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The debate over rental restrictions for condominiums has been going on for years. The issue of whether association boards can set limits on the rights of owners to rent out their property can be a divisive one, and both sides highlight valid concerns.
The basic premise of those arguing for condo rental restrictions is that renting the property out to tenants decreases the property value of the entire building. This assumption is based on the widely accepted belief that rental property tends to be cared for less well than owner-occupied property.
In addition, the renting of a condo technically restricts the rights of other owners in the building, because it limits their options to sell. This happens because banks consider buildings with many rentals to be a riskier investment than those that are mostly owner occupied. For this reason, it can be hard to get a bank to approve a mortgage on a building in which less than 70% of the condos are owner occupied.
Property rights advocates sit on the other side of the debate. They believe that an owner has the right to manage the property as he sees fit, and should be able to decide for himself whether to rent it out or not. They would also argue that the belief that having tenants is somehow riskier for the property is unfounded, because owners can select responsible tenants and still remain hands on, whether on their own or through a condo management company.
While the debate is unlikely to subside anytime soon, it helps to remain aware of both sides of the argument. The truth likely lies somewhere between these two poles, such as general freedom to rent as long as certain maintenance and financials conditions are met. And/or adding a reasonable remedy to a current rental restriction rule such a fee that a unit owner would have to pay every month if in violation of the rule. Ultimately, Boards will need to settle on a solution that would preserve owner property rights while also ensuring the overall value of the building will remain high.
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