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  • February 21, 2019 1:57 PM | Talia Lionetti

    Pro Home 1 Inc. is an independent contractor with over 40+ years of combined residential and multi-family complex construction experience. Pro Home 1, what recognized and awarded by Remodeling Magazine as a BIG50 Americas top Remodeler and has received a Business Excellence award by Daily Herald Business Ledger.  We provide straight talk and help our customers to understand their options, so they can make the best-informed decision. Our vision is to become the area's most trusted and respected provider of quality remodeling and be rewarded by customer's increase pride in their home. 

    Services include: Roofing, Siding, Soffits, Gutters, Balconies and windows/doors.

  • February 20, 2019 12:06 PM | Talia Lionetti

    Deborah Hagan will serve as Secretary of Illinois Department of Financial and Professional Regulation (IDFPR).* For over 36 years, Hagan has been a strong and exemplary advocate for consumer protection in the Office of the Illinois Attorney General. In her role as leader of the Consumer Protection Division, she advanced and defended the interests of Illinois consumers in critical areas such as mortgage origination and servicing, student loan servicing, debt collection, identity theft and other areas of financial risk. Hagan has played a critical leadership role in many groundbreaking settlements on the state and national level, helping to recover billions of dollars in restitution for victims of consumer fraud and other wrongful conduct. In addition to her current role which she has held since 2004, Hagan has served as bureau chief, deputy bureau chief and assistant attorney general. She received her Juris Doctor from the University of Dayton School of Law and her Bachelor of Arts in political science from Miami University.

    Mario Treto, Jr. will serve as Director of Real Estate at IDFPR.* Treto currently serves as Deputy City Attorney for the City of Evanston where he provides legal counsel to its elected officials, departments, and staff with compliance, transactional, and corporate matters. Prior to entering the public sector, he worked at a Chicago-based law firm focusing his practice on commercial and residential real estate, corporate law and commercial transactions. Treto is a nationally recognized lawyer by various organizations, including the International Municipal Lawyers Association, the Hispanic National Bar Association, and the National LGBT Bar. He also serves as board chair of Howard Brown Health, a federally qualified health center in the Chicagoland area with ten clinics and a youth center serving 35,000 patients. He received his Juris Doctor from the Indiana University Maurer School of Law and his Bachelor of Arts in biology and psychology from Washington University in St. Louis.
    Francisco Menchaca will continue to serve as Director of Financial Institutions at IDFPR.* Menchaca has held the post since his appointment by Gov. Quinn in July 2013 and previously served the department as credit union supervisor. Prior to beginning state service, Menchaca developed an extensive resume managing financial institutions and governmental agencies at the Federal Deposit Insurance Company (FDIC). He has spent over twenty years of his career in the financial industry, notably serving as the First Vice President at Bank One, where he also spearheaded the Latino Employee Network. Menchaca is a proponent of robust public-private partnerships and community outreach, citing his youth in the Pilsen/Little Village neighborhood as his inspiration in seeking to provide opportunities for educational and economic development. He received his Master of Business Administration from the University of Illinois at Chicago and his Bachelor of Arts from Northwestern University.
    Jessica Baer will continue to serve as Director of Professional Regulation at IDFPR.*
     Baer has held the post since her appointment by Gov. Rauner in September 2016 and previously served the department as general counsel. In that role, she oversaw the entire legal department for the agency, providing input on a number of topics including pending litigation, labor issues, and legislation. Prior to joining IDFPR, Baer spent six years as an associate at K&L Gates focusing on litigation and antitrust law. Her cases involved complex contractual disputes, antitrust litigation and regulatory compliance counseling. Baer is licensed to practice law in Illinois.  She earned her Juris Doctor from DePaul University and her Bachelor of Arts from the University of Illinois at Urbana-Champaign.
    Click here to view the previous appointments to the Pritzker administration.

  • February 04, 2019 3:53 PM | Talia Lionetti

    The Cook County property tax bill due March 1, 2019, shows taxpayers the debt of every local government that levies taxes on their homes and other real estate, helping explain why taxes rise, Treasurer Maria Pappas said today.

