This is one of a series of articles regarding changes in the IL Condo Act that will become effective in 2018.

Condominium de-conversions have become a popular way for condo owners living in buildings with high rental ratios to unburden themselves of condo ownership by selling collectively to an investor. The investor purchases the entire building and turns it into a rental property.

A de-conversion sale requires a vote of 75% of the unit owners by ownership percentage. Unfortunately for some owners, this could mean that if they owe more on their unit than it is worth in the sale, it could cost them. A change effective in 2018 will help to protect those owners.

An amendment to Section 15 of the Illinois Condominium Property Act states that, if a unit owner objects to the sale of the property, they could be entitled to receive the greater of:

  1. The value of their interest as determined by an appraisal, minus any unpaid assessments; or
  2. The outstanding balance of bona fide debt (mortgage) of the objecting unit owner’s interest, minus any unpaid assessments or charges due. The objecting owner is also entitled to receive reimbursements for reasonable relocation costs.

As a result of this change, owners with mortgage balances exceeding their appraised value will be entitled to at least be paid the amount of their outstanding debt.

By CCR Sponsor Mark Lestina, President - Wastemaster Corp.

A property management professional once told me “Our clients rarely review their waste removal contracts and since they can run 3 years, they often miss the deadline for making any changes. They can almost always find a way to save if they can cancel an existing contract.” 

We hear this almost every day.  Most often, when condo boards finally decide to take action to shop around, the existing contract has already renewed for multiple years and cannot be cancelled without paying liquated damages.

Why is it so hard to cancel a waste and recycling contract on its expiration date? The answer can be complicated.

First, let’s look at what the “expiration date” really is.  A waste hauler contract might state that the expiration date is considered to “start on the date on which service under this agreement commences…”   So if the signature date reads 01/01/17 but the start date is listed as 04/01/17, the contract will expire (usually 36 months) on 03/31/20 and not 12/31/19.  When you have a small window of time in which to send a cancellation letter to the waste hauler, this 90 day period could impact the validity of your letter.

Second, the timeframe for cancelling is extremely limited.  Most trash haulers will have language in their service agreements that allow for a cancellation “window” of time extending 60 or 90 days and usually it’s between 60 to 120 or 90 to 180 days prior to the end of the current term.  In the example above, the contract that expires on 03/31/20 will need to be cancelled during a specific window of time that is clearly spelled out in the agreement.  If the terms are 60 to 120 days, then the waste hauler must receive notice between 11/30/19 and 01/31/20.  What happens if the cancellation letter is received a day earlier or a day later than the cancellation window?  Your hauler might just throw it in the trash because technically, the contract language hasn’t been followed. 

Finally, if you can figure out your window if time to send cancellation, where will you set up your reminder?  Outlook?  Google calendar?  A Post-it note on your desk?  Your waste hauler is NOT going to call you with a reminder so the board will be responsible for tracking the cancellation date and taking action at the right time. If the board has changed, how will this be handled? 

Rather than worrying about renewal dates, why do individuals continue to sign service agreements with an “auto renew” clause in the first place?  Most are unaware that they can simply strike that auto-renew clause from the start!

My research shows that condo associations overpay for waste and recycling removal service because they do not understand how contracts work.

We have a solution to this problem and have saved our average customer 26%.

Send us a recent invoice and we will compare your rate to others and give you the details on potential savings. There is no cost or obligation for Wastemaster to perform the analysis. Contact us today!

Mark Lestina
President – Wastemaster Corp.
This email address is being protected from spambots. You need JavaScript enabled to view it.

It’s fall in Chicago! On top of getting involved in all the fall festivities, it is also important to get involved in recycling. Below are several ways you can personally get involved or contribute to Chicago’s recycling efforts this fall:

1. The Recycling Partnership

This national non-profit has the goal of collecting more and better quality recyclables. In Chicago, the Partnership has provided the city with some needed resources, including recycling info cards that highlight what is recyclable, and the costliest items that are not recyclable.

To get real information about what is being placed in Chicago’s recycling bins, the Recycling Partnership took random samplings of carts to see what recyclables were going in the garbage and vice versa. Investigating these details gave the Partnership a baseline understanding of what’s happening, which allows them to modify their educational materials to meet the needs of the City of Chicago.

The Partnership also raised awareness for recycling with their “It’s All You” campaign, inspired by everyday moments that include recycling, the campaign reminds the residents of Chicago about the good they can do.

Click here to learn more or get involved with the Recycling Partnership. 

2. No carve, no waste, pumpkin decorating.

It is estimated that 40% of the food grown in the United States is wasted. This equates to $165 billion dollars’ worth of food that ends up in landfills every year.

Click here for no-carve, stylish, and simple to make pumpkin decorations. They will preserve the flesh of the pumpkin so they can go from decoration to dessert with no waste.  

3. Chicago’s Yard Waste Program

Nationally, yard waste accounts for about 15-30% of all landfill space. Chicago’s Yard Waste Program diverts waste by harvesting the nutrients found in leaves and grass. This is a simple and effective means of conserving landfill space, reducing pollution, and creating healthy soil.

To take part, collect your leaves and grass in a paper or plastic bag and call 3-1-1 to order free collection. Yard Waste service is available all year round, free of charge.

Click here to learn more.

Effective January 1, 2018, “on demand” owner access to Association records will be expanded: 

  • The categories of records available will now include all active association contracts and 10 years of financial books and records.
  • Of the nine categories of records that every association must maintain, only election ballots and the official unit owner list will not be subject to examination on an on-demand basis.  
  • A unit owner no longer needs to explain or prove a purpose to obtain the documents.
  • An association now must make the requested records available within 10 days instead of 30. 
  • If an association fails to meet the deadline to provide the requested records, and the requesting unit owner prevails in a lawsuit to compel their review of the records, the association must pay the unit owner's attorneys' fees and costs. 
  • The requesting unit owner is allowed, but not required, a charge-back for retrieval and copying costs of the requested records.

To read more about upcoming ICPA changes in 2018, click here.

It's budget season at Haus Financial Services! We are in the process of helping our clients to plan for 2018 and set their assessments accordingly.

A detailed budget that realistically projects anticipated income needs for the year is vital for every condominium association. It is also legally required by the IL Condo Act. If your association's board is not drafting and approving a budget each year, you may face deficits that can lead to inadequate reserves and deferred maintenance. This is the recipe for a major special assessment down the road.

All owners must receive a copy of the Proposed Budget at least 25 days prior to the board meeting at which the budget will be approved. Owners must also receive at least 10 days' and no more than 30 days' notice of the details (date, time, location ) of the meeting scheduled to approve the budget.

Remember - email notification is not a valid means of sending notice to owners unless the board has been given express authorization to communicate via email. Cover your bases by mailing or delivering notices personally as well as by email and by posting a notice in conspicuous locations in your building. 

Need guidance in preparing your budget? View our Educational Video "Budgeting Made Easy". (Available to CCR Subscribers.)

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