Requesting Your Association’s Federal Tax ID Number

Condominium and homeowner association board members and property managers are often asked for their association’s Federal Tax Identification Number.  Community associations in Ohio are not-for-profit corporations that are registered with the Ohio Secretary of State.  Just because an association is not-for-profit, however, does not mean that an association’s income is non-taxable; therefore, the association still may have to pay income taxes.  As a result, every association is assigned a Federal Tax ID Number, also known as an Employee Identification Number (EIN).  Similar to an individual's social security number, a corporation's Federal Tax ID Number is a unique number that government agencies and other institutions, such as banks, use to identify individual corporations.

When paying taxes, filling out mortgagee questionnaires, receiving payment from a bank on a delinquent account, or opening a bank account and/or certificate of deposit, associations are often asked to provide their Federal Tax ID Number, but many board members are unaware of the assigned number.  To obtain your  association’s Federal Tax ID Number, board members may either call the Internal Revenue Service’s Business & Specialty Tax Line at (800) 829-4933 or visit http://www.irs-ein-application.com.

Association Thief Released From Prison

After serving 44 months of a 51 month sentence in federal prison for stealing more than $3.4 Million Dollars from over 40 of Ohio’s community associations, former MultiVest Management owner Kathleen DeSalvo is being released today. By her production of fraudulent bank statements and online fund transfers, the losses related to Ms. DeSalvo range from a few thousand dollars to almost $300,000 per association, with at least four associations losing $250,000 or more. While Ms. DeSalvo may have “paid her debt to society,” the losses sustained to many communities will likely never be repaid.

Despite this alarming wake-up call for associations, many Ohio community association still remain vulnerable to financial threats. To guide association board members in making sound financial decisions, partner Darcy Mehling Good, authored a Kaman Report Article entitled “Safeguarding Association Funds.” This article provides 10 suggestions that boards should seriously consider to reasonably protect the community’s money including lock box systems, segregated accounts, proper insurance, and regular audits. Kaman & Cusimano, LLC service option clients can view the entire article in the Client Articles section of ATLAS. Please click here to log into ATLAS.

Aurora Management Theft Leads to Prison Sentence

As a result of her theft of over $1 Million Dollars, Tracy Reed was sentenced to seven (7) years in prison yesterday by Judge Judith Hunter in the Summit County Common Pleas Court.

Bob Kmiecik attended the hearing and reports that Judge Hunter appeared fully informed about the economic, emotional and other harm that Tracy’s theft caused for hundreds, if not over a thousand homeowners. The Judge had read all of the letters submitted by Board members and had reviewed the matter at length with the prosecutor and Tracy’s defense counsel.

In addition, she listened to statements presented in Court by two board members and allowed Bob to speak as well. Bob informed the Judge that not only had Tracy’s criminal acts caused harm to the associations and their owners, but that a “secondary loss” occurred when Tracy gave a “black eye” to her colleagues in the Professional Property Management industry. Bob noted that Tracy was well aware of the great harm caused by the Multivest loss, but that apparently she was not deterred by the 5 year Federal Prison sentence handed down to Kathleen DiSalvo.

Tracy spoke briefly and softly in her own defense and said “I have no legitimate excuse; I betrayed my “customers’” trust; It is a difficult business; It got out of control; I have no way to repay it; I have no way to make it right.”

In sentencing Tracy to 7 years out of a maximum of 8 years, the Judge specifically noted Tracy’s apparent lack of genuine remorse and rejected Tracy’s request for a couple of weeks to arrange for the custody of her children. Noting “we will take care of your children” the judge ordered Tracy to be “immediately” taken to jail as she was led out of Court in handcuffs.
Although the Court will issue a restitution order, it was generally agreed by the prosecutor, the Judge, and Tracy’s lawyer, that she does not have any substantial assets to satisfy the order.

Condo Associations Get Tough on Fees

The increasingly large, grassroots push for community association rights to delinquent fees is beginning to receive national attention. The May 25, 2011 edition of the Wall Street Journal features a story entitled “Condo Associations Get Tough on Fees.” The story features communities in Nevada and Florida that have taken proactive steps to collect delinquent fees as a result of new legislation in both states. According to the Wall Street Journal:

Condo associations, which have been struggling as troubled homeowners stop paying their condo assessments, are becoming increasingly aggressive about finding ways to recoup unpaid fees. And they have lawmakers on their side.

Closer to home, we are optimistic that Ohio lawmakers will similarly respond as a result of increased national attention and greater pressure from community association constituents. Legislators are still being sought to reintroduce the updated Ohio Community Association Preservation Act (formerly called the “Super Lien”).

In the meantime, Ohio community association continue to be aggressive in pursuing delinquencies by filing liens, foreclosing on properties, and requesting that a Court appoint a receiver to collect rent from a delinquent owner’s tenant. By following this strategy, Kaman & Cusimano clients have recovered over $3,972,802 over the last twelve months for Ohio condominium and homeowner associations.

To view the complete Wall Street Journal report, please visit:http://online.wsj.com/article_email/SB10001424052748704281504576327693591415736-lMyQjAxMTAxMDIwNTEyNDUyWj.html#articleTabs%3Darticle

Ohio Introduces Legislation Protecting Service Flags

Recently, the Ohio General Assembly introduced House Bill 189 that would affect all condominium and homeowner associations within Ohio. If passed, this legislation would prohibit all community associations, through their rules or recorded declaration provisions from restricting the display of blue star banners, gold star banners, and other service flags.

