In a community association, you live in much closer proximity to your neighbors than in a neighborhood of single-family homes. With shared resources such as hallways, lobbies, laundry rooms, and recreation facilities, a little consideration goes a long way. Read the following tips from eHow.com and NS Management on how to be a good neighbor beyond just a smile and a wave.

-Welcome any new neighbors with a personal note or pop by for a personal introduction.

-If you have a large party, invite your neighbors to join in the fun, consider them when directing your guests where to park, and end the party at a reasonable hour.

-Be mindful of noise—loud music, barking dogs, power tools—that may disrupt the neighborhood beyond a reasonable hour.

-Loud hallway conversations can be heard by your neighbors. Please be mindful when coming and going, especially after hours.

-Do not place any personal belongings in the common areas shared by all residents.

-Respect your neighbor’s privacy.

-Make sure that the visible areas of your unit are well kept and comply with your association’s declaration, bylaws, and rules.

-Return anything you borrow from your neighbor promptly, in the same condition they lent it to you, and express your thanks.

-Offer to take care of mail pick-up, plants, or pets while your neighbor is on vacation.

-Replace anything of your neighbor’s that you, your children, or your pets break or soil.

-Be social! Inviting a neighbor over for coffee and conversation can promote open communication and a friendly neighborhood environment from which all neighbors can benefit.

Visit www.ehow.com and www.nsmanagement.net for other helpful advice on community association living.

It seems like apathy is a very common theme that revolves around community association boards. Even in small amounts, it can easily affect even the best functioning communities. However, it’s important to keep in mind that most of the people involved in your community inherently care. The only thing to remember is that it is ultimately up to the board when it comes to increasing motivation and the opportunity to move past apathy.

The board needs to take initiative in order to overcome any apathy lingering around the community. If they don’t, it leads down a slippery slope that can result in burnout and overall negative community associations. That’s why we’ve put together a few ways to steer the attitude away from apathy.

1. Communicate

Communication is the key to any effective and positive relationship. Whether it’s between members or throughout the community, make sure that you’re engaging with everyone. Even though getting a quorum is always difficult, it can go more smoothly when you think outside of the box. Try online surveys, email blasts, social media, or other convenient sites. People like to know that you’re interested in their opinions.

2. Keep Records

When you ask for input, you need to make sure that you are recording people’s output. If you don’t, it does nothing but shows that you don’t care. While some responses will be more helpful than others, every reasonable request should be considered. It’s also important to thank participants so that they know their voice was heard.

3. Make Decisions

After communicating and seeding through the responses, it comes time for the board to make a decision. They need to pick what they will be focusing on for the community and how to handle all of the logistics. Everyone involved in the final decision needs to understand their purpose, limitations, and goals in order to be successful.

 4. Follow Up

Follow-up should be done at a reasonable length of time in order to keep the momentum going. About 2-3 weeks post-results is a great time frame. Make sure that when you provide committees, approved projects, and the need for volunteers (if applicable). In addition, take the time to thank them and let them know the efforts that were put into the decision.

5. Dig In

Now it’s time to take action. Electing a chairperson is a great way to establish a clear line of communication with the board and volunteers are essential to make sure things get done. From there, building a committee of dedicated and respected volunteers is a huge factor in the end's success. Make everyone feel important and encourage people in their efforts.

6. Take Notice

In order to foster a positive community, you need to appreciate and recognize the work that people put into the job. You could hold an annual meeting or dinner where you recognize the volunteers or create certificates to pass out. Whatever you do, this step is important for the long-term success of your community.

These steps may seem like a lot, but they are truly an effective way to combat apathy in your community.

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

The 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 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 the proper format for association financial statements, annual reporting requirements, the budget process, and required deadlines. Enforcing the 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 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.

Ken Bertolucci is President of NS Management, a community management company serving the North Shore and north/west suburbs of Chicago. For more information visit www.nsmanagement.net.

Q: Forgive me, but I’m a bit confused by the advice an insurance company employee gave me about a basic concept of condominium unit coverage. This is something about which you have previously written in your column.

In discussing this matter with this representative of a large insurance company, I was told that, for example, if water from my apartment damaged the unit below, that person’s insurance company would legally have to pay the damage, not my insurance company.

