Retired Chicago condo owners could soon lose their home to deconversion

By Deborah Goonan, Independent American Communities

debgoonan@icloud.com

Less than 2 years after they decided to retire in their Chicago condo, Eddie and Colleen Soto were shocked by news of a vote to sell the building to investors for a deconversion.

The Sotos have owned their condo a 2 East Oak since 2008. Except for the year they rented their unit to a colleague, they enjoyed their Windy City condo on weekend getaways from their hectic careers.

The Sotos sold their home in Flint, Michigan, in 2017, in the midst of the city’s struggle to deal with lead contamination in its water supply.

Eddie is recently retired from Genesee County Sheriff’s department. Colleen continues her career as a licensed social worker.

On April 16, 2019, at a Town Hall meeting, 2 East Oak owners were informed that their board of directors signed a “Letter of Intent” to sell their building “as is” to ESG Cullen for $92 million.

If the sale goes through, the buyer intends to terminate the association and deconvert the condos to apartments, under its ownership.

Colleen Soto says that their condo 2 East Oak is now their primary home, in which they planned to live out their retirement years.

She also says many of her neighbors are elderly, and have owned their condos for many years. Some of them are under medical treatment for cancer.

Of course, they are devastated about the possibility of losing their homes, and the prospect of finding affordable replacement housing.

 

What’s a condo ‘deconversion?”

In a condominium deconversion, all unit owners agree to sell their units, according to the terms of a bulk buyer’s sale agreement. The sale price of each unit is based upon its proportional share of the total assets of the condominium association.

In the state of Illinois, the sale of a condominium association must be approved by at least 75% of owners.

In September, the City of Chicago passed its own ordinance increasing the deconversion approval threshold to 85% of unit owners.

Once a condo association collects the required number of votes in favor of a bulk sale, the process of termination and deconversion begins. All owners must sell their units to the buyer, even if they voted NO on the sale agreement.

 

The vote

Colleen says that at the April Town Hall meeting, attorney Kelly Elmore of Kovitz Shifrin Nesbit, the association’s legal counsel, explained that unit owners would receive a ballot to vote for or against the sale.

According to Colleen, owners were told in June that the board was still trying to locate owners of 30 units, who had not returned a ballot.

Then in July, the board of 2 East Oak notified owners that 76.1% of ballots were cast in favor of the sale. Since the vote occurred prior to the new Chicago Ordinance, attorney Elmore and the board claimed they had collected enough ballots to move forward with the sale.

Shortly following that announcement, Soto says that the management company shut down online communication via the association’s ‘Building Link’ platform.

 

Owners ask to see the ballots

With such a narrow margin of approval, the Sotos asked to view the ballots cast. For obvious reasons, they want to validate the vote. And Illinois condominium statute gives them that right.

According to the Illinois Condominium Act, owners the right to review and copy official records of the association, including voting ballots.

Here’s a copy of Colleen Soto’s request from July 22, 2019:

2 east oak Soto request to see ballots

The condo manager required the Sotos to sign a document promising not to disclose information on any association documents they request.

2 east oak condo assn nondisclosure form

But the ballots were never provided to the Sotos, despite repeated requests and reminders.

Then on November 6, Colleen submitted to the 2 East Oak Management office a $57 check to cover the cost of copying ballots and proxies from the June and July meetings.

But Soto says that neither KSN, the community manager, or board directors have provided access to the ballots.

Additionally, Soto explains, that the terms of three of the 2 East Oak Board members — President, Vice President and Secretary — expired in July 2019, yet no annual meeting or election has been scheduled.

Colleen Soto tells IAC that the Illinois Attorney General is now involved. “They agreed to assist this morning.”

Colleen is disappointed that 2 East Oak condo association is “refusing to comply with the Illinois Condominium Property Act (765 ILCS 605/1. et.seq.) (“CICAA”) and the Illinois General Not for Profit Corporation Act (805 ILCS 105/1 et.seq), as well as common law duties. Specifically, Section 18.4 of the ICPA states a Board must exercise the care required of a fiduciary of the unit owners.”

The Sotos and other concerned condo owners have hired Attorney Todd Stephens to represent their interests, as they attempt to determine whether the board can legally proceed with the sale to ESG Cullen.

 

About 2 East Oak condo association

39-story high rise on Chicago’s Gold Coast, with 304 units priced from $136,800 – $228,000. Originally constructed 1969. Most of the units are currently leased, with monthly rents ranging from $1,600-$2,100.

 

A special memorial

Colleen Soto requests that this post be made in memory of her nephew, and in honor of active military, veterans, and their families:

In 2015, Marine Lance Corporal Matthew J. Determan, died at the age of 21, in a crash landing at Bellows Air Force Station, Waimanalo, Hawaii. Determan was deployed with the USS Essex Assault Carrier Group, 15 Marine Expeditionary Rapid Assault Unit. The Osprey air craft was carrying 22 members of the platoon when it crashed, killing Determan and one other Marine, Lance Corporal Joshua Barron, and injuring many others.

From a very young age Matthew wanted to be a Marine. He achieved his goal through hard work and dedication to his brothers in the 3rd Battalion, 1st Marines. Lance Corporal Determan’s awards include the National Defense Medal and the Global War on Terrorism Service Medal.

Matt’s parents, Michael and Charlesa Determan are also both Air Force Veterans. His sister Ashley and brother, Taylor continuesto struggle with this horrific loss.

Determan would often say it was his dream to protect his family and the the rights of all Americans.

Per Colleen Soto:

It’s ironic that … we find ourselves in the midst of a  battle with our 2 East Board of Directors and the Property Management Company for our HOA. They are denying unit owners our fundamental rights. The same rights Lance Corporal Matthew Determan put his life on the line for and his battalion trained so hard to protect.

Not only is our Freedom of Speech being violated but many of  2 East Oak condo unit owners are elderly, battling cancer and will soon be out on the streets. We never dreamed in America that we could lose our homes at the whim of the 2 East Oak Board of Directors.

♦♦