail or piece of paper shoved under my doorway, and that has been going on forever in condominiums.

Brian Butler, vice president of property management at FirstService Residential: We are always trying to achieve a balance between the individual rights of the owner with community interests of security and financial stability. That may require disclosure of information that wouldn’t be needed if a person were not part of an association. From a legal perspective, that might be who the mortgage lender is and what the owner’s financing situation is, but those things are generally found in public records. Others affect security and safety, such as how many folks live in a unit. The types of pets someone owns raises risks in some associations.

Owners should have a maximum of personal privacy until it reaches the point that could affect the quality of life in the community as a whole.

Kara Cermak, senior vice president of learning and development, RealManage, LLC: This is a difficult question. Anything that increases the potential insurance liability for the community or impact property values is something we can regulate. Therefore, an association may have the right to legislate window coverings, what is stored on your patio or deck, and whether you

use your garage for storage rather than for parking your vehicle.

Furthermore, associations must consider mitigating noxious or offensive activity that may impact someone’s peaceful enjoyment of their home. I choose my words carefully here because one person’s noxious or offensive activity is not another’s, and this is where we rely on attorneys and the board’s interpretation of their documents.

Voting records are maintained by the association and may be reviewed by a resident that requests to do so, which means they are not private.

The board and management maintain additional information with regard to each home and emergency contacts, financial information and pertinent information about each resident. While this information is not for general public use, volunteers do--and should--have access to it.

Butler: Email addresses are an important element to emergency contact information. We have a much more mobile society today, and being able to communicate with an owner in real time is essential. In the past, we could do it by slower avenues.

Q: What about drones and surveillance cameras?

Can I expect a right to privacy, or is Big Brother constantly watching me?

Cermak: Contractors who use drones should have permits to do so, and they should be using them only for the specific services for which they were hired.

Surveillance cameras are used in several communities I manage, but the membership is aware of them, and we have to be certain that the cameras are pointed only at common areas and never the possibility of seeing into someone’s windows.

Bartell: There are essentially two uses of drones of which associations need to be aware. First, a drone with a video camera may be an excellent tool for an association to inspect difficult-toaccess portions of a building like a roof or tuckpointing. To avoid invasion of privacy claims, the drone must not transmit or record video or photograph into an area where an owner has a reasonable expectation of privacy.

Second, residents will no doubt use drones for hobby or recreational purposes, which also creates the potential for invasion of privacy claims.

Associations should consider the adoption of appropriate rules and potentially amendments to their recorded covenants that address the use of drones.

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COVER STORY

Q: So it’s not really true that I can do anything I want to do inside my unit, right?

Keith Hales, president, Hales Property Management: Board members themselves are at risk of breaking confidentiality of owner information.

Board members are volunteers, and they certainly should try to take steps to protect their owners, but if it’s easier to share information or a key with a vendor, they probably are going to do it. They’re not versed on what good privacy practices should be, unlike a management company.

A lot of board members just want to get stuff done, and they don’t necessarily think to consult with the management company or owner about the right way to do it first.

White: To a certain extent, activity within a unit is not something that is greatly limited--except if the activity becomes pervasive and a nuisance to others in the community. As associations have a governing board of directors, the approved rules are under their jurisdiction, and they are typically governed pretty closely for compliance.

Cermak: No, it’s not. For instance, never touch a load-bearing wall without obtaining a permit and making sure you are properly handling the construction related to that wall’s removal.

Read the rules and regulations to see what further rules exist within your home. Your window coverings, your doors and windows, your plumbing could impact other residents. Your air conditioner replacement could impact the exterior. Or the efficiency of a furnace you’re installing could call into question additional modifications that are necessary to the interior and exterior of the home, all which impact the community.

Bartell: All owners are subject to the association’s declaration and the relevant state statutes. Some of the provisions such as architectural control and smoking bans may dictate what owners can do inside their units.

Q: From the management’s point of view, how safe is an owner’s financial or contact information from hackers or malicious employees?

White: Protocols are in place so that the financial information is as guarded as can be reasonably expected through the technology available.

Cermak: Your data is safe, and the very best of our industry is making sure each day that it remains so. But is it possible it falls into the wrong hands? Yes, it’s possible. We can only continue to use best practices to protect all of the data for which we are responsible.

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10.18

Butler: Everyone has to do the very best they can to reduce the number of eyes that see the data.

Our company has taken steps to reduce the amount of financial information we collect. We have a third-party processor that has security procedures in place to handle our assessment auto-pay program. As little as ten years ago, management companies could be getting paper forms and a copy of an owner’s voided check. We have eliminated that step. We try not to accept payments in our office directly. The less we can touch the actual check and the information on it, the safer the data is and the lower the risk for associations and for us.

In addition, I think any association should seek to obtain only the minimum amount of information necessary to effectively administer and operate the property.

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Bartell: Managers and associations can help safeguard owners’ personal and financial information by following best practices: Caution employees against personal web browsing; beware of phishing schemes; manage security updates; protect password confidentiality; destroy traces of personal information on hardware that may be sold or recycled; encourage good practices among owners like avoiding open wi-fi when making payments.

Hales: Whenever we take over a property from a developer, we always tell the owners to have their locks changed. The developer and his contractors have keys.

Q: Are management companies selling the personal information they have on me?

Hartwell: I’ve never heard of it, but it wouldn’t shock me. Our information is bought or sold or traded hundreds of thousands of times a day. You can’t do anything over your phone or computer that isn’t being bought or sold for whatever reason. Is that an acceptable practice when it comes to your home? The answer is probably no.

Or, if it were a concern, the association could write into the management contract that their information cannot be disseminated. But contracts change.

Cermak: We don’t provide owner data to professionals that work with our communities. It has always been the practice of Rowell and now RealManage that we never sell that data.

Butler: One of the legal underpinnings of a management company’s relationship with an association is we have a fiduciary duty to our associations. An association’s data belongs to the association, not to the management company. We are dis-incentivized to sell or disclose association data because it breaks the trust and confidentiality requirements of our agency relationship. If you violate someone’s trust, you won’t be in business very long.

Hales: Whoever is the association’s management company has to have an internal policy for keeping it as confidential as possible and not selling it to solicitors or anyone else, and there should be some sort of protection in the contract that the association can count on us for that.

The developer could write as a covenant to the declaration that any information collected shall not be sold or disseminated except by authorization of the board, or it could say the opposite.

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Q: When can the association access my unit without my permission?

White: If there is a leak that is entering your unit or if your unit has an active leak that is affecting other units, the association has the ability through law to access the unit for your protection and the protection of other community members. Any emergency would be grounds for access with or without specific approval from the resident.

Rosenlund: Associations generally should only access a unit with the homeowner’s consent; in an emergency situation where there is a legitimate safety risk or threat of imminent, serious property damage; or with a court order granting access.

Associations should not attempt to assume responsibility for enforcement of criminal laws and should defer that function to the police. If apparent criminal activity has a disruptive effect upon the property as a whole, then the association can initiate violation proceedings or civil litigation seeking to abate the problematic conduct.

Cermak: The association would not provide access to your home for anything other than something that is impacting the community.

I have had federal and state authorities that require access for one or another issue, legally, and they do so without even notifying us, to be

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COVER STORY

honest. Surprise entry is usually the name of the game in that instance.

Hartwell: We typically advise our clients if an association is seeking access to a unit for something that doesn’t quite rise to the level of an emergency to confer with the owner and get permission. One scenario is if I gain knowledge someone is a hoarder and the unit is in shambles, it may be a health concern but might not be an emergency. If the unit owner refuses entry, we would try to get a court order.

Q: What is your best advice for balancing the privacy rights of an owner with the association’s need to function?

Rosenlund: If an owner’s behavior is detrimental to the association’s maintenance or operation of the property or is unreasonably compromising the quality of life of the other residents, then an association can and typically should intervene in the situation.

But associations should remain aware that they have limited authority to dictate what owners do inside their homes, so long as the owners remain in compliance with the association’s covenants and rules.

Hartwell: I offer the same advice as with anything the board does. The board of directors is required to follow the business judgment rule.

They don’t have to make the perfect decision all the time, but they have to engage the processes and thoughts a business person would.

I think most boards understand where their boundaries are--that includes limiting the information they obtain and share to what is needed to administer and operate the association and its buildings, make decisions objectively, and follow their governing documents.

Cermak: The community must be able to protect the community and the infrastructure and each of the residents within their homes. Give your community what they need to reach you in an emergency, and be patient when we indicate we need that access. It’s never a good time to force entry into someone’s home, and you should do what you can to avoid this.

Butler: Minimize the amount of data being collected, but how much is a question associations have to answer for themselves. No doubt, there are some legal anchors and some things the association needs to function. However, an association with no rentals has a different need for data than one that has a large rental population.

The conversation around privacy is not one that should happen once, and it’s over. Outlooks change over time.

Bartell: Owners should be aware that some of their personal information is already a matter of public record. Additionally, they do not have a reasonable expectation of privacy in the common elements.

The board should remember they are a fiduciary for the association and its owners, and that owner information should be treated as confidential unless the association’s attorney advises that the information can or should be disclosed and to whom.

Hales: Honestly, I’d say the average board member doesn’t think about it. A lot of this stuff to me is common sense, but I don’t think board members when they are giving a key or information to a vendor think, “What’s the worst possible scenario that could come back to bite you?” They don’t ask how well they know the vendor, or can they trust the vendor or the workers who work for the vendor.

It’s the management company who knows this and has gone through those scenarios and has experience with what could possibly happen and things to watch out for. Sometimes those things don’t cost a whole lot extra. Y

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CONDO LIFESTYLES

by Michael C. Davids

Good Board Members & Bad Residents …Keeping Your Association on the Right Track

Some boards do behave badly. Their number is, however, far exceeded by those that run their associations fairly, impartially and in basically strict observance of all legal and governing document constraints. That's a point that should be emphasized here. Too often, people share horror stories of bad behavior by boards much more than they share positive remarks. As a result, some receive a distorted picture of a typical board; that it is autocratic and arbitrary rather than what most of them truly are, democratic and evenhanded.

W

e want to correct that false impression, in large measure because that portrayal might have increased the apprehension some concerned unit owners feel about serving on boards that, contrary to Spike Lee's cinematic admonition, “don't do the right thing.” If most are like that, why get involved, they might ask themselves?

