Q&A: Rental Rules Not Enforced

b>Q My condo board rarely enforces rules, especially with respect to certain unit owners. Some are now renting, and I would like my family to be able to do so also. It is really bizarre because the board members, who are adamant about no renters, are very well aware of the families that are, and when you bring it up, they promise that if we were to rent, their lawyers would sue us. What is the worst that they could do to me and my tenants if I rent the apartment? Our documents allow up to a thousand dollar fine for any violation. Is this all the risk I am exposed to?

—Wanting to Rent in Watchung

A “Most condominiums have rules governing owners’ ability to rent. Such rules are permissible because the association has an interest in limiting the number of renters on the condominium property so as to protect owners’ property interests and to ensure owners’ involvement in the property’s upkeep,” says Anne P. Ward, Esq., an attorney at the law firm of Ehrlich, Petriello, Gudin, & Plaza in Newark.

“It is an axiomatic principle of condominium law that the board of an association must enforce terms of its governing documents and rules and regulations in a uniformly consistent manner. The board has a fiduciary responsibility to each and every unit owner. This means that it must act in a manner which promotes each owner's interest in the condominium. Clearly this means it cannot discriminate among or between owners by refusing to enforce its rules against some owners while threatening punitive action against others. N.J.S.A. 46:8B-14(j).

“It is unclear from what you write whether the board is imposing fines against owners who are renting or taking any action at all to enforce the prohibition against renting. The board has an affirmative obligation to enforce rules. If it is not, the situation you describe is a blatant violation of the New Jersey Condominium Act, N.J.S.A. 46:8B-1, et seq., and of your condominium's governing documents.

“You state that your condominium's rules provide that an owner who violates the prohibition against renting can be fined $1,000. Is this all you may face if you violate the prohibition? It is impossible to predict without examining the exact terms of the rules which govern your condominium.

Many governing documents provide that a stated fine may be imposed for each day that a violation continues to exist. If you do not pay the fine (or fines) the association can record a lien against your unit which will negatively impact your ability to pass title on the unit. Moreover, the association can foreclose the lien in the same manner as a bank can foreclose a mortgage. N.J.S.A. 46:8B-21. In theory, the board can apply to a court for injunctive relief stopping you from renting your unit. N.J.S.A. 46:8B-16(b).

“I recommend that you clarify the situation by seeking more information from the board or its attorney (if it has legal representation), and by carefully reviewing the condominium’s governing documents.”

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