A big thank you to Chuck VanderVennet, one of the leading attorneys specializing in community association law, for inviting me to join him at the ACTHA spring seminar to speak about Collections, Short Sales, Foreclosures and Delinquencies. Here is a summary of the top 15 key points of our presentation (please note that this is not legal advise; for specific legal advise, please consult and attorney):
• Now more than ever associations must plan ahead and run as lean and cost effectively as possible.
• 5 year capital planning is essential to ensure maintaining the association properly so that funding is available to pay for projects proactively
• Associations should have well documented collections policies within their rules and regulations
• Enforcement of collections policies is critical for associations and is essential to ensure funds are available for day to day operations and long term capital reserve funding
• Collections policies must be enforced even handed. Exceptions are not advised.
• Budgets should contain a “bad debt” line item on the expense side to take into account uncollected assessments
• Foreclosures have affected the financial balance sheet of most associations and continue to do so
• Most foreclosures are taking between 12-24 months to take effect
• Illinois has one of the most aggressive laws that enable association boards to gain possession of non paying condo association units and rent them out to collect back assessments
• In 2007, Illinois passed legislation that provided condo associations “super lien” rights. These rights allow associations in certain circumstances to collect unpaid assessments from homeowners that have purchased condos at judicial sales.
• It is critical for associations to have a registered agent with the State of Illinois and to keep current with the annual registered agent paperwork. The registered agent receives all notices in reference to foreclosures and other related matters that will keep the board of directors informed.
• Associations should work with attorneys that have specialized knowledge in condo and community association law in reference to collections, foreclosures, short sales and bankruptcies.
• Short sales take place when homeowners are able to sell their unit for less than what is owed the bank.
• An owner may or may not continue to pay assessments during a foreclosure or short sale process. It is important to monitor the collections process at all times for the financial security of the association.
• When a unit owner files for bankruptcy, an association should consult with an attorney and discuss the risks involved with spending money to attempt to collect a debt post claim balance.
About Chicago Property Services, Inc.
PREMEIR COMMUNITY MANAGEMENT: Chicago Property Services, Inc. is Chicago’s premier provider of professional offsite management services for condo and townhome community associations. Through innovative management techniques, CPS is creating stress free living environments for thousands of homeowners throughout the Chicago area. With 50 exclusive properties under management, Chicago Property Services is setting the gold standard in offsite management.
COST SAVINGS: Through their cost cutting and price negotiation abilities, CPS is saving community associations thousands of dollars annually. In addition, CPS has saved associations tens of thousands of dollars on their capital project expenditures through the project management services offered by CPS.
TIME SAVINGS: Through the guidance of CPS, client board members are much more effective in decision making and planning. This allows board members to spend more time attending to their professional and personal lives. The average CPS board meeting last no more than 1 hour and our typical client holds quarterly board meetings.
Through proactive 5 year capital planning, CPS saves clients both time and money. Projects are completed sooner and cost less money. In addition, CPS clients have access to a state of the art exclusive online support tool called managemycommunity.com (MMC). MMC gives board member and homeowners real time access to critical information such as contact information, maintenance issues, and financial information. Let Chicago Property Services create a more pleasant living environment for your association. Experience MORE LIVING and LESS WORRYING. For more information, visit www.chicagopropertyservices.com
About the Author, Salvatore J. Sciacca
Salvatore J. Sciacca is a leader in community association management, with more than 20 years experience. Founder of Chicago Property Services, Inc., (CPS), the premiere community management company in metropolitan Chicago for townhouses, condominiums, co-operatives, and homeowner associations, Mr. Sciacca also serves as its chairman and president. Mr. Sciacca is also the founder of managemycommunity.com which is soon becoming the leading online support portal for community associations. Mr. Sciacca is recognized for his extensive knowledge of capital planning, preventative maintenance, and cost-saving measures. At present, Mr. Sciacca’s firm manages a portfolio of 50 exclusive properties including the former Marshal Field mansion. The portfolio has a combined value of $300 million.
Following rigorous exams, Mr. Sciacca became a Certified Manager of Community Associations (CMCA®) in 2002 by the Community Associations Institute (CAI), the top national trade association in the field. He was designated an Association Management Specialist (AMS®) in 2004 through CAI. Mr. Sciacca is a member of CAI, and the Association of Condominium Townhouse & Homeowners Association (ACTHA). Mr. Sciacca regularly attends national conferences such as the CAI CEO Retreat and the CAI National Trade Show.
Locally, Mr. Sciacca regularly attends ACTHA and CAI trade show events and is a regular guest speaker at ACTHA seminars and events.
Through his continuous interactions with national and local trade associations and industry experts, Mr. Sciacca remains at the forefront of best practices in the industry. Mr. Sciacca has often teamed up with the legal experts at Kovitz Shifrin Nesbit to give seminars and presentations throughout the community about current issues. He has been featured in several Chicago Tribune articles, CondoLifestyles articles and on CAI’s radio talk show. Mr. Sciacca holds a Bachelor of Science degree in electrical engineering from the University of Illinois at Urbana Champaign and a Masters of Business Administration in international business from DePaul University.
Feel free to contact Salvatore J. Sciacca aka “condoboss” at 312.455.0107 if you have any questions.
You can also find more information on Mr. Sciacca on his: Condoboss FB page at: Condoboss on Facebook or Linked In profile at: Condoboss on Linked In