For Some Associations, an Easy Source of Cash
July 5, 2007
By Pamela Dittmer McKuen
Special to the Tribune
Community associations looking to raise cash can do it by shopping. A new Web site called CondoPerks rebates to registered associations a percentage of whatever their residents buy. And it's free.
"It's basically a loyalty program for associations," said founder Blagica Stefanovski, who launched the site this spring. "They can use the money to build reserves or make improvements or for whatever they want. It's a way of contributing to the financial health of the building and keeping assessments down."
About 140 merchants, including Nordstrom, The Container Store, iTunes and Orbitz offer rebates through the site. The amounts vary, but Red Envelope kicks back 6 percent and iTunes gives 3.5 percent. Stefanovski serves as the liaison between the merchants and the associations, and issues the checks.
Among the participating associations are Tandem Lofts Condominium Association and State Place Condominium Association, both in Chicago.
"I thought it was a great idea because most people I know use shopping portals, especially around the holidays, because they get miles or whatever else," said Tandem Lofts' president Deb Soehlig. "My building has healthy reserves, but I have a lot of friends who live in buildings that don't. This is basically a free way to do it."
She's also impressed by the quality and assortment of merchants.
"A lot of them are stores I shop online at pretty regularly, anyway," she said.
"CondoPerks is just such an opportunity where residents can bring funds into the association by simply changing their standard online purchasing behavior," said State Place president Brian Fernald.
Stefanovski got the idea for the site after buying her first condo at State Place two years ago. She attended a meeting at which an accountant said assessments had to be raised significantly to keep up the building and its amenities. Hoping to reduce that need, and with previous career experience with other loyalty programs, she set one up for her association. Then she went into business.
"I'm paying 43 percent more for my assessment than I did in May of 2005," said Stefanovski.
Associations can sign up online at condoperks.com. Stefanovski creates a home page for them, along with space for building announcements and neighborhood news. Then residents, as well as their friends and family, follow the links to accrue their rebates. No contracts are signed and no personal data are collected.
From a legal perspective, the program doesn't expose the association to liability if the owners use it, said association attorney Howard Dakoff of Levenfeld Pearlstein in Chicago.
"However, the practical issue with the website income is that the association cannot rely on steady income, so the budget should not be drafted to be reliant on it," he said.
The money is tax-free as long as it is used for expenses or, after passing the appropriate resolution, set aside for reserves.
How much money an association can earn depends on how much the residents spend. When one association told Stefanovski that they were in the middle of a $1 million special assessment and that they could not raise that amount of money in a year by shopping, she said, "Maybe not, but you can put a dent in it."
"I expect a very small return, but it will be large enough to help host holiday parties or add decorations to the garden," said Fernald.
"We're looking at it as bonus money rather than planning our reserves around it," said Soehlig. "If we get $600 a year, that $600 will buy plants."
Whatever the amount is that much less the residents have to come up with, she said.
"It feels like the right thing to do," she said. "It's a way of contributing to the community. It's a better cause than getting miles I'll probably never use."
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