HOA fined me $12,000 for allegedly short-term renting my condo (Chicago)

[Mergim Kacija]

Hello BP Community,

I've been accused of short-term renting my unit (which I have not) and was fined $12,000. Furthermore, the building's bylaws have a 25% rental cap, and my unit is NOT approved, yet I informed them that as an absentee owner, I shared my space (using a roommate agreement) to manage costs and that concurrent occupancy is permitted by the bylaws.  However, there seemed to be a misunderstanding around the term "concurrent occupancy," with them giving an example of a married couple. I questioned the relevance, asking why a married pair would have a lease amongst themselves. They remained unyielding in their stance.

After their decision, in goodwill, I offered to show them my roommate agreements for 12 months terms (which I did), terminated my roommate's agreement as they requested (which I did) and even proposed selling my condo (currently for sale). However, the HOA's attorney said their decision stands, leaving me with a hefty $12,000 fee.

I have done everything within my power to be amicable and respect the HOA's authority in the matter. At this point, I would be content with mediation and having the HOA just wave the fine to prevent me from selling the unit. The HOA board, however, doesn't seem to be vested in resolving the matter and the $12,000 balance remains in my account and the only form of communication they will have with me is via their attorney. 

Although I didn't actually stay at my unit during the lease term (my primary home is in Florida), I genuinely thought that I was within my rights to share my space based on the rules and regulations. 

So my question is, should I just pay the fine, sell the condo and chalk this up as a lesson learned? Or do I have any recourse in this situation? 

Thank you, 

Mergim

[Greg M.]

Quote from @Mergim Kacija:

I did not short-term rent the property, but I did lease it to my roommate with shared usage rights. If I did violate anything, it's the 25% rental cap. However, the rules and regulations don't have anything specifically calling that out, the only thing that is in there is this:  

For any violation of the Declaration prohibition on short-term leasing, defined as any term less than six (6) months of occupancy for hotel or transient purposes, a fine of $1,000.00 per day will be assessed against the unit for first and subsequent violations.

In conjunction with the below clause in a rental cap amendment, the board somehow conflated the two to come up with a $12,000 fine. 

The leasing of renting of any Dwelling Unit of other occupancy of Dwelling Unit without concurrent occupancy by the Owner of such Dwelling Unit is limited to Twenty-Five Percent (25%) of the total Dwelling Units at any given time; 

So in short, the fine seems to reflect a short-term violation (which they cannot prove and I can disprove with my lease contracts) because they didn't have any fines specifically defined for rental cap lease violations in the rules and regulations. 

If they specifically cited you for STR violation, have an attorney write a letter. Any attorney will write practically any letter for a couple hundred dollars. 

You cited my client for a STR violation. This has been proved false (see enclosed copy of lease). You have 14 days from date of letter to remove fines and all costs from his account. Failure to do so will result my client filing suit naming the HOA Board, the Board members individually, and the Management Company, seeking removal of these costs as well as damages for their gross negligence.

Given the attached proof that my client did not violate the clause you cited, it would be extremely unwise to continue harassing my client for such an obvious mistake by the Board. Should the Board confirm within 14 days of this letter that this matter has been closed  and all fines and costs been removed from my client's account, my client graciously agrees not pursue legal action against the HOA Board, the Board members individually, or the Management Company for their negligence in this matter.

Once they get this letter, their lawyer will inform them of the costs of fighting it. They have to notify their insurance company (higher premiums / non-renewals) and they will have to pay the deductible which could easily be $10K or more. The fact it is not an open/shut case should make them back off.

FYI, you can file suit against these people without an attorney. Lots of free help out there on filing out the forms.

Also, nothing stopping you from sending a letter to every homeowner in the HOA. "The Board cited me for a violation I did not commit and I have provided them proof of this. I don't wish to have to sue the HOA (after all, it is all our money they are wasting on lawyers to defend their wrong actions and also to pay claims when they lose). Tell the HOA to acknowledge their error and drop the matter..."