Page 15 - CooperatorNews Chicagoland Winter 2022
P. 15  Your one source for all the   businesses and services essential   to your   co-op, condo or HOA  COOPERATORNEWS  CHICAGOLAND  DIRECTORY OF   BUILDING SERVICES  CHICAGO.COOPERATORNEWS.COM  COOPERATORNEWS CHICAGOLAND  —  WINTER 2022    15  intensity, given everyone’s increased time at   home), patience and empathy probably left   the building some time ago. With morato-  ria  on  evictions  expiring  across  jurisdic-  tions,  this  is  an  area  that  managers  and   attorneys are keeping a close eye on; this   publication is as well.   The Communal Spirit  As the world enters its third year of CO-  VID, it’s clear that the effects of the pan-  demic are far-reaching and exponential.   And as microcosms of the broader human   condition, co-op and condo communities   reflect this reality. The harshness of fear, un-  certainty, and isolation drives some people   to act in antisocial—even harmful—ways.   But many others are driven to look for new   ways of coping, helping, and reinventing.   Because the communal and social aspect of   living in a multifamily community is part   of its appeal, its residents are more apt to   reach out to neighbors, create safe commu-  nity activities,  and demonstrate patience   and flexibility with ever-changing rules and   guidance. Just like in the rest of the world,   there are the outliers who disrupt, but with   the right policies and professionals, co-ops   and condo associations have the means to   handle them, even if COVID continues to   present additional challenges.    n   Darcey Gerstein is Associate Editor and a   Staff Writer for CooperatorNews.  had\] a reasonable time and chance to cor-  rect any deficient behavior.” He adds that   “another essential  provision is  requiring   the managing agent to notify the board of   violations placed on the property, and of   any condition in the building or property   which is known to be unsafe, or would be   a violation if noted by any governmental   agency.”   Parting Ways  Breaking  a  management  agreement  is   never an easy decision, but it’s a contin-  gency that should be included in every   contract nonetheless. “The management   contract should provide that the associa-  tion has the right to terminate the con-  tract if the management company breach-  es the contract,” says Kasten. “However,   an association may consider  negotiating   a broader right of termination. Generally,   terminating  a contract prior  to  the end   of the current term for the convenience   of the terminating party will subject the   terminating party to damages, unless the   contract provides that the contract can be   terminated without cause. Those damages   could include the fee that would have been   paid during the remainder of the current   term or possibly liquidated damages, if   provided for in the contract.   “Some contracts may expressly provide   for a termination fee,” continues Kasten.    “Also, some contracts may include provi-  sions allowing the management company   to deduct from association funds unspeci-  fied amounts  after termination,  which   amounts can be significant and the pur-  poses of which may be unclear.”    But before breaking a management   agreement,  says  Hakim,  “we  always  sug-  gest having a frank conversation with the   upper management of the company, and   perhaps even having the property manag-  er reassigned. However, when it becomes   necessary, the exit agreement must be re-  viewed to ensure that a timely termina-  tion is sent. Generally, a building will have   a right to terminate upon 30- or 60-days’   notice without cause. The building is gen-  erally only liable for the costs to the date   of termination. It’s quite rare in a manage-  ment agreement for a co-op or condomin-  ium to see any penalties, but again, the   agreement must be reviewed.”  Greenstein points out that “breach of   the terms of the agreement, such as the   agent acting outside the scope of their   authority under the contract, mismanage-  ment  (or  worse)  of  funds,  or  willful  de-  fault of the agreement,” can lead the board   of a co-op or condominium to dissolve a   management agreement before its end. As   to what legal or financial penalties might   be incurred, “someone can always assert   a claim against another person or entity,”   Greenstein says. “The board would have   to prove there was a breach or default and   then damages. And if successful, then they   would have to seek to enforce a judgment   if obtained.”  Proceed With Caution  Kasten cautions boards to be vigilant   about what exactly their contracts con-  tain, and what responsibilities—and li-  abilities—may fall to board members   themselves. “Most if not all management   contracts provide that the managing agent   will take direction from a single designat-  ed board member—or, in the absence of   such designation, the board president,” he   says. “This type of provision makes sense,   because it ensures efficient communica-  tion and avoids a situation where multiple   board members could give the managing   agent conflicting directions. However, an   association may want to review the lan-  guage of such a provision carefully, and   make appropriate changes to ensure that   a less than honest board president doesn’t   use the exclusivity of his or her commu-  nication with the managing agent to hide   impropriety from other board members. I   have seen that type of provision become   the focus of a dispute between an associa-  tion and management company where a   board president used association funds for   personal purposes.”  When changing managing agents or   firms, say the pros, keep in mind that   you’re seeking a seamless—or near seam-  less—transition. Hakim relates one not-  so-seamless example that demonstrates   why it’s important to keep things cordial:  “One of our condominiums terminat-  ed its managing agent,” he says. “The old   MANAGEMENT 101  continued from page 8  company refused to assist in the turnover/  transfer  process,  and  didn’t  deliver  the   books and records of the condominium   to the new agent. So for an extended pe-  riod, the association was unable to access   its bank accounts. Imagine a condomini-  um unable to pay its bills? Or not having   access to its own books and records? We   worked with the board and new manage-  ment, and the bank, and we were ultimate-  ly able to assist in facilitating the transfer   of  the  accounts,  and  the  books  and  re-  cords—but obviously, it took the threat   of legal action to do so.” To minimize the   chance of such headaches, Hakim says,   “Especially in this day and age of digitized   records, we recommend that a board have   real-time access to its files, and also that a   current board member always be a signa-  tory to any account.”   Management  contracts  are  a  critical   cog in the co-op/condo machine. Even if   your board includes members with con-  tract negotiation experience, it’s always   wise to seek the advice of legal counsel—  and to always read the small print. Most   importantly, identify your wants and ex-  pectations and make sure they all get into   the document in clear, concise language to   avoid troubles later.   n  A J Sidransky is a staff writer/reporter for   CooperatorNews, and a published novelist.   He can be reached at  per building records.   At 4504 N. Clark St., Raftery Construc-  tion is working to convert a years-vacant   building to a 12-unit condo by adding four   stories to the property. The existing first floor   will house 23 parking spaces, according to   building permit records. The residences on   floors two through four will have balconies,   and there will also be a second-story and a   rooftop deck.   A 56-unit apartment building at 4511 N.   Clark St. and mixed-use development with   24 apartments at 4533 N. Clark round out   the unit total. An additional 25-unit apart-  ment development one block south at 4410   N. Clark was also recently approved.  Block Club   adds that the city has since an-  nounced it will do a study of this stretch of   Clark Street to see how it can be reconfigured   to be more pedestrian-, resident-, and busi-  ness-friendly.   n  PULSE  continued from page 4  Please submit Pulse items to  Darcey Gerstein at

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