Rental vs Leasing

A lease is just a rental for a specific period of time. Put the kabosh on this rent-to-own scam, starting with a letter from your attorney to the investment firm. Your recorded CC&R's now require owner-occupancy and whoever leases the unit will not meet that requirement. Your BOD may wish to post a notice on the entry door(s) to the unit giving notice to any prospective tenant that they will not be able to live there unless their name is on the deed.

Larry,

In some states it is all about the money and not necessary about who is on the deed. There is a difference between an owner and the member at least in Florida:

“ ‘Member” means a member of an association, and may include, but is not limited to, a parcel owner or an association representing parcel owners or a combination thereof, and includes any person or entity obligated by the governing documents to pay an assessment or amenity fee.

I also tend disagree that lease is just a rental...

The CC&R's read: Notwithstanding any provision herein to the contrary, no owner of a unit shall rent or lease such unit, provided that any owner renting or leasing a unit at the time of adaption of this provision may continue renting or leasing such unit.

The remainder of the CC&R's read rules pertaining to the Grandfathered Rentals.

This never was a rental so therefore they have no Grandfathered Rights.

In my mind, this investment company cannot lease and we have a case against them.

The CC&R's were recorded April 6, 2005.

This investment company purchased this property July 26, 2011 and it was recorded August 2, 2011.

Yes, in great length. They seem to do what every they want. They bypassed the escrow company even tho there was a lien and back dues owed. They said the bank had taken care of everything.....of course, the bank didn't and say it is not in their hands now. The investment company said that they were not interested in anything in the past.

Yes.

Tell me how a lease and a rental differ. I've rented both real and personal property and I have leased both real and personal property. I never found much difference except that leases were longer duration and usually for a specific length of time. [Larry]

Larry,

Well, we almost agree but not quite. Rental agreements differ from leases. Leases are different type of contracts conveying property to a lessee for a specified period. Not true with rentals.

Standard rental agreement can be a verbal agreement, while lease must be in writing and MUST include a set period of residence, where rental does not. Typically, rental agreements are automatically renewed and the tenant can cancel giving a 30-day notice. The owner can increase the rent at any time (rental control laws apply). Not true with leases. Lease can include a lease-to-purchase option. Rental cannot. ..

I do not see one reason why any HOA should allow rentals. Leases, yes. Many HOAs in Florida also allow a 90-day lease which must be in writing and subject to all restrictions/rules.

LarryB13 is right that they don't owe what the former owners did. The new owners get a clean slate.

Here's the issue with limiting renting/leasing in a HOA. The HOA can't intefere with the owner's contract. If the mortgage/loan company allows them to rent out their property then the HOA can't interfere or impose that restriction. Now some states those laws are different. You will have to look up what your state allows. Otherwise a good lawyer could easily blow through your rental/lease limitations.

This is a hot button issue with HOA's. It would be great to be able to limit or ban renting in a HOA. However, if push comes to shove, it's something that may lack the enforcement the HOA desires. Your best talking to a lawyer to verify if indeed the HOA could have put this rule into their documentation.

Anita, it appears the owner is in violation of the Covenants and therefore should be fined in accordance with your association's fine schedule. And if the amount fined ($xx,000) will not solve the problem the owner can be taken to court. One problem is the clause in your CC&Rs may be found to be unreasonable by a judge.

Oops, see following.

New Owners must occupy the property they purchase for the first 24 months following the date of purchase. After which new Owners may lease their unit for minimum term of at least twelve months to a single family or while living in the Unit may lease a portion of their unit to a maximum of two unrelated tenants. All leases shall include a statement that failure by the lessee to comply with all of the governing documents shall be cause to terminate the lease. The Owner shall provide an executed copy of a lease; the names of all occupants of the Unit, a phone number and/or email address by which the lessee may be contacted; and the license numbers of all of the lessee’s vehicles. No Owner may lease their unit for transient or hotel purposes. The Owner shall be responsible to provide and review the Governing Documents with each leasee. Failure by a leasee to comply with all restrictions in the Governing Documents may be cause for the Association to void the lease or to pursue any other remedies available at law or in equity.

Petunca what are you talking about? How the property is purchased makes no difference if you have to follow the convenants or not. If you purchase a home in a foreclosure, it doesn't mean you assume the debt of the previous owner to the HOA. The purchaser pays the costs of foreclosure and then assumes a mortgage on the property. It's a clean slate for them. You can't make the new owner pay backed dues of any other previous owner.

I find a serious issue with that last sentance in regards to the lease wording. Unless the HOA OWNS that property, they can't interfere with contracts or impose fines on that property. A HOA doesn't own property, they own the rights to manage it more or less. Common property is property all the owners have an interest in but is not owned by an individual. Which means one individual can't tell another what they can do on that property. It has to be a MAJORITY of the invested owners to decide what can or can not be done. Hence why a HOA has a Board and individual voting rights. It also shows that even if the owners want a rule restricting rentals, it also can't interfere with an individuals rights.

Again, the "lease to own" condition is a condition of the loan/mortgager. They are the ones who can put the restrictions on the loan. There are many loan progams with these type of restrictions irregardless of what the HOA's rules are. I've seen some with no rental for 3 years of ownership. It's quite complicated. It's the rental/owership ratio that determines the types of loans the HOA/local area receives. FHA loans aren't available everywhere but are a really desirable program. A person would have to look for a different loan program in order to buy which could limit the number of available buyers for the sellers.

Our management company would advise the title company prior to closing on this restriction. The company managing the association should have prevented the sale to an investment company base on what Anita posted.

Melissa, what you stated is correct the lease is between the owner and their leasee. The association can not terminate the lease. However, the lease can be terminated by the owner as stated: "All leases shall include a statement that failure by the lessee to comply with all of the governing documents shall be cause to terminate the lease." The association can encourage the owner in this regard when the leasee fails to comply with all restrictions in the Governing Documents or "to pursue any other remedies available at law or in equity." This may include numerous large fines for violations of the Covenants and ultimately court action when required.

Again, the "lease to own" condition is a condition of the loan/mortgager. [Melissa]

There is no mortgagee involved. The LTOP was advertised by the intvestment company who bought the unit in foreclosure and possibly for cash. At least this is how I understand it. Never mind.