Majority Should Rule Boards, for the most part, operate within the law and their covenants and assert the interests of their constituents rather than only their own. They work toward the common objective of protecting the investment of everyone in their homes. And they listen to and communicate effectively with their homeowners.

"Boards that are truly responsive are boards that are serving for the right reason and understand that their decisions must be based on what is best for the majority," said Natalie Drapac of Community Specialists Inc. "They consider every request and explain their decisions. When they cannot do what is asked, they explain why they feel to do so would not be in the best interests of all."

Many management people concur with that conclusion. "I would have to say that the majority of the boards overall are concerned about the betterment of their buildings," noted Tom Skweres of ACM Community Management, adding that while he acknowledges that there are occasional unit owners who attempt to follow their own personal agendas on boards, the overwhelming number of directors consider the interests and concerns of their constituents their own.

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S P E C I A L F E AT U R E

"Most board members know that whatever they do to improve the conditions in their buildings will benefit them also" Al Schroeder of Heil, Heil, Smart & Golee holds a similar view. "Most of the boards that we work with are interested in enhancing the value of the property," he said. "Often board members and residents clash over the best way to do this, but overall, most of the boards consider their fiduciary responsibilities (to the other owners) in every decision they make."

It's Not Easy Skweres pointed out that in his experience aberrant board members who attempt to do things in their own way for their own benefit are generally kept in tow by their colleagues on the board who pull together in the right direction and more than offset the bad influence of the misguided individualist. "The good board members who are professionals will not be willing to serve with a board that is not serious about working together as a team," said Skweres. So they get the dissident in line or work around the person.

It's not easy being a responsible board member. Ask anyone who has ever taken a turn at the job and he or she will tell you that, and rightly

so. Most people who serve could find more rewarding things to do like shampooing the family dog or organizing their penny collection.

And who needs the headaches and abuse that often come with the position? All the negatives discourage many talented people from wanting to be board members.

facts. Usually they are intelligent people, they just don't have all sides presented to them."

Unfortunately for board members, whether intense and misguided criticism comes from otherwise intelligent people or just plain mean spirited boneheads, they can feel the sting equally as deeply and throw up their hands in near despair.

Making Misery

Always A Critic

Some unit owners try to make the life of a board member miserable by constantly criticizing what they do and behaving annoyingly at board meetings and elsewhere. They complain, cast aspersions, and seldom, if ever, find anything positive to say about those who are truly doing their best to see that the affairs of their associations are capably handled. Money issues seem to generate the greatest opposition and most decibels of complaint.

"In many buildings any decisions that the board makes that hits a unit owner in the pocketbook is an unfavorable decision and the board is the group that gets criticized for this," said Schroeder, who added that such a reaction is most commonly based on a lack of perception of the rationale for the board’s action. Drapac adds, "Most of the time people who are upset in an association do not have a complete understanding of all the issues and

Few associations are lucky enough to be free of loudmouthed critics who complain for just the sake of complaining. Many have a critic who attends every board meeting. This critic has an opinion on everything and scrutinizes every decision the board makes. They seem to be unwilling to cede to their boards any authority at all to make decisions that affect their lives even though that is the essence of governance in community living.

Such people have found their way into the wrong type of living environment and need to look for another setting.

Drapac believes that many unreasonable critics are either failed board candidates or people whose lives are not very fulfilling. "Those who are very vocal and nitpick are generally people who have run for the board and lost or are people who have nothing else in their lives but to come to a monthly

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meeting for entertainment and have a good time being the dissident." Â Unfortunately, this is usually at the expense of well-meaning directors trying to conduct business in a timely and efficient manner.

Jackie Timmons, president of the board of Darien Devonshire Condominium Association agreed. "Some people nitpick because they simply have too much time on their hands." While truly sensitive board persons would not necessarily wish such boors on others as a way of gaining a measure of relief, few, if any, would likely have any regrets if someone in that category of humanity found a life outside the association and diluted his/her disagreeableness by spreading it elsewhere.

Not Always Unreasonable It's important to get one thing straight before proceeding further. Not by a long shot are all critics unreasonable in their words and actions. Â Some have valid reasons for complaining about how their boards establish the order of and conduct business. Their voices need to be heard in a coherent, controlled fashion. "I believe some nitpick, but I do believe some have legitimate complaints," said Timmons. For example, "sometimes repairs do not get done as quickly as we would like and the unit owners feel the same way." And they

let the board know their feelings, which, while justifiable and generally sincere, can still add to the stress level for directors, who, for whatever reason, can't move on issues as quickly as impatient owners demand. Â But these owners should recognize that while there may be an appropriate time for complaining, it should be done constructively and in a reasonably respectful way.

Sometimes the differences between critics and boards is a failure of the former to appreciate that board members only have so much time to devote to association business as well as funds with which to do work and must schedule issues in the order of their perceived importance - which may not be the same order of the vocal opposition. Â "I often find that they do not understand the priorities of the board of directors," said Schroeder. Â "Even when critics are well educated on an issue, I still find that often they have not taken the time to understand the priorities of the board. Â An issue that they think is of great importance often ranks relatively low on the board's to do list although the board may well be aware of the problem." Â This unwillingness on the part of naggers and naysayers to let boards execute priorities as they establish them, which is what they were elected to do, can drive directors to desperation.

Squeaky Wheel Gets the Grease In some cases they might even be inclined to capitulate to the caterwauling of their most vocal critics just to get them off their backs. Â The squeaky wheel gets the grease, so to speak. But that is a strategy that should only be followed if, in doing so, the overall interests of the association are not adversely affected and no law or governing document is violated. Â One of the problems in giving in to constant moaners is that they will likely only demand more concessions on other points.

The whiners will never be satisfied. And Skweres knows from his years in management circles that chronic protesters with no substance to their complaints seldom give up and go home.  "People who continually criticize their boards often never will be satisfied no matter what anyone does."  And so well-meaning but unfortunate boards must suffer these fools sadly and often.

Frivolous Lawsuits Have Costly Impact Irascible homeowners taking boards to court to settle just minor issues or differences are becoming more frequent. Â This tendency, however, of hot-tempered people to look to judges for satisfaction over an adverse board decision or some

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S P E C I A L F E AT U R E

other wrongly perceived slight is not limited to associations. Rather, it reflects society's growing movement in the same direction.

"Homeowners and the general public sue for everything and anything," said Karyl Dicker Foray, an insurance broker with Rosenthal Bros., Inc. As examples in associations she noted that an owner might have a request for a handicapped parking space denied by the board or get upset about having his or her name published in a community newsletter for being delinquent in assessments and hire a lawyer. Or one association could sue an adjacent one for fencing over what used to be a free passage to a nearby retail outlet. "It seems that people don't get mad lately, they sue, and that, in turn, drives up the cost of all insurance policies."

Increasingly they are becoming both mad and litigation minded, an even worse situation.

cies. Sometimes higher deductibles are demanded.

Insurers will include exclusions and some have gone so far as to blacklist certain board members by taking them off the protected list in the future because they have been sued individually.

"Underwriters are not only looking at the number of claims but also the type of claims that are being filed when reviewing an association's D&O policy at renewal time," said Foray, adding that associations need to evaluate competing D&O proposals very carefully to determine which exclusions each contains. Insurers vary on what or who

may or may not be covered.

Sugar has noted the insurance-related problems that associations face because of lawsuits by unit owners. “When an association’s D&O insurer has to pay heavy litigation defense costs, the association will often face significantly higher premiums and large deductibles when its current insurance policy expires” he said. Disclosure of pending unit owner lawsuits on an association’s Section 22.1 disclosure statement will also discourage mortgage lenders and prospective unit buyers.

Renters, Pets & Parking From his position as an attorney with the law firm of Saul Ewing Arnstein & Lehr, David Sugar has seen a significant rise in lawsuits against associations.

Much of this litigation is the result of unit owners not understanding - and, in many cases, simply refusing to accept - restrictions on unit use and occupancy, especially those relating to pets, rentals, remodeling, nuisance activities and business use," he said.

Many times easily upset owners are turning to governmental agencies - HUD, Illinois Department of Human Rights, Chicago Commission on Human Relations, etc - with discrimination claims against associations because they will investigate and pursue such matters at no cost to claimants.

Fighting removal of a dog that is purportedly needed for medical or emotional assistance, religious unhappiness over an association's choice of holiday decorations in a building lobby and resisting assessment collection efforts based on a charge of discrimination are examples of situations in which unit owners are appealing to agencies for free help in battling their associations Such claims are often unwarranted - "baseless complaints that are time-consuming and very costly to defend for associations,” said Sugar.

Big Impact on Insurance Such lawsuits can affect everyone in an association. All become victims of the legal maneuverings of one or two, even the litigants themselves, not just the board members who are the primary targets of the wrath of the irksome suit filers. In addition to rising premiums that must come out of the association's budget and be covered by assessments paid by all residents, nitpicking lawsuits can lead to cancellations of or restrictions in D & O poli-

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CONDO LIFESTYLES

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CONDO LIFESTYLES

Good Board Members Won't Serve Homeowners who choose to initiate nonsensical or nuisance lawsuits can eventually wear down the resistance of directors. Their adversarial attitudes and sullen demeanors can cause a growing frustration, sometimes bordering on desperation, amongst board members, who eventually grow weary of all the abuse they receive and decide to quit or not run for reelection.

"Good board members who really work hard at making the best decisions get tired of the very people they are working for being rude and ugly and suing on top of it," said Skweres.

It is not just actual lawsuits that are the problem. The growing tendency of not only filing but also of simply talking about that recourse "either to threaten to sue or even sue," according to Timmons - has caught the attention of insurers.

As a result, it is not only actual lawsuits that can drive up the cost of insurance but also the growing potential for them. Insurers recognize that homeowners as a group are leaning more toward litigation to resolve disputes with their boards for the slightest real or imagined provocation. "I know of instances where ridiculous lawsuits have been filed

against boards," said Skweres, "but I think D&O costs have risen over the years more because of the possibility of lawsuits being filed than actually being filed." So insurers are sometimes jacking up their charges based on anticipation rather than reality, because miffed unit owners might file rather than actually sue. This just adds to the frustration and exasperation of the well- intentioned board.

Turning the Tables Do critics see the potential harm they may be doing to their associations by their constant complaining, haranguing and suing of board members for little or no reason other than perhaps to hear themselves orate or advance their own agendas?

