Quality of Life in Chicago>Question Details

Ronald, Other/Just Looking in Chicago, IL

Our townhouse assoc declaration prohibits renting.We suspect that a homeowner is using a contract sale to mask renting his property.Remedy?

Asked by Ronald, Chicago, IL Mon Nov 1, 2010

Help the community by answering this question:


In today's Real Estate Environment having a renter is the least of your problems. in the past it was felt rental units would lower the value of other units. That is no longer tha case as there are other reasons that could affect values like Short Sales and REO properties. I think it would be wise for your association to assist homeowners who are struggling and maybe change the by-laws and rules of the HOA to assit them and the other unit owners in general.
1 vote Thank Flag Link Mon Nov 1, 2010
My advice woulld be to let it go if the renter isn't doing anything disruptive or unlawful. You could spend a lot of energy with no resolve. If the association is unaware of it it won't impact lending for buyers in the complex. Choose battles wisely.
1 vote Thank Flag Link Mon Nov 1, 2010
As long as the contract sale has not been closed, it's probably worth your while to at least consult your HOA's attorney.

Your HOA's attorney can review the situation and the applicable documents and determine if your suspicions are warranted.

If the contract hasn't closed, the HOA's attorney might be able to contact the homeowner's attorney and intervene - at least dissuade him a bit and alert him to the fact that his HOA is aware of the situation.
Web Reference: http://www.dreamtown.com
0 votes Thank Flag Link Tue Nov 2, 2010
Other answers are good. Unless there's a solid reason for challenging it, I'd be inclined to be quiet.

However--and I'm not a lawyer, so this isn't legal advice--the answer to your specific question depends on how your townhouse association declaration describes prohibited activities. Does it simply say: "Renting is prohibited"? Or "Leases of under a year are prohibited"? Or "Leases and rentals must be approved by the townhouse association"?

Further, a contract sale isn't a lease. Now, you "suspect" that a contract sale is masking a rental. Perhaps. On the other hand, perhaps the owner wasn't able to sell outright, but found someone willing to buy on contract. In that case, unless the association declaration forbids contract sales or owner financing, you may not have much of a case. (Again, I'm not a lawyer, so this is NOT legal advice.) Contracts-for-deed, lease-purchases, owner financing, and a number of other techniques are all perfectly ethical and legal (except, to some extent, in Texas) ways to sell property.

Since I'm not a lawyer, I'm only guessing. But I suspect that a lawyer would first read your townhouse association declaration to determine precisely what is and what is not forbidden. Then I suspect he'd have to read the actual sales contract to determine whether the transaction would violate the association's declaration. All that costs money.

If it's a clear violation, you'd still have to pay the lawyer more money to proceed. And if it's not a clear violation, then you'd probably have to be examining the motivation of the seller. And that could take a lot of time and money.

And for what?

If you want, certainly take it to a lawyer. Still, as the others suggest, I probably wouldn't object since, at least on the surface (from what you've described) it appears that the owner is operating technically within the bounds of the association's declaration.

Hope that helps.
0 votes Thank Flag Link Mon Nov 1, 2010
Don Tepper, Real Estate Pro in Burke, VA
You can hire an attorney, go through all the costs, headaches, and length of it all or you can let it be. If the tenant is ok, and the dues are paid, swallow your pride and ride out the storm we are in. If the tenant is terrible, confront the owner. If that fails, you may have to take legal action.

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
0 votes Thank Flag Link Mon Nov 1, 2010

Be happy/grateful that the owner is current on his assessments. There are much worse consequences should he stop paying.
0 votes Thank Flag Link Mon Nov 1, 2010

Your statement speaks for itself. You "suspect", but you have no proof. Talk to an attorney, when he asks for a $10,000 retainer (or more) to take such a case you will understand how expensive litigation is to undertake. Things are tough right now, as the others said it is better to have a renter than a foreclosure or short sale in your building.
Web Reference: http://www.markmalave.com
0 votes Thank Flag Link Mon Nov 1, 2010
Ron, as earlier said if the tenant is not disruptive and all HOA dues are been paid I would suggest the HOA work with the struggling owner.
Would you rather have a tenat or an REO property on your block?
Web Reference: http://Eftyrealty.com
0 votes Thank Flag Link Mon Nov 1, 2010
No professional can render an opinion without full documentation. If all is true then other residence need to approach HOA and property owner resolve the issues.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Mon Nov 1, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer