rental cap waiting list, possible HOA conflict of interest

I replied to another post about this, but I have a separate bit of info/questioning and I didn't feel it was appropriate to divert the other topic on this.

I'm a unit owner (formerly on the board, but not currently) in a 24 unit building. The current board is concerned that we jumped up briefly to 6 rentals (nowhere near the 50% FHA limit, but they're still concerned) and is seeking to institute a rental cap. We are, as far as I'm aware, at 5 rentals now. I've owned my unit 15 years, and rented it the last 5 - I became a landlord on accident, basically, when I bought a bigger place a few blocks away and failed to sell.

I understand the FHA loan concerns with too many rentals, and I know that there may be some lenders who even prefer a bigger owner occupied percentage (as much as 70%). I'm not here to argue that caps are always bad (though my research suggests it's somewhat mixed / situation dependent - they're not always good or always bad).

My concerns are as follows:

First, the HOA president is a real estate agent. She has sold most of the units in the building that have been sold/turned over in the last 10 years by befriending the unit owners, etc. Nothing inherently nefarious or conflict of interest-y about that. She's got every right to do so.

However, she's the one pushing for not only this cap, but a waiting list structure that seems to be terrible for ANYONE currently renting their units. The way it would work would essentially force some or all owners to sell their units under distress, in my opinion. Basically, any time a tenant chooses not to renew, the owner is moved to the bottom of the waiting list. She claims she's pushing this "to be fair and give everyone a chance to rent" -- though I'd argue that "first come first served" is just as "fair" depending on your definition of fair. Realistically, I don't see how someone benefits from being able to rent for as little as 1 year before being forced to have zero income and either move back in or sell their unit just because their tenant decides to move at the end of the lease. How many people are really moving out and then back into their place with any level of frequency, and consider that a benefit?

I have tried reasoning with her, but her only defense is that "other unit owners will be mad if they'll never get a chance to rent" and "besides, the scenario you're suggesting may not necessarily happen" -- sure, the waitlist may never be more than 0 or 1 people... but it may! It's my financial security at stake here.

I can't help but wonder how much her judgement is clouded by the personal benefits she'd reap from more turnover in the building. I have to imagine none of us landlords would sell through her (given she's effectively forcing us out of the building), but basically any unit being rented out will never be a financial opportunity for her since we're less likely to sell now, even if we move elsewhere.

We have NO known problems with tenants not taking care of the building (renters have been a bit worse about throwing garbage in the recycling, but we already have bylaws that hold the owners accountable for any fines incurred by their tenants - so if we're worried about renters "yucking up the place" - there's already recourse for that)...

They're also proposing a 24 month live in requirement before renting - which I'm fine with. That already should scare off "investor only" owners, and thus accomplishes their goal of slowing down the increase in rentals. The waitlist thing just seems like extra spite to drive out existing folks renting their units.

After all that, here are my questions:

- Has anyone had a revolving door waitlist like this at their place, and seen it actually benefit owners, in practice? I'm open to being wrong here.

- Am I crazy to be concerned about a potential for conflict of interest? It sure seems that having 25% of the units in the building rented out lowers her odds of commissions, and she seems super hellbent on this solution that hurts 5 of the existing owners, so I'm having trouble seeing why she's unwilling to even discuss this with more owners than just me and have us all decide on what sort of waitlist might make sense.

- Because of COVID, we can't even have a big meeting of all the owners and discuss this - so they are trying to do this all over email via a proxy vote. What are y'all doing in order to try and discuss issues like this when you're not being given the opportunity? I can't exactly go leave notes under everyone's door asking them to chat (the owners renting their places out would never get the notes), but I'm also not entitled to the contact info for my fellow owners... Do I have any recourse for trying to rally my fellow owners for a conversation about this?

Weird, I thought I wasn't allowed to request peoples' contact info. I'll request that. I was well aware of the need for a 2/3rds vote to have this added to the declarations, but was feeling trapped about how I'd gather support, especially from owners who are renting. I could swear I just read a thread in here that said you aren't entitled to that - but maybe it varies by state.

Just found that thread - but it's specific to Florida. Guess I'll check for Illinois. https://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/293623/view/topic/Default.aspx

I've read their current writeup for updates to the declarations, and the way hardships is covered is very vague. Here's the actual text - it's totally arbitrary and up to the discretion of the board.

Hardship: If a hardship as determined by the Board of Directors, exists, the Unit Owner may apply for a hardship waiver of the leasing restrictions set forth herein in the following manner:

i.The Unit Owner must submit a request in writing to the Board of Directors requesting a one (1) year hardship waiver of this paragraph, setting forth the reasons why they are entitled to same.

ii. If, based on the data supplied to the Board of Directors by the Unit Owner, the Board finds that a reasonable hardship exists, the Board may grant such hardship waiver. Any lease entered into shall be in writing and for a period of one (1) year. The lease must also contain a provision that failure by the tenant or the Unit Owner to abide by the Declaration, By-Laws or Rules and Regulations (the “Governing Documents”) of the Association may, in the discretion of the Board of Directors, result in termination of the lease by the Board of Directors. After the one (1) year period, if the Unit Owner wishes to be considered for an extension of the hardship, such Unit Owner shall make a request to the Board and must comply with all other restrictions provided in this Subsection (ii). All decisions of the Board shall be final. The Board's decision shall be final and binding.