Most managers we talk to think they understand and they enjoy doing it.

Can critics be co-opted - that is, challenged or encouraged to run for the board so they will then experience first-hand how demanding and difficult the job of director can be with the possibility that they would then mute or minimize their disparagement of their new colleagues? Will getting on the board likely change their perspective from that

of an annoying outsider to that of a cooperative insider? Or are they more likely to carry their contrary attitudes with them, eschewing compromise and cooperation to become an obstructionist on the board working from within to unsettle things instead of from the gallery?

"I have had people who did not understand and who complained about everything join the board and become very good board members once they understood the work that goes into every decision," said Schroeder. But they can go the other way too. "When elected, they either realize what is going on and join the process or they remain as dissidents."

But getting voted to the board requires securing the necessary backing from unit owners, which is not easy for people who give the impression that they are more interested in serving their own interests rather than everybody's. Only once in a great while has Schroeder seen critics actually be successful in making that move and when it has happened the experience has been eye opening for them.

"I have seen the critic quickly become overwhelmed by the responsibilities of the board and serve only one term, resign or stop coming to board meetings," Schroeder said. If the board is lucky, when that happens the critic bolsters his/her verbal guns, providing much needed relief to the other members.

Skweres’ experience with critics gaining seats on the board has been more along the line of Schroeder's in that when they do - again a very infrequent occurrence at best - they come to the realization that the job can be very trying and attempt to fit in and go with the flow instead of against it. "Very rarely do people put their money where their mouths are but if they do and get elected it normally doesn't take long for them to see the light," he said. But, as with Schroeder, it doesn't always happen that way. "If they don't, it

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then becomes obvious that the only reason they are on the board is because of a personal agenda."

Timmons would rather not have naysayers and nitpickers even try to get elected to the board, preferring to deal with them as critics from the audience, especially, as often the case, they carp and cavil out of ignorance. "There is a lot to learn in running an association and it could have a negative impact if the candidate isn't familiar with how the board operates," she said. “And may not care to make the effort to learn. It is not as easy, and it takes a lot more of your personal time than many seem to think."

Homeowners Forum Sometimes critics who will shoot off their mouths at every opportunity can be contained at board meetings but it takes a strong president to quell the querulous. A homeowner's forum should be scheduled before or after a meeting to give the very peevish a chance to launch their rhetorical broadsides just as the more temperate unit owners are permitted to give their generally more meaningful opinions. But outside of that period a firm hand is usually needed to maintain order.

"It all comes down to how the board president

handles the meeting," said Schroeder.

"A good president ensures everybody's right to be heard without it creating too much of a nuisance."

Skweres agreed, pointing out that 'out of control' discourse seldom occurs when the president keeps things moving along within a definite structural framework for meetings. "It is when board presidents want to make everyone feel they are part of the decision process - which they are notand do not run meetings in accordance with Robert's Rules of Order (or some similar system) that they have problems." Board presidents take note.

Getting Good Board Members So how do you get good people to serve on boards, especially in associations where they may be subject to frequent verbal abuse or the threat or reality of lawsuits even if only from less than a handful of loudmouths? For the most part, just as you would in associations where conditions are much more tranquil and hospitable to the efforts of well-meaning board members. There are no magic formulas. Somebody has to do the job despite the fact that there may be no rest for the

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10.18

good. Either you find a way to control or check the "n" types- the naysayer, the nitpicker, the noncooperative and, yes, even the Neanderthal - or you live with the situation, enduring the barking and attempted biting. As a board member, you have an investment to protect - yours and that of the supportive residents in the association. So you bite the bullet and work for the best.

Protect Your Investment Skweres focuses on the investment aspect in attempting to persuade the reluctant to run for the board. "We have tried to appeal to a person's sense that this is their home and if they don't take an active role in management, it may not appreciate in value," he said. That approach isn't always successful, but in a difficult environment for board members, it is likely the one to have the greatest impact in inducing people to run. Timmons has adjusted to the whining, whimpering and wrongheadedness that may occasionally boil to the surface at Devonshire. "I have learned to accept it and realize you can’t make everyone happy no matter what you do," she said. Y

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INDUSTRY HAPPENINGS

» INDUSTRY HAPPENINGS »»»»»» Alliance Association Bank Alliance Association Bank welcomes Diane White as the new Vice President at Alliance Association Bank specializing in banking services for homeowner associations and management companies. She is responsible for business development in the Midwest. In her role, she will be responsible for building new client relations as well as nurturing our current community management portfolio.

Diane is a dynamic client retention strategist with over 10 years' experience in the sales and property management industries in the greater Chicago area. Her expertise is in identifying and developing prospects along with networking and cultivating business relationships.

Before joining Alliance Association Bank, Diane was the senior vice president of condominium management for a leading Chicago management company, where she oversaw the condominium division. Her primary objectives were customer satisfaction through developing and executing strategic plans, which resulted in growth and client retention.

As a former condominium management executive, Diane has proven leadership and relationship-building skills, to accomplish desired results for our clients. Consequently, Diane's unique blend of core business operational experience, financial planning, and condominium management skills will enable her to bring a wealth of professional support.

Nicholas Bartzen, co-chair of the Chicago Bar Association Condominium Subcommittee and attorney formerly with another Chicago law firm’s Community Association group, recently announced the opening of Altus Legal ("Altus"), a law firm dedicated to assisting Illinois condominium and homeowners associations with legal issues. Regarding the model for Altus, Bartzen stated: "Altus operates on a slightly different model that is designed to help boards maintain a predictable budget.”

Y Diane White

Diane holds a Master of Business Administration from Benedictine. She is a Certified Manager of Community Associations (CMCA) professional, a member of The Community Association's Institute (CAI), and a member of the Association of Condominium Townhouse Associations (ACTHA).

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Bartzen is frequently published and interviewed on condo and HOA legal issues in a range of local and national industry publications, including Condo Lifestyles.

He is also a frequent lecturer and host of legal seminars for industry organizations and area property management companies. Prior to law school, Bartzen worked for two leading Chicago condominium management firms managing associations as a licensed Illinois CAM (Certified Association Manager) and trained with the Institute of Real Estate Management (IREM®) to earn his CPM® credentials. He graduated from Beloit College with a degree in Economics and Management and earned his J.D. at Chicago-Kent College of Law. Said Bartzen on his work with associations: "I truly enjoy assisting boards and property managers obtain clear and concise legal guidance, allowing all to operate associations more effectively. On a personal note, I am a big proponent of association living as a means of enhancing community and safety within the city of Chicago, as well as reducing our environmental impact on the great state of Illinois."

Heil and Heil Insurance Company Shown to the right is a group of guests and staff at the Heil and Heil Insurance Oktoberfest 2018 event that was held on Friday, September 28 at the company's Skokie office. The event raised money for the BrightFocus Foundation which is working to help people that suffer from Alzheimer's disease.

Altus Legal

?

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CONDO LIFESTYLES

» INDUSTRY HAPPENINGS »»»»»»

ACTHA

FirstService Residential FirstService Residential donated the proceeds from its seventh annual Vendor Expo to Ann & Robert H. Lurie Children’s Hospital of Chicago. The expo, held on July 27, 2018 at Abbington Distinctive Banquets, brought condominium, townhome and homeowner association board members together to meet with service providers and experts from the property management industry.

“The proceeds of our Vendor Expo are donated each year to an organization whose values closely align with our own, such as being genuinely helpful, doing what’s right and building great relationships. These are just a few of the tenets at the heart of everything we do,” said Asa Sherwood, President. “We are honored to support Lurie Children’s, an organization that has had a significant impact on the wellbeing of children and families in Chicago for over 130 years.”

“Support for Lurie Children’s mission by companies like FirstService Residential propels advances in research and

care, trains new generations of specialists and allows us to advocate for the most vulnerable members of our community,” remarked Grant Stirling, PhD, Executive Vice President and Chief Development Officer of Lurie Children’s Foundation. “We thank you for your partnership in creating a healthier future for children.”

The group will also hold their annual Spring Expo and Conference on March 30, 2019 at Drury Lane located at 100 Drury Lane in Oakbrook Terrace. For more information on ACTHA seminars and other upcoming events, visit: www.actha.org/event

ABOMA The ABOMA 81st Annual Meeting, will be held at The University Club of Chicago, on Friday, December 7th, 2018.

For more information visit www.aboma.com

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CONDO LIFESTYLES

ACTHA recently held seminars on the topics of Dealing with Difficult People, Foreclosures and Collection of Delinquent Assessments, and Intra Board Relations.

ACTHA will hold seminars on “Doing What’s Right for your Association When Disaster Hits!” on November 15, 2018 in Wheeling and “Community Building, How to End Apathy” on November 27, 2018 in Countryside.

10.18

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INDUSTRY HAPPENINGS

» INDUSTRY HAPPENINGS »»»»»» Mutual of Omaha Bank Mutual of Omaha Bank has awarded Tom Engblom with the company’s prestigious Pillar Award – an honor given annually to the bank’s top 10 performers nationwide. This is the second time Engblom has received the award.

Based in Chicago, Engblom is a regional account executive for Mutual of Omaha Bank’s Community Association Banking group. He was one of 10 individuals honored out of nearly 1,000 bank employees nationwide. Pillar Award recipients undergo a vigorous nomination process that evaluates performance, leadership and a demonstrated commitment to Mutual of Omaha Bank’s purpose and core values. Performance is measured by production goals, demonstrated exceptional service and contribution to a positive work environment, among other criteria.

“We couldn’t be more pleased to present the Pillar Award to Tom for a second time in recognition for his work as a re-

gional account executive,” said Jeff Schmid, chairman and CEO of Mutual of Omaha Bank. “This is a prestigious and competitive award that recognizes top talent across our organization. Recipients like Tom have demonstrated exceptional leadership and performance on a consistent basis and we are fortunate to have them at Mutual of Omaha Bank.”

In addition to the Pillar Award, Engblom has also earned the Certified Property Manager designation from the Institute of Real Estate Management and the Professional Community Association Manager designation from CAI. He also recently completed his doctorate degree in Business Administration from Northcentral University.

Mutual of Omaha Bank is a full-service bank providing financial solutions to individuals and businesses across the United States. With $8 billion in assets, Mutual of Omaha Bank is a subsidiary of Mutual of Omaha, a Fortune 500 insurance and financial services company founded in 1909.