    “The financial challenges facing local governments can seem unreal because the numbers are so large,” Pappas said. “The tax bills show homeowners the problems are indeed real.”

    Anywhere from five to 13 taxing districts — local governments and school districts — levy taxes on a given property, Pappas explained.

    On the front of every bill is a section called “Taxing District Debt and Financial Data,” which provides detailed information for each taxing district, including:

    • Money owed by your taxing districts
    • Pension and health care amounts promised by your taxing districts
    • Amount of pension and health care shortage
    • Percentage of pension and health care costs taxing districts can pay

    The First Installment for Tax Year 2018 is due March 1, 2019. The First Installment is always 55 percent of the prior year’s total taxes. About 1.7 million property tax bills have been mailed to owners of homes, businesses and land, Pappas said. Property owners can download a copy of the new bill by going to

    Click here to download the article. 

  • February 04, 2019 3:45 PM | Talia Lionetti

    By: Phil Mariotti, Woodland Windows & Doors


    noun: 1. the unbroken and consistent existence or operation of something over a period of time.

    The word continuity is often overused in homeowners associations.  Board members and managers often use it as a means of defense against “off the wall” request in the same way that middle school teachers use “insubordination” as the catch all for unruly behavior. 

    When you stop and consider the reason behind the rule, there really is a value in keeping continuity in a community.  In my travels to various condo & townhome buildings, I have seen a stark contrast in communities that value keeping the buildings “looking alike” verses those that take the “laissez faire” approach to exterior architectural modifications. 

    The challenge in this regard is evaluating homeowner’s individual expression, style, and preference with the good of the community at large.  Sometimes these two spheres cannot coexist and the community value needs to oversee the individual value. 

    One of the secrets to limiting the amount of conflict between the individual owners and the association at large is to be clear in guidance regarding the exterior standards for the association.  For instance, in regards to window and door replacement request it is helpful for the association to offer a clear specification for owners to follow.

    If the current doors are entry doors with 9 lites and 2 panels below, provide some acceptable replacement models for homeowners to follow and also a place where they can purchase the door locally with a contractor who is familiar with the association’s guidelines.  This will limit the amount of frustration for owners who go shopping and have their heart set on a front door with decorative glass. 

    Additionally, outside of white windows and doors, the exterior color can provide a significant problem in replacement request.  Manufacturers often use the same name but have different shades of the same color.  Inversely, manufactures also in many cases have different names for the same color.  Specifying a product which does meet the needs of the community offers the guidance that the majority of homeowners are looking for such as “Marvin Ultimate Double Hung Windows with Evergreen Clad Exterior” instead of just saying to make sure the windows have a green exterior. 

    Not only is it important to be specific in the type of windows or doors that residents will install into their homes, but is also equally important to specify some guidelines for the installation method that will affect not only the final look of the product, but also the integrity of the building. 

    There are some instances when contractors can install a new window while leaving the original window frame in place, while in most cases this will result in a different look for the building.  The glass will be smaller as well as the exterior aluminum trim being wider.  In these cases, it will be difficult for the association to know the method of replacement that is planned unless the contractor is thorough and specific in the contract document. 

    The community can combat the installation variable issue by working with a reliable contractor or architect/engineer to specify the basic installation requirements such as requiring complete removal of the existing windows and frames in the document provided to owners.  It may be beneficial to require the homeowner and contractor to sign off on receipt of the installation specifications and window/door specification to avoid confusion between the contractor and homeowner.

    Lastly, it is important in the architectural process to require the certificate of insurance information from the contractors to avoid claims against the association.  If the association is clear in insurance requirements through a specification for windows and doors, this will avoid the issue on the back end of approval when the insurance provisions of the contractor do not meet the association requirements and deposits have already been made by homeowners. 

    Essentially, if the homeowners associations become more proactive in providing clear guidance for homeowners in regards to the window and door replacement requirements, then they will be less likely to end up in a regrettable position of dispute with homeowners/contractors after work has been complete.  Encouraging owners to work with reputable contractors providing reputable products will also encourage the quality assurance for the building and will also streamline the architectural approval process.

