In Illinois, restrictions on short-term rentals (STRs) within condo associations can vary based on several factors including community preferences, local ordinances, and, most importantly, the association’s governing documents. The Illinois Condominium Property Act (ICPA) generally gives HOAs the freedom to create their own rules and restrictions when it comes to renting individual owner units.
Across the greater Chicago area, there is variation in how condo associations limit and/or regulate STRs, but here are a few common approaches we see:
- Enacting occupancy limits – Condo associations may impose occupancy limits that restrict the number of individuals allowed to occupy a unit at any given time. In doing so, this can indirectly limit the potential for some STRs.
- Imposing leasing restrictions – Some condo associations impose leasing restrictions that limit the frequency or duration of rentals. For example, they may require a minimum lease term of six months or one year, which also squashes STRs.
- Requiring registration and/or approval – Condo owners who wish to engage in STRs may be required to register their units with the association or provide notification of their intent to rent. This allows the association to monitor and enforce compliance with any applicable regulations. Others may also establish an approval process that involves reviewing the rental agreement, verifying insurance coverage, and ensuring compliance with association rules.
- Applying fees and assessments – Another way to limit STRs is to impose fees or assessments on homeowners who engage in STRs. This can also help cover the costs associated with monitoring and regulating rentals.
- Amending governing documents – Many condo associations have governing documents that regulate or prohibit STRs. These documents may include restrictions on rental duration, minimum lease terms, or prohibitions on commercial use of units. In some cases, HOAs may need to amend their governing documents to explicitly address STRs and establish regulations governing their use.
To learn more about how to approach short-term rentals in your Chicago condo association, our team at First Community Management is here to help. Contact us today to learn more about our full-service management solutions for Chicago condo associations.