I also was told that this ruling is found in the Illinois Condominium Property Act. Could you please cite the section of the statute?

A: If water from your apartment damaged the unit below, you are personally responsible for the damage. And insurance coverage for the damage is dependent upon the terms of your neighbor’s insurance policy.

Section 9.1(a) of the Illinois Condominium Property Act states a unit owner is responsible for damage to another unit or the common elements caused by the operation of the unit.

This provision means that a unit owner is responsible for damage to a neighbor caused by an appliance, plumbing apparatus, or other cause, regardless of whether or not the owner was negligent.

Thus, the unit owner, and not his or her insurance carrier, is liable for a neighbor’s damage.

In most cases, with the proper coverage, the insurance company for the damaged party should cover a claim by the owner who sustained the loss. That company, however, may have a right of subrogation or reimbursement against the responsible party. That would mean seeking money from you, or your insurer.

Regardless of the position of the carrier, in your example, the owner is liable to the neighbor below for the extent of the water damage, caused by the operation of equipment in the unit above.

The Illinois Condominium Property Act does not assign liability to the insurance carrier of an owner for damage within a unit. The major insurance provision in the law, contained in Section 12, states the insurance coverage requirements for an association.

The entire article can be found here.

As the years progress, more and more millennials are buying condominiums, townhomes, and single-family homes. With this influx, the Condo Association (COA) and Homeowner’s Association (HOA) demographic has started to saturate and chances are you’re noticing the changes.

In case you’re unfamiliar with who falls under the term “millennials,” they are also known as Generation Y. They’ve reached adulthood just as we experienced the turn of the 21^st century and are projected to take over the homebuyer's market in 2017. Since they are growing up, chances are they will move to a community that has a current Association in place. This represents new changes that tend to fit better with adult lifestyles. However, it is important to realize that this will also bring about a change in the way you currently manage.

Communication

Millennials fall into a unique category of people. They are the first generation to grow up completely surrounded by technology. Because of this, it tends to also be used to drive their behaviors. This includes the way they communicate, mainly being the fact that emails replace newsletters and texts replace calls.

Some would say Millennials hate idle time. They utilize waiting time or work breaks by checking their phones. In order to be adaptive and to complement their communication style, you need to begin to do the same. Simply put, transferring to an all-electronic service option will be beneficial. When you offer everything online, the chances of them receiving, and actually reading, your messages increase 10-fold.

Expectations

Millennials are used to the luxuries of renting properties. They enjoy having maintenance handled and, in a way, rules to follow. It takes a lot of guesswork out of things. That’s why, when they move into the role of a first-time buyer, it is likely that they will seek out communities with Associations in order to avoid dealing with some maintenance responsibilities on their own. They would be looking to the Association in a positive light rather than avoiding involvement.

This is why it is crucial, when you are communicating with prospective first-time buyers, to clearly explain what the Association does and what responsibilities each party has. Otherwise, you could face some serious misunderstandings down the line.

With the Millennial generation changing the ways we view Condo or Homeowners Association, a strong line of communication and their clear understanding of expectations will help keep your entire community happy.

Q: I am an owner in a condo association where I have lived for 10 years. We had a board that did a fantastic job. The directors held meetings four times a year, completed many improvements, and were always active. They were hard-working and dedicated, but they grew tired of beating their heads against a wall for owners who did not appreciate the effort.

Now those who complained have the opportunity to run for the board, but we have no volunteers.

What happens when an association does not have a board? Will the state take over? I am very concerned.

A: You should be concerned. A condo association cannot operate without a board. If owners do not volunteer to serve on the board, there are two alternatives: The property ceases to be a condominium by a vote of the ownership or a court will appoint an individual to run the property.

Section 16 of the Condominium Act says that owners may vote to remove the property from the provisions of the act. For your association, 75 percent of the ownership may then vote to sell the property. In that case, owners will receive a share of the total purchase price equal to their percentage of ownership.

Condos also are subject to the Illinois Not-for-Profit Corporation Act. Section 112.50 of that permits a court to dissolve a corporation if it is unable to carry out its purposes. A non-profit condo association with no directors cannot function. If asked by an owner, the court may appoint a receiver or custodian who will exercise the powers of the directors. In that case, association members will have to pay from their assessments the fees of the receiver or custodian, the attorney for the receiver, and possibly a management firm.

