Restricting owners from renting out HOA homes

Sorry I can't provide any legal info but I'm sure Donna can. I thought age discrimination was a thing of the past.

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

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.

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.

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.

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?

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.

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.

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.

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.

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.

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.

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.

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.

RobertR1

I don't want to hedge, but it depends on the specifics in the CC&Rs.

If the CC&Rs grant the association (board) broad authority (beyond the scope of provisions in the CC&Rs) to write rules and regulations, then courts would likely support the board's actions if the new rules are reasonable, fair, not arbitrary, and not discriminatory. From an owner's standpoint, this is the worst situation, and ripe for abuse by boards. Courts may be receptive to an argument that the rules and regulations don't run with the land (not recorded with the register of deeds against all property units) and therefore are unenforceable if inconsistent with, or beyond the scope of, the provisions in the CC&Rs.

If the CC&Rs grant the association (board) limited authority to write rules and regulations consistent with the CC&Rs for the implementation and administration of the CC&Rs, then the property rights and obligations remain totally in the CC&Rs. R&R would be enforceable only if consistent with the CC&Rs and reasonable, fair, not arbitrary, and not discriminatory. This is probably best for the owners and the association. The requirements are in the CC&Rs and cannot be amended without approval of the owners.

If the CC&Rs are silent with regard to implementation and administration, then the CC&Rs are controlling. Board rules would not be enforceable in my view.

This is all just common sense which the court usually apply unless the courts are bound to strictly interpret documents, as they are with CC&Rs.

Again, this is not legal advice, but rather observations based on my research. Others may have different observations. I invite their posts.

i always like hearing that the renters have less respect for the property than owners do, since the property IS STILL THE OWNER'S.

honestly, how much respect does the owner have for the property, to rent it to bad renters? How diligent is the owner, to allow that to happen? How "good" is that absentee owner? They aren't even taking care of their property, their investment, and yet we think they are far better owners than they deserve to be.

Well, you can add my name to the list.

Owners that rent simply do not provide the attention to the property that residents that own do or non-residents that don't rent for that matter. I can't imagine how you can consider otherwise, but, more than once I have had a absentee that rents declare the people that live there full time should have to pay a premium because we use the facilities more. You have to have a large dedication to the property to stick around and hear some of this stuff coming from owners that rent their property. I am not saying they are foolish or stupid or something because they believe as they do. I don't know any well enough to judge their thught process. But after living here a long time stuff seeps into your mind that makes it hard to believe they have the same committment to the association as resident owners. At this present time we have a couple side by side ground floor ocean front large (3 bedroom) units that are rented. And this is not any different that some of the owner rentals or sometimes a unit with multiple owners. Anyway these units (2)are owned by same individuals (Absentee). In front of these units are 22 plastic lawns chairs, fishing gear, potted plants, other stuff and six huge rainbow colored plastic inner tubes stacked up 7 feet high. All, against our Rules of Conduct and our rental program (a part of the By-laws), goes on 24/7, and we have covenants against this kind of conduct. For the past 18 years our boards have not addressed the issue, even after amending the Rental program to tighten up requirements. I find my peace in the joy of the location of the Condo and the saving grace that we living here get a break during off season. I bring up the whole matter because this whole scenerio I picture has to be looked at through the wide lens. I know, I can't change them, and I am not certain anyone else can. Why, because it comes down to cost and reward. Is the cost I pay worth what I get? Apparently it is and my reward trumps my helplessness with not changing the picture over all these years. Hell we just passed a ruling that all Regime meetings will have an open format, and you would have thought someone had given me the Lock Box on Millionaire, but my doorbell don'r ring all the time anyway.

JimH5,

My association attempted to amend our governing documents, this particular covenant would limit the amount of renters within our subdivision (detached single family) unfortunately, that particular amendment didn’t stand a chance, and was dismissed.

I understand and can some what relate to your feelings about renters and their inability to abide by the covenants, as well as the rules and regulations.

