DavidP10
(Ohio)
Posts:4
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| 05/25/2008 8:50 PM |
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| Our association is considering restricting homeowners in the HOA from renting out their properties. Also want to consider amending our Covenants to create a 55+ community. There are 17 privately owned villas in the assn. which are currently owned by 55+ owners. We would like to keep it that way if legally possible. We are looking into the legalities of both and would appreciate any feedback of experience in these areas under State of Ohio and Federal laws. |
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EllenS1
(Florida)
Posts:353
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| 05/26/2008 8:33 AM |
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| Sorry I can't provide any legal info but I'm sure Donna can. I thought age discrimination was a thing of the past. |
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JosephM6
(Florida)
Posts:2
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| 05/26/2008 9:47 AM |
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| I read an article (Daytona News-Journal) written by Gary Poliakoff of Becker & Poliakoff, that HOA can ammend their covenants, conditions and restrictions to impose leasing restrictions, and if approved by the requisite number of members, the restrictions are binding on all unit/home owners, both those approving and those opposed. |
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DonnaS
(Tennessee)
Posts:2855
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| 05/26/2008 11:24 AM |
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David,
Yes it is actually a simple thing to do IF the majority or whatever percent of your membership is required to pass an amendment to your CC&Rs and Articles of Inc votes to accept the change.
Exactly, how are you registered in your State? You probably are or should be registered as a Not For Profit Corp. or a Non Profit Corp.
Your safest way to do this is to have a legal person/aka lawyer, write up the amendments. You will need to do the Restrictive Covs, the Articles of Inc and your ByLaws, to make the change consistant with each other.
Then it goes out to the membership for a vote. If it passes by the required amount that your Docs require, the amendment is registered in your County Clerks office and a copy of the amended Articles gets sent to your State.
Now, that was for any rental restrictions. To create a 55+ community, that will go by the same process except you will need to go to HUD and find the "HOUSING FOR OLDER AMERICANS " section. below is what it is.
Title 24: Housing and Urban Development
PART 100—DISCRIMINATORY CONDUCT UNDER THE FAIR HOUSING ACT
Subpart E—Housing for Older Persons
§ 100.306 Intent to operate as housing designed for persons who are 55 years of age or older.
(a) In order for a housing facility or community to qualify as housing designed for persons who are 55 years of age or older, it must publish and adhere to policies and procedures that demonstrate its intent to operate as housing for persons 55 years of age or older. The following factors, among others, are considered relevant in determining whether the housing facility or community has complied with this requirement:
If you want ideas on what to restrict in your rental agreement, I'll post that if you would like because 1 of my units did that
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DavidP10
(Ohio)
Posts:4
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| 05/26/2008 3:46 PM |
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DonnaS (Tennessee)
Thanks for your offer to post ideas on what to restrict concerning rentals in a HOA community. I would appreciate it. |
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DonnaS
(Tennessee)
Posts:2855
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| 05/26/2008 4:00 PM |
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David,
I was the chair of a Documents committee for a 55+ community that wanted to ban all rentals. There were 2 rentals in the 230 unit villa community, mine being the first one. The very good Palm Beach attorney that Ellen has referred to said that there are no "grandfathering in" laws and Statutes so I would have been out of luck.
After several workshops, the main concern that arose was a fear that Realtor/ speculators would buy up the units and then the dreaded "renters" would take over. So we came up with a good safety device to prevent that.
it reads "ANYONE RENTING OUT THERE UNIT MUST HAVE OWNED THE UNIT FOR A CONSECUTIVE PERIOD OF TWO (2) YEARS PRIOR TO THE RENTAL" ALL LEASES WILL BE OF ANNUAL PERIOD (12 months) ALL RENTAL APPLICATIONS WILL GO THRU AN ORIENTATION PRIOR TO SIGNING A LEASE TO UNDERSTAND THE RULES, REGULATIONS AND OPERATIONS OF ***** COMMUNITY"
In the event a unit is passed on to an heir due to the owners death or leaving, the new owner may not lease the unit for a period of 1 year.
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GlenL
(Ohio)
Posts:1377
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| 05/26/2008 4:29 PM |
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David there have been some postings recently about rental restrictions. You can find them using the search feature. Some other restrictions I would suggest:
1. The right to initiate an eviction action against problem tenants with the legal costs being assessed against the H/O.
2. That the tenant must provide contact information for everyone living in the unit.
3. Something to the effect of if the homeowner becomes delinquent with their assessments then the Association can collect them and any past due amounts directly from the tenant and the owner must credit the money paid by the tenant as rent. In other words if your monthly assessment is $150.00 and the H/O is delinquent and the BOD collects the $150.00 from the tenant directly then when the tenant sends the owner his rent minus the $150.00 the owner must credit it as if the tenant paid him in full.
