Kate Liebelt moved into her condo at Park Millennium — a posh, towering 480-unit building in the Loop — in 2020 and was looking forward to enjoying the property’s pool, location and vibrant community.
She also felt a sense of security knowing she could rent her two-bedroom unit if her work or personal life changed.
But Liebelt and other residents said problems have started to surface — from broken elevators without a clear maintenance timeline to changes in assessment fees. And owners of larger, more expensive three-bedroom units have more voting power, according to the building’s bylaws.
“We feel like it’s a form of voter suppression,” said Adnan Hassanali, who has owned his one-bedroom unit for nearly 10 years. “If you have a one-bedroom or studio or a two-bedroom, essentially, your vote is not as important or it won’t count as much as someone with a three-bedroom.“
Omar Malik, attorney at Kovitz Shifrin Nesbit, said it’s common for voting to be based on a percentage of ownership, which is set by the property’s developer and outlined in the state’s Condominium Property Act. He also said “it makes sense.”
“For example, owners pay their assessments based on percentage of ownership. So, let’s say a penthouse owner has 3% of ownership and a studio owner has 1% of ownership. The penthouse owner is paying three times the assessments of the studio owner, and his or her vote counts for three times as much,” Malik said.
Issues with condo boards or a homeowners association are surprisingly common, but there are ways to spot a troubled building, said Lou Lutz, chief operating officer of Chicago-based building management firm First Community Management.
Homebuyers interested in purchasing a condo can take several steps to protect themselves, according to industry experts, and there are ways for condo owners like those at Park Millennium to mitigate any issues with their board.
Look for documents
Potential buyers can request copies of meeting minutes, the building’s bylaws and other rules.
Bona Doci, an attorney at O’Flaherty Law, said it’s important to see if meeting minutes are detailed and that the board is meeting regularly.
“You don’t want to buy into something that’s disorganized. You’re ripe for potential problems and liabilities,” Doci said.
She also emphasized that not all HOAs are the same, with some more restrictive than others.
By law, condo associations and HOAs are required to hold board meetings four times a year, according to Malik.
“If you request meeting minutes and you are told there’s no meeting minutes, or they haven’t had any meetings in a while, that is probably an indication that the board’s not meeting regularly,” Malik said.
Follow the money
Building reserves are a good indicator of the overall health of an HOA, Malik said.
Some buildings might also have a reserve study on file, which provide greater detail of the building’s financial health. Potential buyers can ask for any reserve studies as part of the buying process.
“[Reserve studies] will help provide an idea of if the reserve fund is adequately funded and of any upcoming capital expenditures and maybe a breakdown of the useful life of various components in the building and when you should anticipate replacing them,” such as elevators, Malik said.
Doci said it’s essential for buyers to ask if assessments have been paid and are up to date.
“There are situations where, if the assessments are unpaid, the buyer will be responsible for a certain amount,” she said.
Hikes in assessments over the last few years might indicate a troubled building, Doci said, and check for any planned special assessments that could increase an HOA fee such as “replacing the roof or other big-ticket items that ... a new buyer might not expect but will still be liable for.”
Liebelt said when she purchased her two-bedroom condo the monthly assessment fee was $883. Now she pays about $1,067. Hassanali and Patel pay about $680 and $618, respectively. Resident Clara McIntyre pays a $700 assessment for her one-bedroom unit, a $240 increase over four years.
Rogelio Lasso, a member of Park Millennium’s board of directors for more than 10 years, said he pays more than $1,600 in assessments for his three-bedroom condo. He also said Park Millennium has avoided large special assessments.
“Our guiding light is always: ‘What can we do so this is what is best for most of the people in the building?’” he said. “We cannot make rules or make decisions based on how a few people are going to be affected. … That’s the reality of living in a community. You have to think of what is best for most people, not necessarily for the people who complain the loudest.”
Building inspection
Buyers should check for cracks in the walls, water damage, dirty common spaces and even take a peek into the parking garage.
“If you see the building’s in bad shape and you notice when they turn over the documents that they don’t have a lot of reserves, it’s a safe bet to think that this is a property that’s not being well managed by the HOA or they’re going to need to do repairs,” Doci said.
Building records will show if a property has any code violations and how quickly those violations were corrected. Buyers and residents in Chicago can look up a property’s records through the city’s Department of Buildings website.
“If you see an issue that first cropped up a couple years ago and it still hasn’t been closed out by the city, you may want to dig a little bit deeper,” Malik said.
Be social
Current residents of a building can be a good source for sussing out concerns, experts said, so make a point to ask them about their experiences before you buy.
It might be worth trying to figure out how many units in a building are rented versus owner-occupied, too.
“Sometimes it’s helpful to know how many units are rented in the building, because if you’re going to buy into a unit where the vast majority of units are rented, I think we probably expect a different environment than one where it’s all owner-occupied.” Malik said.
A board gone rogue
If residents find the condo board is not meeting regularly or being transparent about its meetings, a gentle reminder to follow the rules can sometimes help. Doci said to address conflicts, owners can go through the process laid out in the building’s bylaws.
“If you’re having issues, the first step is to just try to communicate with your neighbors, with your HOA board,” Doci said. “A lot of times they’re not receptive, and that’s where it unfortunately ends in litigation. But again, it’s so important to review the rules and the regulations to make sure you know what’s expected of you so that you’re able to protect yourself in the best way possible.”
If residents can’t get their concerns addressed through official channels, the best option might be to run for a board position, Malik said.
“All board members are volunteers,” he said. “So for owners having issues, I would say volunteer. That owner should try to get on the board because when you’re on the board you can be part of the change or at least you can get the full picture.”
Liebelt, along with residents Hassanali, McIntyre and Nish Patel, said their issues highlight the power condo board members wield and how that power can become a headache for owners.
Their concerns recently came to a head when some owners approached the board about modifying the building’s cap on the number of units that can be rented. Hassanali said the board declined to “entertain the idea.”
“There are 138 units that are currently rented, but then there’s another 122 that are on the waitlist,” he said. “That’s upward of 54% of the building that’s in favor of rentals. When you have more than half of the building that’s kind of pushing for rentals, why is the idea not even being entertained?”
Board member Lasso said he hasn’t seen much interest in changing the rental cap. In response to the more than 100-person wait list, Lasso cited concerns about having too many investors.
“When we bought our unit there was no cap, and at one point we had over 40% of the units being owned by investors and being rented out,” said Lasso, who has lived in the building for more than 20 years. “People who rent simply don’t care as much about their unit, and they don’t care as much about the common areas because they don’t have that pride of ownership.”
For condo owner McIntyre, the headache of fighting with Park Millennium’s board has been a lesson on what to do next time around. She said as a young professional and first-time homebuyer, she has a better understanding of what to ask.
“I now know how important it is to ask lots of questions and really understand the HOA — who serves on the HOA; how is the HOA governed — and building management,” she said. “What is the culture of the management office? Are residents happy with the property manager or management company? And ask to see the results of any resident surveys, before signing those closing documents.”
