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Subject: Negligent Investor, Nightmare Tenants
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Author Messages
NinaC2
(North Carolina)

Posts:15


11/15/2021 9:24 AM  
One of the units in my community is rented to tenants who are driving us board members to an early grave.

The owner of the unit has done NOTHING to curb the behavior of his tenants. We send notice upon notice to his legal address on file. We've held hearings to which he never shows. Fines are accumulating on his hoa account north of $800 as of today, and still his tenants violate rules and regs constantly. We even started having a duplicate notice sent to the actual unit in case the property owner was not communicating the issues with his tenants. They made sarcastic remarks to their neighbors about these notices, so we know they receive them. Still, non-compliance. The property manager says there is nothing we can do, except place a lien on the property to get the fines paid.

There has to be a better way.
KerryL1
(California)

Posts:8720


11/15/2021 10:04 AM  
If your governing document permit it, you can withhold amenity privileges from the owner if you have anything worth withholding. In my condo HOA, we've withheld gym & also pool access (fobs needed to enter) and Visitor Parking. I Let's hope a couple of our good posters from NC know about liens.


PatJ1
(North Carolina)

Posts:290


11/15/2021 10:54 AM  
The HOA relationship is with the owner, not the tenant. I hate it when we don’t have addresses of the owner and the violation gets sent to a tenant. As HOA president, I've been physically threatened by a tenant because a violation was sent to the rental. Police involved. Sheesh!

All owners should include a copy the HOA R&R’s in their leases. This protects the owner and allows a swifter eviction for non-compliance of the R&R’s. Without the R&R’s in the lease, the owner has no choice but to wait out or offer to buy out the lease. Some choose to wait it out. Buying out a lease can be expensive, a lot more than the fines, or the tenant may just flat out refuse to move until the lease it up.

In North Carolina you can lien a unit for fines, but not foreclose for fines. Fines are capped at $100.00 and I have read where daily fines are difficult to recover in the courts.

The violation process is long and time consuming. Sometimes the violation may never be remedied. The fines can be collected and lien can be filed, but it really doesn’t address the violation that the neighbors complain about. In North Carolina, violations are covered under privacy laws. The Board can not share with the member’s what is being done about the violation.


Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
JohnC46
(South Carolina)

Posts:11659


11/15/2021 11:02 AM  
If have found you have to turn the heat up. Some pay no attention to any correspondence form a BOD or a MC. You need a lwayer to write a threatening letter. Probably cost a few hundred dollars.
MichaelH34
(North Carolina)

Posts:64


11/15/2021 11:05 AM  
PatJ1, The legal relationship is with the owner but the tenant still has to be dealt with in some fashion in the same way that adult children of owners might have to be worked with directly rather than through the "owner."

"In North Carolina, violations are covered under privacy laws"

Do you have a reference handy for this? Asking for my own education.
BenA2
(Texas)

Posts:1104


11/15/2021 12:35 PM  
I suggest contacting an attorney. They may be able to pass on any legal fees to the owner and it may be enough to get the owner's attention. At some point the owner will probably realize that it is not worth the cost of keeping bad renters.
PatJ1
(North Carolina)

Posts:290


11/15/2021 12:51 PM  
Posted By MichaelH34 on 11/15/2021 11:05 AM
PatJ1, The legal relationship is with the owner but the tenant still has to be dealt with in some fashion in the same way that adult children of owners might have to be worked with directly rather than through the "owner."

"In North Carolina, violations are covered under privacy laws"

Do you have a reference handy for this? Asking for my own education.




http://www.lawfirmcarolinas.com/Executive-Closed-Sessions-.cfm

It's listed under TOP SECRET. - Handling disciplinary matters or rules violations by association members



Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
PatJ1
(North Carolina)

Posts:290


11/15/2021 1:25 PM  
Missed this comment in my reply "The legal relationship is with the owner but the tenant still has to be dealt with in some fashion in the same way that adult children of owners might have to be worked with directly rather than through the "owner."

Unless their name in on the recorded deed for the property, they are not the owner and not a member of the HOA. If the deed registered owner requests to allow their tenant, child, parent or any other person to discuss HOA issues, a document filed with the MC to allow that by the deed registered owner will allow information to flow to that person from the owner.

Even with such a document, an HOA can only collect from, sue, lien, or foreclose on a deeded owner unless they hold a legal Power of Attorney from the registered owner that designates them as the responsible party.


Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
MichaelH34
(North Carolina)

Posts:64


11/15/2021 1:37 PM  
Isn't it the case that in NC renters are subject to HOA rules even though they aren't owners?

I doubt that we can impose fines on the renters (but hope to be wrong) but keeping renters informed of the rules and when they're breaking them is well within our rights to do.

There's got to be some legal avenue available. This isn't the first time an issue with a renter has come up in NC.
NinaC2
(North Carolina)

Posts:15


11/15/2021 1:39 PM  
PatJ1, I just spent about 30 minutes on this site. A glorious resource. Thank you.
PatJ1
(North Carolina)

Posts:290


11/15/2021 1:53 PM  
Posted By MichaelH34 on 11/15/2021 1:37 PM
Isn't it the case that in NC renters are subject to HOA rules even though they aren't owners?

I doubt that we can impose fines on the renters (but hope to be wrong) but keeping renters informed of the rules and when they're breaking them is well within our rights to do.

There's got to be some legal avenue available. This isn't the first time an issue with a renter has come up in NC.




It is in the best interest of they HOA if they do not cross the HOA/Owner relationship. An HOA can not take a tenant to court. There is no binding relationship with a tenant. Only the owner who is an HOA voting member.

