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KrystalA
(Iowa)
Posts:59
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| 06/25/2008 7:19 PM |
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We have a person who wants to buy a unit, then turn it into a rental - can we prohibit the purchase legally as we are currently redoing our by-laws to prevent anymore rental units.
*long story short our previous property manger always said it was 10% cap - yet we have any proof that is true or exists, so now we are having a hard time enforcing |
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GlenL
(Ohio)
Posts:1468
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| 06/25/2008 8:24 PM |
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Krystal you do not want to get between the parties in the sale. If it falls through the seller may go after the HOA over the interference. If there is no provision banning this new person from using it as rental property at the time of the sale then IMO you can't prevent him from using it for this purpose. This type of measure will require a change in the declarations not a simple Board vote which will typically require the approval of 75% (check your docs for specific %) of ALL of the homeowners not just the few that usually show up to vote. Do you have the votes necessary to pass this measure?
An excellent article on this can be found at: http://realtytimes.com/rtcpages/20020102_hoarentals.htm
For specific legal advice always consult an attorney knowledgeable in your state laws and HOA issues.
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RobertR1
(South Carolina)
Posts:2519
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| 06/25/2008 8:52 PM |
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KystalA,
Welcome to the tough lifr of Association living.
A general answer to your question follows. However, it is complex, convluted, at times contradictory and nearly always state or area specific. Condos are different that Hoa's and never always the same in either case.
In general. You must start with your state statute and make sure how, and if rentals are addressed. Information will be minimal at best but that is the senior authority for all associations in nearly all the states. Next read you Master Deed and declaration but look also not just rental issues but authority that is state decreed and dealing with how constrictive the BOD (Management) can be. Are they granted wide open rights or are the specific as to enforcement of covenants. There are general rules by vsarious government lending agencies that might allow a persentage of rental property and any more and they wont lend financing money in the Regime. In a practical sense, if you have in place restrictive sections of your documents that control renters, you stand a much better chance of making those issues more restrictive than if you are starting out new.
If you get this far in your research you will begin to see what you have opened up, a big can of worms. Do I personally think there should be rental restrictions in Condos? Absolutely, and for this reason only. When you sign papers to accept the control and in most cases th immediate lien on your property by the Regime, you agree that all your interest and action involving the association shall be weighed firt by the question. "It it good for the Regime?" Nothing else matters if your actions don't support the health of the whole.......period. Muchbetter that way. So, if you have a rental program, understand what it says and more than likely it needs to be made more demanding by the regime. If you don't have a rental program, work hard as necessary to include one in your documents. Properly worded and not breaking any state or corporation laws, the Regime CAN control your community life. Lots of pros and cons here, but go back to the Golden Rule, and test everything with , "Does it help the Regime." If you are chartered as a single family residential community it is hard to support just letting everyone rent or not rent, you need control, again for the health of the whole.
Naysayers will declare I am full of crap,but if a large number of rental properties with absentee owners are nor pulling their agreed upon responsibilities to the whole, the property will decrease in value and it's rush to distruction with be governed by how quick the property reachs around 60% rental, then it's a rapid fall to complete reorganization into something beside a residential complex.
Nothing written here is noted other than to postulate my opinion, and no one else answering this question will be any more authortive than I. Which means, even the internet is not big enough to cover all the issues by your questions. |
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