Tag Archives: Renting

Condo Rental Blues

A.B. from outside of Connecticut writes:

Dear Mister Condo,

I rent a unit in an 8-family condo building. The day I got my keys, three neighbors knocked on my door and told me the previous tenant moved out because they called the police on her four times for noise. They proceeded to list noise complaints and told me they could hear me already (I was cleaning! I had not moved in yet). They told me the previous tenants talked on the phone loudly after 10pm, banged the water off and on, and slammed the cupboards – this is why they called the police.

Now I’ve been living here for two months and I can hear everything the complaining neighbor (below me) speaks – clearly – and I can hear her snoring. I don’t think there is sound proofing if I can hear her talking through my floor. Then this morning at 6:00 am the neighbor across the hall had a fight with an unknown woman on the landing outside my door and I was a bit frightened.

I told my landlord about their initial complaints. Should I tell him about the fight? He lied to me as to the reason the previous tenants left (he told me they broke the lease because they had financial troubles) when the real reason was the downstairs neighbor called the police on them four times and they were essentially forced out. I am in a year lease and I am thinking I made a mistake moving here. Advice?

Mister Condo replies:

A.B., I am sorry that your new rental is looking less than ideal. The reality is you are a new tenant and a new member of this close-knit community. They have already shown you some of their quirks and you may or may not fit in with this group of folks. The good news is that you will know in short order if you will want to stay there more than 12 months. If you enjoy your experience, you’re good to go. If you find it unenjoyable, there is no need to renew your lease. If you let your landlord know you aren’t planning on renewing your lease and that you are even willing to leave the lease early, your landlord can begin marketing the unit sooner and may find a renter to replace you before your lease ends, which sounds to me like that is what you want. If you voluntarily break your lease without your landlord’s agreement, you may still be on the hook for your rent and lose your security deposit. That isn’t what you want. My advice is to give it a try. If it doesn’t work out, try working with your landlord to end your lease early. If that doesn’t work out, don’t renew your lease and hope for a better group of neighbors next time. Good luck!

Apartment to Condo; Now Back to Apartment

N.P. from Illinois writes:

Dear Mister Condo,

We bought a condo in 2010 in a large apartment complex that was going condo right when the recession hit. It was an investment and we rent it out. Not many condos were sold, the prices never dropped in the recession. Even now many (not sure how many) of the units are still rented out by the developer. Now we have received a letter saying that the developer wants to buy back our unit and NOT be a condo development. The letter is friendly, and says nothing about what happens if we don’t want to sell. We’ve had one tenant in there this entire time (with different roommates) and been very happy with this investment. Do you know what the laws are regarding this situation?

Mister Condo replies:

N.P., dissolution of condominiums varies from state to state. Just as when the project filed to become a condo, a new filing will be made to dissolve it. I am not familiar with the specifics of Illinois law regarding the dissolution of a condo but I imagine it is similar to other states. Typically, unless court ordered (which happens when an association fails or defaults), a petitioner sends in the required paperwork to dissolve the association. There is usually a majority or full 100% agreement required by all with an interest in the association. That can include mortgage holders as well as unit owners. This is a very legal action and you will most certainly wish to hire an attorney to guide you.

I found this link on dissolution of non-profit corporations in your state to be of use: http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=080501050HArt%2E+12&ActID=2280&ChapterID=65&SeqStart=10900000&SeqEnd=12900000

I can see where the developer wants to stop the bleeding and the polite letter was likely an opening attempt to gauge your interest. The reality is that if there are many unsold units in the condo, it may fail due to lack of funds from common fees to pay expenses. If that happens, you could see a creditor sue the association and have a judge dissolve the association or put it in receivership. You don’t want that as that could be quite costly for all involved. If the developer wants to convert back to apartments, you should look into how best to protect your investment. It is likely that a smooth transition could actually help you out in the long run. Good luck!

Who Sets the Condo’s Percentage of Rental Units?

