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When Your Condo Starts Turning Into a Hotel …

Many of our condo board clients have concerns about who is living in the building on any given day. It’s a concern based on security and quality of life. It is also a concern that is raised by Airbnb. Is the condo becoming a hotel?

The board should first review the “use clause” in the declaration or the bylaws. Unfortunately, those clauses are generally not helpful. They will limit the use of an apartment either to any lawful use, or they will give a list of permitted occupants that is longer than my arm.

So what can the board do? You would think it could amend the documents to include more restrictive provisions. Unfortunately in a condominium, it takes a two-thirds unit-owner vote to amend the documents. Since many condominiums can’t even get quorums for their annual meeting, the thought that they’re going to be able to amend their declaration or their bylaws – well, it’s just not going to happen.

There are other things you can do. They may not be as good as amending the declaration or bylaws, but they can help.

First of all, condominium boards should look at every package they get on a purchase. Many boards say, “Well, we only have a right of first refusal. Why should we bother looking at them?” Because you should learn something about who’s buying into  your building and get a sense of how they’re going to use the apartment. I have seen applications where people are actually pretty frank, admitting that they’re going to rent the apartment out on a short-term basis. That would violate the law, and on that basis, you can argue that the purchase offer is not bona-fide, and therefore, the sale package can’t go through. Even if their plans are not enough to scuttle the deal, you could also look at the package and at least learn something about your buyer. If there’s a problem down the road, you may have some background information that proves useful.

You should also have your super or resident manager do a survey of the building to see who is living in the apartments. Do you have tenants who have actually rented the apartments but have never submitted applications for a waiver of the right of first refusal? Or, if the right of first refusal was waived, was it waived as to the lease that they are currently living under, or for a prior lease? In that case, you can require tenants to come back and give you more information.

The last thing you can do is deal with the problem of guests, because that’s what this really all comes down to. You can define guests in your house rules. You could put restrictions on guests. You would couple that new house rule with guest forms. Anybody who tries to get into the building has to sign a guest form, accompanied by an authorization from the unit-owner saying, “This person can come and stay in my apartment for three nights. He’s my cousin. No money has changed hands.”

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