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KASS: Law trumps owner-only agreement

Q:     We are a 20-unit condo building. In 2002, the board decided to protect our “owner only occupancy rule” by having our attorney prepare a form requiring all owners to sign their acknowledgment that only owners can live in our complex. Up until that time and until recently that was the way the building operated. The owners were in agreement in 2002 and 80% signed on.

Recently, in two of our condo units, the owners are not occupying the units but have family members living there. We are told by our management company this is perfectly legal, even though we have a legal paper stating otherwise. Apparently, condo law supersedes the paper we had drawn up in 2002.

Just checking if this indeed is true..some of us feel that the value of our units could change..mainly because “renters” are not as likely to remodel/redecorate etc. D.


A:   Dear D: I don’t know what state you are in and don’t know what your state law says about leasing. However, your management company is correct.

There is a priority in community association law. The state law – whether it applies to condominiums, cooperatives or home owner associations – is first. So if the condo law in your state specifically allows associations to have renters, your condo cannot get around that. However, if the law is silent, then the association documents can require “owners only.”

Next in priority is the Declaration of a condominium or the covenants, conditions and restrictions in homeowner associations ( commonly called CC&R’s). In a cooperative, it will be the articles of incorporation.

The next level of priority are the bylaws. For all practical purposes, this is the “bible” of the association. It spells out such things as what the board can do, what owners can (and cannot do) and how many board members there should be.

Finally, there are the rules promulgated by the board. I always give this example: if the bylaws say “no pets,” then the board cannot pass a rule allowing pets. But if the bylaws are silent, then the board can enact reasonable rules as to how pets must be treated especially on common grounds.

Turning to your question, depending on how the “owner-only” language in your legal documents reads, one could take the position that a family member could qualify.

While I respect the property manager’s opinion, unless she is an attorney, I would ask your association attorney for a legal opinion.


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Q:     I live in a co-op apartment building. We have taken one of the owners to court for non-payment of assessment for many months. She moved out but we also had the sheriff’s department evict her. Our problem now is she still has the shares which she did not turn in.     She feels she still owns the apartment. Can we void her old shares, and make them null and void? Mary


A:       Dear Mary: Why are you asking me? Presumably you had an attorney when you went to court, and clearly that lawyer should be familiar with your state law and your legal documents.

The answer is: Yes, she still owns the apartment. I am not trying to second-guess your lawyer, but when you went to court, the cooperative should also have asked the court to quiet title and void the shares.

What can you do now? Unless that person will voluntarily relinquish her shares (which apparently is not going to happen) you will have to either foreclose on her shares or go to court and ask the judge to issue an order that terminates her ownership and her shares.

Your legal documents should spell out the process when a shareholder is delinquent.

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