Any way to block a condo HOA from allowing more renters?

Hello

First time poster, and I realize that as an individual owner (not a board member), this forum's rules state my topic may be removed. I figure it's worth a try to ask anyway, because I don't know where else to go shy of hiring a real estate lawyer.

I moved into a newly renovated building in 2008, so our HOA and community started from scratch. The building is in a hip young neighborhood, and we have a hip young board to match, with our HOA president being a college student. I do not believe that the board is responsible enough or concerned enough about safety, although this view is indeed shared by the mostly young party-friendly crowd that lives in my building. Rather than fighting an oppressive HOA, I'm fighting a super laid-back HOA that basically doesn't want me "harshing their mellow". I'm really not the authoritarian type, but I've somehow become the nag who regularly complains about building safety issues, which are dismissed out of hand or played lip service at best. Building security is very important to me as a single woman.

A key safety issue for me: the ongoing problem of unknown residents propping open the front door, which leaves the building open for thieves who want to steal unlocked bicycles and UPS/Fedex packages. (We have a callbox/intercom system and there is no need to prop open the door, but people do it anyway when expecting guests or food delivery.) We have had increased theft problems, but I am the only one who believes this has anything to do with the fact that the door has been propped open with an increased frequency in the last 6 months or so. We're in a neighborhood with a medium crime rate, and leaving the front doors open to any intruder really bothers me, but my complaints are dismissed as though I am a paranoid nut suggesting we wrap the building in tin foil to keep the aliens from stealing our thoughts. I've proposed to a number of residents and the HOA board that a fine be put into the bylaws for anyone caught propping the door open, but that idea has so far been ignored.

As more units have become rentals, I have noticed the quality of the community go downhill, as well as a sharp increase in the front door being propped open. It seems like every problem that is reported, when it can be traced, is traced back to renters and renter's guests acting irresponsibly, such as urinating in the outdoor patio area, minor building damage, or smoking in common areas. We're now at our 30% rental limit, and the majority of the building wants to raise it. I am absolutely opposed to this, even though the democracy is against me. The supporters of raising the rental limit are basically in two camps: the party-heavy young guys of the HOA board that just don't have security concerns, and owners who want to jump ship and rent out their units, and thus, have a strong financial incentive to have the rental limit raised. I wanted to live in this building for 5-10 years, but I'm now left contemplating whether to just sell at a loss and be done with it.

Is there any possible legal strategy I can employ to try and block my HOA from raising the rental limit, like an injunction pending a serious assessment of how more renters will impact security, or a better set of rules and fines being put into place, or that non-occupant owners pay higher HOA dues to offset the wear and tear on the building? This is in Washington state.

I'd rather the building became more security conscious than have to move, but part of me feels like the inmates are already running the asylum, and it might be time to give up and sell my unit to someone who would be positively delighted to live in a building with regular keg delivery and no real rule enforcement.

Ms. Cranky Owner

Welcome to our forum. You will see this topic talked about ALOY. I encourage you to read past forum discussions on the topic.

I am one in the minority on here that does NOT believe a HOA can limit rentals. ONLY mortgage companies can. Unless the HOA owns ALL the property, it can't control what an owner does in regard to renting except in certain situations such as "Frat/Sorioty/Multi tenant situations. That does NOT mean I am against rental limits. It just means that unless there is an actual punishment system set up or requirements of proof of rental use is provided to the board, I don't think a HOA can do much.

My example is that what if your HOA has 100 homes in it and 10 rental limit...Owner 89 loses their job and must move out of state immediately for a job. Not enough time for them to sell and facing a HUGE burden of a family members serious illness. The other 10 owners renting are doing so for investment purposes except for 2 because they to are in hardship. Here comes Owner 88. They want to rent their place because they can. They flip houses and use this house as a tax shelter. What does your HOA do?

How can your HOA enforce this rule on the person with the hardship? force them to pay a fine for each month they rent BUT NOT charge the already 10 owners approved for renting? How do you deny renting even according to a quota? Answer these questions and then you know how your HOA can put this rental restriction i their documents and enforce. Otherwise your HOA needs to hold the owners of existing rental property feet to the ground..Plus you have factor in RENTER'S RIGHTS...An owner can't just kick a tenant out...It can take over a YEAR to kick out a non paying renter../A consideration that has to be factored in when dealing with owners because they are limited by the law as well..

Thanks for the replies.

I'll propose the door alarm, but even if that managed to get approved (and I'm doubtful), since people in this building have demonstrated that they will go out of their way to sabotage security by propping open the door, I imagine they will also learn how to defeat an alarm. If there's a latch on the door that causes an alarm to sound unless the door is closed, they can stick a rock or something against the latch to "trick" the alarm. If a security measure can be disabled, I have no doubt that some of the people of my building will eagerly disable it. Or, on the flip side, some people could prop the door open, alarm be damned, and the units nearest the front door will suffer from the noise problem. The alarm idea sounds perfect in theory, but given the situation, I fear for its practical applications.

