Chicago Cooperator Summer 2019
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Summer 2019                  CHICAGOCOOPERATOR.COM  205 Lexington Avenue  New York, NY 10016  CHANGE SERVICE REQUESTED  PRSRT STD  U.S. Postage  PAID  Phila PA 191  PERMIT 7296  Laws, and the legal decisions that support   and enforce them, are constantly evolving   and can affect every facet of community life   in HOAs, condominiums and co-ops. While   law and legal cases can emanate from any of   our three levels of government –  federal, state   or local – most of the developments that af-  fect housing come from the bottom up, with   local and state law often defining or redefin-  ing what co-op, condo, HOA, and even own-  ers of rental housing may and may not do   within the law.  Much of the legislation and case law per-  taining to housing derives from the federal   Fair Housing Act, which was signed into law   by President Lyndon Johnson in 1968 around   the time of the civil rights movement. The law   exists primarily to protect against race-based   discrimination in housing, but it has gone on   to represent and promote a much broader   range of principles.  Aside from non-discrimination, housing   law and legislation also deal with safety, eq-  uity, and the ability of local governments to   tax real estate owners. This type of legislation   and specific case law more than likely origi-  nates at the local and state level. Often as a   result, individual statutes and cases apply to   specific localities. A decision handed down in   an Illinois court may not affect communities   in Massachusetts, though a similar case could   result in a similar decision in more than one   locale. Similarly, a statute may apply to a con-  do or HOA in one city and not in the neigh-  continued on page 8   Co-op, condo and HOA communities   are a property manager’s bread and but-  ter.  Ensuring that their client buildings   and associations  run smoothly everyday   provides managers with both purpose and   pay. Therefore, it stands to reason that a   dedicated manager might bend over back-  wards in order to satisfy his or her client –   even if that client’s requests border on the   outlandish.   But that very term ‘borderline’ im-  plies that there is in fact a line that can   be crossed, and that an association can   generate enough headaches for its man-  agement to make continuing to serve that   community feel like a losing proposition.   In these instances, it may be prudent for   a manager to end that professional rela-  tionship and rather focus on clients who   aren’t a 24/7 source of anxiety.  Keep It Together  Before cutting ties with an association,   a manager should conduct a thorough   cost-benefit analysis. Can the relation-  ship be salvaged? Is there someone else in   the management company who might be   better suited for this client? A lot of time   and money is at stake, so any parting of   ways must be well worth it.  It’s also a matter of corporate culture   and philosophy as well. Some manage-  ment companies prefer to fight it out un-  til  the  bitter end, rather  than terminate   a  relationship  with  an  association.  “We   have never given a building back due to   board members who could not work to-  gether,” says Joe Kanner, Owner of Quan-  tum Property Management in Elmsford,   Once upon a time, you usually greeted   your neighbor in the hallway of your build-  ing as you're coming or going. But lately you   haven’t seen or heard a peep from her in al-  most two months. You wonder if she is okay.    So you ask the super one morning in the   lobby about your neighbor’s whereabouts.   He responds that she’s perfectly fine – she   just went to a writers' retreat in Portland for   a year. The reason why the neighbor didn’t   sublet her place, the super explains, is be-  cause she has a valuable collection of pre-  Columbian art and was afraid of possible   theft or damage.    And just like that, you have a ghost own-  er for a neighbor.  The Fundamentals of Vacancy  Co-ops and condo units are potentially   income-producing assets.  While ostensibly   intended as principal residences for their   owners, both can generally be leased out.    In a co-op where a resident of the unit is a   shareholder in the corporation that owns   the property, the act of leasing out the unit   is referred to as a sublet.  In a condominium   where a unit is owned directly, the leas-  ing out of the unit is referred to simply as   a lease.  In both cases – particularly in a co-  op – the board will have some level of con-  trol over the leasing of the unit.  Given that   co-op and condo units carry monthly costs   such as common area charges, maintenance   and probably mortgage payments,  owners   who plan long absences for work or travel   often place a rent-paying tenant in their   unit during that time to cover those costs.   But some owners, like the aforementioned   art-collecting neighbor. can afford or prefer   not to have anyone at their place while on   vacation.  Those type of residents become   so-called 'ghost' owners.   The Practical Effects of    'Ghost' Ownership  Perhaps the most obvious possible con-  sequence of unoccupied units is problems   with accessing those units when necessary.    Unlike a private home, an apartment unit   surrounded on all sides and up and down by   other units may be involved in any number   New York. “When an issue does arise,   we will sit down with the board and try   to work out any differences, whether be-  tween members, or with us. We would   make this an official agenda item for a   board meeting so it could be discussed   openly, and action taken. I honestly see   no reason why we would ever quit work-  ing with a client.”  Over time, a good manager develops   the instincts necessary to read a board,   and to tell the difference between a mi-  nor breach that can be repaired, versus a   Why Managers Quit  When the Board-Manager Relationship Goes Sour  BY MIKE ODENTHAL  Legal & Legislative   Update 2019  Keeping a Value-Adding Amenity   From Being a Liability   BY A J SIDRANSKY  Absent Owners  Managing Communities   When Nobody’s Home  BY A J SIDRANSKY  continued on page 10   continued on page 7 

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