violation caused by the recession

We are a condo association in Wisconsin who has this issue with a unit owner.
Because there is no written by-laws that forbids having a roommate, this unit owner has found a work-around to our by-laws and has rented out the unit as if it was a roommate in the unit.
Needless to say the unit owner has not physically lived in the unit since the “roommate” moved in.
Because we have no specific by-law stating that the unit owner MUST live there 24/7 side-by-side with the roommate, this person has taken advantage of that and is renting the whole unit and not just one room. The unit owner was notified of the violation and the excuse provided was that because of work she had to travel a lot and that being the reason why she is not around, which is a lie because she is living with her boyfriend in a nearby town; her checks have a different address other than our dwelling.
Since the “roommate” is a fairly quiet person and causes no other problem other than the obviously violation of our by-laws and the condo fees are being paid in time (right before the deadline). The Board taken the side of ignoring the big pink elephant in the middle of the room. The problem by now is that other unit owners who are not happy with the overall of the situation are also thinking of doing the same, thus all the units may become a rental property instead of HOA.

Anybody else with this issue on your HOA?

Where is it in the documentation an owner can't rent out their unit? Unless the HOA owns the property, they can't limit rental property. ONLY the mortgage/loan company can do that. Even though I agree and most people in HOA's don't want rental property in their HOA, it's just not possible to limit rentals. Any good lawyer (or even bad one) can get around rental limitations in a HOA.

Yes, I know someone will ultimately post some kind of link stating that there are laws that allows a HOA to limit rentals and how terribly wrong I am. However, put yourself in the place of someone who would need to rent out their HOA property. How would you fight for your right to do so? That my friends/posters is your REAL answer to this age old issue with HOA's rental property quandry... It is NOT in the links and laws that allow the HOA to limit it...

Here's my thing. You violate the whole "HOA rental limitation" rule in your HOA. How is it punished? What does your HOA do to the owner? Step further...Which owner do you choose that is in violation? Does the HOA see or review the actual rental agreements between the owner/renter? Do those have to be submitted for approval to the HOA?

Yeah, you might have a law limiting rental property in your documentation...but do you have a punishment for doing so? A lien/foreclosure/lawsuit wouldn't apply if the owner's are up to date on their dues. Can't use fines as basis for liens/foreclosures. So exactly how is rental property violations even enforced???

Let me put this in reality terms. Scenerio: The HOA shows up to court to sue the renter violator. The HOA's rules are that ONLY 10 owner's may rent out their property at a time. This is supported by the state's statutes etc... Basically all the terms everyone posts here no matter the state etc...The HOA is suing an owner who is Number 11. Here's the court records for that day:

HOA Attorney/Prosecuter: "Your honor we are suing HOA member XX because they are in violation of the rental limitations of the HOA and statute xxx (insert whatever stance). We believe he is renting his property and is the 11th to do so. The HOA would like to enforce the rules upon this owner to follow the CC&R's".

Defendent's lawyer: "Your honor, we would like the HOA to show proof that our client is indeed the 11th owner to rent property in the HOA. Where are ALL the OTHER rental agreements of the other 10 renters? May we see them? (Which should have been done at the "Discovery" portion prior to the court appearance and be an Exhibit).

HOA Attorney: "We don't have copies of the other 10 lease agreements. We just know that Mr. XX is renting out his/her property"

Defendant lawyer: "How do you know Mr. XX is renting his/her property? Does the HOA NOT have a copy of the lease agreements? Do they have records of ownership of all their property?"

HOA Attorney: "No your honor, we don't have complete records on who owns each property. We also do NOT review lease agreements or approve/deny them. Owner's just have to abide by the rules set forth by the statutes and CC&R's."

Defendant lawyer: "We move to have this case dismissed. There is no proof our client is the 11th renter. The HOA has overstepped it's bounds in interfering with a contract between an owner and their client. There is also the option of extending approval for special circumstance on allowing rental property that my client was denied. However, 2 other owner's were extended. Thus making HOA unfairly picking and choosing which owners to take action against"

JUDGE: Case dismissed. HOA failed to prove their case. Each party pays their own court costs.

JUDGE IF the defendant lost: The court hereby finds the defenant guilty of violating state code xx and has to pay $100 fine and court costs. Pay up. Case closed.

Here's the other bit of reality. The losing/winning defendant gets to write most of this OFF their taxes. You can write off legal costs involving investment property. They also get to write off their HOA dues while they rent the property. The owner still may get to continue renting the property out win or lose. They may not care if they have to pay the fine for doing so. The HOA on the other hand, doesn't get to gain much of anything. A lawsuit is just a judgement and doesn't have to be paid for years. After about 7 years of non-payment the HOA has to go back to court to pursue again to keep it alive. Who's going to remember 7 years from now and when the owner is gone?

This my friend is REALITY. Why not make it a better one and use the tools the HOA has instead? The abiltity to change and adapt better rules? Notice by the way didn't mention By-laws...It's the CC&R's that's the actual contract with the HOA not the by-laws...