Question: Our declaration of condominium contains very specific restrictions regarding rentals. Rental units at any given time will be limited to 20 percent of the total number of units, leases for a period of less than one year are prohibited, no individual rooms may be rented, no transient tenants are allowed, and subleases are prohibited. Leases must be in writing and are subject to the declaration, articles of incorporation, bylaws and the rules and regulations of the association. The lease shall be approved by the association and must be received at least 10 days prior to occupancy, and the association will have the authority to approve or disapprove the renter. A background and/or credit check on the proposed renter may be requested with all costs to the owner of the unit being rented. Failure to comply with this procedure will be result in a charge of $100 per occurrence, in addition to other remedies.
Recently an owner moved out and, without notifying the board, rented his condo, and now we are over our 20 percent cap. In an attempt to rectify this situation and to get a better handle of the renting issue, there were several discussions held at multiple condo meetings. At the advice of our management company, letters were sent to all unit owners who rent requesting their current lease. Now, the management company has decided that there is nothing in the Florida Statutes that gives us enforcement authority of the leasing provisions in our governing documents, and that we legally can’t ask for leases, stop people from leasing their condo even if we are over our limit, or limit the length of time they can rent. Is our management company correct that our declaration of condominium does not provide our association with the authority to legally enforce the rules, and that we have no recourse? — J.V.
Answer: Without reviewing your declaration I can’t comment on the enforceability of specific provisions you quoted, but everything you described to me sounds typical, with a couple of caveats. But, absolutely leasing restrictions in condominium declarations are enforceable. They are recorded contractual obligations that bind every owner from the moment that they purchase their property. There are a number of court cases where leasing restrictions similar to the ones you describe above have been enforced by a court. It’s hard for me to determine, without further information, why your management company feels that your declaration is not enforceable. Perhaps they are simply saying that the cost of legal action to enforce the declaration is prohibitive. Or, maybe these were in fact amendments made over the past few years — amendments prohibiting owners from renting their units, altering the duration of the rental term, or specifying or limiting the number of times they may rent their units during a specified period only apply to owners who consent to the amendment or who acquire title after the amendment is effective. The blanket statement that you represent was made to you by management is unusual enough that I wonder if there are other factors that they are taking into account that were not provided in your question. In general, leasing restrictions are enforceable.
I should point out that the Condo Act prohibits associations from charging a fee of more than $100 per applicant in connection with the transfer of a unit — and in order to charge even that fee it must be described in the declaration, articles or bylaws. So, you would not be able to charge more than $100 for the background check. Further, while they are presumably legal, leasing caps are very difficult to manage and enforce, and in my experience, they require a very elaborate rule system to coordinate the priority of new leasing requests. For example, do renewals get priority over new leasing requests? If so, it means that certain owners may maintain the right to lease their units almost in perpetuity, to the exclusion of other owners. But if not, you will potentially be kicking out good tenants who are an asset to the community. Or, if a leasing spot opens up, is it first come, first serve? Does the first owner who submits a lease for approval get the slot? Will there be a waiting list for owners? If there is a waiting list, and an owner at the top of the list submits a candidate who is rejected by the board, does that owner go to the back of the list, or do they get another bite at the apple? I find that, for many communities, the complexity of policing and enforcing a leasing cap outweighs any of the benefits that cap may have provided in protecting against a transient population. In the current economic environment many stable and desirable residents prefer to rent instead of own their homes.
Ryan Poliakoff is a co-author of “New Neighborhoods — The Consumer’s Guide to Condominium, Co-Op and HOA Living” and a partner at Backer Aboud Poliakoff & Foelster, LLP. Email questions to firstname.lastname@example.org. Please include your hometown.