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April 30, 2008 9:00 AM

Condo owners consider banning rentals

Posted by Elizabeth Rhodes

Q: Our 19-unit condominium homeowners association has authorized the board to explore the possibility of becoming an entirely owner-occupied building. Our existing bylaws allow a maximum of four rental units. What's the usual procedure, beyond engaging an attorney, and what specifics should we be prepared to address in the initial consultation?

A: Attorney Josh Rosenstein, of Hanson Baker Ludlow Drumheller in Bellevue, says the first thing he'd look at is the age of your condominium. If it was created prior to July 1990, Washington's old condo act is applicable. It requires 67 percent owner approval to amend your declaration, which is what you must do to prohibit rentals.

Complexes created after July 1990 are governed by the state's new condo act; it requires a 90 percent "yes" vote to pass a declaration change.

Rosenstein has seen numerous newer associations consider rental bans, but few actually pass them.

"Ninety percent is such a high bar that a lot of them have trouble getting votes," he says.

In visiting an attorney, you should bring copies of all your association's governing documents and be prepared to answer several questions.

A key one: Do you want to grandfather existing rentals, and if so for how long? Rosenstein says allowing current rentals to remain rentals is often key to getting their owners to accept a ban. The grandfathering commonly ends when rental units are sold.

Another question: Do you want to have emergency or hardship exceptions, and if so, what's the scope of those? For example, say an owner must live elsewhere for some months because of a medical issue or temporary job relocation. Could the owner rent during those months?

While few associations outright ban all rentals, it's common to limit them because major mortgage money sources require that, Rosenstein says.

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