Condominium owners who rent their units have a double set of
responsibilities: to the condo association and to their tenants.
”There is a lot at stake in a condo rental,” said Dennis Hughes, executive vice president of H&H Management & Leasing Co. in Prospect Heights. Condo landlords must protect their investment and minimize problems with tenants and other building residents, he said.
Experts offer the following tips on how to keep things running smoothly:
Be choosy
”You can eliminate a lot of headaches and hassles by being picky when selecting tenants,” Hughes said.
”Don`t be afraid to be tough on screening applicants for rentals,”
advised Barbara Stewart, a condominium rental agent for Rubloff, a Chicago real estate firm. ”If anything about an applicant raises a red flag, look for someone else. There is no reason to take bad risks.”
”Follow your instincts,” said Michael Elkow, sales associate for Sudler Marling Inc., a Chicago real estate firm. ”Dealing with people is always tricky; so meet with potential tenants if at all possible, and trust your gut reaction about applicants. Remember that the owner ultimately chooses the tenant, even when working through a rental agent.”
”Always get a credit check, and call past landlords,” Stewart said.
”Find out if your condo association also requires references and personal interviews before approving tenants.
”(But) sifting through applications is the responsibility of the owner or rental agent, not the condo board,” she said. ”It`s not the board`s responsibility to determine if a potential tenant is a good prospect. Boards mostly approve applications as an administrative matter. The owner or the agent is responsible for the legwork and determining the suitability of a prospective tenant.”
Spell out all the rules
”The condo owner or manager should provide a list of condo rules and regulations to all rental applicants,” Elkow said. ”Guidelines vary from building to building, and potential tenants need to know what (is expected of them) as residents.”
The owner also should inform the tenant of any other restrictions on the unit. Condominium landlords may impose requirements on their units that are stricter than those of the condominium association, but not less stringent rules than other residents of the building have, Stewart said.
”For example, even if a building permits dogs, the owner has a right to say no dogs when renting his apartment,” she said.
”Make sure tenants understand the difference between living in an apartment building and living in a condominium,” advised Deborah Dorr, president of Horizon Management Inc., an Elgin real estate management firm.
”Condominiums tend to have stricter rules than apartment buildings-and hefty fines for breaking those rules.
For example, condo associations may impose fines for parking in someone else`s space or playing music too loud. They also may fine people for moving in or out without previously notifying the condominium board or failing to use elevator pads when moving.
”People used to living in apartment buildings may not realize they can be fined for doing these things,” Dorr said.
Assign responsibility
To ensure that tenants understand the rules, Dorr insists they sign a rider on the lease stating they have received a copy of the rules, regulations and bylaws of the condominium association and will abide by them.
”This makes it clear that tenants are responsible for their behavior in a building, in addition to the owner being responsible for his tenants,” she said.
”Tenants also need to know whom to call for repairs and problems with the apartment,” said Jerry Milos, president of Concept Management Services Inc. in Elk Grove Village.
”In general, the owner must authorize any repairs made to an apartment, although commonly owners and tenants agree that tenants may call building maintenance for small repairs, between $25 and $50 for example, for a leaky faucet or a tub that won`t drain,” Elkow said. ”The owner is responsible for repairing or replacing major appliances, such as refrigerators or dishwashers.”
Tenants also should know whether they are eligible for building amenities, such as parking or health facilities.
Amenities may be restricted
”Renters are usually, but not necessarily, eligible for building amenities, at their own expense,” Elkow said.
”Some buildings don`t guarantee parking for tenants,” Stewart said.
”And some have waiting lists months long for parking spots for renters. If your tenants won`t have in-building parking, make an effort to find alternative parking nearby. It`s worth the effort to make your unit more marketable.”
If the rent does not include heat or air conditioning, the owner should also disclose these costs to potential tenants.
Know your duties
”The owner is ultimately responsible for his tenants,” Milos said.
”The tenant is responsible to the owner for upholding the covenants and rules of the condominium association. If tenants break the rules, the board will cite them, but penalize the owner.”
It`s up to the owner to get reimbursed from tenants for penalties they incur, Milos said. The owner may do this directly by billing the tenants or through deductions from the security deposit. ”That`s why a rider on leases in which tenants accept responsibility is so important,” he said.
”For infractions of the rules and regulations, and for overseeing all financial matters, condo management deals with the owners,” Dorr said. ”The management generally deals with tenants only in matters of routine correspondence, information and reports for minor maintenance.”
Another owner responsibility is providing the condo board with appropriate information on the incoming tenants: names, occupations, employers, even emergency contacts so building management can find the tenants when needed.
”The owner should also let the board know when the tenants are moving in,” Milos said.
A part of Chicago`s Residential Landlord and Tenant Ordinance, passed in 1987, requires all landlords to pay interest-usually passbook rates-on security deposits between 30 and 45 days after tenants move out, Elkow said.
”This applies even if the owner is only renting one unit.”
The usual security deposit is one month`s rent, occasionally more under special circumstances, like if the tenant has a pet, he said.