    This will lead to “continuity” which is a key component in maintaining the “curb appeal” of an association and showing potential “owners” in the market that the association has order.  Maintaining the curb appeal, encourages a sense of pride in ownership which also directly impacts the desirability of a given community and ultimately impacts home value.  Start the process of developing a clear and concise specification for window and door replacement in your community today! 

  • January 28, 2019 4:12 PM | Talia Lionetti

    January 17, 2019 Patty Turner Center, Deerfeild and  January 23, 2019 Countryside Bank, Countryside

    ACTHA was pleased to engage with The Pizzo Group to host two seminars entitled “Natural Areas Restoration for HOA Common Space” which were held on January 17, 2019 at the Patty Turner Center in Deerfield and on January 23, 2019 at the Countryside Bank in Countryside.

    Seth Crackel of the Pizzo Group was the presenter. The unique feature of these seminars was the offering of two CAMBI credits by Pizzo Group to qualified participants.

    Seth Crackel presented a powerpoint presentation that engaged the audience in learning the basic terminology of ponds, the "how" and "why's" of good maintenance, problem solving of overgrowth of invasive species and stewardship of ponds.

    Managers and Association Board attendees, as well as home owners attending the seminar, learned the recognition of trouble signs of pond challenges and the ways to combat these issues.

    Seth explained the principle of ”chemical burns” and the need to do this procedure for the health of the surrounding areas of a pond. He stressed the need for education of homeowners and Board in pond health and maintenance. Communication is the key. Once you educate, the scene is set for formulating a plan forward.

    The plan forward then includes: identifying your goals, formulating your strategies, implementing your plan, then monitoring all your steps in proper sequence.

    He stressed the need to connect the community to nature. This is done by nature signage and engaging your homeowners in the value of protection and maintenance of your ponds.

    Value is added to your community site when successful long range planning is put in place. This is the opposite of “whim planning” which usually yields negative results and results in a confused state of wrong plants in the wrong places.

    Education is the key to pond health and successful planning.

  • January 28, 2019 2:27 PM | Talia Lionetti

    Looking for a financial organization that offers it all?

    Customized loans, reserves, lockbox and auto debit services, friendly, knowledgeable professionals, and up to $3.75 million of FDIC insurance for community associations?

    You’ve found it!

    Wintrust Community Advantage is one of the Midwest's leading providers of financial services to condominium, townhouse and homeowner associations. Wintrust Community Advantage offers a variety of products, from specialized financing to treasury management to reserve investments to online account services, paired with best-in-class client service and in-depth knowledge of the industry, products are customized and utilized with each association's needs,

    Wintrust Community Advantage can serve its clients more efficiently, accurately and promptly than other financial service providers.

    Meet the staff:

    President: Peter J. Santangelo

    Senior Vice President: Pamela E. Muller

    Vice President: Anthony W. Dister

    Vice President: Kimberly Myles

    Relationship Officer: Matthew R. Hall

    Relationship Officer: George T. Toubekis

    Senior Credit Analyst: Nancy C. Taub

    Senior Deposit Services Banker: Mary M. Theile

    Senior Deposit Services Banker: Angela M. Johnson

    Deposit Banker: Fifi F. Farad

    Deposit Banker: Alexandra Diaz

    Credit Administrator: Ulylana Lana Shevchuk

    Credit Administrator: Daniel G. Corwin

  • January 18, 2019 11:07 AM | Talia Lionetti

    By: Chuck Kohut of DRF Trusted Property Solutions

    Courtesy of:

    Have you ever seen what happens to an aluminum can when it freezes? Or more succinctly – have you ever seen it after it’s ruptured and the contents have thawed? The power of ice and water (or liquid) is nothing short of awesome. Ice carved the great valleys of our country – and we all know what a raging flow of water can do. In a similar way, the power of ice and water can impact properties of all types if we’re not paying attention and prepared.

    A quarter of a million homes throughout the U.S. have at least one room damaged by frozen water pipes each winter according to State Farm Insurance. That’s 250,000 families disrupted by damage, lost possessions and the inconvenience repairs bring – during the coldest time of the year no less. What’s more, the Institute for Business and Home Safety reports that claim payments for losses related to water damage or freezing has exceeded $4 billion over the past decade.

