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Subject: Are rentals a business?
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HollyR
(South Carolina)

Posts:3


12/12/2005 8:28 PM  
We have 10 rentals scattered about our 206 home community. Some of the rentals are not being taken care of properly, because the renters do not care. We are a new HOA board and contend rental properties are businesses. Our restrictions reads: No trade or business of any kind or character nor the practice of any profession, nor any building or structure designed or intended for any purpose connected with any trade, business, or profession, shall be permitted upon any lot.
RogerB
(Colorado)

Posts:5067


12/13/2005 6:52 AM  
Holly, rentals are not considered a personal business as they do not create an abnormal problem, such as excess traffic or parking problems. As a guide against discrimination ask "how does this poorly kept rental differ from a poorly kept homeowners property?" Check to see if your Declaration allows rentals. And if so, there is usually a statement that the owner is responsible for Covenant compliance. Contact the resposible party in writing on violations of restrictions and provide them with a copy of your policies and procedures on Covenant Compliance. Following is an example for an HOA with single family homes in Colorado:

Rules and Regulations on
Enforcement of Covenants and Rules

In order to maintain property values, safety, and quality of life the Association enforces restrictions itemized in the Declaration (Covenants), Bylaws, and the Rules and Regulations (sometimes called Policies and Procedures). This may be referred to as Covenant enforcement, or Covenant control, or Covenant compliance.

The Property is monitored weekly by the managing Agent for Covenant compliance. Owners can also report problems to the Agent and may request anonymity. The Agent will investigate and shall photograph potential violations. A Demand letter will be sent to the Owner advising of the alleged violation, the controlling regulation, a time limit for correction (typically 10 days), and the right of the Owner to request a Hearing before the Board of Directors to challenge the cited violation.

To dispute a cited violation the Owner shall promptly submit a written request to the Agent for a Hearing. Upon receipt of such a request, a Board of Directors meeting will be scheduled and arguments heard. The Owner shall be mailed a Notice of the Hearing date, time, and location; the alleged violation with reference to the controlling document, and the proposed sanction if a violation is confirmed and is not corrected within a timeframe determined by the Board. The Owner will be allowed to present a statement, evidence, and witnesses to support their position. After the Hearing the owner will promptly be advised in writing of the Board's decision.

When a violation is not corrected within the specified time limit, an initial fine of $50.00 shall be assessed. If a violation is not corrected, subsequent citations may be issued and the fine will be doubled compared to the previous Demand letter. If necessary the Association shall get a court order to correct the violation and effect corrections required. The owner’s property shall be assessed for all costs involved. This will include, but is not limited to, the costs to correct the violation, fines, fees, attorney fees and court costs.

Following are Rules and Regulations which clarify and supplement restrictions listed in the Declaration (Covenants):

1) Modification to the exterior of property requires prior written approval by the Architectural Design Review Committee (ARC) on an ARC Request Form. Failure to get approval may result in removal or redoing plus a fine. Approval shall include, but not be limited to, consideration of a pleasing appearance which is in harmony with other property in the subdivision.

2) In accordance with provisions of Senate Bill 05-100 amendments to the Colorado Common Interest Ownership Act, one political sign per candidate or ballot issue is allowed on your property within the time period of 45 days before until 7 days after an election. No sign may exceed 36” by 48”, or less if specified by a City of Lone Tree Ordinance. Also, the American flag may be displayed when the display is consistent with the Federal Flag Code; and a service flag may be displayed by an owner whose immediate family is a member of the active or reserve military service.

3) Landscaping shall be maintained in a neat and attractive condition, including periodic watering, fertilizing, trimming, pruning, removal of weeds, and replacement of landscaping when necessary. In accordance with Senate Bill 05-100, Xeriscaping is allowed however the plans must be approved by the ARC. Landscaping variances may be issued during drought conditions.

4) Vehicles are in violation if they obstruct the flow of traffic or block driveways or sidewalks. It is a violation for trailers, boats, motor homes or other type recreational vehicles to be parked in view except for temporary loading and unloading. Emergency vehicles which weigh less than 10,000 pounds and display an official emblem are not prohibited if they do not impede the safe and efficient use of streets. Vehicles shall be parked in the garage with overflow parking in the driveway. Street parking is only allowed for short periods of time. Garage doors shall be closed when not in use.

5) Household pets must be under control on a leash when not secured in the house or in a fenced yard. It is a violation for an animal to threaten or attack a person or another animal; the Owner shall be responsible for all costs if any medical treatment is required. Excrement shall be cleaned up immediately. Pets that bark or make other noises which irritate neighbors are a violation, except for brief barking of dogs as people pass by.

