How to rent out a condo: This may seem like a simple question, but if you own a condominium, you probably know it’s actually rather complicated.
For those who are foggy on what a condo is, let’s start with the definition: It’s a home, typically part of a larger building, that comes with shared common areas such as yards and garages that are maintained by hired help, rather than by individual owners. This makes condo ownership a breeze, by comparison with the labor involved in maintaining your own house, and you pay for that convenience in condo fees.
This more communal living arrangement, however, also means that you can’t just rent out your place whenever the whim strikes. In the past, condominiums were pretty flexible about allowing unit owners to rent out their homes. In recent years, though, condo associations have become a little more restrictive, according to David Reiss, professor of law and academic program director at Brooklyn Law School. Here we break down everything you need to know about how to rent out a condo.
Step 1: Read your condo association’s governing documents
Every condominium is different, but they all have one important feature in common: Owners are subject to a set of rules established by the condo association and upheld by the Board of Directors. Some do not allow for renting as an option. Review your condo association’s bylaws, and/or rules and regulations, to understand the existing policies regarding renting out units.
Step 2: Know your condo association’s restrictions
If renting is allowed, there may be limitations on the length of the lease term—including minimum and maximum times—and on whether pets are allowed. Also look into whether or not renting has been an issue in the past, which could give you a crystal ball into your future. “Review board meeting minutes to see if any new policies are being discussed that might impact your plans,” says Reiss.
Another potential renting deal-breaker to be aware of is that some condominium associations allow only a certain percentage of total units to be rented out at any one time. Check to see if the current ratio of rented to non-rented condos will accommodate your unit. Keep in mind that some associations only allow renting after an owner has lived there for a minimum period, usually two years.
Step 3: Navigate the condo rental approval process
This process varies from association to association, but some form of approval to rent your condominium is usually necessary, says Brian D. O’Keefe, an attorney at Michigan’s Lippitt O’Keefe Gornbein. This step usually requires the prospective renter to complete an application and to provide both financial information and references. (Looking to rent a condo? Check online for homes for rent.)
Sometimes a fee—ranging from a hundred to a few thousand dollars—is also called for. Some condos may even require a tenant interview, usually by a committee of the condo board.
For condos that do not ask for a formal interview, tenants may still need to be approved by the management company. It all comes down to this: “The associations want to know who’s going to be living there,” says O’Keefe. To confirm the exact details of the process, contact a board member directly, in addition to checking the bylaws. Getting it wrong could land you in violation of association rules and result in a fine.
Step 4: Make sure your tenant is clear on condo rules
As the owner, you’re the one responsible for making sure the tenants abide by the condo’s rules. To guarantee that prospective renters understand their obligation, O’Keefe recommends including a clause in the lease about adhering to those rules.
Last but not least, consider confirming everything you’ve found out about how to rent out your condo with a local real estate agent who has listed apartments in the association before. An agent who knows your condo’s process can also help you find the right tenant, too.
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