Tuesday, May 27, 2008

Restrictions on Rental Restrictions Proposed

Condo associations considering restrictions, or a ban, on rentals should act fast or they could soon find additional restrictions on their ability to restrict.

Making its way through the Illinois General Assembly, reports the Chicago Tribune, is HB-5189, a controversial pro-leasing piece of legislation. According to the bill's sponsor, Rep. Sandra Pihos (R-Glen Ellyn), the goal is to protect owners' rights to rent their units.

Supporters include affordable housing agencies, which buy condos and rent them at below-market rates to low-income clients. When rentals are banned, agencies can be forced to sell those units, shrinking the pool of affordable housing.

Associations restrict renters for several reasons: They are less likely than owners to follow rules and care for the property. They don't stay as long as owners; more move-ins and move-outs cause more damage. An owner-occupancy rate that is lower than normal reduces the value of all units and can make it more difficult and more expensive for buyers to obtain a mortgage and thus more difficult for owners to sell their units.

Restricting rentals can be time-consuming and expensive for associations because the declaration must be amended by a super-majority of owners.

Among the provisions being considered by the legislature are requiring future restrictions to allow at least 20 percent of the units to be rented and exempting current owners.

Pihos, who represents the 42nd district, can be reached by e-mail or by calling (217) 782-8037.

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