6) Installation of satellite dishes and antennas, notwithstanding the Over the Air Reception Devices Rule adopted by the FCC pursuant to the Telecommunications Act of 1996, shall be erected in such a manner as to be hidden from the street or other neighbors view, if this can be done without unreasonable delay or increased cost, and does not preclude the reception of an acceptable quality signal.

7) Unsightly conditions are a violation when visible from the street or from other houses. Trash and trash receptacles shall not be visible; except during trash pickup when they shall be placed near the curb, but not blocking the sidewalk, after dusk the day before trash collection and removed soon after the trash is collected.

8) Nuisances encompass those actions and activities which are stated in the Declaration. Loud noises, blocking sidewalks, and failure to remove snow from sidewalks within 24 hours are violations.
ElizabethM
(Arizona)

Posts:5


02/19/2006 8:45 PM  
"Doesn't create an abnormal problem such as excess traffic"? If you saw the renters in MY neighborhood, teh-heh---after you factor in all the roomates, usualy snuck in under the radar (to devide the rent up 8 ways) and the clouds of pot smoke and all the "extra" cars sitting around and all the constant coming and going and their children's coming and going and their friends and their children's friends coming and going and Big Daddy Meth Man and his traveling flea circus, the 2 dogs with the dirty red bandanas around their neck with the ghost of Mary and The Pranksters---you'd start to wonder why you didn't just buy a freight yard and a chain of vending machines---and buy an island.
ElizabethM
(Arizona)

Posts:5


02/19/2006 8:49 PM  
Did I forget Dirty Mary and Crazy Larry? UUh yes, believe it or not, I actually DO live in an "upscale" neighborhood......
HankL


Posts:0


02/20/2006 2:36 PM  
No.
However the owners of rental properties are responsible for upholding standards. That is whom you would cite. Also check your local laws about leases must have the HOA written in, and that breaking the HOA rules is grounds for eviction.
VincentR
(New Jersey)

Posts:7


02/20/2006 4:03 PM  
Check with the HOA Attorney. If you have in your by laws no business or trade you might have a legal case against the homeowner. Lots of Luck
EdR
(Texas)

Posts:170


02/21/2006 6:39 AM  
Anyone can rent out their property unless their CCRs say they cannot, but I've never seen one that states that. In the area where I live, people go out of the state or country on work assignments for two+ years at a time and renting their property is very common. However, if the person renting the property is running a business out of the house, it is the responsibility of the OWNER of that house to put a stop to it. We have many in-house businesses (like computer, sales (shipping),etc.) and the rule we use is that if you cannot see it, taste it, hear it or smell it, it's not a problem. Keep in mind that a bunch of cars coming and going is "seeing it". If you sell something and take it to be shipped, you aren't doing anything that traffic-jam-causing. We have had to file injunctions (to the owner) to stop renters from very busy businesses--like building decorations for holidays, a big wood shop in the garage which opened to the side street within a few feet, and loading and unloading trucks, not to mention that there were several additional vehicles parked on the street loaded with this stuff--in a very high profile entrance to the sub. (but it doesn't matter if it weren't high profile area--rules are rules). Then, our garbage company was not hired for picking up industrial-sized trash and these renters had a yard full of left over wood scraps (huge) volumes of trash--the waste company got pretty upset because it took one truck just for that. This is all against the contract with them and the assn. The injunction took care of the problem though. A very sad part of this situation is that the actual homeowner did this on purpose--he was mad at the assn. for their issue of his building a fence without approval and at every chance he got, he did things to cost the assn. money (like the attorney and filing of the injunction). This is probably TMI, but at least it gives you an idea of what is unreasonable and what is not. It also gives you an idea of why renters don't care about your property either because ultimately it's your problem. If your CCRs have a specific rule about renters, it should be enforced, and if I were the landlord, I'd impose a fine on them if I asked them to abide with something and they did not.
EdR
RogerB
(Colorado)

Posts:5067


02/21/2006 7:36 AM  
EdR, that's good: "the rule we use is that if you cannot see it, taste it, hear it or smell it, it's not a problem."

I hope you assessed his property when "he did things to cost the assn. money (like the attorney and filing of the injunction)." Also, while you can not fine the renter you can fine the owner of a property. When it hurts enough they will take action with the renter.

RogerB
BarbaraS
(New Mexico)

Posts:49


04/28/2006 5:40 PM  
Our codes specify that trash, laundry etc. may not be displayed. After appropriate (3) notifications to the property owner to remedy an unsightly situation, would the Board have the authority to clean up and then charge the owner? Also, in the case of rentals, should the realtor be notified or the owner?

Many thanks for this site and your help.
hoatalk
(California)

Posts:577


04/28/2006 6:01 PM  
You would need to check your governing documents to see if they specify the Board may enter the property to remedy these problems. Keep in mind that you are entering private property and you have to avoid illegal trespass.

