Recent Win Upholds Short-Term Condo Rental Restrictions

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Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 29 August 2018

The battle between condominium associations and Airbnb continues, but a recent dismissal of a "source of income discrimination" claim filed by a Chicago condo owner against a condo association further reinforces associations' right to ban short term rentals.

The lawsuit involved a condo owner who was fined for violating the association's declaration, which prohibited the leasing of units for hotel or transient purposes or terms less than six months, and provided that "no portion of the Unit which is less than the entire Unit shall be leased."

The owner filed a complaint with the City of Chicago Commission on Human Relations alleging that the association violated the Chicago Fair Housing Ordinance by discriminating against the owner based on the owner's "source of income" from the temporary Airbnb guests. The Commission ruled against the owner.

Many condominium Declarations include language prohibiting Airbnb-type rentals. Further, the City of Chicago allows those associations to register as a "Prohibited Building", which Airbnb is required to consult before listing any condo rentals in the City of Chicago. 

If short-term rentals are a problem in your association, the board should consult its Declaration to determine if short-term rentals are restricted and are encouraged to register with the city's Prohibited Building List. If you have questions about this issue, please consult a qualified Condo Law Attorney.

Learn more here.

Payment Plans for Delinquent Condo Owners

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Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 14 August 2018

Unpaid condominium assessments can add up and cause financial difficulty for the association. When owners don't pay their assessments, the board has a right to take legal collection action against the owner and the unit to recover what is owed.

The cost of legal collections can climb very high, depending on a number of variables. Often, the total legal fees and costs exceed the amount of the original unpaid balance, and they are all chargeable back to the unit's account per IL condo law. This can make it difficult for an owner to get caught up.

Before diving into legal collections, the board should communicate with the owner about the delinquency and attempt to get an agreed payment plan in place. The agreement should be written and signed by both the owner(s) and the board, with clear consequences for failure to uphold the plan, including the right of the board to take legal collection action and, if possible, detail on what that action will cost the owner. An owner who understands that the balance may increase sharply if the account is sent to an attorney will be more motivated to stick to the agreement.

The board should allow owners an opportunity to get caught up before saddling them with additional debt. For owners who have broken payment plan promises, however, legal collection action may be necessary to protect the association's financial well-being. 

Court Decision Clarifies Requirements for Closed Condo Board Meetings

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Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 07 August 2018

A recent decision by the Illinois appellate court has outlined clear legal requirements for executive (closed) meetings of condominium boards, particularly in regards to owner violations.

Condo boards can meet in a closed session to discuss certain matters, including owner violations of Rules and Regulations or of the Declaration and Bylaws. Unit owners do not have a right to attend or observe closed meetings. Any vote to take action on those matters must be held in an open board meeting.

Generally boards have not taken minutes of these closed meetings, however, a ruling in Boucher v. 111 East Chestnut Condominium Association has determined that condo boards must take minutes of an executive session if a quorum of the board is present. Minutes must include the following:

• Date
• Time
• Attendees
• Presence of Quorum
• Purpose of the Closed Session
• Time called to order and time of adjournment

For more details on the case (including some eyebrow-raising specifics on the behavior of the owner fined for violations), click here.

Acceleration Clause in Condo Collections

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Written by Lauren Peddinghaus

Category: What We're Thinking About Lately...

Published: 31 July 2018

Does your condominium association have an acceleration clause in its bylaws? This nifty bit of language can help you to collect extra funds from delinquent owners so that you do not have to repeatedly take them through the collections process.

An acceleration clause allows the board to accelerate payment of the monthly assessments due from an owner through the end of the year. So if an owner falls behind in April, for example, the association can apply all of the charges that will come due from that owner through December when pursuing collection action.

This can be helpful if the association is concerned that an owner will pay what is due up through the current month but then fall behind again. Using an acceleration clause allows the association to collect from an owner in advance, and hopefully avoid a revolving door of collections. 

Need help with collections? We can help your association to collect as much as possible as quickly as possible. Get in touch with Haus Financial Services today!