Condo Board made Rule that Contradicts Bylaws

JenniferD8 (Michigan)
Posts: 141

Posted:

Hi Everyone,

I live in an 180-unit condo community. Our bylaws state that an entire condo unit can be leased, but not a room within the unit. Our current board recently made a rule that as long as a Co-Owner provides a lease to the board, then the Co-Owner can rent a room out. I believe that this is incorrect, because a rule shouldn't contradict a bylaw. Ironically, the new board president is now renting out a room in their condo unit. Prior to that, the president was laser focused on citing Co-Owners for this type of violation.

ElleN (Idaho)
Posts: 4,420

Posted:

Note: In Michigan, what are called "covenants" in other states are instead often called "bylaws."

JenniferD8, I agree with you that a board-created rule cannot conflict with the bylaw. I see the Michigan Condo Act says this:

559.154
...
(8) The bylaws shall contain a provision providing that arbitration of disputes, claims, and grievances
arising out of or relating to the interpretation of the application of the condominium document or arising out
of disputes among or between co-owners shall be submitted to arbitration and that the parties to the dispute,
claim, or grievance shall accept the arbitrator's decision as final and binding, upon the election and written
consent of the parties to the disputes, claims, or grievances and upon written notice to the association. The
commercial arbitration rules of the American arbitration association are applicable to any such arbitration.
(9) In the absence of the election and written consent of the parties under subsection (8), neither a
co-owner nor the association is prohibited from petitioning a court of competent jurisdiction to resolve any
dispute, claim, or grievance.
(10) The election by the parties to submit any dispute, claim, or grievance to arbitration prohibits the
parties from petitioning the courts regarding that dispute, claim, or grievance.
(11) Subsections (8), (9), and (10) apply only to condominium projects established on or after the effective
date of the amendatory act that added this subsection.

Are you willing to send a demand letter lite to the board, and then subsequently, elevating the tone of this letter to the point of either asking for arbitration or threatening a lawsuit?

KerryL1 (California)
Posts: 14,550

Posted:

Jennifer, please cite the exact wording of the Bylaw.

KerryL1 (California)
Posts: 14,550

Posted:

Jennifer, please cite the exact wording of the Bylaw.

JenniferD8 (Michigan)
Posts: 141

Posted:

The bylaw states, "No portion of a Unit may be rented and no transient tenants may be accommodated therein; provided, that nothing shall prevent the rental or sublease of an entire Unit for residential purposes or of a limited common element appurtenant to such Unit.

JenniferD8 (Michigan)
Posts: 141

Posted:

I was hoping that I could respectfully point out the fact that the board is in conflict with the bylaw and they would recognize their mistake. I'm probably being too optimistic. Lol!

MargaretM5 (Hawaii)
Posts: 34

Posted:

In my experience, it is best to first politely ask questions and then decide on the best course of action.

You might try contacting your board/management to ask about the apparent rule conflict. There may be a reasonable, valid explanation. If they won't answer you directly, try to get this topic added to the agenda of the next open meeting and then be sure to attend.

If that doesn't provide satisfaction, you might request meeting minutes to learn more and to verify that the new rule was created according to proper procedures. Is there a path for owner comment and/or challenge?

If that is another dead end, you'll have to decide whether further steps are worth the expense, time, and effort they would require.

-- You could file a formal complaint that Unit X appears to be renting out a room, contrary to the bylaw.

-- You could keep your eyes and ears open for negative impacts that renting-by-the-room causes and then present a proposal for reversing the new rule at a future board or members meeting.

-- You could consider working with other owners to elect a new board, either through the recall process or at the next election, that would be more careful about following the rules and communicating with the owners.

-- You could consider legal avenues (arbitration, etc. as detailed in your governing documents and local laws).

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By JenniferD8 on 04/28/2023 10:44 AM
The bylaw states, "No portion of a Unit may be rented and no transient tenants may be accommodated therein; provided, that nothing shall prevent the rental or sublease of an entire Unit for residential purposes or of a limited common element appurtenant to such Unit.

The part in bold is kind of interesting. Does that mean that an owner can rent out his unused parking space to a neighbor who needs the extra room? Or does it mean something like the short-term rental mentioned in BE AWARE OF ALTERNATIVE PROPERTY USES:

Quote: "Curb Flip allows property owners to list their garages or driveways for rent on an hourly, daily, weekly, or monthly basis to park extra vehicles, RVs, boats, and more."

Of course this is a different state and a different set of CC&Rs, but our lawyers told us that limited common elements are still common elements, not parts of the units, and so do not belong to homeowners. I wonder about legal issues involved in renting out something that doesn't belong to you. If there were similar wording in our Declaration, we would have called the lawyers and asked what this was really saying and if it needed to be amended.

BillD16 (Texas)
Posts: 973

Posted:

Quote:

Posted By CathyA3 on 04/29/2023 8:38 AM

Posted By JenniferD8 on 04/28/2023 10:44 AM
The bylaw states, "No portion of a Unit may be rented and no transient tenants may be accommodated therein; provided, that nothing shall prevent the rental or sublease of an entire Unit for residential purposes or of a limited common element appurtenant to such Unit.

The part in bold is kind of interesting. Does that mean that an owner can rent out his unused parking space to a neighbor who needs the extra room? Or does it mean something like the short-term rental mentioned in BE AWARE OF ALTERNATIVE PROPERTY USES:

Quote: "Curb Flip allows property owners to list their garages or driveways for rent on an hourly, daily, weekly, or monthly basis to park extra vehicles, RVs, boats, and more."

Of course this is a different state and a different set of CC&Rs, but our lawyers told us that limited common elements are still common elements, not parts of the units, and so do not belong to homeowners. I wonder about legal issues involved in renting out something that doesn't belong to you. If there were similar wording in our Declaration, we would have called the lawyers and asked what this was really saying and if it needed to be amended.

I’m going to guess they were trying to say “yes, you can rent the entire unit to a tenant, and that includes the parking space, use of the laundry room, pool access …”

I’m not certain that that is what they wrote down.

Bill

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By BillD16 on 04/29/2023 4:14 PM

Posted By CathyA3 on 04/29/2023 8:38 AM

Posted By JenniferD8 on 04/28/2023 10:44 AM
The bylaw states, "No portion of a Unit may be rented and no transient tenants may be accommodated therein; provided, that nothing shall prevent the rental or sublease of an entire Unit for residential purposes or of a limited common element appurtenant to such Unit.

The part in bold is kind of interesting. Does that mean that an owner can rent out his unused parking space to a neighbor who needs the extra room? Or does it mean something like the short-term rental mentioned in BE AWARE OF ALTERNATIVE PROPERTY USES:

Quote: "Curb Flip allows property owners to list their garages or driveways for rent on an hourly, daily, weekly, or monthly basis to park extra vehicles, RVs, boats, and more."

Of course this is a different state and a different set of CC&Rs, but our lawyers told us that limited common elements are still common elements, not parts of the units, and so do not belong to homeowners. I wonder about legal issues involved in renting out something that doesn't belong to you. If there were similar wording in our Declaration, we would have called the lawyers and asked what this was really saying and if it needed to be amended.

I’m going to guess they were trying to say “yes, you can rent the entire unit to a tenant, and that includes the parking space, use of the laundry room, pool access …”

I’m not certain that that is what they wrote down.

Bill

That makes sense, thanks.