Courts across the country have been hearing cases about short-term rentals of homes and condominium units, and there is not much consistency in the decisions made. Sometimes, it is the homeowners’ association that is trying to enforce its covenants in a manner that prohibits short-term rentals, and sometimes it is a municipality trying to enforce its zoning ordinances. In the two cases discussed below, we have one of each—and in both cases, the language of the covenant and the ordinance made all the difference. Continue Reading Short-Term Rentals—A Tale of Two Cases
In Welsh v. McNeil, 162 A.3d 135 (2017) a board member and unit owner (“Board Member”) sued another unit owner (“Landlord Unit Owner”) for violation of the Association documents claiming that the Landlord Unit Owner violated the leasing provisions by allowing someone (the “Tenant”) to occupy the premises who was not on the lease. The lease was only to an unincorporated entity, and did not name who would be occupying the premises. Before suit was filed the Landlord Unit Owner and Tenant asked the Board to waive the bylaw provision as a reasonable accommodation under the Fair Housing Administration (“FHA”) to afford recovering alcoholics an equal opportunity to use and enjoy a single family dwelling of their choice. Continue Reading Can Your Association End a Unit Owner’s Suit by Post-Suit Filing Actions?
A recent New York Court dealt with an issue on leasing (Olszewski v. Cannon Point Association, Inc., 148 A.D.3d 1306 (2017)). The Board adopted rules and regulations that placed restrictions on leasing that contradicted relevant portions of the Association’s Bylaws. The Association then fined the owner for violating these restrictions and the owner sued. The owner won at the circuit court level and the Association appealed. On appeal, the Court again ruled in favor of the owner, upholding the trial court’s decision. Why? Continue Reading Can the Association’s Documents be Contradictory and Still Enforceable?
A Court in Louisiana recently tackled the issue of short-term rentals (New Jax Condominium Association, Inc. v. Vanderbilt New Orleans, LLC, 219 So.3d 471). A Condominium Association adopted an amendment to its bylaws during its annual meeting prohibiting short term rentals. When a Unit Owner continued to engage in short-term rentals, the Association sued and received a permanent injunction, preventing the Unit Owner from continuing to engage in short-term rentals. The Unit Owner appealed, alleging that the amendment to the bylaws was invalid because certain board members had conflicts of interest, and because one board member changed his vote during the voting. Continue Reading Banning Short-Term Rentals
An association in southeastern Wisconsin is made up of condominiums that are also rented out for the owners (condotels). In this particular case, a unit owner, who lived in Illinois, was in financial difficulty and wanted to file bankruptcy and turn their condominium over to their bank. The bank’s attorney prepared a deed in lieu and sent it to the unit owner, which the unit owner then had recorded. The bank became the owner and was responsible for not only the dues from that date forward, but also what was owed by the unit owner. The bank did not want to acknowledge this. Continue Reading Banks & a Deed in Lieu
A condominium association in Milwaukee has historically faced heavy delinquency issues. Through The Husch Blackwell Condominium & HOA Law Team’s assertive collection methods, the firm collected more than $290,000 in assessments, interest and legal fees for the association since 2013. A substantial portion of the $290,000 resulted from the sale and/or rental of 10 units that became owned by the association. Continue Reading When an Association Owns a Unit – Recouping Delinquent Assessments Through Unit Rental/Sales
Under the law in most states, and certainly in Wisconsin, the Board of your condominium association controls any changes to the exterior appearance. This is generally based on a statute that can’t be changed even by the governing documents. However, things are changing. Across the country many laws are being passed that require the Board of Directors of various condominium associations to approve certain changes to the exterior. This can range from artificial turf to solar panels. In addition, the world is changing relative to emotional support animals, sexual harassment and security. Continue Reading 2018 Condo & HOA Issues
Those of us involved in condominium management, whether as board members, officers, property managers or attorneys, know that VRBO and AirBnB have changed the way units are rented. Short term rentals are viewed by many associations as a problem that should be solved. Specifically, these associations and managers would prefer that short rentals (most often defined as less than six months or one year, but I have seen it defined as less than 30 days) be prohibited. The problem is getting enough people to agree on the various issues: Continue Reading Can I Use the Prohibition on “Commercial Activity” to Preclude Short Term Rentals?
Yes! Thankfully, if the association has not been doing so, there is a way to reduce your back-tax liability, interest and penalties.
- Do you have parking that is rented out by the Association?
- Do you charge different monthly assessments for those with a parking spot?
- Do you charge a fee for a boat dock or storage of a boat, canoe or similar water craft?
Of course you do. No worries, the Wisconsin Department of Revenue, like most states, would be happy to perform an audit for you. Unfortunately, they will then also seek to collect all of the taxes due. Continue Reading Parking Spaces – Should Your Association be Charging and Collecting Sales Tax?
You might think that when a tenant breaks a rule, that you can simply fine him like you would fine an owner-occupant. Or, you might think that you can just notify and fine the owner/landlord for his tenant’s violation, since he’ll ultimately be responsible for the fine anyway, right? These assumptions are intuitive; however, anyone who has been around condominiums and HOAs long enough can tell you that the laws governing them are not always intuitive. In fact, sometimes it seems like the legislators threw common sense right out the window! Continue Reading Fining for Tenant Violations? You Might be Doing it Wrong.