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MaureenM1 (PA)
Posts: 344
Posted:
Our homeowner's association has recently taken over control from the builder of our HOA. We are a small 40 townhome developmnet with 4 townhomes to be built.

Our Declaration states that the Board be forwarded leases 10 days after execution. The builder who was previously president of our association (until turnover) owns and rents 11 homes. We recently asked our PM for copies of all the leases. It took some time to get them and when we did the dollar amount of the rents were greyed out.

We emailed the PM and she said that the Board only needs the names of the people renting and no other information and if we want an attorney's opinion she could get one at their hourly fee.

The attorney that we had before turnover was the builders attorney and the builder picked our management company.

We have a year's contract with the management company, however, the new Board is thinking that we should change the management company when the contract is up due to the fact that they were selected by the builder and the builder is still involved with the development as he is a homeowner of 11 homes and still is building 4 homes. The Board feels this to be a conflict of interest.

The Board is in the process of hiring an attorney to help with the transition. Should we be discussing these type of issues with the attorney who will be overseeing our transition? Another issue that has arisen is limiting rentals since we are a small development.

Any advice on this would be appreciated.
TimB4 (Tennessee)
Posts: 21,061
Posted:
There would be no problem in discussing any issue with your Association attorney.

I wouldn't worry so much about the grayed out amount on the lease. In reality, having that information does nothing for the Association. The Board should pick it's battles.

There are pros and cons to limiting rentals. There may or may not be legality issues associated with it. This is something the Board should definetly run by the attorney prior to enacting any policy. I would also suspect that this is not something the Board could do on it's own but would require a change in the covenants.

Some issues I see with limiting rentals that would have to be addressed:

1. What about those units currently rented - will they be grandfathered?
2. Hardship cases - issues beyond a persons control (military transfer for one).
3. How will the number of rentals be decided - first come first served, lottery, etc.
4. How will waiting lists be determined -
5. What about the renter who signed a 2 year lease but the owner losses the next lottery and has to tell the renters to leave midstream - will the Association be liable for moving costs of the tenants?

There has been lots of discussion on rental policies within this site and you can find a slew more by various search engines. This is something every Association will have to decide for themselves, comparing the benefits vs. the headaches.

Tim

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