Monday, August 29, 2005

Back on Track---Fight The Power, Part II

Our association budget seemed like the pretty standard condo budget. Water bills here, gas bill there---that type of thing. Yet upon closer inspection it seemed like a few line items were out of hand.

The number one item that caught my attention was the fact that we were paying over $5,000 a year in lawn and building maintenance.


Quite frankly when we have able bodied people living on the premises, why would we pay over $400 a month for someone to come in and cut the lawn, shovel the snow and clean the hallways? That’s just throwing money away.

I took the responsibility to draw up a workable maintenance plan starting with the month of May.

Trust me, our membership was not exactly happy with the prospect of having to get out and perform the sweat equity home ownership requires. After all when most people think of condominium living they don’t think of having to mop the hallways and cut the grass. Unfortunately we didn’t have room for such luxuries with operating margins running so thin.

Only about half of the unit owners responded to the call, the other half---had, oh how shall I put this, “other commitments?”

Next up on the budget hit parade was the cost of insurance.

Our rates had risen sharply since the 9/11 tragedy and were now topping out at around $12,000 a year. Our policy was up for renewal July 1st and I suggested that we start shopping around for a better rate. I mean, how will we know if we’re getting the best price if we’re not shopping around. Just so you know this is the insurance our association has had since before the first elected board took over in 2002. In short, this is the insurance company that our evil developer initially purchased. Naturally we had reason to be suspicious of this setup.

The minute our insurance company got wind that we were looking around, they came back with a quote $3,000 less than last year’s rate. That would firmly put us below the $10,000 mark with our insurance which was a significant savings.

We also applied for a refuse rebate program run by the city that would reimburse us up to $75 per unit or the cost of an entire year’s trash bill, whichever one was lower.

By now you’re getting my drift, we cut the fat were we could and tried to find “hidden revenue” such as the refuse rebate. I knew and subsequently told everyone that 2005 and 2006 were going to be the “tough” years. The years where we would find out how bad it truly was, find a way to fix whatever the problems were and get back on track. People didn’t quite seem to understand the consequences of those words until we attempted to tackle our first capital project---our crumbling back porches.

Wednesday, August 24, 2005

Building a Bridge and Getting Over It

When I was pissing and moaning about our building, I happened to read about a legal case that makes our issues look like child’s play.

Get this---a woman can’t sell her condo because an association was never formed by the unit owners OR her developer. The proper paperwork was never registered with the state and because four out of the six units in the building were owned by non-resident owners, they never got together to elect officers and fill out the necessary paperwork.

While I won’t make a stinging indictment of all non-resident condo owners who have renters; this type of behavior is increasingly being seen in my neck of the woods as investors buy up property in emerging neighborhoods. The units are cheaper and the condo Declarations and By-Laws tend to not to have owner occupied clauses so the unit can be rented out even before the association is turned over.

Since the developer was such a tool and didn’t do his (or their) part, it was left up to this unfortunate soul to attempt to organize the other owners. Much to her dismay, four other unit owners didn’t see it that way. She could only find one person to attempt to meet with. From what I understand, that isn’t enough to get the ball rolling on the formation of a board.

As if that weren’t bad enough, the developer was such an asshole, he simply stopped paying the utilities about the time the last unit was sold. Also note, he never turned over any of the assessment money that he should of been paying for the unsold units.

This woman not only paid her own mortgage and utilities, but also shouldered the bills for her building until she couldn’t do it anymore.

She lived through a Chicago winter with no heat, no electricity and no water.

Let’s all take a deep breath, imagine that scenario and officially get over ourselves.

I’m pretty strong and I’d like to think I’m also pretty resilient but I don’t know if I could even begin to tackle that problem. Jeeez…

Naturally she attempted to put her unit on the market and was greeted with yet another unwelcome surprise. She was told she couldn’t even sell her unit because an association had yet to be formed. Therefore, it legally wasn’t a condo---it wasn’t anything---it had no designation other than an apartment.

Can you believe that?

The woman is suing her developer and her fellow unresponsive unit owners in Cook County Circuit Court as we speak. The link to the case can be found here.

How did I stumble on this pitiful tale of woe? Simple, one of the jagoffs that was an unresponsive unit owner in her association also happened to own one of the foreclosed upon units in my association. In fact that gentleman who’s name is Ryan Hudson is being sued for foreclosure in fourteen separate cases.

Think I’m giving you the business? Read it for yourself here

Seeing Eye to Eye

Now to make sure we're all on the same page, let's have a quick recap.

Our building is like Glen Close in "Fatal Attraction," very attractive on the outside but not quite right on the inside.

Our developer seemingly (perhaps knowingly) violated multiple City of Chicago building codes and standard construction practices to market and sell the units in our building.

Our association has had four total foreclosures in the past calendar year. Two have already happened, two are yet to come.We now have an active (and might I add ass kicking) board that is committed to righting wrongs, going after our developer and increasing our property value.

All of this is time consuming and very difficult to separate out of my personal life. My friends and family have reached saturation point about hearing about my condo issues. That is why you good folks are a healthy alternative to putting a baseball bat through one of my developer's five luxury cars.