J.H. from New Haven County writes:

Dear Mister Condo,

Supposedly, the percentage of renters in a Connecticut condo association has been changed to allow up to 50% of the units to be rented. If this is correct, where can I find a copy of the law, and who sponsored it? The more renters allowed will increase our insurance costs, change the demographics of the community and discourage most people from buying units in the complex.

Mister Condo replies:

J.H., I am not aware of any law in our state that allows up to 50% of units in any condo association to be rented. Rental restrictions or rental caps are usually outlined in the condominium’s governing documents, if at all. Many associations refer to FHA guidelines (set by the federal government, not the states) so they can maintain or obtain FHA qualification for mortgages to be obtained by unit owners. If associations allow more rentals than the FHA guidelines call for, it becomes unlikely that unit owners will be able to get mortgages within the association as the association as a whole becomes ineligible in the eyes of the FHA, and, therefore, those banks that offer FHA-backed mortgages. All that being said, you need to look at your governance documents to see what, if anything, they say about limiting the percentage of rental units. If the documents are silent on the subject (many are), you might like to see what restrictions may have been placed on the units over the years. Keep in mind that the entire body of unit owners needs to vote on such restrictions. I agree with your assessment of what happens when communities become dominated with rentals However, there are many community associations where investors have purchased a majority of units with the only intention is to rent them out and eventually sell the units at a profit. If you live in such an association, rental restrictions would be hard to implement. Good luck!

Costly Condo Leasing Restrictions

R.F. from Texas writes:

Dear Mister Condo,

Years ago (before I bought my condo in Texas) the HOA passed a Standard Operating Procedure (SOP) and made it mandatory that all rentals go through their onsite management. If I rent my unit out on my own I must pay the full 40% fees + a penalty. Is this even legal for them to force me to use them?

Mister Condo replies:

R.F., leasing restrictions such as the one you have described are not uncommon. Using a particular agent for leasing agreements is one way the Board of the HOA can be certain that all leasing rules and regulations are adhered to. The penalty for not leasing through their agent is designed to discourage the practice and, at a 40% fee plus penalties, I imagine it is particularly effective. While it does seem unfair that you don’t have any other reasonable option for renting your unit other than by using the onsite management company, my guess is that the onsite management company is an excellent and efficient way to keep your unit rented out. Since anyone interested in renting will ultimately end up at their doorstep, there is a greater likelihood that they will rent it out quicker and to a qualified renter. All the best!

Providing a Copy of Condo Lease Agreement is S.O.P.

G.D. from New York writes:

Dear Mister Condo,

My question is “Are we, as owners, required to give a copy of our lease agreement with a tenant and her Social Services information to the board?” It’s not a co-op. We own our unit and I feel her information is not their business. Am I right? Thank you.

Mister Condo replies:

G.D., I do not think that you are correct in this matter. Keep in mind that I am not an attorney nor am I an expert in New York community association law. For a legal opinion, kindly consult with a locally qualified attorney. As a general rule, the Board of any common interest community has a right and a need to know who is living in their buildings. There are generally rules on leasing that require a unit owner who is leasing their unit(s) to provide a copy of the lease with all parties named to the Board or managing agent so that there is a record of who does and doesn’t belong on the property. There are sometimes restrictions on the use of common amenities on leased units as well and the lease is the legal document that may allow a tenant to use things like a workout room or community pool or clubhouse. The lease may also restrict the owner of the unit from using these same amenities during the time that the lease is in effect. There are also insurance issues, emergency contact issues, and more that require copy of the lease to be in the Board or managing agent’s possession. There are also restrictions on short-term rentals or AirBnB type arrangements. Providing a copy of the lease also shows that you are not in violation of the covenants you agreed to when you purchased. Finally, there are many common interest communities that place a cap or limit on the number of units available for lease at any given time. By providing a copy of the lease, you are demonstrating that you are not in violation of these provisions as well. If you find that the Board or managing agent has used any of the information in the lease in an inappropriate manner, you may have recourse. Other than that, providing a copy of the lease is really in the best interest of you, your tenant, and the association. Good luck!