The complaints and apathy of the ownership will cost equity in the units or higher assessments to pay for a third party to operate the association.

Q: I am the acting treasurer of a small condominium association in Chicago. We were recently advised by a Realtor that the new Illinois condominium law requires that we maintain two separate accounts, one for daily expenses and a second for major expenditures.

Does this requirement really apply to small associations? If so, what percentage of our condominium assessments should be set aside every month for major expenses?

 
A: Associations must have operating funds and reserve funds. The purpose of a reserve fund is to require associations to save monies for future capital expenditures and deferred maintenance. All associations have been required to include reserve fundings in their budgets since 1990, so this is not new.

 
Regardless of size, a reserve fund in place for a major expenditure will help to defer or minimize a special assessment for major expenditure. There is no mathematical formula for reserve funds in Illinois. To determine reasonable reserves, directors should review the factors in Section 9(c) of the Condominium Act, particularly the repair and replacement costs of major components and building surfaces.

The Federal Housing Administration requires associations to allocate at least 10 percent of their operating funds to a reserve account each year. Depending on the size and age of your association, that 10 percent requirement may not be sufficient. Posted in: Blog

Too often, new condo owners receive their Declaration & By-Laws at closing and file them away, never to be seen again.  But these documents are the basis for governing your Association.  When there is conflict, the issue can almost always be settled by consulting your Declaration & By-Laws.  Understanding the purpose of these documents will help to decrease conflict among owners.

All condominium associations are governed by the IL Condo Act.  The Act outlines the minimum requirements for all condominium associations.  Your Declaration & By-Laws are built upon the IL Condo Act, incorporating other details and specifics for the governing of your particular Association.  When there is a discrepancy, the Association’s governing documents prevail, provided they adhere to the minimum requirements set forth in the IL Condo Act.

Every owner should read the Declaration & By-Laws.  Granted, there is a lot of legal language in the documents and it isn’t particularly riveting reading.  However, having even a rudimentary understanding of the information contained in the documents is essential for every condo owner.  In short, the Declaration & By-Laws set forth the rules and procedures that guide Board decisions and actions as well as outline how owners are to live in the community.

When it comes to matters of business for the Association, the Declaration & By-Laws are indispensable for Board members.  Board members should have a hard copy of the governing documents in front of them at every Board meeting so that they can be consulted as needed when a question arises about how to handle certain situations.  Nearly every question Board members ask when there is a conflict elicits the counter-question “What does the Declaration & By-Laws say?”  Your governing documents are the first place Board members should look for answers.

The IL Condo Act is also of great value to the Board and to condo owners.  It may be necessary to cross-reference information in the Association’s governing documents with the IL Condo Act to be certain that the information is valid and enforceable.

Referencing & quoting your Declaration & By-Laws or the IL Condo Act comes in handy when the Board takes action and an owner disagrees.  The Board should be able to back up their actions and decisions with legal proof of the validity of those actions and decisions.  If every decision is made in line with the governing documents, the Board will have no reason to fear any retaliation from disgruntled owners.  We’ve found that certain individuals are prone to threatening legal action whenever they disagree with a Board decision.  If the Board has acted within the rights outlined in the governing documents, those threats will have no weight.

One of the great truths of the association culture is that the board shall not conduct its business behind closed doors or have “secret” meetings as this deprives the owners of their rights. In concept, it sounds like a fine principled idea. In practicality, there are more exceptions than rules and more urban myths than exceptions.

Beginning with the minimum legal obligation, we can dispel the biggest myth first.

Illinois does have a law called the Open Meetings Act. It is set forth in Ch. 50 ILCS 120, et seq. of the Illinois Statutes. It requires open meetings for public bodies only. Public bodies are duly elected or appointed governmental bodies such as village boards, park districts, etc. It does not apply to private organizations such as condominiums and homeowners associations. All of the scuttlebutt about violations of the Open Meetings Act at association meetings is not applicable.

Associations are subject to certain “open meetings” requirements set forth in other statutes and often in their operating documents.

