or their sick mom who might take exception if they knew it would be a frequent arrangement.

When you live in a high-rise condominium building or townhome community it’s not always certain you’ll know your neighbors, but you never think you’ll have transient neighbors on a regular basis. Introducing transient housing arrangements into residential housing communities is risky, especially when you don’t have sole ownership of the building or structure. More and more municipalities are tracking this booming industry and it is necessary to evaluate the risks of renting your unit for this purpose.

What are the Risks?

Security is an obvious concern for other residents, as they won’t know if you properly vetted the guests. For example, did you perform a criminal background check, or determine if the guest is in the country legally? A two- day stay in the condo might seem harmless, but if you housed anyone of threat for those two days, you could find yourself in legal trouble and have the authorities at your home. Another important concern is insurance liability. If the guest causes property damage, or worse, has a fatality, and you have no information on family or emergency contacts, you may be culpable. Concerns also arise around traffic and parking. Should the guest park their vehicle in the wrong parking spot, it could result in towing by the condominium association.

Rick Morel, an insurance agent with Mesirow Financial, advises “Short-term rentals could contradict an underwriting representation made to the association’s insurance company during the application process. An intentional misrepresentation might be used to deny a claim. Short- term renters might also present increased exposure to claims for various reasons. The renter might not know how to use unit fixtures which could cause property damage. The renter might try to perpetrate a fraudulent bodily injury resulting in a liability claim. Short-term rentals might not be covered by the unit owner’s policy for either property or liability claims. Depending on the definition of ‘who is an insured,’ the liability claim of an owner might be denied if the renter causes property damage or injury to another person. So, if the renter causes damage to the building or another unit, the owner’s insurance company might deny the resulting claim.”

Condominium associations should carefully review their governing documents and make amendments to thwart the growing trend of using condominium units for short- term stays of less than one month. This is especially important since these uses affect government regulations imposed by the American Disability Act.

Finally, the legal liabilities should be considered since your community’s governing documents may prohibit short-term rentals. You certainly don’t want droves of individuals showing up with coupons to stay in your building. These guests typically bypass security and the

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