4. I would also include language that if you have amenities (pool, tennis court etc.) the owner either assigns the amenity to the tenant and cannot use it for the term of the rental or keeps it for their self and the tenant can't use them.
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GlenL
(Ohio)
Posts:1377
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| 05/26/2008 4:34 PM |
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This doesn't pertain to renting or the 55 question you posted in another thread but did you know there is legislation proposed for Ohio HOA's?
H. B. 220 has been introduced to provide HOA's with many of the rights and protections that H. B. 135 gave to condo owners.
To see the entire bill: http://www.legislature.state.oh.us/bills.cfm?ID=127_HB_220 and contact your state representatives if you would like to see it passed.
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DonnaS
(Tennessee)
Posts:2855
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| 05/26/2008 4:37 PM |
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Glen,
What you posted is what we have in the Rules and Regs. Because these issues are so variable, the attorney suggested that they not be in the amendment restricting the communitys rental ability. But yes, those are excellent. Behavior issues are the real pain for HOA's to control. |
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GlenL
(Ohio)
Posts:1377
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| 05/26/2008 4:42 PM |
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| To be honest I saw some of them in a resolution a Virginia HOA passed requiring H/O's that rent their property to add to the lease as an addendum to protect the HOA. We are currently working to incorporate them in ours. |
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BrianB
(California)
Posts:1742
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| 05/26/2008 5:51 PM |
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is there any proof that renters, as a group, are worse for an HOA than owners? Or are all these desires to "keep renters out" based on anecdotal information? Are property values and neighborhood living better because an OWNER is violating the rules, instead of a renter?
To paraphrase Donna: It's the behaviors the HOA should focus on. |
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DonnaS
(Tennessee)
Posts:2855
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| 05/26/2008 6:18 PM |
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Brian,
It definitely is anecdotal information. If you want to open up a real heated arguement which has absolutely no valid basis, try discussing if renters are bad for a community or not. My villa HOA is absolutely so biased against all renters. My tenants are 80 and 82 year old active wonderful people. He flew B52 bombers in Korea and taught 2 astronauts how to fly the "Big Boys". The Board sent me a letter that they would not be able to stay if the first anti renter amendment passed. It failed by 5 votes. That is when I got on the Documents Committee and write something more workable for all of us.
So I ask, since when does a 55+ community think that a certain age will control behaviors of the residents, renters or owners. Are renters all bad? It depends on who you talk to and it seems that the older the person that you ask, the harsher their opinion is about this issue. How many of us were renters at one time? I know that I was and I'm sure almost all of us posters were so where is the validity in any of this? |
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EllenS1
(Florida)
Posts:353
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| 05/26/2008 7:42 PM |
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| There is no validity to this. Generalizations are always flawed. Being considerate of your neighbors and taking care of a property is not limited by age or by whether you own or rent. As a homeowner most of my life I rented for a period of about 6 years and I can assure you the properties I rented were in better shape when I moved out than when I moved in. I'm 76 and can say I have never had a problem with neighbors or they with me. It's all about respect to others. These old folks don't have enough to keep themselves busy so their entertainment consists of looking down on others. Very sad..you would think with age comes wisdom but not always. |
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GlenL
(Ohio)
Posts:1377
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| 05/26/2008 9:58 PM |
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Ellen I for one am not anti renter; I was once even stupid enough to own a rental property but I wouldn't do it again. (Not my cup of tea) And I suppose when I croak, my kids will rent my condo out while they try to sell it, so I don't want to unnecessarily bind their options. Statistically I suppose renters are no worse than owners, but age does unfortunately factor in. Are young people more inclined to be problem tenants? IMO yes, just like they are more likely to be poorer drivers, especially males. Again not all of them but a bigger percentage until you reach a certain age and then you begin to decline again.
The first two items I suggested are in the law for condos in Ohio and the other two protects the HOA and the renters from abuse. Donna's simply prohibits people from renting right away because unfortunately the number of renters in a community affects the ability of buyers to obtain financing. Besides I think the number of people interested in limiting/banning rentals is not because they've forgotten what it was like to be a tenant but because they REMEMBER exactly the kind of stuff they did when they did rent.
