We have been processing a large number of sales recently at Haus Financial Services, and in the process we are finding that many clients are unclear about how rental restrictions are handled in a condominium association. Board members are stating restrictions that do not exist in their governing documents, and therefore are not legally enforceable against unit owners.

It's important for buyers to be properly educated about any rental restrictions when they are considering a purchase in your builidng, and it's important for the board to understand how those restrictions must be implemented. Attempting to infringe on an owner's right to rent their unit without the proper documentation in place can cause major legal headaches for your association.

The best way to impose rental restrictions is via an amendment to your Declaration. This requires a super majority vote of at least 2/3 of your owners. The amendment document must be drafted by an attorney and properly recorded. Because the process of adopting an amendment is fairly involved, it is considered the most valid and legally enforceable way to enact rental restrictions.

If the association's Declaration is silent on the matter of rentals, the board may impose restrictions via Rules & Regulations, which are more easily adopted and also more easily changed. However, Rules & Regulations do not carry the same weight as an amendment and therefore are not considered the best way to legally enforce restrictions.

For more information on this topic, see this article.

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