United States Alliance Fire Protection United States Alliance Fire Protection (USAFP), a full service fire protection solution provider serving the Midwest, announced it has acquired K&S Automatic Sprinklers Inc. The move strengthens USAFP’s array of commercial, residential and tenant improvement solutions.

K&S Automatic Sprinklers Inc. has a historic legacy serving the Chicago area. As one of the original eight fire safety companies to serve the Chicagoland area, K&S has provided consistent, attentive service to its customers.

“We have a great team at USAFP and this acquisition al-

Condo Lifestyles State of the Industry Event

lows us to further strengthen our capabilities and continue to deliver reliable and efficient service to our customers,” said Chad Huennekens, president of United States Alliance Fire Protection.

Established in 1986, United States Alliance Fire Protection is a licensed and insured contractor specializing in all aspects of fixed fire protection systems. USAFP will continue to provide its full range of services from engineering and design to inspections, testing and maintenance. United States Alliance Fire Protection is a subsidiary of APi Group, Inc.

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10.18

The 23rd annual Condo Lifestyles State of the Industry program will be held on Thursday December 13th, 2018 at the Chicago Cultural Center. The event features a luncheon, educational seminar and information tables. A legal update presentation will be provided by Gabriella Comstock of Keough & Moody and a panel discussion with a Q & A session as well as information tables featuring industry experts will also be provided. Topics to be discussed include a Chicago Ordinance update (Rental Restrictions/ AirBnB, Energy Benchmarking/Ratings), Most Common Current Capital Projects, Funding & Financing Capital Projects, OSHA Façade & Roof Access Requirements, Property Tax Appeals, Property Values & Assessments, RFP's & Contracts, Managing Business Relationships, Technology and Communication. For more information visit www.condolifestyles.net or call 630-932-5551.

CONDO LIFESTYLES

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CONDO LIFESTYLES

From the Editor

F

all is here and it seems as though this year has gone by quickly.

Hopefully we will have some striking autumn color displays to enjoy. Fall is also the time for budgeting for next year, elections of

all types, and finishing up outdoor projects. Thanksgiving will be here soon and

CondoLifestyles

®

OCTOBER 2018 | VOLUME 22 | NUMBER 3 Editor & Publisher Michael C. Davids Vice President Sherri Iandolo Art Director Rick Dykhuis Special Events Coordinator Mary Knoll

Y Mike Davids

although life challenges us more than we like, we still have much to be thankful for. Soon after that will come many holiday events and activities that give us time to reflect on the year gone by.

One of the most challenging topics that community associations and managers have had to deal with in recent times is privacy. The privacy of our individual personal data has been declining in our fast paced society for a number of years. Our cover story offers the perspective of a number of leading community management experts on the new issues that they are faced with as a result of changes to section 19 of the Illinois Condominium Property Act as well as other privacy issues that affect community association residents.

Our second story on good boards and “bad” residents offers some insight on how to deal with various types of negative behavior or negative input from residents at their community associations. The quality of your association board is one of the most important aspects of protecting your investment in the community association you have chosen to be a part of. If you can’t or don’t want to serve on your board, you should at least know that your current board is genuinely looking out for the best interests of your entire association.

Sometimes new laws or court rulings are well intended and at the same time bring about new chal-

Contributing Writers Pamela Dittmer McKuen, Jim Fizzell, David Mack, and Cathy Walker

lenges and issues that must be addressed. A court case ruling by the Illinois 1st District Appellate Court (and

Circulation Arlene Wold

sessions of their board meetings, audio/video tapes, and fines. An overview of what is commonly referred to

Administration Cindy Jacob and Carol Iandolo

is still active) has caused quite a shake up for community associations in the way they handle minutes, closed as the “Boucher” case is provided in this issue.

This is the time of year that budgets for next year are prepared so we have provided an article on this topic in our Money Matters column. Although our general economic conditions are about as good as they

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 1A, Downers Grove, IL 60515. 630-932-5551 or 630-202-3006.

can be, the budgets of many associations as well as many individuals are still stressed and require careful planning.

Our Board Basics column features an article on things you should know about home based businesses in associations while another article in this issue explains why installing fake security cameras is legal, but not

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.

necessarily a good idea.

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.

to legislation, legal, and capital improvement projects will again dominate our presentations, discussions and

All material herein is copyrighted 2018. No part of the publication may be reproduced whatsoever without written consent from the publisher.

Our regular Industry Happenings and Event Highlight columns can also be found in this issue.

State of the Industry Program on December 13 Taking time to review important issues and identify those that will require significant attention in the coming year is the main purpose of our annual Condo Lifestyles State of the Industry program. Issues related resources that are made available on December 13 at the Chicago Cultural Center. A legal and case law update will be provided and a panel of experts will discuss a variety of key topics facing community associations. We also recognize members of our magazine advisory boards at this program. You can find more information on this event on page 29 or at www.condolifestyles.net.

Special thanks to the companies, associations and groups that are Authorized Distributors of Condo

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.

Lifestyles. Those of you who are not current subscribers can find subscription information on our website at

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.

(mdavids@condolifestyles.net Y

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www.condolifestyles.net.

Please enjoy the upcoming holiday season. 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 send us an e-mail

Michael C. Davids Editor and Publisher

10.18

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ANNUAL ACCOUNTING SERVICES: Audits Reviews Compilations / Income Taxes MONTHLY SERVICES: Collection of Assessments Paying of Bills Monthly Financial Statements www.canteycpa.com

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ARCHITECTS/ENGINEERS BTL ARCHITECTS, INC. (312) 342-1858 Bringing Buildings Back to Life Contact Delph Gustitius www.btlarchitects.com

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BASEMENT WATERPROOFING

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

THE REAL SEAL, LLC (847) 756-7987

DOORS

austinwerner@therealsealllc.com

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

DOORS DOOR SYSTEMS ASSA ABLOY ENTRANCE SYSTEMS 1-800-THE-DOOR PEDESTRIAN DOORS / REVOLVING DOORS SECTIONAL DOORS / STEEL ROLLUP DOORS / FIRE DOORS HIGH SPEED DOORS / DOCK LEVELERS www.doorsystems.com

DUCT CLEANING AIRROOT 847-895-9550 NADCA Certified Duct Cleaning Company www.airroot.com

AIRWAYS SYSTEMS, INC. 630-595-4242 Cleaning: Air/Laundry/Toilet Exhaust Ducts, Coils, Trash Chutes, Parking Garages.

Also Air Filters, Belts www.airwayssytems.com

ELEVATORS/CONSULTANTS SMART ELEVATORS CO. (630) 544-6829 www.smartelevatorsco.com smartin@smartelevatorsco.com

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

ENERGY SOLUTIONS CENTERPOINT ENERGY (630) 795-2594 Natural Gas & Electric Energy Reliable Service. People You Trust.

Contact: Vickie Farina Vickie.Farina@centerpointenergy.com www.CenterPointEnergy.com/CES

Window and Related Masonry Interior & Exterior Doors | Siding & Gutters

www.woodlandwindows.com

FOR DISPLAY OR PROFESSIONAL SERVICES DIRECTORY ADVERTISING INFO, CALL (630) 202-3006 22

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10.18

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

SERVICE DIRECTORY

ENERGY USE/BENCHMARKING

FIRE/FLOOD RESTORATION

WESTSIDE MECHANICAL GROUP (630) 768-6562 / (630) 369-6690

SKYLINE DKI (708) 629-0563

Serving the Tri-State Area Since 1970 Contact: Rob Gliniewicz Rgliniewicz@wsmech.com www.wsmech.com

"Restoring Happiness" www.skylinedki.com

CHICAGO FIRE PUMP TESTING (773) 609-1510

SP+ FACILITY MAINTENANCE (773) 847-6942 Daily Cleaning Services / Power Sweeping and Washing Painting and General Repairs / Seasonal Services (Snow/Ice Removal) Parking Facility, Surface Lot, PedestrianPlaza, Large Venue or Commercial Retail Building.

NORTHERN ILLINOIS FIRE SPRINKLER ADVISORY BOARD (NIFSAB)

All types of environmental cleaning. www.BrouwerBrothers.com

708-403-4468

FIRECON CONSTRUCTION SERVICES, INC. 847-534-9400 24 Hour Emergency Services www.FIRECONCONSTRUCTION.com

www.genesisconstruction.com

HVAC & Plumbing Services www.hillgrp.com

JOHNSON CONTROLS SIMPLEX GRINNELL (630) 948-1235

Serving the Tri-State Area Since 1970 Contact: Rob Gliniewicz Rgliniewicz@wsmech.com www.wsmech.com

H V A C CLEANING BROUWER BROS. STEAMATIC (708) 396-1444 All types of environmental cleaning. www.BrouwerBrothers.com

INSURANCE

Fire alarm / Sprinkler systems Fire pumps / Fire extinguishers Backflow prevention Fire panel / Monitoring INSTALLATION | INSPECTION | TESTING | MAINTEnance

24/7 EMERGENCY SERVICE: (847) 816-0050 www.usafireprotectioninc.com

GARBAGE CHUTE CLEANING

THE RESTORATION GROUP, LLC (630) 870-0658

BROUWER BROS. STEAMATIC (708) 396-1444

www.trgrestore.com

All types of environmental cleaning. www.BrouwerBrothers.com

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

HILL MECHANICAL GROUP 847-451-4200

WESTSIDE MECHANICAL GROUP (630) 768-6562 / (630) 369-6690

USA FIRE PROTECTION (224) 433-5724

J. C. RESTORATION, INC. (800) 956-8844

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

www.firesprinklerassoc.org

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

GENESIS CONSTRUCTION, INC. (847) 895-4422

courtneyschmidt@callperfection.com www.callperfection.com

CONTECH

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

(847) 483-3803

BROUWER BROS. STEAMATIC (708) 396-1444

"No Job Too Big or Too Small" service@midproservice.com / www.midproservice.com

HVAC

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

FIRE/FLOOD RESTORATION

Construction / Maintenance / Painting Electrical / Snow Removal

www.chicagofirepumptest.com

THE FIRE ALARM COMPANY

Contact: Daniel W.Nicholson dnicholson@spplus.com www.spplus.com/FacilityMaintenance

