Q We live in a town house condominium community. Recently, the owner of one of the units moved to a larger property. He rented out his unit to a woman who currently lives in the town house but also operates a day-care center as a business from the unit. She provides day-care services to about 15 children ranging in age from 3 to 15 years. Our condominium documents state that the units are to be used for residential use only and are not to be used for business purposes. What can the condominium association do?
A The "cottage industry" problem has been drawing national attention in recent years. Many jurisdictions are attempting to grapple with this problem; some are trying to place restrictions on nonresidential use, while others are trying to liberalize the existing zoning requirements, so as to permit some kind of business use in residential areas.
In any discussion relating to this issue, you must first look to the public zoning. What are the applicable zoning rules and regulations affecting the property? You should check with your local zoning authority to determine what the applicable zoning is and what restrictions, if any, fall within those zoning requirements.
It may very well be that day-care centers are permitted as a matter of right under your applicable zoning. It may also be that a unit owner who wants to conduct a day-care center business will have to ask the local zoning board for permission to obtain a variance to the existing zoning.
It must be made very clear that the public zoning is preeminent in most circumstances. Thus, if your area is zoned residential, and businesses such as a day-care center are not permitted as a matter of right, the condominium has absolutely no right to permit this kind of business, even if your condominium bylaws are silent on that issue.
However, it should also be pointed out that the condominium has the right to put further restrictions on zoning where applicable. For example, if your condominium is in a commercially zoned area, it is permissible for a condominium to impose more restrictive zoning -- for example, a requirement that only residential use be permitted in the complex.
Once we get over the public zoning issue, we then turn to what I call "private zoning," which is found in the condominium declaration and bylaws. The developer of the condominium has the right to establish reasonable restrictions on use. Indeed, many condominium associations will require that units only be used for residential purposes. This is known as "private zoning."
Then we run into the problem of interpreting what "residential" really means. For example, can a unit owner offer private French lessons from his or her home? Under a literal interpretation of language that reads "only residential use," it could be argued that even the offering of the French lessons would be a violation of the private zoning mandated by the condo.
You then get into a question of degree. For example, most people would probably not object to French lessons, but they might object to tuba or drum lessons.
The board of directors must take a firm position on this matter. The general rule regarding condominiums is that once a board of directors has permitted one owner to violate the rules and regulations, then it may become difficult later on to subsequently enforce those regulations as against another unit owner. The courts have been quite consistent in their approach that "selective enforcement" of the condominium documents is not permitted.
However, recent court opinions have also made it clear that a newly elected board of directors of a condominium association can begin to enforce the rules and regulations of the condominium association, and in effect sweep clean the sins of any prior board. But this enforcement must be consistent and uniformly applied.
In any event, it is quite clear that your board of directors has the obligation -- indeed, a fiduciary duty -- to investigate the matter with a view toward ensuring that the unit owner who is conducting a day-care center is not, in fact, violating the rules and regulations of the association.
It should also be noted that since the day-care center operator is only a tenant, if indeed this does violate the condo documents, the association will have the right to take action against the owner, since that owner is permitting the violation to continue.
I am also concerned about possible liability. You have indicated that there are many children, some of whom are 3 years old. What happens if a child gets hurt on condominium property? It may very well be that the association's insurance carrier will deny liability coverage based on the violation of the condominium documents itself.
Indeed, I am surprised that the unit owner who rented the town house to the day-care center operator is not himself concerned about possible liability.
It should also be pointed out that there may be other potential violations of your condominium documents, beyond the question of whether this is a violation of the residential-only use requirement. For example, are the children creating a nuisance, is there excessive noise, and as indicated earlier, is this putting an extra strain on your insurance liability?
This issue must be brought to a head immediately. The board should conduct an immediate inquiry, meet with the tenants and the owner, and if necessary call a special meeting of the membership to discuss this in depth.
Once a violation of the condominium documents takes place, it may be an open invitation for many other unit owners in the complex to do the same thing. After all, the human tendency is to take the position that "If he or she is getting away with this, why can't I?"
Kass is an attorney. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed, stamped envelope to him at Suite 1100, 1050 17th St. NW, Washington, D.C., 20036. Readers may also send questions to him there.