The Clubhouse Rules Renting Out Common Areas

Amenities can be a major selling point for any co-op or condo. You don't have to be Jillian Michaels these days to have a spa or full gym at home. Naturally, they add to the property value of the building as a whole, as well as to the individual units. Some buildings or condo associations are lucky enough to have a library, a residents-only lounge, a rooftop deck, a screening room, an infinity pool, a community rock garden or various other amenity spaces. They can even be a potential source of income for the association community.

Party for Hire

It stands to reason that, by renting out a common area to a trusted individual or group in need, an association could stand to pocket a little additional revenue for its coffers. However, in Chicago, the majority of shared space usage stems from those within the communities in question.

"Typically, an association only allows an owner to rent out the association's common spaces, although the owner may be hosting an event which includes non-owners," explains Benjamin Rooney, an associate attorney with the law firm of Keay & Costello, P.C. in Wheaton. "That said, and especially wherein larger associations are concerned, there are certainly instances in which the common area is rented to non-owner groups in order to generate some income to offset members' common expenses. But before doing this, a board should speak with its accountant to insure that any income thereby derived is treated in the most tax-friendly manner."

One simple reason why Chicago condo communities tend to relegate common area usage to their own is that, should they open their facilities to a broader swath of the public, they're also opening themselves to a higher degree of both liability and responsibility. 

"The leasing of common facilities to non-residents does occur at some properties, but doing so creates more complicated legal and practical issues," says Scott Rosenlund, a shareholder attorney with the law firm of Fullett Rosenlund Anderson PC in Chicago and Lake Zurich. "For example, enforcement of association rules regulating the use of common areas is significantly less complex when the user is a resident or a guest thereof, as opposed to a member of the general public." 

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