PERFECTION PROPERTY RESTORATION (877) 962-9644

MIDWEST PROPERTY SERVICES, INC. (630) 656-1000

FIRE SAFETY & PROTECTION

FACILITY MAINTENANCE

HANDYMAN/MAINTENANCE

HOLLINGER SERVICES, INC. (847) 437-2184 Property Casualty • Employee Benefits Workers Compensation www.HollingerInsurance.com

HEIL HEIL INSURANCE AGENCY (847) 530-3888 afullerton@heilandheil.com www.heilandheil.com

10.18

CONDO LIFESTYLES

23

CONDO LIFESTYLES

INSURANCE

LANDSCAPE CONTRACTORS

PAINTERS

ALLIANT/MESIROW INSURANCE SERVICES (312) 595-8135

ILT VIGNOCCHI (847) 487-5200

ABBOTT PAINTING, INC. (312) 636-8400 (773) 725-9800

www.iltvignocchi.com

Nancy Ayers www.condorisk.com

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

INTERIOR CONSTRUCTION FIRECON CONSTRUCTION SERVICES, INC. 847-534-9400 24 Hour Emergency Services www.FIRECONCONSTRUCTION.com

www.landscapeconcepts.com

info@abcdecoonline.com www.abcdecoonline.com

www.sebert.com

CERTAPRO PAINTERS OF AURORA (866) 715-0882

SEMMER LANDSCAPE (708) 926-2304

XFINITY COMMUNITIES 1 (800) XFINITY

Interior & Exterior Painting Drywall Repair • Metal & Iron Painting Light Carpentry • Power Washing Commercial Roofing Repair cdidech@certapro.com oswego.certapro.com

gsemmer@semmerlandscape.com

For more information E-mail: xfinity_communities@cable.comcast.com www.comcast.com/xfinitycommunities

LAWN CARE

LANDSCAPE CONTRACTORS

SPRING-GREEN LAWN CARE (800) 830-5914

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

www.spring-green.com

Professional Landscaping and Snow Removal www.acresgroup.com

LOCKSMITH

www.alanhorticultural.com

ABC DECO (773) 701-1143

SEBERT LANDSCAPING, INC. (630) 497-1000

INTERNET TECHNOLOGY

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

Quality Painting & Decorating since 1973 Our Mission: Guaranteed Committment to Quality Now offering Parking Lot Painting www.Abbottpainting.com

CERTAPRO PAINTERS OF THE NORTH SHORE (847) 989-4791 Interior & Exterior Painting Wallcoverings • Decorating • Remodeling Drywall Repair • Decks & Staining Tile Installation • Metal & Iron Painting www.certacommercial.com rmuldoon@certapro.com

NONSTOP LOCKSMITH (312) 929-2230 Locksmith Services, Intercom & Access Control Systems, CCTV, Overhead Garage Doors www.nonstoplocksmith.com

HOMETOWN PAINTERS, INC. (847) 870-1600 www.hometownpainters.com

MOLD REMEDIATION

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

PERFECTION PROPERTY RESTORATION (877) 962-9644

MIDWEST PROPERTY SERVICES, INC. 630-656-1000

courtneyschmidt@callperfection.com www.callperfection.com

Construction / Maintenance / Painting Electrical / Snow Removal "No Job Too Big or Too Small" service@midproservice.com / www.midproservice.com

www.BalancedEnvironmentsInc.com

FOX LANDSCAPE 708-514-7307 George Kinsella -Owner GKinsella@Foxlawn.com

PAINTERS AAA PAINTING CONTRACTORS, INC. (630) 231-8350

FOR DISPLAY OR PROFESSIONAL SERVICES DIRECTORY ADVERTISING INFO, CALL (630) 202-3006

24

CONDO LIFESTYLES

www.aaapaintco.com

PARKING GARAGE CLEANING SP+ (773) 847-6942 dnicholson@spplus.com www.spplus.com/facilityMaintenance

10.18

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

SERVICE DIRECTORY

PAVING

PROPERTY MANAGEMENT

PROPERTY MANAGEMENT

DUBOIS PAVING CO. (847) 634-6089

ADVOCATE PROPERTY MANAGEMENT (630) 748-8310

G&D PROPERTY MANAGEMENT (630) 812-6400

Managing in the Chicago Suburbs since 1988 www.advocatepm.com

www.gd-pm.com

info@duboispaving.com www.duboispaving.com

SP+ (773) 847-6942

ASSOCIA CHICAGOLAND (312) 944-2611 / (847) 490-3833

dnicholson@spplus.com www.spplus.com/facilityMaintenance

THE HABITAT COMPANY (312) 527-5400 www.habitat.com

www.associachicagoland.com

TWIN BROS. PAVING & CONCRETE (630) 372-9817 Asphalt Paving & Sealcoating / Concrete www.TwinBrosPaving.com

HEIL, HEIL, SMART & GOLEE LLC 847 866 7400

BAUM PROPERTY MANAGEMENT - REALMANAGE (630) 897-0500

Quality, Service, Performance and Integrity

Contact Mike Baum * MikeB@BaumProp.com

www.hhsg.net

www.BaumProp.com

PEST CONTROL ALL-OVER PEST SOLUTIONS (773) 697-1100 Bed Bug Specialists. Results Guaranteed! www.all-overpest.com

SMITHEREEN PEST MANAGEMENT SERVICES (847) 647-0010 / (800) 336-3500

CHICAGOLAND COMMUNITY MANAGEMENT (312) 729-1300

COMMUNITY SPECIALISTS (312) 337-8691

Professional Property Management.

Affordable Rate.

Contact: Dennis R. Kane; DKane@KanePM.com KaneManagement.com

Plumbing / HVAC / Fire Protection Riser Replacements / Site Utilities www.glph.com

DRAPER AND KRAMER INC. (312) 346-8600

MORE LIVING. LESS WORRYING.

Contact Ian Novak

LIFELINE PLUMBING (847) 468-0069

www.draperandkramer.com

Plumbing - Heating & Air Conditioning Water Heaters - Sewer Cleaning & Repair Hot Water Drain Jetting www.INEEDLIFELINE.com

FIRSTSERVICE RESIDENTIAL (312) 335-1950

www.acmweb.com

MCGILL MANAGEMENT, INC. (847) 259-1331 www.mcgillmanagement.com

Contact Asa Sherwood www.fsresidential.com

Contact Tom Skweres

www.liebermanmanagement.com

KANE PROPERTY MANAGEMENT CORP. (773) 472-2300

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

ACM COMMUNITY MANAGEMENT (630) 620-1133

LIEBERMAN MANAGEMENT SERVICES (847) 459-0000

www.communityspecialists.net

GREAT LAKES PLUMBING & HEATING COMPANY (773) 489-0400

PROPERTY MANAGEMENT

www.hillcrestmgmt.com

www.chicagoland-inc.com

www.smithereen.com

PLUMBING

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

NIMROD REALTY GROUP, INC. (847) 724-7850 www.nimrodrealty.com

FIRST COMMUNITY MANAGEMENT (312) 829-8900 Guiding board members since 1988 www.condomanagement.com

FOR DISPLAY OR PROFESSIONAL SERVICES DIRECTORY ADVERTISING INFO, CALL (630) 202-3006 No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

10.18

CONDO LIFESTYLES

25

CONDO LIFESTYLES

PROPERTY MANAGEMENT

REAL ESTATE TAX ATTORNEY

ROOFING

PROPERTY MANAGEMENT SPECIALISTS 847-845-6067

MCCRACKEN MCCRACKEN BEHRENS (312) 263-4308

ADAMS ROOFING PROFESSIONALS INC. (847) 364-7663

www.Pmgrs.com

www.mmbtaxlaw.com

PROPERTY SPECIALISTS INC. (847) 806-6121

SARNOFF & BACCASH 312-782-8310

(630) 633-5450

Attorneys at Law www.sarnoffbaccash.com

Concentrating in Property Tax Appeals since 1976

ROLLING MEADOWS OFFICE WOODRIDGE OFFICE

WORSEK & VIHON LLP (312) 368-0091

TAIRRE MANAGEMENT SERVICES (847) 299-5740

www.wvproptax.com

tsutton@tairremgmt.com

RESERVE STUDIES

REALTY & MORTGAGE CO. COMMUNITY ASSOCIATION MANAGEMENT

BUILDING RESERVES INC. 1 (877) 514-8256

773-989-8000 1509 W Berwyn Chicago IL 60640 Contact: Hugh Rider www.RealtyMortgageCo.com

www.sudlerchicago.com

Easy-to-Read, Customized Reserve Studies created

by Reserve Specialists & Engineers www.BuildingReserves.com

SUPERIOR RESERVE ENGINEERING & CONSULTING (888) 688-4560

VILLA MANAGEMENT 847-367-4808 We manage so you don't have to! ® Since 1976.

Long-term Thinking. Everyday Commitment.

ROOFING ACTIVE ROOFING CO., INC. (773) 238-0338/(708) 430-8080 Established 1965 Maintenance & Repairs Roofing/Sheet Metal/Tuckpointing www.activeroofing.com

www.KSNLaw.com

All Types of Roofing Installation, Repairs & Maintenance www.csr-roofing.com

Your Home, Our Reputation A+ BBB Rating www.DWingConstruction.com

REAL ESTATE TAX ATTORNEY

KSN TAX (847) 537-0500

CSR ROOFING CONTRACTORS (708) 848-9119

RESERVE ADVISORS, INC. (312) 625-4958

Contact Corinne Billingsley corinne@reserveadvisors.com www.reserveadvisors.com

www.elliottlaw.com

Roofing • Siding • Windows • Gutters Maintenance • Capital Budget Projects A+ BBB Rating www.abc-usa.com

D-WING CONSTRUCTION (630) 397-8889

www.villamgt.com

ELLIOTT & ASSOCIATES (847) 298-8300

AMERICAN BUILDING CONTRACTORS, INC. (847) 670-1887

www.superiorreserve.com

A remarkably simple reserve study system Custom, Comprehensive Studies Conducted by Professional Engineers

7370 N Lincoln Ave., Suit A, Lincolnwood, IL 60712

ALL AMERICAN EXTERIOR SOLUTIONS (847) 438-4131 Roofing, Siding & Windows www.aaexs.com

www.psimanagement.net

SUDLER PROPERTY MANAGEMENT (312) 751-0900

Roofing / Siding / Gutters / Insulation www.adamsroofing.com

HAMMERBRUSH PAINTING & CONSTRUCTION (630) 320-9676 Concrete & Masonry / Roofing & Siding www.Hammerbrush.com

