One of the most common questions I get is whether an Association can restrict or prohibit rentals in the building. It seems, that the battle between renters and owners whether it occurs in Chicago, Lake Geneva, WI, or Marco Island, FL, is one that will never change.
Many concerns pervade the ownership which have solid aims and motivations. Seemingly (but not always), most owners in most buildings do take more time to care for their units than those who reside there on a rental basis. This "pride of ownership" translates into a desire to prohibit rentals, outright.
The Board of Directors can enact a regulation in its normal rules to limit or prohibit rentals. However, that does not have nearly the force and effect of such a regulation that is made part and parcel of an amendment to the Bylaws and Declaration and which is then approved by a majority of the unit owners in conformance with the Illinois Condominium Property Act and the Bylaws themselves.
However, the Illinois General Assembly is currently back to committee on revising a bill that will place an important limitation on this power.
That bill, HB 5189, is a possible response to a fluctuating real estate market and would amend the act to statutorily provide that owners can rent up to 20% of the properties and that no condo board can enact rules to the contrary.
Moreover, there is even better news if a charitable organization is the record owner of your condominium unit. A proposed law in the form of House Bill 821 (Pihos, R-Glen Ellyn) amends the Condominium Property Act. If a unit owner is a Sec. 501(c)(3) corporation and the association's bylaws change to prohibit leasing, then the unit owner may continue to rent the unit until it voluntarily sells the unit. No fine or fee may be assessed against the unit owner for leasing its unit. Makes the same change to the General Not For Profit Corporation Act of 1986 for common-interest community or homeowners' association.
Make certain that whether you are Board member that wants to prohibit rental activity or an owner that wants to foster it, that your attorney has conducted a thorough review of all the condominium documents for you to properly guide you through your best course of action.