The deeper issue is living in a building full of young party-happy people (mostly guys) who have a complete disregard for safety, and an incompetent, immature HOA board that sees no real reason for rules and rule enforcement. (I realize that most anti-HOA ranters have the opposite problem with their condo association that I do.) There's no easy fix for systemic problems, other than me moving and taking a loss on my condo. I believe I have a right to feel reasonably safe in my own home, and I've never had this problem in other buildings, so I'm not just being fussy.

Re: special emotional reasons why people want to move.

Whether or not an argument for more renting comes with a good sob story (and I've yet to actually hear what I'd consider a sob story anyway), more rentals are more rentals. Why there are more rentals is basically irrelevant to me. It effects my own investment and financial solvency by having a building get taken over by renters who cause problems, causing a drop in my home's desirability for resale, as well as the possible loss of our FHA certification. There is no benefit to having more renters to anyone but the people who want to jump ship and take advantage of the down market and buy a bigger home. They're all technically grownups, and if they made a bad choice to buy at the price they did at the time they did, that should be on them, not me.

I live here, and my safety will always be of greater concern to me than someone else's ability to make money or have a nicer condo. Perhaps if I was included in the in-crowd of indie music and beer-chugging, I'd have more emotional attachment to my neighbor's financial and personal success, but I do not. The building is not my social circle. I've seen how things have gone downhill so far with the increase in renters, and I don't want to see things get worse just so some people I don't know well or particularly like can better their own personal financial situation.


I believe laws are skewed too heavily in tenant's favor in many places, but that's neither here nor there. If anything, I see that as all the more reason to NOT increase the number of rental units. To be clear, my building doesn't have any eviction problems (yet). If urinating on the common patio or carelessly causing damage won't get you evicted here, I don't know what will.

Thanks for the helpful post, Glen! I've realized I need to contact some real estate attorneys this coming week and see if they do free consults so I know if I even have a decent course of action. Interesting idea about contacting our insurer. Maybe a stern phone call from a large insurance company could scare the board to taking security seriously. However, I've learned to never overestimate my condo building's leadership by assuming they'll do what any reasonable and mature adult would do in a similar situation.

It's a great point that if the dudes running the board don't take some things seriously, they might not take other things seriously. The building was a renovation, and in order to entice buyers, the HOA dues were set very low by the developer, and this year, it was finally necessary to increase them a bit because we had to dip into reserves to pay our basic utilities and maintenance costs in 2011. The good thing is that so much of the building is new or recently remodeled, so there are no immediate concerns about special assessments for a new roof or something, but in 5 or 10 years' time, who knows.

It's been a depressing week weighing nearby comparable sales against staying put and being unhappy. It kills me to think about having to leave a condo in a perfect location where I love the layout and finishes, and do so at a loss, all because of the short-sighted, inconsiderate choices made by others. From everything I'd heard about HOAs, I thought I'd be moving into a more regulated and mature environment than your average apartment building, but I've never had this many complaints about any rental where I've lived.

I do realize that for some young first-time homeowners, my building would be their dream come true. A college student or recent grad would love moving into a building with an extremely social and laid back atmosphere where rules aren't taken too seriously. One person's trash is another person's treasure.

Cranky,
Raising your rental limit is a REALLY, REALLY BAD idea !!! You and your board need to become informed on this topic. Go back in this forum and look at previous postings. Start researching rental restrictions and the FHA on the internet, talk to your bank loan officer about how rentals affect mortgages. Talk to a realtor about how rentals affect sales and refinancing.
Go to www.caionline.com , click on issues and advocacy then mortgage matters. Check the listings on the left side click on "mortgage matters FHA" and read the articles.

As we don't know the age of the OP but do know the Board President is a college student seems the cards are stacked against what the OP deems as important.

I just wonder how a college student becomes the owner and President of the Board? Must have some financial standing and the support of not only the owners but the remainder of the Board.

The OP likes to live in a young vibrant neighborhood just not with the people who reside there. IMO seems the doctrine of majority rules seems to apply. What is essential to you does not than become a priority to everyone else. And you will become the squeaky wheel.

As to limiting the owners abilty to rent what you see as having no benefit depends entirley on what side of the fence you are sitting.

IMO the OP would be fighting an endless uphill battle to convert those owners who might never see it their way. Secure doors are not on their radar screen.

And IMO many of the suggested solutions will do little to change things.
Contacting your insurance carrier might result in a temporary bit of attention. Threatening to sue in the case your property is harmed might seem a bit premature. And running for the Board? Would you really ever have enough support and then IF successful you become a voice of ONE.

