V.F. from Connecticut writes:
Dear Mister Condo,
An Investor just signed a contract to purchase a unit in our complex, we have a bylaw that requires an owner to own a unit for 8 months before “requesting” to lease their unit. Exceptions can be granted for HARDSHIP situations. The unit that was up for sale was being leased by the owner. The owner asked for a “hardship” exemption to sell…. ridiculous in a “seller’s market”….the Investor who intended to purchase the unit also asked for a “HARDSHIP” exemption in order to keep the lease approval and allow the tenant to remain. This goes against any normal thought. INVESTOR & HARDSHIP doesn’t even belong in the same sentence. The Board of Directors (only 4 people and we should have 9) voted to except this “Hardship” claim and allowed the current tenant to remain. I ask you how is it an Investor just buying a unit could possibly be in a hardship situation before the closing. I believe this “deal” was already approved before this UNIT even hit the market. We have a cap of 15% investor units. This I think is wrong on many levels for our community, what do you think do I have any legal recourse?
Mister Condo replies:
V.F., I am sorry that you find your association in this questionable situation. Since the Board has the ultimate authority to grant the request, and they seem to have done so, there really isn’t too much you can do about it. I am not an attorney and offer no legal advice in this column. You may wish to speak to a qualified attorney if you feel you have a legal case against the association but I am not sure I understand how ownership transfer of a unit that was already rented causes you or the association any harm. At the end of the day, “hardship” can be interpreted as the Board sees fit since there is no definition of hardship spelled out in your governing documents. It is a subjective word, open to interpretation. One interpretation may be that forcing the renter out so the unit could be sold would cause a hardship for the renter. Regardless, as the elected representatives of the association, the Board makes the business decisions. If you are unhappy with the Board, your best alternative is to elect new leaders at the next election. Good luck!
1 thought on “Board Approves Investor-Owned Condo Unit Sale as Hardship”
If there is a lease with remaining time on it, the tenant would most likely be able to remain to the end of the lease, even if the owner/landlord changed (at least that is how it is in CT). One of the risks with rental restrictions is that the hardship exemption component of rental restrictions in condos is a risk area for lawsuits, since there is a huge amount of discretion to the board, but would still need to be within bounds of reasonable standards of exercising that authority. A 15% cap is a low enough threshold that there may end up being more requests for exemptions than complexes that adopted restrictions with a higher percentage allowed. I would guess what could have been (or may have been) done is for the board to only allow the exemption period until the end date of the current lease, then that tenant is not allowed to renew, and an 8-month period would apply to the new owner at that juncture. Our complex tried to pass a rental restriction, the association attorney said owners have to be able to trust the board that they will make appropriate decisions when it comes to hardship exemptions. Since your board is running with high vacancies, it could be a good idea to get involved, you will probably be outvoted on many issues, but you’d be able to have a different mind set injected into discussions, and also find out what is going on in executive sessions. Your involvement could be the start of a future board composition that more people would want to be involved.