M&T EXTERIORS INC. (331) 248-0447 Roofing Siding Windows and Service. www.mt-exteriors.com

MI CONSTRUCTION AND ROOFING (630) 241-0001 www.mancioneinc.com

FOR DISPLAY OR PROFESSIONAL SERVICES DIRECTORY ADVERTISING INFO, CALL (630) 202-3006 26

CONDO LIFESTYLES

10.18

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

SERVICE DIRECTORY

ROOFING

SIDING / RENOVATIONS

TOWING

PROHOME1 630-517-5797

INSIDE-OUT PAINTING CONSTRUCTION & ROOFING (630) 406-3000

CONTRACT TOWING (779) 707-6935

Roofing / Siding Windows / Doors Decks / Gutters & Downspouts Kitchen & Bath Remodeling Specializing in Multi-Family www.prohome1.com

PROHTOP ROOFING (847) 559-9119 We’re Here When You Need Us! www.protoproofing.com

SITE MAINTENANCE, INC. (847) 697-1077 www.sitemaintinc.com

S&D ROOFING SERVICE (630) 279-6600 250,000 roofs installed since 1963 TEAR OFFS • SHINGLES • FLAT Multi-Family ROOFING Specialist Our experience & technical know-how gets the job done right the first time! www.sdroofing.com sales@sdroofing.com

VAN DOORN ROOFING, INC. (847) 228-5800 A Respected Name in Commercial Roofing For Over Three Decades Roofing/Sheet Metal/Maintenance/Repairs www.vandoornroofing.com

SECURITY SERVICES ADMIRAL SECURITY DOOR STAFF SOLUTIONS (847) 588-0888 www.admiralsecuritychicago.com

SIDING / RENOVATIONS D-WING CONSTRUCTION (630) 397-8889

www.insideoutcompany.com

24/7 HOTLINE (877) 613-5040 Outsource your parking to the EXPERTS in towing.

Jason Buffone / www.contracttow.com

MIDWEST PROPERTY SERVICES, INC. 630-656-1000

TV-BULK CABLE & SATELLITE

Siding & Gutters / Wood Replacement Welding & Railings / Snow Removal "No Job Too Big or Too Small" service@midproservice.com / www.midproservice.com

UPSTREAM NETWORK 844-55-STREAM

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

RCN (312) 955-2322

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

SNOW & ICE MANAGEMENT ACRES GROUP (888) 231-1300 / (847) 526-4554

rcnchicagoapts@rcn.net www.rcn.com

XFINITY COMMUNITIES 1 (800) XFINITY For more information E-mail: xfinity_communities@cable.comcast.com www.comcast.com/xfinitycommunities

Professional Landscaping / Snow and Ice Management www.acresgroup.com

WASTE SERVICES

SP+ (773) 847-6942

LAKESHORE RECYCLING SYSTEMS (773) 685-8811

dnicholson@spplus.com www.spplus.com/facilityMaintenance

www.LakeshoreRecyclingSystems.com

WINDOWS/REPLACEMENTS

THE WINTER WERKS (630) 241-0001

D-WING CONSTRUCTION (630) 397-8889

www.mancioneinc.com

Your Home, Our Reputation, A+ BBB Rating www.DWingConstruction.com

SWIMMING POOLS

FORDE WINDOWS AND REMODELING, INC. (847) 562-1188

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

Your Home, Our Reputation, A+ BBB Rating www.DWingConstruction.com

FOR DISPLAY OR PROFESSIONAL SERVICES DIRECTORY ADVERTISING INFO, CALL (630) 202-3006

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

www.upstream.network

10.18

Trusted Window Replacement Services Since 1987 www.fordewindowsandremodeling.com

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

CONDO LIFESTYLES

27

CONDO LIFESTYLES

by Amy Peterselli – Kovitz Shifrin Nesbit

Homebased Businesses in Associations:

6 Things You Should Know Operating a home-based business has become a reality for many Americans. Appealing factors including little to no startup capital requirements, flexible work schedules, and reduced commuting has given rise to the “side hustle” or freelance economy.

A

ccording to a 2017 U.S. Small Business Administration report, there are 29.6 million small businesses with an estimated 50% being home-based.

Undoubtedly, some of those home-based businesses will exist within an association, potentially impacting the community.

Here are six issues that should be addressed when discussing home-based businesses within an association:

Association’s Governing Documents - Most Association Declarations explicitly prohibit businesses from operating out of individual Units or on the Association’s premises. It is important to pinpoint this provision within the Association’s Declaration and determine whether it puts a blanket prohibition on homebased businesses or simply calls for certain restrictions. The Association may revise their Rules and Regulations in order to implement the restrictions indicated in the Association’s Declaration.

Insurance - Certain businesses carry inherent risks and may compromise the Association’s insurance coverage. If operating a business is permissible pursuant to the Association’s governing documents or municipal code, it is important to check with the Association’s insurance provider on whether such commercial activity is covered.

Local Municipal Zoning Code and Zoning Requirements - Oftentimes, zoning for certain areas within a municipality will either limit or permit certain businesses to operate out of an otherwise residential area.

In the event an Association’s Declaration allows business to be conducted within Units, it is important to determine the pertinent Municipal Codes, Permits, Licenses, and/or Zoning Regulations the business will be required to adhere to.

Certain Business Activity - The Association’s Declaration will oftentimes indicate that storing business records, taking phone calls or partaking in communication regarding business matters, and/or keeping a business library are permissible, regardless of prohibitions on business use of the unit.

Risks and Nuisances - Certain businesses might lead to an influx of traffic, non-community members coming onto the premise, increase noise and disturbances.

Enforcement - It is of the utmost importance for an Association to monitor business activity on the premise as a failure to shut down operation of a commercial activity may give the impression to other members of the community that the Association is willing to “turn a blind eye” to the issue. A failure to enforce the Association’s Declaration and the restrictions of business operations may be considered a breach by the Board of Directors of their fiduciary duty owed to the members of the Association. Y

2018 IS THE TRIENNIAL REASSESSMENT OF THE CITY OF CHICAG0

Is Your Condo prepared?

Contact us today about reducing your 2018 Tax Assessment for your Association.

McCRACKEN McCRACKEN BEHRENS 312-263-4308 info@mmbtaxlaw.com | www.mmbtaxlaw.com 28

CONDO LIFESTYLES

10.18

No part of the publication may be reproduced whatsoever without written consent from the publisher.

All material herein is copyrighted 2018©.

Advanced Registration is Required.

2 0 1 8 S TAT E O F T H E I N D U S T R Y S E M I N A R 11:00AM - 3:00PM | December 13, 2018 | Chicago Cultural Center | Call 630-202-3006 for more information

CondoLifestyles

®

~ S C H E D U L E / A G E N D A ~

» 11:00 am – Registration & Visit Information Tables » 11:30 am – Luncheon, Announcements & Legal Updates • Introduce 2019 MCD Media Advisory Board Members • Community Association Legal & Case Study Update (Boucher Case, Board Obligations for Closed Sessions, Deadline for Association Complaint Procedure Ombudsman Act, ICPA Update & More) F E AT U R E D S P E A K E R :

Gabriella Comstock - Keough & Moody, P.C.

» 1:15 pm – Hot Topics, Trends & Challenges: • OSHA Roof and Facade Access Requirements • MANAGING CAPITAL PROJECTS: Mechanical Systems, Energy Efficiency, Riser Replacements, Windows & Roofing • Funding & Financing Capital Projects • Condo De-Conversions (what do do if you are approached) • RFP's & Contracts • Property Tax Appeals, Property Values & Assessments • Technology & Communication • CHICAGO ORDINANCE CURRENT ISSUES: Energy Ratings, Rental Restrictions • Managing Business Relationships

Table Discussion Topics & Information Tables include: » Chicago Police Department / William Townsell » Chicago Fire Department » Bulk TV, Internet Technology & Community Associations Jake Garechana - XFINITY Communities

The Chicago Cultural Center is located at 78 East Washington. An MCD registration table will be located outside the Washington & Garland rooms on the fifth floor. Use elevators in South lobby.

» Developers » Realtors & Realty Professionals

» Fire Detection & Signaling Rocco Bartucci - Contech MSI Co.

» Colleagues & Contractors » Government Officials & Employees

» Funding Capital Projects, Cash Management Rachel Rowley - Seacoast Commerce Bank

Timing -Structure This event is intended to be structured to accommodate various levels of expertise as well as different types of interests in community associations. It is also intended to be flexible to meet time and schedule concerns. We are pleased to accommodate you in this regard. Contact our office to make customized arrangements.

» Exterior Building Restoration & Maintenance Jarrell Johnson - Kellermeyer Godfrydt Hart, PC » FAQ’s of Bulk Energy Purchasing Vickie Farina - Centerpoint Energy » Life Safety & Fire Protection-Sprinklers Tom Lia - NIFSAB Northern Illinois Fire Sprinkler Advisory Board » Property Tax Appeals Ed Wittenstein - Worsek & Vihon, LLP

Why Should You Attend? » To gain valuable, practical insight on how to deal with special issues of Community Associations » Identify resources needed to help your association(s) solve current challenges that your association(s) is facing » Meet and greet Condo Lifestyles Advisory Board members and other industry experts » To better understand government regulations regarding community associations » To contribute and share your ideas and input in an effort to improve standards in the field of community associations

» Windows & Door Replacement Phil Mariotti -Woodland Windows & Doors » Fire & Water Restoration, Mold Remediation Rick Brouwer - Brouwer Brothers Services » Safety - OSHA Facade Access Requirements » Legal Q & A »Managing Mechanical Systems & Replacing Risers

Hand-Outs & Resources will be provided on the following topics: Renters, Pets & Parking, Board Training, Security, Waste Management, Green Building Technologies, Budgeting & Financial Management, Reserve & Transition Studies, and Managing Capital Improvements Additional topics may be added.

2018 State-of-the-Industry Committee Tony Briskovic - Chicagoland Community Management

What Should you bring?

Your questions. We will provide you with a bag full of paper, pens, and several other items you can use at the program, home or office.