Violations are served to the owner, not the tenant. Involving tenants in HOA issues puts the HOA in a pickle without resources to enforce or collect.



Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
LetA
(Nevada)

Posts:1462


11/16/2021 10:39 AM  
Have you tried running a skip trace on the absent owner? 
NinaC2
(North Carolina)

Posts:15


11/16/2021 12:37 PM  
Oh, we know exactly who and where the owner resides. He is just refusing to get involved or respond to letters. He has simply set up his autopay to send us the monthly HOA premium automatically each month.
LoriM15
(Florida)

Posts:49


11/16/2021 12:45 PM  
Here's a portion of our declaration that allows us to terminate leases for tenant behavior. We also have the right to disprove a lease renewal if the tenants are bad. If you don't have this provision in your documents you may want to amend them. Makes the relationship a lot easier.

Tenant Conduct; Remedies. All leases will provide, or be deemed to provide, that the Tenants have read and agreed to be bound by the Governing Documents, and that any violation of the Governing Documents shall constitute a material breach of the lease and subject the Tenant to termination of the lease and/or eviction as well as any other remedy afforded by the Governing Documents or Florida law.

Our bigger problem is bad property management companies for the leased units. They don't respond to the tenants for issues and cause problems for surrounding units. We are starting to communicate with the unit owners and tell them we won't approve their leases unless the management company is either replaced or is more responsive.
PatJ1
(North Carolina)

Posts:290


11/16/2021 12:54 PM  
Posted By NinaC2 on 11/16/2021 12:37 PM
Oh, we know exactly who and where the owner resides. He is just refusing to get involved or respond to letters. He has simply set up his autopay to send us the monthly HOA premium automatically each month.




Well at some point those continued fines on his account will push his aged dues out into the collection stage. When we hit the 91 day column out goes the 15 day demand letter. If no response, it's sent to the attorney's for collection. Our attorney charges the owner their fees, not the HOA. Our attorney files our liens. That might get his attention.

Keep holding hearings that he doesn't attend and adding the fines to his account. Make sure all your documentation is in order.

Board members are volunteers. Many have no idea what they're doing. Educate them. Don't beat them up.
JeffT2
(Iowa)

Posts:637


11/16/2021 2:19 PM  
I definitely don't buy the idea that you can't deal with renters who are violating your docs.

What are the violations?

Are any of the violations also violations of local laws, such as noise, late night partying, running a business in a residential area, dealing drugs, etc.? If so contact the local authorities to find out what you can or should do to stop it.

Do any of the violations involve damage or changes to the common areas? If so, pay someone to fix it and send the bill to the owner and the tenants. If they don't pay it, then take the tenants (or the owner) to small claims court.

Do any of the violations involve leaving things outside?

What are the violations?

Many governing documents have a statement that the document is binding upon "each member, tenant, resident, and occupant" and each has a duty to follow the association’s governing documents. Does your document have such a statement, or any restrictions about tenants? If so, it may be possible to take the tenants to court.
NinaC2
(North Carolina)

Posts:15


11/23/2021 5:02 PM  
Thanks for all your replies. We will look into the idea of having our governing docs amended to include a provision that allows us to terminate tenant leases.

MelissaP1
(Alabama)

Posts:10584


11/24/2021 4:26 AM  
You can't do that. The HOA is a third party to a lease. The HOA does NOT own the property. A HOA can not terminate or force an owner to terminate a lease. What you need to do is make it so the owner has to include following the HOA rules in the lease. If you do that, then that protects most parties involved. A HOA can have their rules be the reason the owner can terminate the lease. Otherwise the owner's hands are tied just like everyone else.

Former HOA President
MichaelH34
(North Carolina)

Posts:64


11/24/2021 6:32 AM  
MelissaP1, you know this isn't possible in NC?

I'd be skeptical that it would be legal but every municipality has it's own spiderweb of regulations.
CathyA3
(Ohio)

Posts:2588


11/24/2021 7:29 AM  
General comments:

As with a lot of things in HOAs, state laws differ on how much an HOA/COA can interact with tenants.

It can range from basically giving the association veto power over leases (they can evict or even refuse to approve a lease altogether) all the way to forbidding the association from interacting with tenants in any way.

The same sort of thing applies to violations. For some states/associations, it's complete privacy with discussions of violations held in executive session. In others, homeowners are entitled to some amount of information about others' violations.

So you have to know what your state law and what your governing documents have to say about it.

In most cases, though, the owner of the unit is legally responsible for the behavior of tenants and financially responsible for paying fines. This gives the association some control over the situation even in communities where they have to stay strictly hands off with the tenants.

Landlords are in this to make money. If they're spending more than they're taking in, then they don't have investment property, they have an expensive hobby. Landlords who took out a mortgage to buy the units generally have less wiggle room as far as profitability goes. Ditto those who live outside the area and must hire a property manager. Fines resulting from a tenant's bad behavior can make them cash flow negative in a hurry, and this should get the landlord's attention big time.

So, enforce your CC&Rs diligently (for everyone, not just tenants - otherwise the landlord can claim selective enforcement). Make sure you have a published fining schedule for violations and use it. Be diligent about collections. If you're lucky, you'll live in a state that allows foreclosure for non-payment of fines (some states do, others don't). If foreclosure is not on the table, then things like small claims court may work for you. In short, do whatever you can legally to get the landlord's attention and make it unprofitable for him to ignore his tenants' actions. Ir takes patience, but this does work.
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