    It’s Not the Freeze – It’s the Thaw

    Damage from frozen pipes can be significant, and expensive. The average claim for water damage due to frozen pipes is about $15,000 according to It’s not only the pipes that contribute to this cost – In fact – it’s not the freeze – it’s the thaw. According to the Institute for Business and Home Safety, once a frozen pipe bursts as much as 250 gallons per day can escape from a one-eighth inch rupture. And for multi-family properties, chances are the damage will not be isolated to the unit experiencing the leak. Water can quickly travel to other units on the same floor and below increasing damage and costs. Walls, ceilings, flooring, décor and anything in the path of the water can be affected. The IBHS notes that claims for frozen pipe related failures “resulted in losses that were roughly twice as severe as those caused by plumbing supply system material failures.” What do these numbers tell us? Homeowners, property managers, condo residents and even renters need to be diligent in their focus of just how important it is to be aware and prepare for the potential damage cold weather can cause.

    Being aware means understanding all of the places the potential for a frozen pipe exist. Interior pipes positioned along exterior walls (especially North facing), outdoor spigots, swimming pool lines, water sprinkler/fire suppression systems, especially those in large open areas such as lobbies or vestibules, can all be affected by extreme cold.

    Awareness is only the first step. Preparation is the key to prevention. Prior to the cold weather setting in it’s recommended that homeowners, and property managers, review their property for potential winter water issues. According to Mike Lawyer, Director of Plumbing for DRF Trusted Property Solutions (, “It’s absolutely critical that a property be reviewed and steps taken to protect areas that are susceptible to freezing due to exposure to extreme temperatures”. Lawyer recommends checking the property two times per year. Once prior to the cold weather to prepare, and once in the early spring – just to make sure no damage occurred.

    Lawyer continues: “There are actually two states to being prepared. Proactively protecting your pipes, and the response to extreme cold weather events.” As one can imagine prevention is a much less expensive proposition than the repairs and hassle a broken pipe brings. First, know what you’re insured for. Call you agent and learn what your policy protects you against. Then as you review the property take measures to insulate pipes and water lines that can come in contact with cold weather. Building maintenance staff can implement simple measures to protect against issues. Installing heat tape, foam insulation and other inexpensive products, which are available at most hardware stores, can protect pipes from freezing. Don’t forget the outside water supply as well. Turn off the water to outdoor spigots and use an inexpensive foam cover the block the wind.

    Reviewing the property’s heating system is also important. Maintaining adequate temperatures is critical. Temperatures at least 65 degrees should be maintained to keep the whole property warm during extended cold spells. In fact, if a pipe bursts and suitable heat is not maintained an insurance company may not cover the damage claim. On this front it’s especially important that residents, and operators, of multi-family properties know the specifics about their policies. notes that “During a particularly cold spell, it could be argued that “reasonable use” of the apartment plumbing includes renters taking precautions against burst pipes. Tenants might also be required by the lease to keep the apartment thermostat above a reasonable temperature to help prevent weather damage. No matter the type of residence, keeping the space warm is critical. While saving on the heating bill is an attractive motivation, coming home to a flooded house and expensive repair bill is anything but. Lastly – monitor the water systems. There are many options from alarms to devices that can wirelessly notify you of a problem and even shut off the main water supply in the case of a leak. Today, such systems are more affordable and feature-rich than ever – and are proving to pay for themselves many times over. Both homes and commercial buildings are susceptible to water damage in uniquely different ways according to Jim McLaughlin, President of Vital Command – one company that’s fast becoming a leader in smart home technology solutions. “Water damage from burst or leaking pipes doesn’t discriminate,” explains Jim. “It’s the number one cause of commercial property damage and over a 10-year period, 20% of homes will have a significant water damage incident.”