Is Condo Board Responsible to Provide Onsite Parking?

S.K. from outside of Connecticut writes:

Dear Mister Condo,

Are condominium boards required to provide on-site parking for residents or renters?

Mister Condo replies:

S.K., no, on-site parking is a function of use of the common areas, which are under the control of the Board as they have been elected by the association to manage the common assets of the association. Many communities, especially urban-based associations, simply don’t own any land or garage space where parking can be provided, leaving the job of finding a or renting a parking space up to the unit owners or renters. Unless otherwise stated in your deed or governing documents, the Board is not obligated to provide this amenity. Good luck!

Noisy Condo Neighbor Ruining Renter’s Peace and Quiet

P.M. from outside of Connecticut writes:

Dear Mister Condo,

I am dealing with a neighbor at condo. I am a renter; she is not. She is loud and noise every night until at least 1:00 a.m. The owner I’m renting from is lazy. I can’t wait until May to leave next year. I tried talking to this neighbor and had to call police twice. The manager of the association says they will send a letter but the problem still persists. Recently, a picture fell of my wall and broke. She stomps on her floor on purpose and intentionally drop loud objects. I am so angry I can’t sleep. What can I do?

Mister Condo replies:

C.J., lazy or not, your landlord has a responsibility to provide you with a rental unit as outlined in your rental agreement. Most likely, that agreement included a copy of the rules and regulation for the condo association where you reside. Inside those rules, there are the steps for complaining about another unit owner or resident that isn’t following the rules. Typically, a report is made to either a Property Manager or directly to the Board. There are usually rules about acceptable noise levels, quiet hours, and peaceable enjoyment for unit owners. As a renter, you may or may not have the ability to directly lodge such a complaint, meaning it may need to come through your landlord. If your landlord refuses to support you in this effort, he may be breaking terms of your lease which may leave you the opportunity to end the lease early. However, if you decide to break your lease early you may be out of your deposit or create a legal battle between you and your landlord. My practical advice is for you to motivate your landlord or have him give you the power to work directly with the Property Manager or Board to bring about a resolution. Understand that it may take time and as the months go by towards the end of your lease, the simplest solution may be to not renew your lease. If you decide to break your lease, speak with an attorney to see what legal and financial consequences you may be incurring. It is an unfortunate circumstance to say the least. However, in tight living spaces as many condos offer, an unruly neighbor can make living there unpleasant. Good luck!

Hardship Case Causing Condo Rental Cap Chaos

H.S. from outside of Connecticut writes:

Dear Mister Condo,

Our association passed an amendment to the CC&R’s capping the rental of units at 17. We have 66 units. This was done in 2006 to help us keep FHA funding. Our last management company let it slide, so our new management company has gone through the hoops and we are now FHA approved again. We have a clause that allows a temporary hardship case which allows renting of a unit out for 1 year and 2nd extension of 6 months. Someone has married and his wife has 3 kids and lives in a house. He bought the condo just before the big collapse in prices. Now he cannot sell it for what it is worth. His wife was laid off. He wants to claim hardship to rent for a year. He said we had until a certain date to give him an answer for a court filing. Well we finally decided to let him do it after conferring with our lawyer. But we waited past his deadline. We have a rental list that he could get on. He has not signed up. If the current person who is number 17 on rental list and cannot get his unit rented within 60 days, he falls to bottom of the rental list. The next person on the rental list moves up to rental position. This person with the hardship case, if he signed up, would now be able to rent the 1 bedroom unit as a regular rental now, if the other 4 folks on the list allowed him to skip over them to be 1st on the rental list. Then we would be back to 17 units rented and no hardship case. This way we won’t lose FHA funding. Some folks are saying FHA is now allowing up to 50%. We are considered the old school rule of condos. I don’t want to take a chance of going over 17 units if I can help it. Will we be in trouble being over the 17 units with this hardship case?