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JoanR
(North Carolina)
Posts:15
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| 07/02/2008 9:45 AM |
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| I am in a new development in NC under Declarant control. HO's have asked the Declarant to amend the Declarations to restrict the renting of homes by builders who are unable to sell due to the economy. The Declarant has responded that his attorney has advised against it because he "thinks" it will be a problem. Does anyone know if there is an issue with this in NC? |
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GeraldT4
Posts:932
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| 07/02/2008 11:41 AM |
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| JoanR - Are you a proponent of letting built homes sit vacant, or lots sit not constructed? Association costs in an association are divisible by the number of units/homes. If there's no owners to occupy units, those that have closed, and moved into units will need to divide association costs by lower denominator. Not in anyone's best interests. |
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MaryA1
(Arizona)
Posts:2259
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| 07/02/2008 12:06 PM |
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Posted By GeraldT4 on 07/02/2008 11:41 AM
JoanR - Are you a proponent of letting built homes sit vacant, or lots sit not constructed? Association costs in an association are divisible by the number of units/homes. If there's no owners to occupy units, those that have closed, and moved into units will need to divide association costs by lower denominator. Not in anyone's best interests.
It's a real Catch 22 situation! On one hand we can all agree developers and homeowners should have the right to rent their properties especially if they are unable to obtain a buyer. On the other hand we have lenders (FHA and VA) who look at the number of rentals in a development b/4 granting financing. Even homeowners living in assn's that have amended the CCRs to put a cap on rentals may be forced into foreclosure. Frankly, I don't think this is the right time to be considering a "no rentals" rule. |
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JoanR
(North Carolina)
Posts:15
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| 07/04/2008 4:41 PM |
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I am a proponent of living in a development that looks and is run as it was billed when I purchased. Yes, the economy has taken a turn but there are ways to make situations work for both developer and owners. Please note, I did not indicate we are proposing there may be no rentals, only that the rentals should be restrictive. We have builders who are on a month-to-month rental agreement with tenants. Is that the type of tenants you would like as neighbors? I'll give you an example of what our "Superior Urban Design" community looks like...sheets on windows, trash in the front yard, and no lawn maintenance. Lawn care is to be handled by the renters but seems to only get done by the builder when tenants move. One renter said they didn't want to purchase window treatments because they didn't know how long they would be living here. Do you get the picture?
So in this situation, yes, I would prefer a vacant home that must be maintained on a regular basis by the builder.
And why is it that so many of you only respond with biting comments and not answer the questions posted? You are trying to get your opinion out there and doing nothing to give the helpful advice and comments I thought this discussion was intended to provide. I usually read only and avoid posting for exactly this reason. So, do you know anything about NC laws as I asked?
Furthermore, there are risks involved in all types of purchases, including home ownership, but there appears to be an increasing number of builders and developers falling into that category of being under capitalized to withstand economic downturns and there is no protection to the homeowner. Declarations in developments under Declarant control are basically useless since they can be changed at the will of the Declarant and the Declarations are considered private agreements by the Counties that record them and the County will do nothing to enforce the rules that were established that the homeowners felt would provide the type of community in which they wanted to reside. |
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JoeC6
(Florida)
Posts:11
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| 07/04/2008 6:04 PM |
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| Do you need to change the CCR's or can the BOD just add to the rules and regulations???? |
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KirkW1
(Texas)
Posts:1145
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| 07/04/2008 6:14 PM |
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Do you need to change the CCR's or can the BOD just add to the rules and regulations????
Either the age thing or the rental should absolutely be in the CC&Rs. Trying to do this in rules and regs is an invitation to lose a lawsuit in summery judgment. |
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JoeC6
(Florida)
Posts:11
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| 07/04/2008 6:36 PM |
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| If we were only doing requirements for rentals like background checks, list of renters, etc. could we do it in rules. our problem with changing ccr's is getting the numbers. we can't even get 25 at an annual meeting out of 365. So it would be almost impossible to get ccr's changed |
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BrianB
(California)
Posts:1742
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| 07/04/2008 7:56 PM |
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Posted By JoanR on 07/04/2008 4:41 PM
I am a proponent of living in a development that looks and is run as it was billed when I purchased. Yes, the economy has taken a turn but there are ways to make situations work for both developer and owners. Please note, I did not indicate we are proposing there may be no rentals, only that the rentals should be restrictive. We have builders who are on a month-to-month rental agreement with tenants. Is that the type of tenants you would like as neighbors? I'll give you an example of what our "Superior Urban Design" community looks like...sheets on windows, trash in the front yard, and no lawn maintenance. Lawn care is to be handled by the renters but seems to only get done by the builder when tenants move. One renter said they didn't want to purchase window treatments because they didn't know how long they would be living here. Do you get the picture?