    Be Proactive to Avoid the Freeze

    Despite the amount of pre-planning that’s done – there’s always the possibility of a cold weather event overwhelming even the most diligent planning. The next level of preparation involves the steps that can be taken to avoid frozen pipes in the moment. How do you know that there may be a problem? When it’s cold walk through your property and observe your pipes. Are there obvious signs such as bulges, or frost on the pipe? Is the flow of water from a faucet significantly reduced – or not present at all? How about the toilets? Are they not flushing? It’s time to act when you encounter any of these signs. Opening the doors under kitchen or bathroom cabinets and allowing warmer air to circulate is one commonly recommended tactic. Making sure you maintain a consistent temperature bears repeating. If the residence has a water line in or adjacent to the garage or other unheated space, keep the door closed. Lastly – one bit of common knowledge – let the faucet trickle. Having the water flow protects a pipe from freezing.

    Frozen Pipes – What to Do Now

    Even with proactive measures taken to prevent freezing, the worst can happen. What next? If there’s no rupture the sooner steps are taken to get water flowing again the better. However, according to DRF’s Mike Lawyer, “if you see a break in the line and it’s still frozen, shut the water main off and call your plumber right away.” The ice can actually block the hole – and when it thaws water will leak through the break”. Turning the water off even if a rupture has not happened is the first step you should always take. Warming the pipes is the next step. But, never use any device that has an open flame. That’s a good way to start a fire and potentially destroy the whole property. In 2017 the Chicago Tribune reported on at least four structure fires caused by people attempting to thaw pipes with open flames in one 10-day period. Even a high wattage light bulb presents a danger. So, what can be used? The Red Cross recommendskeeping the faucet open and applying heat with an electric heating pad wrapped around the pipe, an electric hairdryer or portable space heater or by wrapping pipes with towels soaked in hot water.

    The key to avoiding the costs and frustration of frozen pipes is pretty simple actually – Awareness, Preparation, and Action. Before the cold sets in be aware of what areas of your particular property could be vulnerable. Prepare for the worst by taking action to protect the property and avoid potential damage.

    Click here to view the original article. 

  • January 09, 2019 10:46 AM | Talia Lionetti

    Courtesy of:

    The Condominium and Common Interest Community Ombudsperson Act became effective on January 1, 2017. Generally, the purpose of this Act is to create a State of Illinois-operated mechanism to assist in resolving certain disputes within condominium and community associations.

    It is important to recognize that certain tasks must be accomplished before the January 1, 2019 deadline.

    On January 1, 2019, each association is required to adopt a written policy for resolving complaints made by unit owners. The policy must include:

    • A sample form upon which a unit owner may make a complaint
    • A description of the process by which complaints shall be delivered to the Association
    • The Association’s timeline and manner of making final determinations in response to the unit owner’s complaint as well as the form for such determinations

    This is a limited summary of the new Ombudsperson Act and each condominium and common interest community association should become familiar with the full version of this new law.

    KSN can prepare documentation that complies with the requirements of this Act and can assist Associations with the procedural steps necessary to adopt the required policy by January 1, 2019.

    Please contact our law firm at 847-537-0500 or visit

    About the Office of the Condominium and Common Interest Community Ombudsperson

    On January 1, 2017, Adrienne Levatino was named the Illinois Condominium and Common Interest Community Ombudsperson by Kreg Allison, the Director of the Division of Real Estate for the Illinois Department of Financial and Professional Regulation. The Ombursperson’s website:

    The website indicates that the Ombudsperson’s goals are to:

    • Educate unit owners, associations and their respective boards
    • Publish information useful to unit owners, associations and their respective boards
    • Respond to relevant inquiries by providing educational materials and directing citizens to relevant resources

    The website also indicates that the Ombudsperson’s does not:

    • Provide legal advice or advocacy services
    • Enforce any laws or regulations, including the regulation or registration of: Professions, Associations, Companies, People Hear, mediate or resolve: Issues between unit owners and associations, Complaints of discrimination, Complaints about Community Association Managers (“CAMs”)

    This article is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this article you understand that there is no attorney client relationship between you and the article author. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. © 2018 Kovitz Shifrin Nesbit, A Professional Corporation.

    Click here to view the original article. 

