How Should the Association Think About Rental to a Legal Entity?

In many condominium associations, there is still concern and hesitation regarding renting to legal entities, often based on outdated information. Some associations even go so far as to prohibit it in their bylaws. This is an unfortunate situation, both for the association and its condominium owners. In fact, experience shows that renting to legal entities is usually a safe and beneficial solution for both the owner and the condominium association.

Here are the most common concerns and helpful responses if you are facing this issue with your association:

  1. "If too many people rent to companies, we will become an 'oäkta' association."

No, absolutely not. An association is classified as "oäkta" when more than half of its members own their homes as legal entities (such as businesses). If a member rents out to a company, it does not affect the "authenticity" of the association.

  1. "It will become a hotel business, and there will be a constant influx of people in the building."

An important aspect to consider is the ability to regulate who actually resides in the apartment when renting to a company. This means you can include conditions in the lease agreement that limit the number of people who can live in the apartment and clearly define the purpose of use. This ensures that the rental does not turn into a hotel operation and that you have control over who resides in your condominium. Many associations have concerns about hotel-like operations, something we haven't seen since 2003 thanks to well-drafted lease agreements.

In summary, it is important to carefully consider the benefits of renting to legal entities in a condominium association. By understanding the association's rules and creating clear lease agreements, you can establish a stable and advantageous source of income while protecting your home and the interests of the association.

 

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