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I am in the process of purchasing a condo in North Philadelphia. The situation is great and my offer has been accepted. I received Condo Association documents to review and have 4 days left to review them. One of the lines in the document states: "No portion of a Unit (less than the entire Unit) may be leased for any period."

This is a problem for me as the primary reason for purchasing said condo is to live in it the first year, renting out the other room. This language indicates that I can't do that. This seems a bit weird, considering I know this practice to be widespread across the city. I have a few questions:

  1. Is this the same thing as Single Room Occupancy laws, or is it something specific within the Condo agreement? If its the former, I know this practice occurs everywhere and I am good. If it is the latter, that makes it riskier.
  2. Since the practice is so widespread, it may just be that renters are consistently not actually signing leases, but rather just gentlemans-agreementing with the landlord. This isn't a problem if I can get a friend of mine to do it, but if its a random person this doesn't seem like a good idea?
  3. The premise that I can't charge someone rent for my spare room in a property I own just seems stupid as a concept. Am I just misinterpreting what is allowed here?
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    This is probably a clause of the condo association and not a statute applicable to the greater municipality. Some associations enforce their rules well. I would pass on purchasing this condo if rental income is required for affordability. – Pete B. Aug 1 at 19:22
  • What exactly are these Condo documents? Are they from the Condo Association, as @PeteB. suspects, or something else? – RonJohn Aug 1 at 19:26
  • @RonJOhn they are from the Condo Association. – KingG0at Aug 1 at 19:57
  • @PeteB. I can comfortably afford the mortgage without a renter. For me it would just mean I would have that much less to put to the stock market each month. – KingG0at Aug 2 at 11:30
  • You could always ask them to change the rules. They have quite a bit invested now that they accepted the offer. – xyious Aug 5 at 15:50
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This is not unusual.

Many condo associations are very interested in how many properties are rental properties. Even before the growth of extremely short term rentals, they knew that having too many rental properties could limit the ability of potential owners to get FHA loans.

Is this the same thing as Single Room Occupancy laws, or is it something specific within the Condo agreement? If its the former, I know this practice occurs everywhere and I am good. If it is the latter, that makes it riskier.

In many jurisdictions that have passed laws to allow these short term rentals, they have allowed community associations to enforce their rental rules. So if the governing documents limit the ability to rent part of the unit, expect that they can and do enforce it. You could hope that there are already people trying to get the documents changed, but don't count on that being successful.

Since the practice is so widespread, it may just be that renters are consistently not actually signing leases, but rather just gentlemans-agreementing with the landlord. This isn't a problem if I can get a friend of mine to do it, but if its a random person this doesn't seem like a good idea?

That is a big risk.

The premise that I can't charge someone rent for my spare room in a property I own just seems stupid as a concept. Am I just misinterpreting what is allowed here?

Welcome to life a condo owner. You have to deal with the rules. They can limit what you can do.

  • I feel like there must be a way to get around this. Is there a problem with having a person rent out the whole apartment (per a lease that says so) with the person under-the-table understanding that I am occupying the other room? Otherwise it seems like there are only two options which don't really make much sense: I don't live there at all and rent out the whole place, or I live there by myself. Are those really the only two avenues? – KingG0at Aug 2 at 11:37
  • You have to read the rest of the rules to know if whole unit leasing is allowed. – mhoran_psprep Aug 2 at 12:12
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A condominium unit includes the ownership rights to access the common areas. The point of this language is that it explicitly prevents you from leasing your private area of the condo to a tenant, while simultaneously not renting to your tenant access to common areas such as the hallways (you wouldn't do this) or amenities like a roof deck, storage room, etc (you might do this). Importantly, this language also prevents your board from restricting a common area amenity from tenants or making it owner-only.

You are able to lease the entire unit. Entire units are rented to groups of roommates regularly who organize roommate room assignments separate from the landlord. You might find being a joint landlord and roommate risky or what you describe as a "gentleman's agreement", and that's fair but it is available to you. The lease isn't going to be what keeps your roommate out of your room or using your TV.

A separate roommate agreement can establish who gets which room, share of utilities, chores, etc. so you can have a contractual agreement to not have your roommate use your room. It's just not in the lease.

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    The agreement explicitly states they can not lease a portion of the unit, and that's what OP is asking. You are saying you should still be able to lease the unit. Yes, but only the complete unit, not, as asked, just one room. (I didn't downvote) – ChrisInEdmonton Aug 1 at 20:24
  • @ChrisInEdmonton agreed. Rephrased to make it clear there is a permitted option here, that may or may not be to the preference of the OP, though the one word answer to the question as asked is "no" – user662852 Aug 1 at 21:18
  • Is there a problem with drafting a lease that specifies the whole apartment, with an understanding that what they are getting is the whole apartment - my room? I would like a lease for the security of it... what is the issue with just saying the lease is for the whole apartment? – KingG0at Aug 2 at 11:34
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Turns out in my specific case the condo is only 3 units large. Both myself and the other two owners want to be able to rent out single rooms. The language in the documents was boiler plate as the builder had just finished constructing the property. As we, the 3 owners, ARE the condo association for that condo we kind of make the rules. All of us are ok with rewriting (or not enforcing) that stipulation within the document. So we are all good!

  • That's funny that it's boilerplate. It's in my condo association's bylaws too and the board defends it to their death, yet I suspect the original writers of the bylaws just copied it from somewhere else without much thought. In my opinion, renters who live with the owner are actually better behaved than those that have the entire place to themselves, so if anything the rule should be the other way around, or not exist at all. – TTT Aug 5 at 22:17
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    "All of us are ok with rewriting (or not enforcing)" My gut feeling is that you should go with rewriting (with at least the assistance of a lawyer). Simply not enforcing may cause problems if any of the present owners were to change and the new owner(s) were not as accommodating. Check also that your three-unit condo isn't also subject to any other agreements, e.g. if it's part of a larger development. – TripeHound Aug 6 at 8:09

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