This prohibition would be in addition to the restriction on associations prohibiting the American flag already found in Ohio law. The intent of passing this bill follows the common sense approach to patriotic flags that Kaman & Cusimano has advised its clients to follow in the past.  In these times of great national pride, associations should consider permitting such displays of patriotism to honor those serving in the armed forces and their families here at home, whether or not required by law. While the board for a community association may implement reasonable restrictions how such flags may be displayed, just as they do now with the American flag, an outright ban would be unreasonable and may lead to angry, upset owners and even negative media attention.

HB 189 enjoys broad, bi-partisan support with two sponsors and 25 co-sponsors. As a result, there is a significant chance that it will be approved in both the House and Senate and signed by the Governor this year. If, for some reason, it does not become law, we still recommend that all Ohio condominium and homeowner associations create reasonable rules for permitting service members and their families to display these patriotic flags.

To view a full copy of the bill, please click here.

New ADA Pool Regulations Generally Don’t Apply to Associations

Recently, the US Department of Justice revised its Americans with Disabilities Act (“ADA”) regulations regarding pools. These new regulations require that public pools have sufficient access for the disabled, including ramps or lifts. Some pool companies have sent notices to community associations informing them of the new requirement, but neglecting to inform the association that the ADA regulations do not apply to them.

These new pools regulations are found in Title III of the ADA. Title III of the ADA applies to private entities that operate places of public accommodation, such as a hotel or local health club. As neither the association nor any individual owner is operating a place of public accommodation, Title III does not apply. As a result, community associations, generally, do not have to comply with this new requirement.

On the other hand, if your association opens your pool up to persons outside the community, then the pool must comply with ADA regulations. For example, the hosting of swim meets, selling of memberships to people outside the association, or providing swim lessons to people outside the community are all “public” activities that trigger the ADA requirements. If your association is conducting these types of activities, then the association must comply with all ADA regulations, including pool, parking space, and restroom requirements.

Again, these new ADA regulations do not generally apply to Ohio community associations because the association’s pool is reserved for the exclusive use of the owners and their guests. If you believe that your association is conducting activities that may subject the association to the ADA’s requirements, contact your association’s attorney for further analysis and information.

Impact of “Robo-Signing” on Association Foreclosures

Recently, there has been significant media attention regarding banks’ “robo-signing” procedures and the impact on pending foreclosure cases. In response, many Ohio judges have imposed strict new guidelines for banks and their attorneys to follow in an effort to ensure accuracy of loan documents. On Monday, the Columbus Dispatch reported that multiple Franklin County Court of Common Pleas judges have joined with other judges from across Ohio to require banks and/or their attorneys to file certifications that their documents are accurate, or the case will be dismissed.

In response to this news, many association board members and property managers have contacted our office questioning the impact on their associations’ pending foreclosure cases. To be clear, these requirements and the banks’ errors will not affect association foreclosures, provided the board followed Kaman & Cusimano’s recommendation to either file a foreclosure complaint or an answer and cross-claim.
Kaman & Cusimano has strongly encouraged its service option clients to be aggressive in pursuing delinquencies. To do so, the firm strongly recommends that an association file a lien and then either 1) file a complaint to initiate foreclosure proceedings when a balance become high, or 2) join take action through the bank’s foreclosure by filing and answer and a cross-claim. Using this approach is a proven method for protecting the associations’ interest and enabling the association to proceed, if necessary, to a sheriff’s sale. In fact, by following this procedure, Kaman & Cusimano collected over $3.97 million, including the costs of collection and attorney fees, for its clients in 2010.

Again, when an owner fails to pay, filing a lien, then a complaint or an answer/cross-claim enables the association to push the foreclosure, continue the court proceedings, and order a sheriff’s sale regardless of the status of the bank’s claim. The owner has no choice but to pay the association to save his/her home. If your association has aggressively pursued its delinquent accounts and followed Kaman & Cusimano’s recommendations, the banks’ foreclosure problems will not affect your association’s ability to obtain a judgment on its claim and ultimately order a sheriff’s sale.

NPR Columbus - Condo/HOA Special Report Part II

For those of you who were unable to listen live to Kaman & Cusimano, LLC Attorney Marie Rutkowski's appearance on WOSU Columbus, the show's archives are now available online.  To listen and watch the round table discussion, please visit:

http://www.ohiochannel.org/MediaLibrary/Media.aspx?fileId=128655&returnTo=Collection

On Wednesday, January 12, Marie appeared with host Ann Fisher on “All Sides with Ann Fisher.” The topic discussed: “Condominium and homeowner association finances. Are condominiums still a good investment?”

NPR Columbus – Condominium/HOA Special Report

We are pleased and honored to announce that attorney Marie Rutkowski will be appearing this week on WOSU Columbus. On Wednesday, January 12, from 10 – 11 AM, Marie will appear with host Ann Fisher on “All Sides with Ann Fisher.” The topic to be discussed: “Condominium and homeowner association finances. Are condominiums still a good investment?” The show will address how condominium owners and condominium and homeowner associations can deal with the challenges of the foreclosure crisis.


This is a great opportunity to highlight ways that central Ohio association board members and property managers have worked tirelessly to protect our communities. To listen, please either tune your radio to WOSU 89.7FM or listen on the internet at www.wosu.org. If you are unable to listen live, please stay tuned to Kaman & Cusimano, LLC’s Ohio Condo & HOA Law Blog at http://www.ohiocondolaw.com/ or http://www.ohiohoalaw.com/ after the show for information on how to listen to an archived version.