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SandraM7
(Illinois)
Posts:6
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| 02/21/2011 9:04 AM |
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Ok. Below this message is my Association's ARR. It's an exerpt of the Leasing/Selling rules. Please review and let me know what you think. Also, I didn't mentioned this before because I didn't want to make public personal issues, but here it goes: Last year after my fiance had a critical car accident and I had to move to another state to help him and and top of it I had just lost my job, I wrote a hardship letter and was given permition to rent for one year. However, the year is up and my situation hasn't change much, other than I now have a job. My now husband is unabale to work and I am supporting us for now. The tenant I have at the unit is wonderful and keeps the unit as if it was his own and treats the building the same way. I dont make any money off the rental as if it's just enough to pay for the mortgage and I still have to come up with $500 extra to pay for the assessments. The damage here is that in order for me to keep the condo is by renting it. There's no way I can come up with $1,600 montly to pay for an empty apt. and support me and my husband in the state we are at. I cant move back to chicago, as I will then be unemployed!!! so I basically can't win! And yes, I tried to get the hardship extension but it was declined.
Thanks for your help.
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Moving, Selling, and Leasing
In order to preserve the residential character of The ???? Condominium Association, effective November 18, 2008, the following leasing restrictions will apply:
1. Subject to the exemption for current leased Units stated below, the purpose of this rule is to limit rental Units to twenty percent (20%) of the total Units in the Association.
2. No more than one (1) rental Unit shall be permitted per individual Unit Owner. The Board will not recognize multiple entities formed by individuals to circumvent this rule.
3. All existing rental Units as of November 18, 2008, shall be “grandfathered” or exempt from this rule until sold or transferred. Existing investors may continue to rent their Units, but unless they qualify for a lease under the future twenty percent (20%) limitation, investors must sell their Units to resident Owners.
4. Hardship cases for Unit Owners experiencing difficulties in selling a Unit or experiencing other personal hardship shall be heard on an individual case by case basis by the Association’s Board of Directors. The decision of the Board of Directors on a particular hardship request shall not establish a precedent for future applications for a hardship exemption.
5. If the Board of Directors grants a leasing hardship exemption to a Unit Owner, the Unit Owner may lease his or her Unit for a period of one (1) year.
6. The sale or lease of a unit requires the filing of forms before the Board can waive its right of first refusal. These forms can be obtained from the Management Office.
7. As soon as an owner decides to sell or lease, he must file a ‘Notice of Intention to Sell or Lease’ with the Management Office.
8. Three additional forms must be filed with the Management Office when a sale or lease has been arranged:
A. Notice of Pending Sale or Lease
This form must be completed by the unit owner. It attests that the owner understands his/her obligation to the Board, including the furnishing of information about the purchaser or lessee and the right of the Board to act within a 30 day period.
B. Memorandum of Understanding
This form must be signed by the purchaser or lessee. It attests that the purchaser or lessee has knowledge of the Declaration of Condominium Ownership and By-laws and his/her willingness to abide by its terms, and of the right of the Board to a maximum period of 30 days before waiving its right of first refusal.
C. Information on Purchaser/Lessee
This form is confidential and must be signed by the purchaser or lessee. It requests
information concerning occupation, finances, and references.
9. A transfer/move-in fee will be charged to anyone moving into a unit, with the exception of a move on the same floor, where the elevator is not required.
10. Upon filing the forms with the Management Office, the purchaser or lessee must contact the Management Office to schedule an orientation meeting with Association representatives.
11. Based on the above information, the Board will decide whether to waive or exercise its right of first refusal. If the Board waives its right of first refusal, it will execute a ‘Consent to Sell or Lease’ form, which is needed to close on a unit or validate a lease.
12. The Association requires a credit report on a new purchaser or lessee. This is to be treated as confidential information. The credit report should come from a licensed commercial credit reporting agency.
