Rental Review Fees in Condominium Associations

February 16th, 2021 | Community Association Law Blog

By Eric F. Frizzell, February 15, 2021

Your condominium association charges a fee to any unit owners who rent their unit. Is the amount of the fee legal?

In the New Jersey appellate court decision of Chin v. Coventry Square Condominium Association, 270 N.J. Super. 323 (App. Div. 1994), the court ruled that an association may charge a unit owner a remedial assessment for the association’s expenses legitimately and reasonably related to the owner’s rental transaction. Anything more is an illegal revenue-raising device that results in landlord owners subsidizing the common expense obligation of resident owners.

The court found that the association’s recoverable expenses may include its administrative and personnel costs incurred to review a proposed lease (in order to assure it complies with the master deed and bylaws, and local ordinances and building codes); checking the prospective tenant’s prior rentals for claims of damage to rental property and other pertinent information; and the cost to inspect any common elements in the unit for damage.

The court reasoned that the association can inspect a unit’s common elements for damage upon the commencement of, or change in, a tenancy, so that repairs can be made promptly and the association can determine which party is responsible. The court further found that the association may review the proposed lease to assure that both the owner and prospective tenant will comply with the master deed, bylaws and other rules pertaining to rentals.

Please feel free to contact us if you have a question about your condominium association’s rental review fees, or any other community association law matter.

This bulletin is for informational purposes only and does not constitute legal advice.