The following requirements appear in the Illinois General Not-for-Profit Corporation Act, the Illinois Condominium Property Act, and many declarations and bylaws:

1. All meetings of the Board where business is conducted are open to the members;
2. Notice of a Board meeting must be sent to all members no less than 48 hours in advance;
3. Board meetings are to be conducted in accordance with the basic rules of parliamentary procedure (adopted from Roberts Rules of Order);
4. Members have a right to be present, but shall not participate in the discussion or voting on board business (most associations hold an open forum for the owners to speak before or after meetings);
5. All votes are recorded in the minutes;
6. Minutes are a short summary of board votes, not a verbatim transcript of discussions or owner comments;
7. Minutes are available upon request. They do not have to be sent out to all owners after every meeting;
8. The president runs the meeting and directors may only speak when called upon;
9. Minutes are not official until approved at a subsequent meeting;
10. Minutes must be kept for seven years.

Where there is confusion and often controversy is when the board meets without owners being present. There are three statutory exceptions and one implied condition of when a board meets in a closed session.

1. No notice to the owners is required.
2. No business can be conducted; i.e. no votes can be taken.
3. No minutes are kept.
4. The board can discuss:

(a) Third-party contracts or information regarding hiring and firing of agents, contractors, personnel, or any other provider of goods and services.

(b) Disciplinary action against an owner such as fines and delinquencies (and implied that a board can also discipline its own members for violations as a director).

(c) Confidential discussions with legal counsel about pending or threatened litigation.

(d) Where no business is actually conducted.

For condominium associations, once the “proposed” budget is hammered out, then the statute has protections built-in for the owners, i.e. it must be sent to all owners 25 days prior to adoption, owners must receive notice of not more than 30 nor less than 10 days prior to the meeting where it will be adopted, owners have a right to be present, the board voted on the budget at the open meeting and it is recorded in the minutes.

In the event the budget exceeds a 15 percent increase over the prior year, then the owners can file a petition for a referendum and could reject the budget if more than a majority of all owners deem it so.

As you can see, there is a balance in this instance. The board has a right to meet and crunch numbers without interruption; the owners are protected with the right to be present and even reject a large increase in assessments.

This is just an overview and there are exceptions to the exceptions.

The most important thing to remember is board members have the right to act as directors of a corporation, owners have the right to be informed as members of the association and the Illinois Open Meetings Act protects the taxpayers by imposing criminal penalties on public officials that knowingly violate it.

There are no such sanctions for private organizations, nor, in my opinion, should there be.

Presented at the 32nd Annual Community Association Law Seminar (January 13-15, 2011). Updated 2016.

Q: I’ve been on our HOA board for a number of years. At a recent meeting, one of the homeowners started to yell at me. We have five members on the board but at the time of the meeting, we only had three positions filled. A motion was made and this homeowner made horrible remarks. He kept shouting and pounding on a table. He thought that the board was illegally voting on the motion because we only had three board members. He came across the table. He did not hurt me but I was scared. Our management representative and other board members tried to intervene and we tried to keep the meeting moving but he wouldn’t stop. What should we have done?

A: The moment that anyone, be it a homeowner or a board member, acts in a most disrespectful and possibly harmful manner, the meeting needs to be either recessed or adjourned. If recessed, the board and the community manager can try to settle down the member; if this fails, then the meeting needs to be adjourned.

A warning letter should have been sent to the member by the association’s legal counsel. The letter should have stated that if he continues to conduct themselves in such a manner he would no longer be able to attend board meetings for some period of time.

If necessary, the board could have security at the next couple of meetings to ensure that the meetings are being properly conducted.

Your state has laws that pertain to threats, harassment, and conduct that causes harm or serious emotional distress or reasonable apprehension that creates a hostile environment. A person who violates the provisions of this law is guilty of a misdemeanor. The law applies to anyone, not just board members or community managers but homeowners, tenants, etc. To enforce this law, a police report needs to be submitted.

Homeowners who feel threatened are not so anxious to file a police report because of perceived retribution from the member who is already harassing them. Bullies work on the assumption that others will not take any action. The final decision rests with the board.

Barbara Holland, certified property manager, broker, and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to the Association Q&A, P.O. Box 80360, Las Vegas, NV 89180. My fax is 702-385-3759 and my email is support@hlrealty.com.