Q–I serve on the board of directors of a 119-unit condominium located in the western suburbs. Many of our residents are original condominium owners and are now approaching the time where they need to sell their residences and move into retirement facilities.
The condominium community has long been associated with one particular real estate agent. In fact, until recently, this agent had his office in our clubhouse.
We are very concerned about his practices. After reviewing a listing, the agent waits for unit prices to go down because the owners have time constraints and need to move. The owners keep lowering their prices to a level where the real estate agent will buy the unit, do some minor upgrading, and then resell the unit at a very high profit.
While I am not against free enterprise, his practice gives our board members strong concern and a desire to legally terminate this arrangement.
In 1991, we amended our declaration to require new purchasers to occupy the unit. New owners purchasing units after the effective date of the amendment are required to occupy the unit and are prohibited from leasing except under hardship cases acceptable to the board.
Based on these provisions, can the board require the real estate agemt to actually move into a condominium which he purchased for immediate resale? If this could be enforced, we would be able to solve our problem.
A–The problem still exists. The board cannot force the realty agent to move into newly purchased units, although it can prohibit him from leasing the units for investment.
The leasing amendment enclosed with your question states that individuals who purchase units after the effective date of the amendment are required to occupy the unit and are prohibited from leasing except under hardship circumstances. If the realty agent resells the unit without leasing the premises, he has not violated the amendment.
The purpose of the amendment is to prohibit leasing for investment. The realty agent, however, is purchasing the units for immediate resale.
Prior boards of directors should never have allowed the real estate agent to establish an office on association property. This arrangement gave the appearance that the board was endorsing one agent over others in the community; it also violated the declaration by involving the association in a commercial enterprise. There should be no affiliation between the association and any real estate broker.
Owners make individuals decisions regarding the sales of their units. With the pattern you describe, I would question the information given to unit owners regarding the fair market price of the unit.
The board can express its concerns in writing to the association. Nevertheless, the broker is engaged in private transactions which does not warrant substantial involvement by the board.
Q–Our condominium association passed a leasing amendment last July. We have four units in each building with four attached inside garage spaces. I believe that each space is part of a unit and should be covered by our recent leasing amendment.
Recently, however, one owner sent out a letter looking for a garage space. Can a resident rent out his or her garage, in light of the leasing amendment?
A–A unit owner cannot lease a garage space unless it is a separate unit and the declaration permits this type of transaction. In the case of your association, separate leasing of garage spaces is prohibited by the amendment. The garage space is part of each unit. Most declarations prohibit an owner from transferring a portion of a unit. Thus, unit owners cannot separate the garages from the residence for either sale or lease.
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate Section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, he can’t make personal replies.
