Many condo owners consider leasing their units as a way to generate income or hold on to a property they’re not ready to sell. But unlike owning a single-family home, renting a condo involves more than just finding a tenant. If you’re unsure of where to start, our Troy, MI real estate lawyer can help you review the details and avoid costly missteps.
Steps To Consider Before Renting
If you own a condominium in Michigan and are thinking about renting it out, it’s important to know what your condominium documents say and how Michigan law may affect your decision.
Check Your Condominium Documents First
The first thing you should do is review your condominium association’s governing documents. These typically include the master deed, bylaws, and rules and regulations. Many associations have rules about whether units can be rented, how many units in the building can be leased at one time, and whether board approval is required.
Some documents include outright bans on rentals, while others may allow them under certain conditions—like minimum lease terms, background checks, or registration requirements. Associations may also limit short-term rentals or require owners to live in the unit for a set amount of time before renting it out.
Keep in mind that these restrictions are legally binding. Violating them could result in fines, legal action, or the association blocking your lease. If you’re not sure what the language in your documents means, getting legal clarification is a smart move before you sign anything with a tenant.
Know What’s Allowed Under Michigan Law
Michigan’s Condominium Act gives associations the authority to adopt and enforce rules about leasing. However, the association must follow the proper legal process when making changes. For example, if your condo documents originally allowed rentals and the association now wants to limit or ban them, they usually need to amend the master deed or bylaws—and that often requires a vote of the owners.
Even if the association does update the rules, existing owners might be “grandfathered in” and allowed to continue renting, depending on how the change is handled. Courts in Michigan have looked at this issue in several cases, and whether or not a restriction applies can depend on timing and notice.
In short, just because a new rental restriction is added doesn’t automatically mean it applies to you—but you shouldn’t assume you’re exempt either. It’s best to get a clear legal opinion before moving forward with a lease.
Additional Requirements You Might Face
Beyond the association’s rules, you may need to comply with local zoning or rental registration requirements. Some Michigan cities or townships require landlords to register their properties, obtain rental licenses, or pass safety inspections. These rules apply even if your condo is in compliance with the association’s documents.
You’ll also want to make sure your lease agreement reflects any restrictions imposed by the association. For example, if short-term rentals are banned or only long-term leases are allowed, that should be clearly stated in the lease. It’s also wise to include language requiring tenants to follow all condo rules and to acknowledge that the association has authority to enforce them.
Speak With Your Attorney Before You Lease
Renting out a condo in Michigan isn’t always as simple as listing it online and collecting rent. Between association restrictions, state law, and local ordinances, there are several issues that could trip you up. At Gudeman & Associates, P.C., our experienced real estate attorney can review your condominium documents, help you understand your rights, and assist you in preparing a compliant lease.
If you’re thinking about renting out your unit, don’t make assumptions—get answers. Call us today to speak with an attorney who can guide you through the process with confidence.