13. All leases shall be in writing and shall provide that the lease is subject to the terms of the building's rules and regulations, Declaration and By-laws, and the Illinois Condominium Property Act. The lease packet supplied by the Management Office contains the lease form incorporating the City of Chicago Residential Landlord/Tenant Ordinance. This lease must be used to comply with the City of Chicago and the building. Lessees assume all obligations of the unit owner to the Association, except for financial obligations, although the unit owner is not relieved of these obligations.
14. Leasing of a unit for less than one year is prohibited.
15. Owners or renters will not be allowed to move into the building before the following has been completed:
A. All paper work,
B. An orientation meeting,
C. Schedule of moving dates and service elevator reservations with the Management Office.
16. Owners must make it known to their tenants that a tenant may not move into the building before being seen by a representative of the orientation commission.
17. All moving activities must be scheduled through the Management Office. There is no moving on Sundays or designated holidays.
18. Any damages attributed to the resident's moving activities will be charged to the owner.
19. The Association has no obligations with respect to the Chicago Landlord/Tenant Ordinance. Those obligations will be between the unit owner and his/her tenant.
20. If any tenant moves into or moves out of a unit in the building without abiding by this section of the Rules and Regulations or the By-laws of ??? Condominium Association, following notice
and opportunity for a hearing, the Board of Directors may levy a fine in the minimum amount of $200 against the owner; and the Board may file suit to evict the tenant. Failing to comply will also result in the tenant's name being omitted from office records, the mailbox, and cessation of maintenance services.
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SteveM9
(Massachusetts)
Posts:1529
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| 02/21/2011 9:33 AM |
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They have already granted you a 1 year hardship permission to rent, it doesn't say this cannot continue, but needs to be approved every year. Ask for another 1 year to rent. Should be no problem to grant that to you.
Wait till the market gets better, then sell. Might be 5-10 years. |
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SandraM7
(Illinois)
Posts:6
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| 02/21/2011 9:42 AM |
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I did ask for an extension, and it was declined.  |
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LawrenceC1
(Georgia)
Posts:342
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| 02/21/2011 10:00 AM |
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Posted By SandraM7 on 02/21/2011 9:04 AM
Ok. Below this message is my Association's ARR. It's an exerpt of the Leasing/Selling rules.
Sandra,
Since this restriction was not in force when you bought you unit, how was it added? Is this a resolution of the board or is it an amendment to your CC&Rs? |
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SandraM7
(Illinois)
Posts:6
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| 02/21/2011 10:08 AM |
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| I don't have the answer to that, What is the difference between the Resolution and an Amendment? This is the most update ARR that was given to me. |
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BonnieE
(Illinois)
Posts:331
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| 02/21/2011 10:12 AM |
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As a followup from Lawrence....please provide your Declaration language that provides the basis for the Board to establish this rule. Thx.
(Even better, if your entire Declaration & governing docs are available electronically, a link to them would be helpful.) |
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SandraM7
(Illinois)
Posts:6
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| 02/21/2011 10:21 AM |
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Bonnie,
Thanks again for your feedback. All I have is the ARR is that what you are referring to? I don't know of anything else...please tell me what I should request from the Association so they can send it to me. Thanks! |
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JanetB2
(Colorado)
Posts:1818
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| 02/21/2011 10:37 AM |
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Hi Sandra:
You should have been given By-Laws, Declaration of CCR’s, and ARR when you purchased your unit.
Because it is a Rule & Restriction and not an Amendment to CCR's then what I posted before should potentially prevail in that any rule cannot create a hardship:
Under the principles of Apple II and Hinojosa, a rule to limit or restrict leasing rights must (1) be in the best interests of the association, (2) be nondiscriminatory, (3) be applied even handed-ly and not create a hardship, (4) not restrict any owner's rights under the First Amendment or any other constitutional or public policy provision, (5) be binding on all present and future owners, (6) not be antagonistic to the legitimate objectives of the association, and (7) be intended to promote the health, happiness, and peace of mind of the owners.