While i understand your dislike of the situations ou speak of, I have to say, I really don't care if the person living in the home is paying money every month to a mortgage company or a landlord. WHat i do care about is if they follow the rules of the HOA, are good neighbors, don't let their kids play in my yard, put their trash in the cans and not on the street, etc.. It never really seemed to make a difference to me if the good neighbor next to me was paying rent or paying a mortgage, or if the crappy one down the street was paying rent or a mortgage. If it does to you, more power to you to regulate where their money goes each month. But what matters to me is where their efforts go.
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GlenL
(Ohio)
Posts:1377
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| 07/04/2008 9:12 PM |
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Joan I understand your frustration however since you're still under Declarant control I'm afraid there is little that can be done until transition if he doesn't want to do it. That being said if these properties are in violation of the CC&R's then everyone should inundate the Declarant with complaint calls until he addresses the situation. Is not having a "proper" window treatment a violation?
You can also check NC's Landlord Tennant Laws and the Hostelry Laws to make sure short term leasing is allowed and if any type of registration is needed. For instance the State of Ohio requires residential property owners to register their rental properties with the County Auditor. I would also check with local authorities to see if there are any local laws that can help.
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CharlesW1
(Georgia)
Posts:818
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| 07/05/2008 6:18 AM |
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Posted By BrianB on 07/04/2008 7:56 PM Posted By JoanR on 07/04/2008 4:41 PM
I am a proponent of living in a development that looks and is run as it was billed when I purchased. Yes, the economy has taken a turn but there are ways to make situations work for both developer and owners. Please note, I did not indicate we are proposing there may be no rentals, only that the rentals should be restrictive. We have builders who are on a month-to-month rental agreement with tenants. Is that the type of tenants you would like as neighbors? I'll give you an example of what our "Superior Urban Design" community looks like...sheets on windows, trash in the front yard, and no lawn maintenance. Lawn care is to be handled by the renters but seems to only get done by the builder when tenants move. One renter said they didn't want to purchase window treatments because they didn't know how long they would be living here. Do you get the picture? While i understand your dislike of the situations ou speak of, I have to say, I really don't care if the person living in the home is paying money every month to a mortgage company or a landlord. WHat i do care about is if they follow the rules of the HOA, are good neighbors, don't let their kids play in my yard, put their trash in the cans and not on the street, etc.. It never really seemed to make a difference to me if the good neighbor next to me was paying rent or paying a mortgage, or if the crappy one down the street was paying rent or a mortgage. If it does to you, more power to you to regulate where their money goes each month. But what matters to me is where their efforts go. BrianB, Excellently written post. I agree, 100% with every thing you have written. I too DON’T CARE WHERE THERE MONEY GOES AS LONG AS THEY FOLLOW THE COVENANTS, RULES AND REGULATIONS. I have renters residing within my community and they are better neighbors than some of the lot owners, by ten fold. I don’t feel you should focus entirely on eliminating renters. You should focus your attentions on getting ALL residents (those who rent or who own) to abide by the governing documents. Keeping your community looking magnificent will increase property values. PERIOD I highly doubt there has ever been a study about the number of “renters” within an HOA compared to the equality of life, of those who aren’t. If there is PLEASE ENTERTAIN ME WITH SUCH. I’m certain; many of us would be interested in reading that comparison. I (as well as many other posters) know how difficult it is to enforce the covenants on ALL equally. However, as an elected board member I must do what is in the best interest of ALL who reside here; renters, lot owners or otherwise. Chuck W.
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Charles E. Wafer Jr. |
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JoanR
(North Carolina)
Posts:15
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| 07/06/2008 4:41 PM |
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Glen, Thank you for your comments. You are obviously the only one who paid attention to the fact we are under Declarant control. No matter how many owners complain, he does nothing because he doesn't need to. Glen, you reference 'local authorities'. What type of authorities could help me?
Everyone else who replied seems so concerned with renter vs owners maintaining their property. No homeowner is neglecting their properties as of yet, but all of the renters are contributing to an ugly sight, consequently the desire to restrict the rentals. |
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RobertR1
(South Carolina)
Posts:2159
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| 07/06/2008 5:00 PM |
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Glen.