Steve,

You need to do your homework.
Since you said unit, I expect you are within a condominium complex.

See: (765 ILCS 605/) Condominium Property Act

Specifically [emphasis added]:

(765 ILCS 605/19) (from Ch. 30, par. 319)
Sec. 19. Records of the association; availability for examination.
(a) The board of managers of every association shall keep and maintain the following records, or true and complete copies of these records, at the association's principal office:
(1) the association's declaration, bylaws, and plats of survey, and all amendments of these;
(2) the rules and regulations of the association, if any;
(3) if the association is incorporated as a corporation, the articles of incorporation of the association and all amendments to the articles of incorporation;
(4) minutes of all meetings of the association and its board of managers for the immediately preceding 7 years;
(5) all current policies of insurance of the association;
(6) all contracts, leases, and other agreements then in effect to which the association is a party or under which the association or the unit owners have obligations or liabilities;
(7) a current listing of the names, addresses, email addresses, telephone numbers, and weighted vote of all members entitled to vote;
(8) ballots and proxies related to ballots for all matters voted on by the members of the association during the immediately preceding 12 months, including, but not limited to, the election of members of the board of managers; and
(9) the books and records for the association's current and 10 immediately preceding fiscal years, including, but not limited to, itemized and detailed records of all receipts, expenditures, and accounts.
(b) Any member of an association shall have the right to inspect, examine, and make copies of the records described in subdivisions (1), (2), (3), (4), (5), (6), and (9) of subsection (a) of this Section, in person or by agent, at any reasonable time or times, at the association's principal office. In order to exercise this right, a member must submit a written request to the association's board of managers or its authorized agent, stating with particularity the records sought to be examined. Failure of an association's board of managers to make available all records so requested within 10 business days of receipt of the member's written request shall be deemed a denial.
Any member who prevails in an enforcement action to compel examination of records described in subdivisions (1), (2), (3), (4), (5), (6), and (9) of subsection (a) of this Section shall be entitled to recover reasonable attorney's fees and costs from the association.
(c) (Blank).
(d) (Blank).
(d-5) As used in this Section, "commercial purpose" means the use of any part of a record or records described in subdivisions (7) and (8) of subsection (a) of this Section, or information derived from such records, in any form for sale, resale, or solicitation or advertisement for sales or services.
(e) Except as otherwise provided in subsection (g) of this Section, any member of an association shall have the right to inspect, examine, and make copies of the records described in subdivisions (7) and (8) of subsection (a) of this Section, in person or by agent, at any reasonable time or times but only for a purpose that relates to the association, at the association's principal office. In order to exercise this right, a member must submit a written request, to the association's board of managers or its authorized agent, stating with particularity the records sought to be examined. As a condition for exercising this right, the board of managers or authorized agent of the association may require the member to certify in writing that the information contained in the records obtained by the member will not be used by the member for any commercial purpose or for any purpose that does not relate to the association. The board of managers of the association may impose a fine in accordance with item (l) of Section 18.4 upon any person who makes a false certification. Subject to the provisions of subsection (g) of this Section, failure of an association's board of managers to make available all records so requested within 10 business days of receipt of the member's written request shall be deemed a denial; provided, however, that the board of managers of an association that has adopted a secret ballot election process as provided in Section 18 of this Act shall not be deemed to have denied a member's request for records described in subdivision (8) of subsection (a) of this Section if voting ballots, without identifying unit numbers, are made available to the requesting member within 10 business days of receipt of the member's written request.
Any member who prevails in an enforcement action to compel examination of records described in subdivision (7) or (8) of subsection (a) of this Section shall be entitled to recover reasonable attorney's fees and costs from the association only if the court finds that the board of directors acted in bad faith in denying the member's request.
(f) The actual cost to the association of retrieving and making requested records available for inspection and examination under this Section may be charged by the association to the requesting member. If a member requests copies of records requested under this Section, the actual costs to the association of reproducing the records may also be charged by the association to the requesting member.

Note: If your Association is incorporated (most are, but check to be sure), corporate laws also apply.

See: (805 ILCS 105/) General Not For Profit Corporation Act of 1986.

(805 ILCS 105/107.75) (from Ch. 32, par. 107.75)
Sec. 107.75. Books and records.