While a board-adopted policy must meet these tests, an amendment to the declaration is presumed valid unless proven otherwise.
In the above noted case law it states:
Section 18 of the Act sets forth certain provisions that shall be included in Relevant to the issue before us is paragraph (k), which states: the bylaws. “[R]estrictions on and requirements respecting the use and maintenance of the units and the use of the common elements, not set forth in the declaration, as are designed to prevent unreasonable interference with the use of their respective units and of the common elements by the several unit owners.”
Board rules must be objective, evenhanded, nondiscriminatory, and applied uniformly.
Your state case law refers to this case law from Washington where because the restriction was not in the covenants it could not be enforced:
http://caselaw.findlaw.com/wa-supreme-court/1474728.html
What I would do in your situation is respectfully request to continue renting and let them know that you have researched and found case law which states that any Rule or Regulation must be applied even handedly, not create a hardship, and applied uniformly. By denying you the ability to continue renting it creates a hardship in the current economy and this rule is not being applied uniformly in not allowing everyone to rent units.
In worst case scenario, if needed, you could discuss with an attorney and have him possibly write a letter to your board requesting to rent the unit.
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SteveM9
(Massachusetts)
Posts:1529
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| 02/21/2011 10:40 AM |
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I did ask for an extension, and it was declined.
Did you explain the situation. You cannot afford it if you cannot rent and owe $150,000 on a condo that will sell for $100,000 forcing you to short sale. A short sale will hurt all other people trying to sell their condo's because it will lower their appraisal making their condo worth less and then they will be underwater too.
Let them know if you cannot rent it, you will have to list it with a Realtor on MLS for $20,000. Note: This will start a bidding war, and you might get close to what you owe, but will have serious effects for all people trying to sell their condo in the future if they look at past listings on similar condo's in the building. People will have very low offers for the next 10 years if they saw you listed yours for $20k. Most people use the internet to buy now and Zillow, trulia and others keep price history forever.... |
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LawrenceC1
(Georgia)
Posts:342
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| 02/21/2011 10:41 AM |
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Posted By SandraM7 on 02/21/2011 10:08 AM
What is the difference between the Resolution and an Amendment?
A resolution is the result of a motion made at a meeting of the board. Usually it requires only a majority of the board members in agreement to be passed. Resolutions are limited to extending or elaborating restrictions already written into your CC&Rs. Resolutions do not have to be recorded at the courthouse.
An amendment is the result of a legal process that changes your recorded governing documents. Usually this requires a formal notice to all members of the Association, and written affirmation by 2/3 of those eligible to vote (but sometimes the threshold is 90% or even 100%). Please refer to your Covenants to understand the specific process in your case. An amendment is recorded with the land records of the court just like your original Covenants. If the association made an amendment you should have received notice of the amendment, voting instructions, and a letter describing the final result -- all by postal mail.
Since a leasing restriction is a new limitation of the rights of owners, it is likely that it would require an amendment, and not just a resolution. |
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ChrisW10
(Georgia)
Posts:5
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| 02/04/2012 2:56 PM |
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Hi John06,
I have a similar issue as the original post in Georgia. There was no lease provision in my HOA convents when I purchased my house, but one was added right after the housing bubble burst. Specifically, the HOA added that only 10 units of a neighborhood that includes >200 homes can be leased at a time and that you must obtain a permit in order to lease. Of course, there are at least 10 units being leased currently. From what you posted, it seems that this may be an added restriction to my land use that may be unenforcable. If so, what can I do to gain the right to lease legally? This was added by amendment and was added with the use of a law firm, so my guess is that it was handled correctly. Thanks in advance for any insight. |
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BradP
(Kansas)
Posts:2491
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| 02/04/2012 3:23 PM |
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Posted By ChrisW10 on 02/04/2012 2:56 PM
Hi John06,
I have a similar issue as the original post in Georgia. There was no lease provision in my HOA convents when I purchased my house, but one was added right after the housing bubble burst. Specifically, the HOA added that only 10 units of a neighborhood that includes >200 homes can be leased at a time and that you must obtain a permit in order to lease. Of course, there are at least 10 units being leased currently. From what you posted, it seems that this may be an added restriction to my land use that may be unenforcable. If so, what can I do to gain the right to lease legally? This was added by amendment and was added with the use of a law firm, so my guess is that it was handled correctly. Thanks in advance for any insight.
