mortgage

7 choices for underwater condo owner

Hardship exemption
Hardship exemption

She could ask the condo board to let her rent out the unit under a hardship exemption to the rental cap.

The condo association's rulebook, called "the declarations" (in other states, the rules might be known as "the conditions, covenants and restrictions," or CC&Rs), allows owners to rent out their units in certain "special circumstances," such as military deployment or job relocation. Board members have told Huss that she doesn't fit these special circumstances.

She could formally apply for the hardship exemption, anyway. It might help her cause if she has evidence that she's being treated unequally: for example, if the condo board has turned a blind eye to an unauthorized renter, or has dispensed a hardship exemption that wasn't strictly by the book.

Condos and co-ops limit rentals for various reasons. A frequent reason is that lenders won't approve mortgages in buildings with a lot of rentals. But lenders also avoid lending in buildings with a lot of foreclosures. There are so many foreclosures in Huss's building that the rental cap is irrelevant right now.

"In this economic condition, you would think they would be willing to make some sort of exception, especially because it ultimately doesn't affect them at all," Huss says.

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