“Owner Occupied” Condo Communities: Unreasonable Restrictive Covenants?

By Catherine Park, Esq.

A condominium’s governing documents frequently prevent condo purchasers from renting their units to residential tenants for a period of one year or so after the initial sale of a new unit.  Beyond the typical one-year period, rules and regulations of the Condominium Association may attempt to require owners who want to lease their units to place their names on a waiting list, with only a small percentage of units permitted to be rented at any one time.  

Such restrictive covenants may or may not be reasonable.  Some Condominium Boards are vigilant about maintaining primarily “owner-occupied” communities, on the theory that owners exercise greater care over their property than renters.  However where those restrictions go beyond what is necessary to maintain a well-cared for community, such restrictions may violate the property rights of owners, and the civil rights of prospective tenants.  

In a typical case, an affordable community seeking advantageous property tax credits or in an effort to meet lending criteria limits the number of units that can be rented at any one time.  Such restrictions, enacted for a seemingly legitimate purpose, may have a disproportionate impact on certain unit owners, and may violate the civil rights of certain prospective tenants (those who pay for their rentals through vouchers, for instance).  

In such a scenario, the community association may be skirting dangerously close to violating federal fair housing laws that prohibit discrimination in housing.  

DISCLAIMER:  The opinions expressed herein are general and might not be applicable to your case or circumstances.  If you need legal advice about a specific matter, consult an attorney in your jurisdiction.