Yeah that was no typo---five luxury cars. Don't get me started.

Before I continue telling you about our odyssey, let me give you an honest to pete story about someone who has it worse than us. No bullshit, I looked up the files at the Daley Center and it reads like a homeowner's nightmare. I'll get to that tomorrow. I'm just now coming down from that Star Wars movie in the park.

Tuesday, August 23, 2005

Fight the Power

With some new blood on the board (myself and my neighbor across the hall), we set about sorting through the friggin mess that comprised our business affairs. We did all of the mundane stuff like set a permanent date to meet every month and discussed the direction in which we thought the association should go. We also chose officers and proceeded to discuss what needs should be addressed in the order of their importance.

For clarity’s sake please note that our developer was still on the board in an advisory capacity. Those were his words not mine.

In short he wanted to keep an eye on us to make sure that the condo association’s interests were not going to conflict with his interests as a developer. Lord forbid a monkey wrench gets thrown into his master plans.

When we met for the first time in February our developer wasn’t present and didn’t make any excuses for his absence. We proceeded without him.

Despite the fact we didn’t have any hard numbers, we all had a strong feeling that the association was not on sound financial ground. No one could point to a comprehensive spreadsheet of what was money was coming in and what was being spent. We also didn’t truly know who was behind on assessments and by how much. I had also just found out that one of the non-resident owner units that had a renter was in the middle of the foreclosure process.

How did I find that bit of information out you ask?

Due to an ongoing problem we had with the residents of some of the units leaving their household trash on top of the dumpster instead of putting it inside (due to the locked gates---they were too lazy to unlock the gates and properly dispose of their trash), I personally put on my gloves and did a little trash picking.

There’s no quicker way to get a fine from the cash strapped City of Chicago than to have open trash in and or around your dumpster. Additionally I hate rats. Want to attract a big swarm of those beady eyed little suckers? Have open trash around and let the feast begin.

I wanted irrefutable evidence against our anonymous culprit and the best way to find that out is to dig through their trash. Well you could have knocked me over with a feather when I found that mortgage foreclosure papers had been sent to one of our non-resident owner’s address.

Great, we had money issues AND a foreclosure. This condo thing was getting better and better.

When I presented evidence of the foreclosure at the meeting, our new president stated that he already knew about the situation. I nearly broke my neck to turn and look at him. He didn’t feel it necessary to inform anyone about this issue as he felt it didn’t affect the condo association and he didn’t want to unnecessarily put “someone’s business in the street.”

I’m sure the smack of my palm against my forehead was heard ‘round the world.

Because of the late notice to not just this foreclosure situation but the three others that immediately followed my discovery of this news, we as a condo association could not file a lien against the property to recover the back assessments that were owed to us. Not anyone’s business indeed. What a crock of shit.

Just to give you yet another gentle reminder kids, condo boards aren’t for lazy people or sissies. You actually have to do some work to make sure things are in top working order. If you fall down on the job, your shit will wind up like ours. Trust me it ain’t no fun making these types of decisions on almost a daily basis and also trying to negotiate the pitfalls of your own personal life as well. Long story short, just do it the right way to begin with. Question everything. Document everything.

Now back to today’s story…

Our developer’s partner’s girlfriend was our treasurer for the first two years that our developer was our president. Yeah, I know, we are supreme dumbasses for letting it happen but let’s get the whole truth out there. If I’m gonna tell it, I might as well tell the ugly along with the good and the bad. She along with our developer made deposits and took care of the bills until she decided last year that the responsibility was too much for her. Then of course she also decided to move out of her unit without so much as a “so long suckers” before she rented out the unit to her sister(s).

That left our now president (the one who didn’t want to put anyone’s business in the street) in charge of the books. While I have a problem with his execution and follow through with much of our condo business, I will say this in his defense---He did make sure our bills were paid on time and that people (mostly) paid their assessments. By nature he is not a technocrat so Excel spread sheets and sending notices of late assessments aren’t his thing. Nonetheless, as we have found and are finding out---everything must be documented. He kept us afloat until the new people could come in and start kicking ass and taking names. For that I’m grateful.

One of the first things our president said to me was that this was like having another job and he wasn’t bullshiting. If he did need help though, my only question is why didn’t he ask for a lifeline sooner? While I may not have been able to run for the board, that didn’t preclude me or anyone else from helping out where and when it was needed. It would have saved all of us a hell of a lot of trouble.

When the financials arrived, from what I understand they were in a paper bag (or something similar) and it took our treasurer about three weeks with the help of one of our other neighbor to put everything together in a spreadsheet. A nicely done spreadsheet might I add. What’s coming in, what’s going out and to whom. Easy to read and completely digestible---those girls are geniuses.

Financials in working order---check!

Now our next order of business was to examine the yearly budget to see where we could cut corners so we didn’t have to raise regular assessments.

Time for the south siders to play “Show Me the Money” or “Get Money and Get Your Ass Out!”

Welcome to Woodlawn---Part II

Moving day came and went. Our building as well as our association started to fill with new and excited first time homeowners. Young people living the American Dream of owning their own home---becoming the captains of their ship so to speak.