Not very appealing to me.

He who turns and walks away lives to fight another day. I would consider if all the angst is worth the benefits? If so stay and do battle with the windmills. Life is to short and the positives in this siutation seem to me might be outdone by the constant stress of living in what the OP perceives as a community that does not share similar values.

Whoa...party time at Bonnies. No kegs but do BYOB...fine wine and choice spirits...LOL

There is a part of me that says restrict renters but then if they are required to keep an owner afloat and paying their dues....why not?

I would also say that certain type developments will draw renters as it is the nature of the area while other do not and this is something gone must look closely at. You can bet apartment style buildings, near beaches, schools, tourist attractions, vacation areas, public transportation, etc. are goint to draw renters more so then a private home in suburbia.

Is that link not from a lawyer and refers to CA law?

Robert

Are you spamming/slutting for lawyers?

We're set to raise the limit as high as 50% so we can keep FHA standing, although there are some people who don't even care about FHA status and argue there should be no rental limit at all.



It's a building where almost everyone (owner and tenant) is 25-35. At first, I thought it would be cool living with other young people, but from my perspective, this social experience of sorts has failed. I'm in the same age range as the rest of the building, but I'm more responsible and quiet. The only racket I raise is about making the building safer, but otherwise, no one would notice I exist.

I often describe my condo building as "Melrose Place": it's filled with young attractive people who like to do things together, gossip, sleep with one another, and its a sort of scene unto itself for many who live here. They're living in a paradise of few rules and neighbors like themselves. There's a definite in-crowd that drinks and parties together, and that group also makes up the board of directors. (I consider any HOA elections to be sheer popularity contests.) I would never stand a chance at being elected to the board.

I've lived in vibrant and dense neighborhoods, and I've never had this many problems and complaints about a building. I have plenty of friends who live in condos or rentals in the same area who don't seem to have a lot of problems, either. "Young" and "vibrant" doesn't have to mean an irresponsible party scene.

Maybe you should join in the drinking and sleeping around going on in the building....otherwise...you sound a bit uptight and it seems you made an error in judgement moving there.

Yeah, only "uptight" people dislike it when your neighbors urinate in common areas in like stray dogs, or prop the front door open so thieves can pop in and steal anything that isn't tied down. Crime is cool, man, and drunkenly peeing on the floor is a sign of awesomeness.

Cranky,
We are dealing with the same issue. Your rental level is a MAJOR deal. It goes FAR beyond whether renters are good or bad for your community. Traditional type banks now will not approve mortgages after a condo reaches a 20% rental level.The same applies for companies that insure mortgages.

For condo associations without rentals, more than 50% of mortgages will be backed by the FHA. With rentals, more than 90% will be backed by the FHA. You must meet the strict FHA guidelines and you now must be on the FHA list of approved condominums to get FHA backing.

In the past loan officers could do the FHA approval but the government stopped that.

If you go over 50% no one is going to be able to buy, sell or refinance mortgages. Your only options at that level would be cash sales and lease-to-own.
Setting your level at 50% is a risky game because a cash sale (for example) could put you beyond the 50% before you know it and the association could end up in a court case if the new owner bought to rent.

Be sure that any change in rental restrictions is offically recorded.

After the government bailed out the banks, the companies that insure mortgages (AIG Etc.),companies that buy up mortgages (Fannie Mae etc.)and almost all lenders now use the FHA guidelines.

Banks and lenders now rarely hold onto the mortgages and sell them off in bulk to companies like Fannie Mae. Condos in general are now considered high risk investments and lenders etc. now look at the association as a whole rather than just at the individual applying for a mortgage.

Condos with high rental rates and no rental restrictions are considered an even higher risk investment.The FHA and Fannie Mae charge higher interest rates and demand higher down payments in condos with rentals.

Scratch the "cranky owner" and write in "concerned owner" because your concerns are more than justified.

First question, the 30% rental limit is that in your CC&R's or just an arbitrary rule someone made a long time ago? If it is in your CC&R's then you would have to follow that procedure to get it changed which would be difficult. If it is an arbitrary rule then that isn't as hard. I do believe HOA's can limit rentals if it is properly documented.

The issue of building safety is a whole other ball of wax. Your HOA has a duty to its residents. If it is aware of a safety concern and does nothing to address it, not only can your HOA be held liable but they can personally. D & O insurance will cover you if you act in good faith, ignoring security issues is not acting in good faith.

There are many things they could do for the door, a buzzer was one suggestion and there are a variety of ways to do it. Another is to install a camera there and see who is doing it. That also is fairly cheap. I think you should take up the safety route and try to explain their lack of action is in reality negligence.