In response to the outcry against the recent amendment to Section 19 of the Illinois Condominium Property Act, the Chicago City Council passed an ordinance at the end of March amending Section 13 – 72 – 080 of the Chicago Condominium Ordinance.

The amended Ordinance makes owner information, including names, addresses, email addresses, phone numbers, and weighted vote of all members entitled to vote, available only to board members. The Ordinance allows condo associations to opt-out of the Chicago provision with a 2/3 vote of owners. This means that if 2/3 of condominium owners approve, the association would have to allow access in line with the IL Condominium Association Act, rather than keeping the information private to only board members, as detailed in the Chicago ordinance.

To learn about the IL Condominium Association laws regarding books and record, click here. 

Mayor Emanuel recently updated Chicago residents on legislation he helped to pass in Springfield. The legislation expands certain property tax exemptions as follows:

1. All Chicago homeowners will benefit from an expanded Homeowners’ Exemption which increased the exemption by almost 43%, from $7,000 to 10,000. Working class and middle-class homeowners will be the largest beneficiaries of this exemption.

2. The Senior Citizens Homestead Exemption is increasing 60%, from $5,000 to $8,000

3. The income cap for seniors eligible for the Senior Freeze exemption will increase by almost 20%, from $55,000 to $65,000

To receive these exemptions, you must fill out an application with the Cook County Assessor's Office. You can visit the website here or call (312) 443-7550.  More details are also available here. These benefits will show on the property tax bills you receive this summer.

There are a number of additional exemptions that owners may not know they qualify for. These include:

1. The Homestead Exemption
2. Senior Citizen Exemption
3. Senior Citizen Assessment Freeze Exemption
4. Home Improvement Exemption
5. Returning Veterans Exemption
6. Disabled Veterans Homeowners Exemption
7. Disabled Persons Exemption
8. Long-Time Occupant Exemption 

To learn more about these Cook County Property Tax Exemptions, click here.

Your condo association may need to contract with vendors for recurring maintenance or one-time projects. Your association may want to use a request for proposal when collecting bids from vendors.

A request for proposal (RFP) is meant to give direction to a contractor/vendor about the scope of service for a project and to the association with a focused cost to complete the identified scope. A properly prepared RFP can make a big difference in getting quality proposals from service providers and give the association the ability to make an informed decision. 

There are three keys to keep in mind when you are getting ready to develop the RFP for an upcoming project or contract: 

  1. Who should prepare the RFP?
  2. What unforeseen conditions may arise?
  3. What documents should you receive from the contractors?

Read more here

At HausFS, we come across many small associations that do not keep a separate bank account for accumulating reserves funds. Sometimes this is a result of the buildings simply not having any excess funds to transfer to a savings account because they are not budgeting properly. More often the board just never got around to opening an additional bank account and segregating the reserves that they have.

There is a few good reasons why your association should have a separate bank account for reserves funds:

  1. The board can make financial decisions regarding capital expenditures more easily when it can clearly see how much money is available to spend. When operating and reserves funds are co-mingled, it is not so black and white.
  2. Some mortgage products require that the association hold reserves in a segregated account. If your association does not have a separate reserves account, owners may encounter problems when trying to sell or refinance.
  3. Associations miss out out interest income when excess reserves funds are not held in a separate, interest-bearing account.

HausFS recommends that all small associations segregate their reserves funds in a no-fee savings account that bears interest. The association should also be transferring funds to reserves each month based on its annual budget. Your budget should show a minimum of 10% allocated to reserves each year to meet lender requirements.

Condominiums associations are considered corporations in the eyes of the IRS. As such, they are required to file an annual tax return (either an 1120 or 1120-H).

Condo associations showing taxable income on their federal returns are also required to file an IL-1120 with the state of Illinois.

Tax returns must be postmarked by April 16th this year. The IRS granted an extra month to file beginning with the 2016 tax year.

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