Restrictions on leasing in a condominium - by Saul Feldman

Saul Feldman, Feldman Law Office

There is a tension between unit owners in a condominium who question whether restrictions on leasing may go too far and those who are in favor of such restrictions.

In the era of home-sharing services such as Airbnb, condominium associations have been asking me to draft amendments to condominium documents which will prohibit home-sharing services because of the problems arising, such as noise that may last into the night – well past 11:00 p.m.

Some unit owners want the condominium documents to allow the condominium board to impose steep fines to deter home-sharing. Because of the “business judgment” rule, courts are likely to uphold such fines. The business judgment rule gives a condominium board broad leeway in such matters.

Home-sharing may turn a condominium unit into an illegal hotel or bed and breakfast establishment. This of course violates the condominium documents which limit the use to residential and prohibit commercial use. Home-sharing will also cause insurance problems and may be a reason for an insurance company to deny coverage for a commercial use as only residential uses are covered under the policy.

It is reasonable for some Unit Owners to want the condominium documents to be very strict – to allow only leases with a twelve month minimum requirement, and to prohibit subleasing, 30 day tenancies at will, and undergraduate college students.

However, other unit owners are afraid that they may not be able to sell their units with such harsh restrictions.

The answer is for the condominium board to meet with its legal counsel who will advise them in this new and challenging area.

Saul Feldman is a real estate attorney with Feldman Law Office in Boston, Mass.