I personally would mail each member (unit owner) this restriction notifying them of what will happen and when the BOD will implement such R/R.

As far as the ONE person you may have to evict. Couldn’t/shouldn’t you provide the unit owner until the end of the rental contract? In other words NO automatic renewals! Notifying all until owners that the renting of their unit will NO LONGER BE PERMITTED WITHOUT PRIOR PERMISSION, if permission isn’t requested and therefore, isn’t permitted they will face strong legal ramifications. They will also incur any and all legal expenses.

Just a thought.

Chuck W.

Gerald,
I don't want to ruffle feathers Gerald but I must propose a different aspect of this renter issue. I for the life of me can't see where Quorum has anything to do with renters, other than to observe that maybe the reason you have a quorum problem is because you have too many folks that have a different agenda when it come to responsibility of the association.
This little incident that happened may 30 minutes ago seems to speak to some of this, who is thinking about what. I live in a condo on the Ocean, fulltime for close to 19 years. I usually walk around the complex ofton daily, and I want go into how many times I walk around has a protective purpose. A bed shread was lying out on the deck that all these places sit on. We have a underground garage, a deck where all entranceways go into 6 buildings, a total of 65 units. All common property. I noticed outside a ground floor unit a floral bedspread, very ornate, fluffy and quilted. I asked the renters if it belong to them, they said yes, I asked why it was lying out on concrete. They said they had taken it to the beach that afternoon and it got wet and dirty and now it was drying. Our beach, although acreting at this time is not the whie dry sand beach you see in pictures. I told them to remove the spread, put it into dryer and moved on. A view from the renters. This am I was going to go to breakfast at a golf club cafe and this requires I go over some of the area as noted. Ground floor, two large units rented by friends, I hope. In front of those units were 22 plastic chairs, some large potted plnts, assorted junk and six or eight huge brightly colored innertubes. Next to this place was a one bedroom, occupied by owner and family but usually rental. I joked with owner of this unit I think I will take a picture of this mess at the two units and put it on the internet as a sales incentive to showcase our lovely condos. This owner doesn't have a clue about where his responsibilities reside. He mentioned he just wished they wouldn't do it when he was in his unit. I responder to him, that may be all well and good for him but this was my backyard 24 hours a day, every day.

Old, old story, but, I would suggest that all owners look at the whole story, but nothing on the horizon indicates any change. I don't think it passes the minds of some absentee owners that the picture is really different if you look close enough. I tried for all these years to restrict total % of renters. I couldn't do it, I could not get any bank or government agency (FHA) to restrict loans because of % rental property, State, County, etc, will not touch it. I believe our covenants could, in a court of law, have some weight, if, there was owners support, which will not happen.

RobertR1 - Achieving votes from owners that are not living in the association may be harder than achieving votes from those living in the association. In other words, a risk that quorum may not be achieved. Further to quorum is the risk that a vote that requires a high percentage of owners may be harder to achieve with absentee owners.

Gerald,
I am all for lowering votes needed for Quorum, because in case of a complete filure of the internal management of the regime, the documents still prevail and if decisions have to be made to dissolve or make changes or amendments quickly, a large Quorum will prove detrimental. Those living in the association can be almost threatened to step forward and in any case it will be to their benefit anyway, and that would be evident.

Answer to # 1: Little or none Gerald.

I don't think I validated we had trouble making a Quorum, we handle that like 90% of folks do, we get assigned proxies. Now that I disapprove of. I suggest Quorum should be lowered so that the associations business can be conducted in a routime fashion and with some degree of swiftness in an emergency. I suspect those that rent property as absentee owners do no attend, in general, as many home owners meeting as other folks, I am positive of this if the Meeting date falls on a date they have a rental for the unit. As far as allowing few people to make changes that effect many, Gerald, I think that is what we do now anyway.

Make no mistake, your opinion counts 1, as mine does, and the way it should be.

Don't hold it against me Gerald, I am full of Contraryiness. Only fun I have left, but maybe that will change and I can discover fun in all the wrong places.