EXPANDING CONDO MARKET INCREASES NEED FOR CONDO OWNER EDUCATION
[ March 27, 2007 ] Part of the series of articles regarding affordable housing issues in Rogers Park,
written by Brian White of Lakeside CDC ( website )
Across the city, condominiums have become the primary option for a growing majority of first time homebuyers, as well as an attractive option for people looking to downsize their living space or move into the city to take advantage of the community amenities sometimes lacking in suburban areas. Many multifamily property owners have also converted buildings to condominiums to capture profits or provide a means to update an older building that cannot be sustained as rental. As a result of these emerging market conditions, condominium ownership has dramatically increased in many Chicago neighborhoods, particularly on the far North Side. In Rogers Park alone, more than 3,600 new condominium units have been created in little more than three years, mostly in smaller buildings of less than 30 units.
For many new buyers, owning a condo and being part of an association is an entirely foreign concept. Lacking the experience, new condominium owners may not understand how to deal with common issues that affect associations, such as how to manage effective meetings, the responsibilities of the board, and how to generate interest in collective decision-making among people who see themselves as individual and distinct owners. Other issues that may arise have to do with preparing an association budget, collecting assessments and dealing with investors who rent units in a building that is primarily owner-occupied.
As one of Chicago’s only providers of nonprofit programs for ongoing, regular training of associations, Lakeside Community Development Corporation receives countless calls and emails from individual owners with questions, some of which can be a bit complex to deal with.
Take for example a recent case involving a rental tenant in a condominium building where the pipes kept freezing, leaving her without water for several days. The problem was a long-standing problem and the property management firm had even gone so far as to issue the owners an advisory to keep their water running and the heat turned up so that individual units could have water. These efforts failed to protect the pipes that ran through an outer wall of the building, and they eventually froze. The question posed to Lakeside was: Who is responsible?
Under the by-laws of the association and the laws of the state, the condominium association is ultimately responsible for the common elements and their maintenance. This includes the plumbing that serves the entire building and runs through the outer walls. The association delegates the responsibility to the Board, which in turn delegated it to the property manager, who may or may not have been able to fix the problem independent of the Board acting to have the plumbing system improved.
Additionally, because the owner of the unit rents his unit to the tenant, he is the landlord in this instance and, under the Chicago Residential Landlord Tenant Ordinance, is required to ensure that essential services are provided to the tenant and in the case that an interruption in services occurs, to take steps to address the problem. The RLTO provides explicit instructions for how a tenant may seek relief, but in this case, the owner tried to claim that the problem was between the tenant and the property manager. In truth, there was one problem between the tenant and the landlord/unit owner and a second problem between the landlord/unit owner and his association. The tenant ended up seeking legal assistance from a tenant advocacy organization, which may yet result in the owner facing a lawsuit by the tenant to recover expenses she incurred when she could not live in the unit.
Could all of this have been avoided with a better understanding of the owner’s and association’s rights and responsibilities? Possibly. Is the law pretty clear as to who is responsible and why? Absolutely. In the end, as with many housing disputes, a little information could have gone a long way to helping avoid what is now a very troubled housing situation that could prove expensive to the owner.
Another common area of concern has to do with the board of directors elected to run the association on behalf of the members. Most owners do not realize that while owners elect a Board, the Board selects the officers from among its members. That means that the owners do not elect a president or a secretary. Owners often do not know that only the Board drafts and votes on budgets. And few owners realize that by law, a Board must meet at least four times per year and that all meetings must operate under the Illinois Open Meetings Act. Holding meetings by email or getting together once a year does not meet the state standard and may open the Association and its board up for complaints from owners that are not only justified, but easily avoided with a better understanding of the law.
Lakeside Community Development Corporation trains condominium association members and boards with regular workshops that address these issues and many more. The program is funded in part by the Chicago Department of Housing and is one of the only nonprofit programs to provide ongoing, regular training of associations in Chicago. Lakeside will soon offer an online forum for owners to engage in moderated discussions that will help them learn from other owners’ experiences.
To learn more about our free programs for condominium owners, visit us on the web at www.lakesidecdc.org or call us at (773) 381-5253.