2 ways to add a condo rental restriction

1. Cheap and easy: If your condo declaration (the legal document that lays out the condo’s rules) doesn’t mention rental limits, the condo board can pass one or more rules that:

  • Cap the proportion of units that can be rented out at any one time.
  • Limit each home owner to one rental during the time they own the unit.
  • Limit the length of time the unit can be rented.
  • Ban rentals completely.
  • Allow rentals only when home owners can prove a hardship, like they’ve been transferred to another city and can’t sell their unit for enough money to cover what they owe on the mortgage, or they need to move to take care of a sick relative.

A rule change is the easy way to go because it usually requires a vote only by the board of directors—not other residents. Grandfather in existing rental units so the rental ban doesn’t force condo owners who currently rent their units to breach their leases with their renters. That could lead the landlords to file suit against the condo board.

Cost: About $500 for the association attorney to review the condo rental restriction to make sure it’s reasonable and fair.

2. Tougher and more expensive: Amend the condominium declaration. This will be harder because you’ll probably need a supermajority of owners (80% is common) to agree to the rental ban. A declaration change to limit rentals will better withstand a court challenge than a rule change because the declaration vote shows most unit owners (and not just the board members) want the change.

  • If the declaration does mention rentals and you want to change the specifics, your condo board has to amend the declaration, which often means getting that supermajority of owners to agree. The board can’t pass a rule that conflicts with the declaration.
  • A declaration change is a long process because your board might have to hold public meetings or send certified letters to make sure everyone in the building knows about the proposed change. The steps for changing your condo’s declaration will be explained in the declaration.

Cost: About $500 to $1,000 to have an attorney review the condo rental restriction amendment and verify the board followed the rules when it notified home owners and held a vote on changing the declaration.

Whichever method you choose, check state laws to see if they have anything to say about limiting rentals. Be sure to ask the board’s attorney about what will happen and how much it could cost in your area if an owner sues over the condo rental restriction. Our rough estimate: $10,000 to $20,000 to defend or enforce a condo rental restriction.