  • January 09, 2019 10:24 AM | Talia Lionetti

    Courtesy of:

    According to the IBOPE Zogby International 2012 survey on Community Associations:

    • 62 million Americans live in an estimated 315,000 association governed communities
    • Seven out of ten residents are satisfied with their association living experience
    • Residents rated their community experience as positive where they believed:
      • Association board members strive to serve the best interest of their communities
      • The association rules protect property values and they value the return received on their association assessment payments

    Elected association board members have the fiduciary responsibility to protect and enhance the association common elements and unit owner’s investments, by maintaining and preserving the property values of the community.  In order for the Board to maintain the Associations property value, they may contract to have a Reserve/Engineering Study completed to define to the Board/Unit Owners  the nature, timing, and cost of future capital replacement projects and assessment dollars needed for each project.

    In current difficult economic times, boards and unit owners are reluctant to raise assessments for future replacement projects and frequently delay projects in order to raise the necessary funds.  This increases the probability that repair costs for the later “fix” will be greater due to the problem becoming broader and deeper (or as our grandmother’s always told us; “An ounce of prevention is worth a pound of cure.”)

    In a capital replacement project, boards and unit owners have the following options:

    • Pay for the project from the accumulated reserve dollars
    • Implement a special assessment
    • Obtain a commercial bank loan
    • Or a combination of any of the above options

    Paying for the capital replacement project from accumulated reserves dollars based on the reserve study is the best option, as dollars are set aside over time. The yearly reserve assessment increases are smaller and less of a burden on the unit owners to pay for the replacement projects.  

    Special Assessments are usually implemented, when there is a shortage of reserve dollars to pay for a capital replacement project and unit owners are given a limited period of time to pay their portion of the project cost.  If the Special Assessment is large, this may place a burden on unit owners that are unable to pay the onetime assessment charge and default on their payments, which places additional stress on the Association in trying to complete and pay for the project.  

    With a commercial bank loan, the capital replacement project is completed in a short period of time and the unit owners are not burdened with a onetime large assessment payment and are able to spread their portion of the project cost over time. There will be an increase cost to the project due to interest payments; however this still may be more palatable to the unit owners then a one time large Special Assessment payment.

    If the board decides to borrow dollars to complete a capital replacement project, a Community Association Lender will look most favorably (the best loan terms) to boards and unit owners that are proactive, well prepared and meet all the bank guidelines.  Community Association Lenders may require the following information:

    • Average unit market value
    • Number of units
    • Delinquent payment of assessments
    • Contingencies for bad debt
    • Assessment levels
    • Owner occupancy ratio
    • Insurance
    • Present and pending lawsuits
    • Repayment plan
    • Reserve funding

    An Association should surround itself with qualified professionals to ensure the project goes smoothly and is completed correctly.  

    The lender will need to understand how the scope of work was identified, the duration of the planned repairs, and the process for selecting the professionals to complete the projects. Prior to loan approval, the lender will require copies of the executed contracts for the work to be performed.

    Depending on the size of the project, an independent engineer or architect may be required to supervise the project and approve all advances on the loan and payouts to contractors.  
    Average unit value and number of units is taken into consideration to determine if the size of the loan requested, meets the bank’s guidelines. For example:

    • A 50 unit building requests a $1,000,000 loan
    • The units are valued at $100,000 each
    • The assessment per unit would be $20,000 (20% of its value), which the bank might consider this high.

    Assuming a 5 year repayment, the monthly amount due per unit would be about $333 per month, which does not include interest, regular assessment or mortgage payments. Such an expense has the potential to monetary stress unit owners, which may increase delinquencies and cause the association to default on the association loan.

    To prevent this, it is imperative that associations reserve funds for future capital expenses to reduce or eliminate the need for a loan.  If an association has reserves and is able to fund 50% of the project, this reduces the financial impact to owners and increases the probabilities of acquiring a loan.  

    Collateral for a community association loan is the assignment of future assessments of the association. Most lenders have internal guidelines regarding delinquent assessments that Associations must meet, to both qualify for a loan and maintain, while the loan is in place. Typically no more than:

    • 5% - 10% of the total number of units can be delinquent on assessment payments
    • 5% - 10% of the annual assessment income 

    Prior to obtaining a loan an association should establish a delinquency collection policy and adhere to it. The Association’s assessment income is the Bank’s source of repayment so the Association must be diligent about collecting all assessments. Delinquent accounts should be turned over to the Association’s attorney as the Association’s delinquency collection policy allows.  Associations with high delinquencies may not be able to secure a loan.

