Legal Question in Real Estate Law in Illinois

Is it legal for a Condominium HOA to charge an owner of a condo who is leasing the condo to another a new or renewal lease fee?


Asked on 5/08/10, 4:05 pm

1 Answer from Attorneys

Conceptually, yes. Your monthly assessment covers "common expenses". So as the declaration apparently allows unit rentals, if it also requires the association or its management company, if any, to become involved in some way (reviewing the documents for compliance with declaration requirements, process them for any first refusal right, board action, record keeping or otherwise) then it would most likely be a supplemental "user" charge for your particular situation. While one could argue that the board's/management company's involvement benefits everyone by keeping order in the building (and in a high rise downtown the likelihood is that any unit might be a rental) and therefore should be considered a common expense even though less than all actually lease their units, it is just as soon if not more so something serving less than all the units, is therefore not a common expense, and can be a "user charge" (especially if there is any kind of limit on the number of rentals that can be in the building at any given time, which is the trend especially when it comes to FHA financing, and there too the management company has to keep tabs on these situations as they affect the ability to qualify a unit for FHA financing). But you should nevertheless look at the declaration/by-laws to see if the costs and expenses of board/management company involvement in unit leasing is a common expense (unlikely but also in high rise buildings possible especially where the management company actually helps procure tenants for rental units) and inquire into the management contract because there ought to be a schedule of these "extra" services and fees associated with them. If there is not a set policy there should be. The fee needs to be reasonable, regardless. In addition, you may note there are elevator key deposits and move-in/move-out fees; while you may pass these along to your tenants, they are similar. There are many such "user fees" as such, and why if you call on building maintenance to fix something relating to just your unit, they will bill you unless it's a common element/common expense and even if it is if it is a repair necessitated because of something you (or your tenant did), such as stuff up a toilet, they'll bill you because it would be unfair to charge everyone for that kind of situation.

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Answered on 5/14/10, 10:23 am


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