(a) Each corporation shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its members, board of directors and committees having any of the authority of the board of directors; and shall keep at its registered office or principal office a record giving the names and addresses of its members entitled to vote. Any voting member shall have the right to examine, in person or by agent, at any reasonable time or times, the corporation's books and records of account and minutes, and to make extracts therefrom, but only for a proper purpose. In order to exercise this right, a voting member must make written demand upon the corporation, stating with particularity the records sought to be examined and the purpose therefor. If the corporation refuses examination, the voting member may file suit in the circuit court of the county in which either the registered agent or principal office of the corporation is located to compel by mandamus or otherwise such examination as may be proper. If a voting member seeks to examine books or records of account the burden of proof is upon the voting member to establish a proper purpose. If the purpose is to examine minutes, the burden of proof is upon the corporation to establish that the voting member does not have a proper purpose.

BTW: Per this article, which provides legal references, the HOA would still be required to provide names and mailing addresses of members.

Per the article:

In the meantime, Chicago condo owners can still request access to records of their associations. If the condo association fails to provide access to records, it will be subject to the City’s Penalty for Violation. See https://chicagocode.org/13-72-110/

Here is a link to Chicago code: MUNICIPAL CODE OF CHICAGO

You would want Title 13, Chapter 72, Section 80

Per that code: No unit owner, with the exception of those on the board of managers of the association, shall have the right to inspect, examine, or make copies of the unit owners’ email addresses and telephone numbers from records described in subsection (b) of this section.

They still must provide names and mailing addresses.

You will simply have to mail the info to them and ask that they email you with questions or concerns to discuss.
This way, over time, you may get the email address of those owners on your own.

My first post to this thread above is a post-o; wrong thread. Here's what I wanted to post:

-- Great work by TimB4. Thank you, Tim.

-- SteveS32, I would ssay in the letter, "Dear Board of Directors, Pursuant to Illinois statutes 765 ILCS 605/19 and 805 ILCS 105/107.75, please provide me with the names and addresses of all condominium members. Thank you, [name, address, phone, email addie]" Send the letter registered mail, return receipt requested, to the condo's registered agent (which is usually the manager).

-- I think proving, to an appropriate legal standard, that the Board President is somehow corrupt would be difficult. I would try to accept the reality of the latter. I would focus far more on the chances of an amendment being passed and, if is passed, your chances of legally challenging it.

-- If an amendment is passed, then you may nonetheless have legal rights to be grandfathered so that you can continue renting without limitation.

-- The cost to merely consult an attorney on this will likely run from $3000 up. A competent attorney will have to review all your condo's governing documents. Hence the high cost right up front.

-- What works against your wishes here is the fact that, when you bought the condo, you knew it could be amended by a 2/3rds vote. Granted the amendments must be "reasonable." What "reasonable" is depends on the details of each situation.

TimB4, myself and others here routinely quote a state's Condominium statutes and Nonprofit Corporation statutes when folks here have queries pertaining to records requests. Citing the applicable sections of these statutes, in a letter to a HOA/Condo, is often just enough to shake the records free from uncooperative (read: lawbreaking) of HOAs/Condos. What TimB4 and I posted was not done, say, 'off the top of our heads.' It's based on years of study and actual experience.

Regardless, as I think you know, always question authority and especially anonymous internet posters having pretenses of being authoritative. Your name goes on any letter you send to the HOA/condo. Make sure you believe in what you are sending.I believe the following is a bit of an update to the above, citing a 2015 lawsuit:

http://www.keaycostello.com/stobe-leasing-restrictions-going-forward/

Various law firms' discussions of Apple II (1995) and Stobe (2015):

https://loftus-law.com/2017/08/11/condo-rental-caps-how-the-board-can-prevent-you-from-renting-your-place/

https://chicagocooperator.com/article/qa-can-board-establish-a-rental-cap

http://rudolphkaplan.com/blog/2016/2/16/question-can-condominium-boards-restrict-leasing-without-amending-the-association-declaration-answer-maybe-

http://illinoiscondoattorney.com/articles/Stobe%20v.%20842-848%20Bradley%20Place%20Condominium-2016.pdf

More in a subsequent post.

I think the 1995 Illinois Appeals Court case Apple II Condo Ass'n v. Worth Bank & Trust is the most important reading the OP can do. As interested, see https://casetext.com/case/apple-ii-condo-assn-v-worth-bank-tr

The only other Illinois case law that seems worth reading is this, from 2014:
https://casetext.com/case/studiger-v-honeytree-townhouse-improvement-assn?PHC&sort=relevance&resultsNav=false&q=

My conclusion: Unless the circumstances here are like the Illinois 2014 Studiger decision, I think the OP will not be able to challenge a properly passed amendment that caps rentals or even prohibits rentals. I do not think the courts would even require a grandfathering clause.

I do not think this is unjust. As the court decisions indicate, amendments are all part and parcel of the contract (the covenants) to which all Owners agreed when they bought into the condo/HOA.

I didn't mean to imply that either of oyu don't know what you're talking about. My apologies for not being more clear. I'm the one who's confused! I read what each of you share, then I see other stuff that contradicts it and I'm just not sure what the final word is, that's all.

I sincerely appreciate your expertise (which is vastly greater than mine!) and your help in this thread thus far. Thank you!