For example: I have heard of communities that are allowed to have lawns mowed and charge the homeowner if the grass is above a certain height, but you just need to be very sure of the rights of the HOA here and assuming you have the right you may even want the Sheriff to escort the contractor onto the property to avoid problems. This is a case to ask your Attorney about before acting.

For rentals: Notify the owner, not the Realtor. The Realtor has no responsibility here. If they are using a management company, then you could try to contact them as well, since they manage the tenants. If the MC will not help you get the tenants to follow the rules, then their customer, the Owner, will be fined and will be very unhappy with the MC. Because of that, the MC may be willing to help and speak to the tenants.

Best of luck.

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BarbaraS
(New Mexico)

Posts:49


04/28/2006 6:16 PM  
Thanks for your reply. Ours is a townhome complex in which the owners own the buildings, but not the lots.. Our by-laws identify "common" and "limited access" properties. I'm assuming the "limited access" are walled in yards and patios and that the Association may allow maintenance people access. Am I right? Our Association is responsible for maintenance of the exteriors of the buildings and the common areas - grass, shrubs, irrigation system etc. The by-laws specify that each owner is reponsible for general tidying up of the area around the unit and for maintenance of the walled yards and patios. However, there are renters who allow trash to accumulate or weeds to grow in the walled yards and owners who have not maintained their roofs, allowing the ceilings of the carports to deteriorate and become unsightly. Is the Board then able to notify and subsequently charge the owner for clean-up or repair of carport ceiling?
BrianB
(California)

Posts:2820


04/29/2006 10:07 AM  
Holly, your covenants read much like ours on the business issue. "No business of any kind", period.

While i agree that a nice interpretation is the "can't see, smell, hear" etc rule, it is VERY well stated in the CC&R's that the founders wanted NO business. Absolutely none. It's right there in "NO business of ANY kind." That means, even if i can't see it, hear it, taste it, smell it, it doesn't matter. NO. NONE. NADA. Not of any kind, even the invisible/unsmellable kind.

Now, all we have to do is figure out how to enforce this draconian piece of rulemaking, and shut down the web manager, the writer, the artist, the painter, the telecommuter, the kid who mows lawns for neighbors, the teenager who babysits, and myself, since I run the association from my home.

Dang. Some rules suck and are just impossible to truly enforce.
VincentR
(New Jersey)

Posts:7


04/29/2006 11:58 AM  
I am very surprised that you allow rentals. There are laws being enforced now where in the by laws it states “No business shall be allowed or conducted out of the homes (units)” this also means rentals. The home owner is responsible for the unit. If the tenant is not keeping the unit up then the association attorney will have to go after the owner (s).

Vince

Business such as Avon, Tupperware and Reantals and so forth

TomJ
(Arizona)

Posts:42


04/30/2006 1:17 PM  
They are not considered a business in Arizona. However, in Maricopa County they must register their rental with the County of Maricopa and provide an in state address that the County can contact.

Additionally some cities also charge a tax on rentals.

HOAs may limit rentals but this has not been brought forward in court so no one knows what the outcome of that would be.

Some HOAs here also charge rental owners an extra administrative fee added to their assessments.

Our HOA has one rental that is being used as a live in senior care facility and our lawyer says we cannot prohibit this.
HaroldS
(Arizona)

Posts:906


04/30/2006 1:41 PM  
Some HOAs here also charge rental owners an extra administrative fee added to their assessments. >>> What for? And under what legal basis is this allowed if this is not specified in their documents? I would certainly contest that charge.

Our HOA has one rental that is being used as a live in senior care facility and our lawyer says we cannot prohibit this. >>> That is correct. We have two and cannot do anything about it. Something to do with the whole idea of group homes - being that they need to be in family neighborhoods. But I am still trying to find an actual ARS that spells this out. Or is it federal? Harold
BarbaraS
(New Mexico)

Posts:49


04/30/2006 5:28 PM  
An additional fee for administrative and other tasks, does not seem out of line to me, though our association does not do this. When the unit is empty, it is up to the association to handle water leaks, make calls and send notification to the owner, follow-up on damage done by owners repair people, etc. It just seems as though we are "managing" their units for them. This is especially true when the owner does not have a local property manager.
TomJ
(Arizona)

Posts:42


05/01/2006 8:08 PM  
One thing for the added fees, double mailings, research, etc. Our management company sends copies of any newsletters, violations, etc. to both the home owner and the lessee.

Our CC&Rs require owners to notify the board "of any lease and must provide the board the following fnformation: (a) name of tenant, (b) date and term of lease, and (c) current address of the owner".

Any one care to guess how many lessors actually do any of the above? Therefore the management company has to do research to find this information and they don't work for free.

At our last meeting one absentee owner requested a waiver of late fees because they did not receive bills for assessments. All letters to the address he provided came back as no such address.
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