Chicago Cooperator Summer 2019

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