There’s always a learning curve when you’re dealing with any new situation so owning your own unit in a condominium is no exception. The difference is that a learning curve mixed with naiveté and conniving developer are a potentially costly mix.

Due to those factors and plain out and out apathy on the part of some unit owners, our developer was the president of our association for the first two years of our existence.

Talk about putting the fox in charge of the hen house.

Naturally nothing significant got done over the next two years. Meetings were held without notice to the other unit owners, financials or meeting minutes were never made available for inspection and our building continued to fall apart under our very noses.

I contribute our failing to detect our perilous state of our business affairs on a few things. Primary was apathy---pure and simple. When you have a group of people who are used to renting and they become owners that old renter’s mentality dies hard. Not that that is a bad thing but when you’re a part of a condominium association, there are certain issues that are time sensitive in terms of warranties and the like. Sitting back and letting your condo developer shoulder responsibilities that everyone else should be taking an interest in is just plain foolish. Don’t worry; I count myself in the group of owners that simply let our developer guide our little ship onto the rocks.

For example, we became a condo association in the eyes of the State of Illinois in 2001. We had been writing checks for our assessments to our association since that time. Yet when the new board took over in early 2005, there were no bank statements or financial records that could be located since before June 2003. The question remains where we as an association had our accounts. We also don’t know if our developer and his partners (oh yes, he had partners) paid the assessments on the unsold units like they should have from the sale of the first unit.

Fun times on the south side, huh?

Secondly we as homeowners didn’t know our rights under the law. Once again, we simply were too trusting that someone other than ourselves had our best interests at heart. But there we sat with our heads firmly up our asses without a care in the world. Whoo boy did that come back to bite us---big time.

Now you’re probably wondering why I didn’t do anything about this sordid mess before it got out of hand. After my closing, I was in a bit of a financial mess that while not of my own making, was ultimately my responsibility. I fell behind on my assessments and wouldn’t you know it, the developer and his partners changed the rules for running as an officer on the board. Right before the first elections in 2002, they came up with rule stating that you couldn’t run for the board if you had unpaid or back assessments.

Brilliant---a masterstroke that shut me down for almost two years.

But you can’t keep a good woman down. I got my financial shit together so to speak and kept on the straight and narrow. I ran for the board, got on and you are now reading about the rest as fast as I can type.

Okay, you’ve heard most of the worst of the drama. I’m sure there are unseen and undiscovered issues that we have yet to make themselves known. Nonetheless I’ve hit the high notes about our problems. The best part of any melodrama is how fortunes are turned around and wrongs are set right.

Next: The road to recovery.

Thursday, August 18, 2005

South of Madison Street---Welcome to Woodlawn, Part I

As with most paths to hell, everything started out with good intentions.

I saw a beautiful property; it had the space I was looking for at the price I could afford with almost limitless potential to increase in value. What’s not to like? Yet when the red flags were waving, I ignored them---blew 'em off to nerves. Discounting the common sense that has saved me from many a hard lesson over the years. Obviously I picked the wrong time to ignore my "inner voice."

I should of know what I was in for when I didn’t have a completed kitchen or bathroom three days before closing (November 15th 2001) even though the sales agreement was signed on August 3rd.

When I walked in with both my home inspector and realtor and saw gaping unfinished maws where the bathroom and kitchen should have been a screaming meltdown ensued.

Oh baby, it was on like Donkey Kong.

Future brides fighting at the Filene’s Basement bridal sale is no comparison.

The worst meltdown you’ve ever seen any woman have can only be termed as “mildly annoyed” on my personal scale that day.

When I walked in and saw that my unit wasn’t finished must less ready to inspect. I yelled so loud and so long with so much language unsuitable for a woman that six workmen immediately left the premises.

The Metro Pro sales agent confrontational. She had gumption to ask me why I needed an inspection in the first place. My realtor who was talking me down out of my blind rage saw me making a fist and hurriedly sent me to sit in the car.

For brevity's sake I’ll fast forward a bit. The inspection was completed, I closed, I moved in to what I thought was a beautiful unit with semi wet floors that were hurriedly varnished---and not well might I add.

The red flags were practically unfurling themselves to spell out the message, “Don’t buy this place, dumb ass!” Kind of like the robot from lost in space warning where he flails his arms screaming, “Danger Will Robinson! Danger!” Yet my rational mind would not cede to my irrational one and the deal was done.

It’s all so clear now---so crystal clear---why wasn’t it clear then?

Wednesday, August 17, 2005

Home Owning Ain't Easy---Welcome to My World

It’s not even noon in Chicago and I already want a drink. A big huge whopping make me forget all of my problems drink.

This condo thing has got me in a tizzy.

The amount of negligent work done by the developer of our condominium association simply boggles the mind. Our three year old association has been faced with soliciting bids for the construction of a brand new porch system, securing financing and levying a special assessment. Note I said that our association is only three years old---those porches should have been replaced with the initial rehabilitation of the building. It seems that the more we think we have our building issue(s) under control; the more construction defects rear their ugly heads.

Here I am getting ahead of myself as usual. Let me start from the beginning of this sordid mess so you can fully understand the situation.