Michael Donnell - FirstService Residential Tairre Dever-Sutton - Tairre Management Natalie Drapac & Molly Trogdon - Community Specialists Gail Filkowski - First Community Management

Panel Discussion Participants: MODERATOR : Natalie Drapac - Community Specialists Michael Bonnick - Kellermeyer Godfryt Hart, P.C. Howard Dakoff - Levenfeld Pearlstein LLC Marshall N. Dickler -Dickler Kahn, Slowikowski & Zavell, Ltd. Terry McDonald - Klein and Hoffman Ted Haralson - Draper and Kramer, Inc. Matt Panush - Worsek & Vihon, LLP Tax Attorneys Peter Santangelo - Wintrust Community Advantage

Luncheon Seating is limited to the first 140 registrants.

Who Should Attend? » Community Association Board & Committee Members » Property Managers

John Hancko - The Habitat Company Marla Jackson - DRAPER AND KRAMER, INC. Tom Skweres - ACM Community Management William Townsell - Chicago Police Dept.

Chicagoland

Buildings & Environments CondoLifestyles

We welcome you to join us!

Please complete the form and return to our office. If you will attend the seminar, return the registration information with your payment.

Seminar (per person) Cost is $125.00 for professional property manager, $175 for colleague or vendor, $150 per additional person from same firm. Qualified Community Association Volunteers are $40.00 per person (includes luncheon, seminars, handouts and other resources to be provided).

MCD Media, 935 Curtiss, Suite 1A, Downers Grove, IL 60515, Phone: 630-202-3006 or Fax: 630.932.5553 email: mdavids@condolifestyles.net

®

No. of CA units you are involved with as a:

No. of CA properties you are involved with as a:

DEVELOPER; __________

DEVELOPER; __________

MANAGER; ____________

MANAGER; ____________

REALTOR; ____________ COLLEAGUE/ CONTRACTOR; ________

REALTOR; ____________ COLLEAGUE/ CONTRACTOR; ________

DIRECTOR ____________

DIRECTOR ____________

UNIT OWNER __________

UNIT OWNER __________

NAME(S) List additional names on back or seperate sheet

NUMBER OF PROFESSIONAL GUESTS @________________________ = $ __________________ NUMBER OF VOLUNTEER GUESTS @________________________ = $ __________________

ASSOCIATION/COMPANY

ADDRESS

E-MAIL

PHONE

FAX

T O T A L = $ __________________ VISA/MC#

EXPIRATION DATE

CVV CODE

CONDO LIFESTYLES

MCD MEDIA GOLF INVITATIONAL

July 13, 2018 / Eaglewood Resort, Itasca

Y Shown here are 1st, 2nd and 3rd place winners in the 2018 MCD Media Golf Tournament.

Y Pictured above are the 1st, 2nd and 3rd place winners of the Bocce Tournament.

Y Shown here are Michele and Rick Dubois - DuBois Paving Co. with Tom Engblom of Mutual of Omaha Bank (center).

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by Ken Bertolucci, CMCA - NS Management

Tired Board? Let the Experts Help When we ask Boards of Directors at self-managed Community Associations about their reasons for making a switch to professional management there is remarkable similarity to their replies. They fall into three basic categories:

T

he Board is tired. Since board members

usually live on the property they are often stopped while coming and going with homeowner questions they cannot avoid. With no buffer, they feel they are always on call. Board members also find it awkward to enforce the association rules and policies with neighbors with which they are otherwise friendly. In other instances a key individual has been graciously carrying the burden of handling the association’s business for some time. When they leave the board due to relocation, illness, or death, a huge gap is left behind.

Unsure about legal and compliance issues.

Board members are often unsure of how far their governing authority extends and what is permissible. This is even more challenging due to the constantly changing

HH

laws regarding closed meetings, document requests, and reporting standards.

Difficulty complying with budgeting and financial reporting requirements. Even if the Treasurer is a CPA, the Board is often unsure about proper format for association financial statements, annual reporting requirements, the budget process and required deadlines. Enforcing collection of delinquencies with neighbors is also uncomfortable.

Once a Board is ready to lay down the burden of doing it all themselves, several things happen. They often find surprising cost savings on services, due to the multiple resources available through a professional manager.

In one recent instance we saved an association over $5000 a year by immediately bidding out their insurance policies

to get a more favorable rate. We have also found savings in phone service, utilities, and janitorial services, often negating much of the cost of management fees.

The challenge of recruiting board volunteers is simplified due to the reduced workload. When the officers no longer need to collect assessments, create monthly financial statements, prepare for meetings on their own, and address every request from homeowners, the workload is substantially lighter. They can often reduce the number of board meetings.

When homeowners get prompt answers to their questions, see professionally prepared financials, and observe consistent property maintenance, they develop confidence that the community is well-governed. This improves trust between the board and homeowners and results in a happier and better functioning community where people want to live.

Best of all, an increase in property values often follows, making the change a win for everyone. Y

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L E G A L U P D AT E

by Nicholas Bartzen, Altus Legal

Installing Fake Security Cameras is Legal, but That Doesn’t Make it a Good Idea First, the question: can an association board install fake security cameras in the common areas to deter crime? Legally-speaking, yes. But should the board do so? Probably not. Allow me to explain.

I

t is both legal and within the board’s discretion to place conspicuously-mounted, fake “dummy” cameras in common areas to deter would-be criminals or vandals.

However, if the board chooses to do so, it should be careful and take certain steps to limit the association’s liability.

But first, a quick primer on “real” security cameras.

1). Security vs. Surveillance Cameras Physically-speaking, security and surveillance cameras are usually indistinguishable (the names are awfully similar as well, adding to the confusion). The main difference between security and surveillance cameras is how their footage is collected and reviewed. Both record footage, but surveillance cameras are monitored in realtime by a person and security cameras are not. Unless you live in a Vegas casino or in a community with very high assessments, your association is unlikely staffed to have a person monitoring the common area surveillance cameras 24/7. Instead, most associations install security cameras that are motion-activated that then digitally record footage to be reviewed as necessary by the association or the police. So most associations have “security” cameras and not “surveillance cameras.”

2). Be Careful with the False Sense of Security No matter which the board installs (fake or real secu-rity cameras), the association is exposed to liability with conspicuously-mounted cameras because there is the risk that individuals will assume they are monitored and thus take chances they otherwise wouldn’t, thinking that there’s an “eye in the sky” watching them if they walk unattended through the parking garage late at night or confront a suspicious individual in the mailroom. When cameras are visibly-mounted, people assume the cameras are “surveilled” and thus a high level of security exists. If a criminal act were to take place, the injured party may allege that the association has some liability because that injured party relied on the presence of what they believed were “monitored” surveillance cameras. In short, people may engage in more risky behavior when they think there’s someone watching out for them.

3). Fake vs. Security Camera As I said, legally, yes, the board can opt to install a fake camera instead of a functioning security camera to save money, but the association still must be careful about giving owners a false sense of security. In the case of fake cameras, the cameras will obviously not be monitored ever. In order to protect the association’s liability, the board should post a warning near any camera stating

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“Cameras are not monitored by an individual.”

You’re now wondering: “Why would we blow our cover by telling would-be criminals that no one is monitoring the camera?” You have a point; the efficacy of the “dummy” cameras is contingent upon the widely-held belief that they are actual, functioning cameras. However, in the case of dummy cameras, the sign the board posts serves the dual purpose of not only protecting the association from liability but also adding to the authenticity of the cameras (i.e. why would the association put up signs like that for fake cameras?).

With new technology, the cost of motion-activated cameras that record straight to a computer has gone down considerably. So when considering between real security cameras and fake “dummy” cams, the board should weigh the added costs of installing real cameras against the possibility that the footage could actually be used to solve a crime. While a fake camera may deter crime, it’s never going to help solve one. Also, it will likely take only one incident (say, a package being stolen from the lobby or some kind of altercation) for the fake camera myth to be blown with occupants (i.e. the board would have to confess that there is no footage to help identify the attacker or vandal, and likely explain to owners why that is).

If your board is considering mounting fake cameras, it probably makes sense to just pay the extra money to install “real” security cameras. It may prove worthwhile in the end. Y

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by Salvatore J. Sciacca - Chicago Property Services

10 Best Board Member Budget Practices Revealed Approving the annual community association operating budget is one of the most important obligations of the board of directors. It is also the duty of the board treasurer to take the lead in this endeavor and ensure that a budget is approved in a timely fashion (i.e. before the end of 2018) and in accordance with applicable laws. The approved budget should be realistic while considering short, medium and long-term maintenance requirements of the common elements while also adequately funding the association’s capital reserves account. That said, what are some of the best budget planning practices board members should follow? Let’s look at the best of class:

1. Approve the budget in a timely fashion.

By now all managed associations should have received a proposed budget by the management company. At that point, the treasurer should make any adjustments to the 2019 proposed budget. This involves a careful line by line item review of the proposed budget on the income and expense side and by considering a reserve study and/or capital plan along with an operations plan for the upcoming year. Once the board agrees on a proposed budget, the management company distributes the proposed budget to all the homeowners in

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advance of the budget approval board meeting to ensure compliance with applicable state and local laws and the association’s governing documents. Bottom line: Pass a realistic budget in a timely manner and experience a peace of mind in 2019.

2. Include a contingency line item. This

might seem like common sense to some, but unfortunately it seems that many board members are quick to remove this line item. This is probably one of the most important line items to include in a budget as it is nearly impossible to accurately predict with a high degree of certainly the

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income and expenses of a community association over a 12-month fiscal period.

Snow removal expense is one of the best examples of why an association needs a contingency expense line item. The contingency line item should be in the range of 5% of the total operating expense budget. So, if your expenses are $100,000, there should be a contingency expense line item of $5,000. Bottom line: Include a contingency line item in your 2019 budget and don’t stress out if you encounter an unexpected expense.

3.Integrate a capital plan/reserve study.

How can you properly determine the correct assessment levels? It is certainly not a simple answer because there are many factors that should be taken into consideration. One factor that undoubtedly needs to be taken into consideration is a capital plan and/or a reserve study. This will determine with a high degree of accuracy how much assessments should be to properly fund the reserves and avoid a special assessment.

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Without considering a capital plan, there is no way of knowing how much there should be in the reserves when it comes time to address capital improvements or repairs.

The worst-case scenario is to ignore long term capital planning and then pass an emergency special assessment to fund the project. If the project(s) are larger in size, this might require bank loans which will further increase the cost of the projects.

Bottom line: integrate a reserve study and/or capital plan and start saving now for those future large-scale projects. The homeowners will thank you.

reserve account. This will help plan each capital repair/replacement item with an even more detailed approach and ensure that proper funding is in place. Bottom line: A more detailed and methodical approach to budgeting and capital planning will only lead to happier and healthier community living.

