Condo Association Management Blog

IMO, if your bylaws only allow owner-occupied units, then I wouldn't think the LLC could be allowed to purchase a unit. The LLC cannot live there as it is not a living, breathing, entity. An LLC is, without a doubt, going to be leasing to unit to another party. Now, the LLC may lease the unit to the owners of the LLC, but that would still not be owner-occupied. 
The LLC is meant to offer a blanket of protection for the business owner. I could certainly see this *blanket* work against the condo association in certain situations.

A board has no authority from prohibiting anyone from buying a unit. The only thing a Board can do is to enforce governing documents, but that's only possible when there is an owner who is bound by those documents. 
 
You may want to know who is living in a unit, but you have no legal foundation to that. This is not a coop where members get to accept or not to accept a new member. 
 
The only thing you can do is to make sure that the new buyer has a copy of your governing documents and once they become owners you can start enforcing them. 
 
What if this LLC is buying the unit to flip it. You have absolutely no control and power to stop it. If this is a single member LLC meaning the LLC only has one owner you'll be hard pressed making the case that this unit is being rented. I am sure most judges will see it as asset protection on the part of the owner and will allow it. What would you do if this was a trust buying it?  
 
It sounds like you'd like to have a little more control than you are entitled to.

We unknowingly purchased a condo in a residential building that is part of the same association with a building next door renting split condo units as hotel rooms under the name of Beacon Pointe Resort. Our declaration states all units in both building are residential and for single family use only. However, the developer put a statement in the declaration saying owners in that building can rent nightly and owners in our building can rent weekly. Due to the developer’s bankruptcy, Republic Bank now owns most of the units in the resort building and also has 51% of the votes in our combined HOA. Is this hotel operating legally? If not, short of an expensive lawsuit, how can we stop this hotel from operating on the association’s property? The declarant (bank) controlled board has already violated other CIC laws including using the reserve fund to pay for repairs to bank owned units. We seriously doubt just bringing this to their attention would do much good. Next week a new “owner controlled board" is to be elected as it is now the end of the declarant control period. Unfortunately, we fear the bank and the management company that runs our HOA and profits from the hotel will hand pick the board and they will still be in charge. We would appreciate any suggestions of what to do about this.

One of the risks of self managwement is acting without the advice of an attorney. Strongly suggest youy retain one to advise you on this LLC purchase.

I posted the original question. Yes of course, I have already contacted our attorney but I wondered if others have handled a situation like this in the past. While Ohio condo laws differ from other states, I will post our attorney's response once I receive it. Thanks!

Yes, our Association had a foreclosure owned by a bank, that subsequently did a closed, secret bid and now a family LLC bought the Unit. We know nothing about the people or their plans. It is upsetting that banks, who were bailed out by FEDS, are now making things much harder for the average citizen. Realtor contribute to degrading properties when investors with bad intentions buy in a secret auction. My question is, why do banks allow secret auctions and avoid responsible people who need a loan to buy a home? People with over $100,000 in cash may not be the most trusted or honest...slowly American taxpayers can take back their life buy managing their property with common sense strategies, like carrying good insurance and never spending above their means. and, "Kathy" please post the results of your Ohio attorney's journey into the darkness of greed. I live in California and things are no better. Good luck. I await your blog results...mc

I smell a rat. Get an attorney who specializes in condominium law. The HOA always needs to stay in control and a LLC will jeopardize the board's authority.

board members who bad mouth or trash talk others. is there a law on books or something that can cease this from a board member

Every once in a while we get posts here from people that can only be described as 'HOA Haters'. While their posts are generally not productive and don't serve this community one can understand that their feelings towards HOAs is based on their previous negative experience. 
 
Unfortunately some boards (or individual board members) behave in a way that can only leave negative experience. It seems like the original poster and Marie above represent exactly these kind of boards. 
 
Board responsibility, and ONLY responsibility is to enforce governing documents of an HOA and create and enforce rules associated with it. It's really that simple. Anything above that is acting outside of board's authority. 
 
Knowing who the people are, how a unit was purchased, what one's plans are, etc. do not belong in a board. 
 
Many residents frequently feel that their HOA boards control too much of members' personal lives. Messages above indicate just that, at least to me. 
 
This is just my two cents as someone who very frequently sees conflicts between homeowners and boards and in a significant number of cases it's due to board members sticking their nose where it doesn't belong.

UPDATE: I posted the original question: Our attorney did advise us that we can't stop the LLC from purchasing the unit, it will most likely be a rental unit but we needed to know the name of the managing agent for the LLC before any other documents would be released to the title company which they needed for the closing. They did provide the information and I also advised them we do not allow rentals and since they are aware before closing and that we will evict any tenant moving in they know where the Association stands. The realtor said the buyer is seperating from his wife and wanted the unit in his name which I also think is a bit strange because in Ohio if you are married you can't sell property without the spouses consent, but at least we know who is moving in. I reminded him that our bylaws don't allow rentals and of our eviction policy, I also sent him a copy of the bylaws. Ohio also requires the Board to maintain records containing the full name, and address of all owners and we can request updated information if needed. Unit will be fined for failing to provide requested information.  
 
To Jeff: Shame on you for assuming you know every situation that involves an HOA and every states laws: The title company sent documents to me to complete in the LLC's name and I simply requested clarification as to who they were. Our Association was concerned, and rightfully so because that's the only name we had. Since an LLC's assets are protected we simply wanted to know who was going to be in the unit and who would be responsible in the case of a default. As Board members, we ARE enforcing the governing documents by not allowing rentals, we ARE enforcing Ohio condo law by requesting owner information- that's our responsibility.  
 
We ARE trying to stay with in FHA guidelines regarding rentals since we are in the process of recertification. If they bought the unit to flip it great-as long as they pay the monthly fees and follow our bylaws. 
 
 
 
We also have an very active neighborhood watch in our Association and if there is ever a problem the first thing we are asked is who lives there. I am reminded of a situation a few years ago where I just happened to be home during the day and I heard glass break. Someone was breaking into a neighbors unit and I witnessed the situation, I called the police and gave a description of the guy breaking in and subsequently had to go to court as a witness. The first thing they asked was how to get in touch with the owner and I had her contact information, to this day she thanks me for being home because they probably would have stolen all her electronics, as it was all he did get was a flat screen.  
 
 
 
I've lived on this property for close to 20 years and have a vested interest in my community.

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I came upon these posts when inquiring about the ability for an LLC to own a condo. My mom and dad passed and willed my 6 siblings and I their Florida condo. Our attorney is advising us to form an LLC to make it easier to manage the entity as respects buying and selling each others' interests, potential death of family members, etc. We have used LLC's in the past, but only for commercial real estate. We have no intention of renting out the condo; we just see an LLC as a straighforward means of managing our family's interest in ours. I just wanted to point out that a family LLC is probably different from a business-oriented one. Good luck!

UPDATE: I posted the original question and I wanted to give an update. Just as our Board feared the LLC has not paid any condo fees since they purchased the unit 4 months ago and the address for the managing agent is a post office box. We have sent mail and it has gone unanswered.  
 
Now the Association has to use valuable funds to file a lien to protect our interest, and while yes we charge all legal fees back to the owner, it is still a waste of funds because we pay the attorney up front. Either way it's a loss of revenue and I bet the fees will continue to pile up because the owners have no responsibility to pay, their personal assets are protected by the LLC. Does anyone still think we were wrong to be concerned and be against this purchase?