Do you have current information of how you all are going to control this uncontrolled situation of rental units is Condos epecially. In SC at our condo it is totally uncontrolled and the Board refuses to address the issue, even with some restrictive requirements they were more or less forced to add to covenants when ammended in 2005. They just refuse to address them. Another attempt will be made to face this issue soon and I would like some info about how to put enforce the retrictions and requirements and if you have any stuff about actually charging fees or what have you to recoup the added expense of policing and caring for a short term rental populace with all owners absentee owners. |
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GlenL
(Ohio)
Posts:1377
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| 07/06/2008 6:30 PM |
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Joan there are various agencies that could be involved with rental regulations including the Zoning & Health departments. I've found in most communities if you start with the City or County Clerk's office and tell them what you're trying to accomplish they are more than willing and able to point you in the right direction. In the town where I grew up there was no HOA but even there it was against the law to have grass taller than X inches and the city would make you mow.
Poor economy aside these builders are primarily interested in selling their properties. I doubt they want to be a landlord for the long term, so I would contact them with your concerns calmly and rationally. The owner of the company especially if they are not local may not be aware of just what is going on. Point out to them that the better maintained and more inviting the neighborhood as a whole looks the more likely they are to sell homes there.
Talk to them about at least installing mini-blinds on the windows and maintaining the grounds as short term renters are not likely to have a mower let alone be willing to buy one that they may have to abandon when they move. Point out that if the builders that are renting the properties could join together and hire someone to mow the properties and add the cost to the lease.
Also don't forget the Declarant just because he is unwilling to add lease conditions at this time; become a pain in his side until he fairly enforces the CC&R's on all the property. If it's against the covenants for you to let your grass grow then it's against the covenants for the builders to unless he gives them a pass. So get your neighbors together and complain, complain, complain until he makes them comply, the squeaky wheel gets the grease syndrome. And don't forget complaining to your City Council member or County Commissioner about this; they always get more helpful during an election year.
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GeraldT4
Posts:932
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| 07/07/2008 12:16 PM |
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| JoanR - I believe we are all proponents of living in beautiful, well maintained communities. There's commonality amongst all of us. If an owner chooses not to install window treatments, to me I could care less. My question to you was not meant to be biting. Rather I meant for you to consider the flip side, that the practice of restricting an owners ability to rent can have a negative ramification upon the value of homes. Due to the fact that owners may be forced to sell in a less than favorable market. The protection of the value of the community requires enforcement of cc&r's to the owner, even if the owner is absentee, or the declarant. Please provide some ways to make situations work for both the developer and owners. |
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EllenS1
(Florida)
Posts:353
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| 07/07/2008 3:28 PM |
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| The problem as I see it is not about renters but on month by month. In one month there is no easy to correct a situtation. Perhaps your board can put rules in place that fine owners for the misbehavior of their tenants. I'd take pictures of the sheets in the windows, etc and contact the owner. Perhaps then they would be more careful about the people to whom they rent. |
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DonN
(Michigan)
Posts:240
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| 07/07/2008 6:14 PM |
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DavidP10
I believe the answer to your question requires some comprehensive legal research in your state and nationally. Your state may not have any cases on the subject, so courts would consider the rationales and decisions in other states as related to their laws and applicability to your state.
Case law places limitations on the types of amendments that can be approved by the stated amendment requirements in your CC&Rs. Generally, case law across the country places a minimum requirement of approval of a majority of owners to be binding on all owners. The definition of amend is also critical. Amend means to adjust, fix, correct, refine — not a wholesale change which generally requires approval of all owners. A wholesale change creates a different kind of community.
Changing to a 55+ community creates a new bargain and a different kind of community. It may require unanimous approval. Please read Armstrong v. Ledges HOA at http://www.aoc.state.nc.us/www/public/coa/opinions/2005/pdf/050088-1.pdf. This case cites cases from other states that have made similar rulings. It also discusses some exceptions.
An amendment to restrict use to single family residence and to restrict rentals may be okay on the long term. I believe that most courts would grandfather to the current owner the prior requirements for units being rented. The reason is that an amendment cannot take a given situation that is permitted under the current CC&Rs and make it into a non-compliance. To do otherwise would be a majority ganging up on a few. New owners would be bound by the amended requirement since the amended requirement would be in effect at the time the new owner purchased the property.
This is certainly not legal advice, but rather reflects my understanding from reading hundreds of cases on CC&Rs and owners associations. Your situation is complex and requires careful legal research in my view. The property rights of all existing owners have to be respected.
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Don Nordeen
Governance of Property Owners Associations
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