 

Mister Condo replies:

H.S., your adherence to FHA rules while trying to accommodate a unit owner who has fallen on hard times is admirable. However, since you have already involved the association attorney in these proceedings, my best advice is to continue to seek legal advice to guide you through these murky waters. While hardship cases tug at my heartstrings, condo associations are businesses and do not have the luxury of caring about individual unit owner’s unique situations. It sounds to me like you have some very reasonable rules in place about rental restrictions. They have been in place since 2006 and, I am assuming, are in compliance with your state laws on rental caps within community associations. The unit owner’s lack of ability to sell the unit for what it was purchased for is not the business of the association. The collection of common fees from that unit owner and the enforcement of the rental restrictions and other rules of the association are the concern of the Board. If your true concern is FHA funding eligibility, you would be wise to speak with an expert in that area. I am not an expert but I would agree that the current standard of 50% is accurate as of the time of this writing. As your question so easily points out, the FHA changes the rules so today’s answer may not be true tomorrow. There are other reasons for maintaining rental caps, including quality of life for unit owners. Additionally, if you do wish to change the rental cap restrictions, you will need to hold another vote on the matter.

Subletting the Condo is Against the Rules but Who Can Sue?

M.B. from outside of Connecticut writes:

Dear Mister Condo,

I am about to enter a legal dispute with the inspector that performed the inspection of my condo prior to purchase. I currently live in the condo with two roommates. The Master Deed states that any lease or occupancy agreement should be in writing and should apply to the entire unit, not merely a portion thereof. There are only 4 units in the condo association and they all know that I live with roommates. No one has a problem or intends to take action against me at this time. For legal purposes, can I get around this clause by creating a lease that encompasses the entire condo with a total rent due each month for the entire unit vs. separate bedrooms?

Additionally, can someone outside the condo association, such as the inspector, file a claim against me for violating the Condo Bylaws? Would that hold up in court if the other unit owners/Condo Association members do not wish to take action?

Mister Condo replies:

M.B., I am sorry you find yourself in this somewhat precarious situation. The term for what you are doing is subletting and many condo association documents do not allow for such activity. There are a variety of reasons for this but suffice to say that if your association has a clause that prohibits you from doing what you are doing, you are on shaky ground here. The good news is that it is up to the association to take action against you should they choose and, from what you have stated here, they aren’t interested in doing so. Unless there are local or state laws forbidding the action of subletting (uncommon, in my experience), you and your roommates should be fine. I am not sure how the inspector of your unit fits into this equation as inspectors are typically charged with the soundness of the structure and your issue has nothing to do with that. I am not aware of anyone other than the association being able to take any action against you that violates the condo’s governing documents as they would not have the authority. However, if local or state laws are being violated, that is another story. If you are sued by anyone, my advice is to hire your own attorney and counter the suit. From what you have told me, you would likely prevail against anyone other than the association. Keep in mind that I am not an attorney nor am I an expert is your local or state laws regarding leasing and subletting. For a proper legal opinion, seek the counsel of a qualified local attorney. Good luck!

Is Condo Landlord Liable for Illegal Actions by Tenant?

M.J. from outside of Connecticut writes:

Dear Mister Condo,

Is the condominium unit owner responsible for their renter’s theft of property of another unit owner’s unit?

Mister Condo replies:

M.J., thanks for writing and I am sorry that your tenants have put you in this position. The short answer is “it depends”. What it depends upon is local and state law that govern such issues. As a landlord, it is generally held that you are not responsible for anything that your tenant does. However, if you don’t have a proper lease in place or if you have housed a known felon you may have some liability for their actions. You should really speak with an attorney to determine your liability based on local laws. Also, if you are named in a lawsuit by the neighboring unit owner who was the theft victim, you may have no choice but to defend yourself. My guess is that as long as you have a valid lease to show that you were not the unit occupant but merely the landlord, it is unlikely that you will be found responsible for the actions of your tenant. However, I would advise against renewing the lease of a tenant that is found guilty of such a crime. All the best!