7.Incorporate a 1-year operations plan.

This plan which breaks out in detail the day to day building maintenance and operations activities of the association will help

the board see the entire fiscal year in a snapshot view and will allow them to see the big picture. It will also encourage the board to include money in the budget for general association upkeep and other items that might otherwise get lost in the drudgery of the budgeting process. Bottom line: Seeing is believing.

8.Properly Communicate. Not only is it important to include the right levels of income and expense categories in the budget and pass the budget in a timely

4.Include realistic expense category line

items. It is tempting to cut expense line items to keep the assessment “low”. But sooner or later, this practice will haunt the board of directors. For example, it is typical for associations to have a 2.5% to 5% delinquency rate of assessment payments.

So inevitably this issue translates to legal collection bills. Even if your association is fortunate enough to not have any uncollected assessments, sooner or later this will become an issue. If you have been excluding a legal expense line item because you have been “lucky”, that doesn’t mean it is a good idea to exclude a legal expense line item. You should still include an expense and use it to further fund your reserves if you end up not using an entire expense line item. Bottom line: Take a more conservative budgeting approach and watch your reserves grow to a healthy stress reducing amount.

5.Raise assessments every year.

Have you ever wondered why utility expenses always go up? Your answer is probably, “No, I just take it for granted”. That is why you should raise your assessments every year. It is much better to raise assessments 3-5% per year than waiting 5 years and then having to raise assessments 15%. It is easier on the homeowners to pay slightly higher assessments and it ensures that the association is keeping up with rising expenses. Bottom line: Raise assessments every year to keep up with rising costs and sleep more comfortably at night.

6.Avoid special assessments. Even if you

raise assessments annually, there is a good possibility that you will not have enough funds to cover capital expenses. So that is why I mentioned in Recommendation #3 to incorporate a capital plan and/or reserve study when setting the assessment levels.

An even more methodical approach is to create separate reserve accounts for each large-scale capital project or at least have a way to segregate the funds in a single

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manner, but it is equally important to properly communicate this information to the homeowners. Professionally managed associations should not have to worry about this, but self-managed associations should make sure that the proper notices are given to all the homeowners. Another important aspect in the approval process is making sure there is a reasonable open discussion during the board meeting allowing the homeowners to voice any concerns for or against the details of the proposed budget. Bottom line: A compliant and transparent approach is always best.

9.More Details are Better. How many

budget categories should your association budget have? It really depends on the type of association and the size of the budget. If you have an HOA with 100 single family homes with just a security gate and common area landscaping that the HOA maintains, there really is not as much need for a very detailed line item budget. On the other hand, if you have a 300-unit high rise building with onsite staff, a swimming pool and a parking garage, it certainly should have a significantly higher number of income and expense categories. For example, for the simple HOA example

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above, it would be okay if you have an expense category called “general maintenance” with only a few subcategories such as snow removal, gate repair, landscape maintenance and landscape replacements/flowers to capture the types of maintenance expenses. In the case of a community with more areas of responsibility, it would make more sense to have many more General Maintenance subcategories like: carpet cleaning, fence repairs, electrical repairs, fire suppression equipment, drywall, power washing, painting etc.

A rough rule of thumb is more is always better as it is easier to manage any budget overages with greater details in the expense categories. Bottom line: More is better when monitoring and controlling income and expenses.

10.Adequately fund the reserves. How

much should be in the reserves? One common rule of thumb is to fund the reserves by AT LEAST 10%. This would mean making sure your budget includes a reserve contribution of at least 10% of the total projected annual income. This also ensures your association is FHA compliant (if applicable). Adequately funding the reserves properly is critical when it’s

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time to take on large scale capital projects and when prospective buyers are looking at the financial picture of the association.

Bottom line: A healthy and adequately funded reserve leads to a more peaceful community living environment.

Approving the association’s annual operating budget is by far the most critical annual task that the board of directors must complete. Not only is it important but it is a fiduciary duty. The good news is that these duties and obligations are vested to the board of directors by the governing documents of their association. This means simply that they need to approve a budget that is fair, realistic and takes into consideration real life conditions and long-term capital requirements. Taking any other course of action is simply a dereliction of duties that will only cause the homeowners undue stress and frustrations. The better approach is to properly plan the future of the association, so you can create the most ideal and enjoyable community association living environment for you and all the other homeowners. Y

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L E G A L U P D AT E

by Benjamin J. Rooney, Keay & Costello, P.C.

Conducting Executive Sessions and Assessing Fines After Boucher V. 111East Chestnut Condominium Association, Inc. The recent decision out of the Illinois Appellate Court for the First District involved a condominium association board of directors fining an owner for making inappropriate and disrespectful comments to the association’s employees. The owner was afforded a hearing during a board meeting which was closed to the other members, at which the owner was represented by counsel.

A

t the hearing, the owner’s counsel requested the board turn over all evidence it had concerning the alleged violation, but the board refused to turn its evidence over. A hearing was conducted, with the board of directors making both a video and audio recording of the proceedings. The board ultimately determined that a violation had occurred, and levied a fine against the owner. After the hearing, the owner’s attorney requested copies of the audio and video

recordings which were taken of the hearing. The association refused to turn these recordings over.

Finally, after paying the fine assessed by the Board, the owner filed suit in Cook County Circuit Court.

The owner’s suit made three distinct claims.

Count I of the owner’s complaint claimed that he was not fined for being noxious or offensive as the board asserted, but was actually being fined for “expressing criticism of the management employees.” The owner’s contention was that

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fining him for this reason was a violation of Section 18(h) of the Illinois Condominium Property Act, which prohibits condominium boards from adopting or enforcing any rule which “impair any rights guaranteed by the First Amendment to the Constitution of the United States,” the amendment to the United States Constitution prohibiting Congress from adopting laws curtailing a citizen’s right to free speech. The owner next alleged in Count II that the association’s refusal to provide the audio and video recordings of the hearings amounted to a refusal to make meeting minutes available to

him, as required by the Illinois Condominium Property Act. Finally, Count III alleged that the board violated its fiduciary duty by conducting the hearing without granting his attorney’s request to turn over all of the evidence the board possessed related to the violations.

The trial court granted the condominium association’s motions to dismiss the owner’s claim that his right to free speech was being violated, finding that the owner could not bring a claim against the condominium association for this because the condominium association was not a

governmental actor and therefore not subject to such restrictions in adopting and enforcing rules.

As for count II , the trial court ultimately granted summary judgment in favor of the condominium association and against the owner, holding that the audio and video recordings were not “minutes” of the meeting, and therefore need not be turned over to the owner. After the condominium association presented ample, detailed information concerning the owner’s obnoxious behavior, the court also entered summary judgment in the association’s favor on Count III.

Owner’s right to free speech In defending the fines, the association argued that Section 18(h) of the Illinois Condominium Property Act is only applicable when a government actor controls the board of directors of a condominium association. The appellate court rejected this argument, stating that the Illinois Condominium Property Act prohibited boards form adopting or enforcing any rule that would prohibit an owner’s right of free speech.

An important thing to keep in mind here is that the court’s decision only held that a condominium association cannot restrict the owner’s right to freedom of speech, not that this particular condominium association actually had. Associations are still able to enforce covenants restricting noxious and offensive behavior, but may not issue violations simply for disagreeing with an owner’s statements. If an owner is able to show that a rule was adopted or fine assessed solely based upon the owner’s criticism of management or other opinions, the rule or fine will likely be overturned by a court.

Meeting Minutes In overturning the trial court’s entry of summary judgment of count II, the court found that the audio and video recordings of the meeting, taken by the board, did constitute the “minutes” of the meeting. Being meeting minutes, the recordings must be made available to owners under the Illinois Condominium Property Act. More interesting, the court went out of its way to expressly hold that Section 19 of the Illinois Condominium Property Act requires boards to take minutes of all meetings, even those which are closed to the membership. This is contrary to the belief that portions of the meetings closed to the membership should not be memorialized in the minutes and made available to the membership upon request.

While a video or audio recording may serve as these minutes, a board is not required to record any meeting, and owners only have the right to record portions of meetings open to the entire membership (i.e., not executive sessions). For

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executive session meeting minutes, I strongly suggest a board contact their attorney and discuss how executive session meeting minutes should be kept, and what information should be included within these minutes.

Breach of Fiduciary Duty The owner’s final allegation was that the board had breached its fiduciary duty by refusing to provide the owner’s attorney the evidence it relied upon in assessing the fines. In discussing the longstanding principle that condominium boards are fiduciaries to unit owners, the court held that this fiduciary duty to the owners includes the duty to disclose and be candid with owner.

This fiduciary duty would then require that evidence a board relies on in investigating allegations of misconduct and assessing fines be made available to the owner. Further, the court acknowl-

edged that Section 18.4(l) of the Illinois Condominium Property Act requires the board to provide an owner “notice and an opportunity to be heard” before it levies a fine against the owner, but indicated that this was even another reason to adequately inform the owner of the evidence against them, and in no way “overrides” the board’s fiduciary obligation to disclose the evidence. In light of the notice requirement under Section 18.4(l) and a board’s fiduciary duties to the unit owners, an association should make sure to adequately inform a unit owner of the allegations against them, and to disclose any evidence the board relies on to the owner before assessing a fine. Simply notifying an owner that the board is considering a fine against them, without also informing them of the specific violations and the evidence supporting the allegations, can be deemed a breach of the board’s fiduciary duty to the unit owner. The extent of evi-

dence that should be gathered and presented to the owner will likely vary depending on the nature of the violation, so a board seeking to fine an owner should consider seeking the advice of counsel.

Takeaways from Boucher v. 111 East Chestnut Condominium Association In reading this opinion, it is important to not be overly focused on the underlying allegations of behavior. The case is not over, and the Defendant did not “win.” Instead, the case will go back to the trial court where the owner will have the opportunity to prove his allegations against the board, and the board will have an opportunity to refute them.

While the alleged behavior of the owner may have been offensive, the court’s holdings relate almost entirely to procedural missteps and misconceptions of the board. In no way does the opinion stand for the proposition that an association cannot enforce its covenants and rules against an owner acting in a noxious and offensive manner, but instead that in doing so a board must be conscious of its obligations to the unit owners. Y

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