you may want to start a new thread and give as much detail as possible... |
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ChrisW10
(Georgia)
Posts:5
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| 02/04/2012 3:26 PM |
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| Thanks BradP. Advice taken! |
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BonnieG1
(Nebraska)
Posts:350
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| 02/05/2012 10:22 AM |
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Posted By MelissaP1 on 02/20/2011 2:32 PM
Honestly, I don't believe ANY HOA has the right to limit or make rules against renting property. (Unless the HOA actually has the mortgage on the house.) ONLY the mortgage company can limit the use of property. I've seen a few FHA type loans with these restrictions on when you can use the property as rental. Sometimes rental property falls under laws regarding excessive "Flipping". Some states don't allow buying/selling a certain amount of properties in a given year. This is due to some illegal activities of some condo flippers in year's past.
A good lawyer can easily fight the HOA's policy on rental property. It would be best to ask for "forgiveness" than permission either way. Worst case you hire a lawyer.
For those who don't like my statement about HOA's NOT having rental policies/restrictions. I understand COMPLETELY the WHOLE issue about rental property and their effect on home values in a HOA. I agree wholeheartedly there should be restrictions. However, the reality is that this is just NOT legally possible thus I wouldn't even open the can of worms...
We have restrictions. A unit must be least for at least 90 days and the terms of the lease must indicate that the renters are to abide by the rules of the association.
A few years back, the Board made the decision that a unit cannot be sold for the purpose of renting. That rule I am certain was to prevent people from buying just to make a profit.
However, If I moved, I could lease my unit. As of today we have no restrictions on the number of units that can be leased. Of course most of the owners would prefer the units are not leased. |
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JohnB26
(South Carolina)
Posts:579
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| 02/05/2012 12:01 PM |
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4. Hardship cases for Unit Owners experiencing difficulties in selling a Unit or experiencing other personal hardship shall be heard on an individual case by case basis by the Association’s Board of Directors. The decision of the Board of Directors on a particular hardship request shall not establish a precedent for future applications for a hardship exemption.
if you can not get an extension based on your continuing hardship ... you need to get an attorney
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DanielM6
(North Carolina)
Posts:1
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| 02/26/2012 2:37 PM |
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| Our homeowners association was formed in 2007 and in our CC&rs we had a clause that allowed us to make changes to our by-lays.That same year we discussed the rental ban and of the 40 units 38 residents voted to ban rentals. We had three units bought pre constructed that we grandfathered in as they wanted to rent them. We had legal help with drafting these covenants and recorded them at the courthouse.Our wording in the CC&Rs state 7.5 units or three that is allowed.Now thats stated in NC statutes that CC&Rs can be amended by a vote of 67 percent of homeowners, we had more than enough with 38 out of 40 yays and 0 neys.Three abstentions.I know it sounds harsh but the reality is in these hard economic times the rule,by-lays,covenants or whatever is what it is.People voted the changes for the better.We have one thats in short sale, one in bankruptsy, four thats listed for sale and we just had one sold.I think the market is in for a rebound very soon. |
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JanetB2
(Colorado)
Posts:1818
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| 02/26/2012 5:40 PM |
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Hi Daniel:
Welcome to HOATalk.
Can I please ask you to start a new thread with your question? This thread was initially started in 2011 and you are from a different State than the original poster. In order to avoid confusion between various states it is best to keep each state and corresponding questions/answers separated.
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