    Associations considering whether or not to take out a loan should incorporate a reserve for bad debt into their operating budgets. In the event of non-payment or late assessment payments, this reserve will help to ensure the association has sufficient cash flow to meet debt and operation obligations.

    The Board should determine the number of non-owner occupied units and what is currently allowed by Association policy. The lender’s guidelines for non-owner occupied units range from 20% to 30% of the total number of units.  

    The lender will require proof of adequate insurance as a condition of the loan. Insurance will be required to be maintained while the loan is in place and the lender will require that they are added to the policy as additional insured or loss payee. Boards should review their insurance levels annually with a qualified association insurance professional.

    Litigation against the association is also reviewed by the bank. As plaintiff or defendant, an association that is a party to a lawsuit complicates matters for owners trying to buy or sell units and can inhibit an association’s ability to obtain a loan. Lawsuits against the association may impact the ability to repay its loan due to increased or unbudgeted legal fees and the potential for a monetary settlement payout not covered by insurance or reserves. Association boards should act to resolve lawsuits in order to focus on day to day operations of the association.

    Community Association Lenders vary in documentation they require, their evaluation processes, and loan terms. Lenders with dedicated association staff, broad experiences, and strong portfolios are generally the easiest to work with and can guide you through the process. Associations considering a capital replacement project should contact a Community Association Lender early in the process, to acquire guidance and options in financing. This will aid in ensuring the loan is acquired in an expedient manner.

    Community Association Lenders know that Association Boards with strong leadership, that are well managed and proactively plan, demonstrate to the unit owners that the Board members are exercising their fiduciary duty to ensure the financial integrity of the Association and property values.

    (Wintrust Community Advantage®, with offices in IL and MN, is a division of Wintrust Financial Corporation, which has over 100 banking offices in IL and WI, with assets of $16 billion dollars.)

    Click here to view the original article. 

  • January 09, 2019 10:11 AM | Talia Lionetti

    By: Anthony Dister, VP, CMCA, Community Advantage 

    Courtesy of: www.

    During the 1970s, the weekly news television show “60 Minutes” introduced a Point/Counterpoint debate segment in which journalist Shana Alexander provided a liberal point of view on a controversial topic against conservative James Kilpatrick. The shows popularity led to a parody skit on Saturday Night Live with Jane Curtin providing one point of view opposite conservative Dan Akroyd. When it comes to people’s homes and money, the debates can often become heated. In an effort to keep the discussion at board meetings from taking on the decorum of the latter, it is important to consider the options available to an association when planning for its next common element repair project.


    Board members have the fiduciary responsibility to maintain, preserve, and protect the association’s common elements. Unit owners want the price of their home to appreciate. The board is often trying to balance the demands of competing pressures.

    Real estate brokers have indicated that the primary drivers for buyers continue to be location, price, and curb appeal so maintaining the common elements and the overall appeal of the community will continue to be the most important aspect to boards, homeowners and potential buyers.

    Many associations are more than 20 years old and are showing signs of deteriorating infrastructure and deferred maintenance. Communities are often in competition with nearby properties for potential buyers. As a result, many boards wish to keep monthly assessments low in order to be more attractive to buyers. This can lead to the replacement of certain components that may have reached their useful life to be delayed or deferred. Alternatively, boards may choose to make recurring repairs to common elements or stretch a project out over time in an effort to avoid the large replacement cost and keep assessments low. The downside is that over time, the recurring repairs can add up to more than the replacement cost, and by spreading the repair project out over time the cost significantly increases due to repetitive set-up and staging costs. Community associations tend to receive more competitive bids and can save money by doing all the work at once.


    The board has several options when it comes to funding a large project. The first is reserve balances. Having sufficient reserves set aside is the best choice for funding a large capital replacement project. The downside is that having sufficient reserves means the board has to adequately fund its reserves, which can mean increased assessments.

    The second option (and most unpopular) is to pass a special assessment. The benefit is that it’s a means for the association to collect cash at one time to pay for the project without taking out a loan. The downside is that the large one time payment may be difficult for some or all of the unit owners. Special assessments may also have a negative impact on the owners’ ability to sell units within the association.

