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First District Appellate Court Decision Casts Doubt on Ability to Regulate Leasing of Units by Rule Rather than Declaration Amendment

Written by Kreisler-Law-PC on . Posted in appellate court, condominium attorney, condominium board, condominium law, Condominium Property Act, First District Illinois Appellate Court, Illinois Condominium Board, leasing article, limitations on leases, restrictions on leasing, right of first refusal, summary judgment, unit owners, unit tenant

The February 2016 decision of the First District Illinois Appellate Court in Stobe v 842-848 West Bradley Place Condominium Association has cast some doubt on the ability of an Illinois condominium board to limit leasing of units through its rule making authority. Article VII of the declaration in Stobe covered the “sale, leasing or other alienation” of units. It contained a statement that if a proposed unit tenant agreed to abide by the declaration, the board’s rules and the Condominium Property Act, the board would have no right of first refusal.

The leasing article of the Stobe declaration did impose specific restrictions on leasing for hotel or transient purposes or for terms of less than six months and imposed limitations on leases of parking spaces. The article did not expressly refer to the right of the condominium board to regulate leasing by rule. The court then stated: “With that said, article VII did not expressly state that owners had the right to lease their units either.”

The appellate court in Stobe affirmed the trial judge’s grant of summary judgment striking down the attempt of the condominium board to restrict leasing by rule, interpreting the declaration’s intent to be that owners had the right to lease their units without restrictions other than those specifically enumerated in the declaration. The Stobe court said: “As stated, the declaration expressed certain limitations on leasing. If owners had no right to lease their units, the enumerated limitations would be meaningless.”

The court went on to point out: “The article on leasing did not specify that it was subject to further regulation by the Board, unlike other provisions in the declaration that did. While this omission would not alone require a determination that owners possess leasing rights, the declaration’s intent is clear when considered in its entirety: Unit owners have the right to lease their units subject to the declaration’s limitations.”

Feel free to contact a Logan Law, LLC condominium attorney, if you have any questions regarding the ability of your condominium board to impose rules restricting leasing or if you need assistance or advice regarding other areas of condominium law.

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