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Dimitry Esquire
Dimitry Esquire, Attorney
Category: Real Estate Law
Satisfied Customers: 41221
Experience:  JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin
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I have a client that purchased a condo and it states in the

Customer Question

I have a client that purchased a condo and it states in the bylaws that only 15% of the units can be rented. This is in Michigan. When we called and ask if we were able to rent the unit the company stated we needed permission but they could not enforce it. They did mention if try to rent the unit out that they will sue. Buyers purchased this unit strictly for investments and the previous owner was renting the unit out. Not sure if he sold it for that reason but that was not disclosed.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Dimitry Esquire replied 2 years ago.
Thank you for your question. Please permit me to assist you with your concerns. I understand the situation but am unclear as to your question. What can I answer for you?
Customer: replied 2 years ago.
My clients purchased a condo from someone that was renting out when they owned it. When we call the HOA to confirm we could rent it out the response we received was that we needed permission to rent out the unit and that they only allow 15% of the units to be rented out in the complex. Although they stated the above they alkso stated that they could not enforce it. We went through with the sale and come to find out they are denying our request. I've attached what we have been sent. I also copied the email we received from the HOA. I would like to also mention that a copy of the bylaws was never signed by my client at time of purchase.
Dear Trendafile,I am in your receipt of your request received 5-26-15, to lease out the unit at 42755 Sheldon Place, unit 104 in Clinton Twp., MI 48038. As you have been previously made aware, Schultz Estates II is NOT currently allowing any new leases as they are at capacity. A bylaw amendment was passed putting a cap on the percentage of units that may be rented at any given time.Currently there are several evictions pending for those co-owners and their renters who did not abide by the proper procedure and receive written approval prior to commencing any lease agreement. Should a renter be placed in this unit, they (you) too will be immediately filed on for eviction with our.I would be happy to place you on our rental waiting list. There are at least 12 people currently waiting for the next available spot.I will follow this email up with a phone call and mailing as well.Amanda BeaudoinProperty Manager
Expert:  Dimitry Esquire replied 2 years ago.
I appreciate the additional information but I am still not sure as to your question. Are you asking if this policy is valid or legal? Or if the past use creates an argument for 'grandfathering'? Or are you asking how this can be bypassed, if it can be?
Customer: replied 2 years ago.
I guess I'm asking all the above. Do we have any way around this bylaw. We were under the impression that you were able to rent the unit. Bot***** *****ne we need to rent out the unit.
Expert:  Dimitry Esquire replied 2 years ago.
Hi, This is a valid bylaw, I am afraid. HOAs are ultimately self-regulating and can put in place rules and conditions that may bar or curtail ownership rights but would still be perfectly legal. HOAs can limit pet ownership, pet size, use of the property for commercial purposes, and even what colors are permitted for siding and front doors. All those are property limitations and all of them are legal. Likewise it is irrelevant if your client purchased the property for investment purposes, the HOA is permitted to bar such use especially if that bylaw was part of the documentation. Such use is also not 'grandfathered', so he would need to apply as a new party and get in line behind all other tenants. Other than getting a grass roots campaign and have other tenants vote to amend the bylaws to remove this limitation (which is possible based on local HOA process), he would need to wait until the HOA permits him to rent or grants him a waiver for this limitation, but it would be granted solely at their discretion. Sincerely, ***** *****