    The third option would be for the board to increase regular assessments and build reserves to fund the project. The downside for increasing regular assessments is that it may take years to contribute sufficient reserve funds for the pending project and once assessments have been increased they typically never return to their prior level.

    The fourth option is outside financing or an association loan. The loan could be used to fund the entire project or in combination with any of the above funding options. It is important for the board to explore all options and be creative when formulating an approach to select the option which is best for the overall association.


    The proceeds from an association loan can help to fund immediate common element repairs. The bank can work with the board to put in place a repayment plan tailored to best suit the association’s needs. There are many options available other than a lump sum payment or special assessments. The association loan can allow member assessments to increase slightly because the loan payments can be spread out over a longer repayment schedule. Repayment can go out to 15 years, however, a shorter term is recommended. The typical loan amortization is three, five, or seven years, depending on the useful life of the components being replaced, or the cash flow requirements of the association.

    In today’s economic environment, interest rates are at historical lows. Low interest rates are not good news for savings or reserve accounts. However, it is good news for association’s that are in the market for a repair or replacement loan and may have deferred maintenance. These associations can take advantage of today’s low rates and complete all needed projects with minimal interest expense.

    There are advantages to completing a project or multiple projects at one time. Associations will usually receive preferred pricing from contractors if the work is completed at once as opposed to spread out over time. If multiple projects are being considered, the association may have cost saving in work permits and one time setup costs such as scaffolding for roofing as well as masonry work. The association also avoids lengthy construction site issues by completing projects in a timely manner.

    The loan proceeds can be used for common element repairs, capital improvements, purchasing units within the association, as well as to replenish reserve balances. 


    The loan is a debt obligation that must be repaid with interest. The association will have a monthly principal and interest payment to the bank amortized over the term of the loan once the project is complete. The monthly loan payment will be included in the association’s annual budget with a line item or sufficient contributions to the reserves to cover the payment. While the loan is made to the association, the loan is ultimately repaid by the individual unit owners.

    The association may incur one-time setup costs associated with the loan which include bank loan documentation fees and attorney review fees. Loans made to community associations typically do not have commitment fees, non-usage fees or penalties for early payment.

    As part of the loan agreement, the association will be expected to provide annual financial reporting items and maintain certain standards or covenants for the duration of the loan depending on the financial institution. These include annual financial statements, budget, tax returns or other such information as required by the bank. For example, the repayment of the loan is based on the association having sufficient cash flow. One of the covenants that the bank will rely on to help measure the strength of the cash flow is the association’s delinquency ratios.

    Delinquency is typically defined as monthly assessments that are more than 60 days past due. The rate of delinquency commonly used by lenders is 10 percent or less in terms of number of units and/or dollars past due as a percentage of the annual budget. Having a relatively high delinquency rate may impact the association in receiving a higher interest rate for a loan or being charged a fee if the ratio is not maintained during the loan period. While maintaining a satisfactory delinquency rate is required for obtaining a loan, it is also in the best interest for the association in order to have sufficient cash flow to pay its bills on time. This ratio is also looked at by mortgage companies for owners buying/ selling units within the association.


    Funding a major project requires a proactive board and advance planning. While funding a project with replacement reserves is recommended, most associations are not in a position to fund a project entirely with reserve funds. One of the options available to an association is outside financing. A common element repair loan can help the association address its major challenges.

    • By providing funds to complete necessary projects in a timely and cost effective manner.
    • At the conclusion of the project, property values typically increase.
    • Special assessments may be financed with an association loan or increases in monthly assessments may spread out over time to repay a loan. 
    • With a properly structured loan, the association is typically in a stronger financial position at the completion of the loan due to its ability to maintain or build reserve balances.

    When considering outside financing for your association it is important to consider a combination of all options as well as opinions from all board members and committee volunteers. Boards should consult with professional teams early when planning a capital repair project. If considering a loan, it is best to consult with your financial institution to ensure the association meets all requirements for a loan. Similar to Point/ Counter Point there may not always be a right answer. The solution just has to make sense for your association.

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