Condominiums and Short-Term Rentals
The Illinois State Bar Association recently published a description of a July 7, 2021 Illinois Appellate Court Decision concerning the rights and obligations of Condominium owners to engage in short-term rentals (“Airbnb” etc.) of their condominium units. The court ruled that the Condominium Association Declaration prohibiting the use of the condominium units as a business prohibited the use of the unit as a short-term rental. However, the court also ruled that the short-term rental agreement was a “License “not a “Lease.” This ruling is significant because the Condominium Association Declaration prohibited the leasing of the condominium units but did not prohibit the licensing of the condominium units for short-term use under programs such as “Airbnb.” This new appellate court opinion has significance for condominium associations and condominium owners. A review of your Condominium Association Declaration would be advised as a result of this new appellate court decision.
The Illinois State Bar Association article states:
Condominiums | 1st Dist.
Wood v. Evergreen Condominium Ass’n, 2021 IL App (1st) 200687 (July 7, 2021) Cook Co., 3d Div. (BURKE) Affirmed.
Plaintiff filed complaint against her Condominium Association and its acting President who prohibited her from operating her condominium unit as a short-term rental on Airbnb, on the basis that the Condominium Declarations barred short-term rentals. Plaintiff granted her guests a mere license to use her unit, not a lease. The restrictive covenant in section 7 of the Declarations, which must be strictly construed, does not bar short-term licensing of the units. City of Chicago imposes regulations on short-term rentals similar to those imposed upon a hotel, and imposes taxes on and requires that financial records must be kept for short-term rentals. This is evidence that Plaintiff’s short-term rentals constitutes a “business” for purposes of section 11(b) of the Declarations. The more general prohibition in section 11(b) controls to prohibit Plaintiff’s short-term Airbnb rental of her unit. (McBRIDE and ELLIS, concurring.)
Bruning & Associates, P.C., represents Condominium Associations and Condominium Unit Owners in all matters concerning their Condominium Declaration, Condominium By-Laws, and Covenants, Conditions and Restrictions on the use of condominium units and condominium property. Please contact the experienced attorneys at Bruning & Associates, P.C. at 815-455-3000 to schedule your complimentary consultation to discuss your condominium matters.
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