doormen because the owner provides them security keys to access doors meant to keep the general public out. If you use your unit as a hotel, can you be sued? “Yes!” says Kelly Elmore, attorney for Kovitz Shifrin Nesbit. She also adds, “Many community associations have provisions in their governing documents that prohibit owners from using their units as a short-term rental or hotel. In cases where the association has a provision in the declaration or rules and regulations prohibiting such types of housing, an owner’s violation of the provision may be addressed like any other violation of the declaration or rules. In the event a violation is detected, the board should send a notice of the violation to the owner and provide an opportunity for a hearing to allow the owner to respond. During the violation hearing itself, the board may consider a number of factors in determining whether a violation has occurred, including copies of any postings on vacation rental sites (such as AirBNB, VRBO, etc.), door staff reports of constant streams of weekend visitors, and statements from the visitors themselves. In many cases, simply the issuance of a violation notice and the imposition of a fine are sufficient to deter owners from utilizing their units for short term rentals. However, in other cases, because the nightly rental rate that an owner is receiving greatly exceeds the cost of the fine, there are situations where owners are not deterred and simply pay the fine and continue to violate the short-term rental restriction. In those extreme cases, the board may then be forced to consider additional options, including litigation, in order to force compliance with the short-term rental restriction.
Because the Illinois Condominium Property Act allows the association to recover fees incurred in the enforcement of the association’s covenants, the association is entitled to recovery of reasonable attorney’s fees and costs incurred in such litigation.
What are the Pros?
There is a flip side to the use of condominiums for hotels. Per Ronnie Collins, doorman for a luxury high-rise in downtown Chicago, “When building residents accommodate weekend guests, we typically ask for guest lists, and provide the guests with keys, and normally there is little interruption to community life, but when the guests are rowdy or throw wild parties, drink to excess or begin tearing up the property, that is disruptive.” Ronnie’s sentiments are generally shared by many vertical housing owners. When guests cause little disruption, few neighbors are concerned with their comings and goings, and the peace is not disturbed because respect for the surrounding families and for the building is maintained. Unfortunately, this situation
50 | COMMON INTEREST® A Publication of CAI-Illinois Chapter
does not exist in all circumstances, and most large cities enact ordinances for short term housing much in the way they do for hotels. The City of Chicago, for example, notes misrepresenting that an owner resides at a project address as a building violation.
Have a Plan for Short-Term Rentals
Property managers should work towards mitigating risk for the communities they manage as much as possible. One person’s financial gain or another person’s convenience should not take priority over the primary design of the community. The board of directors and unit owners know that condominium ownership is a shared living experience and it is essential that everyone understand the mutual obligations and responsibilities associated with compliance of the community’s governing documents, and in this way we preserve the property’s overall value.
Congratulations to James McMillan
who recently fulfilled all requirements and earned the Dedicated Community Association Leader (DCAL) recognition. He joins an elite group of homeowners who are committed to enhancing their knowledge of community association living.
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