lease requirement

Fred,

It's a private document and the association doesn't have the right.

Seriously, if your association has a right to have a copy of the lease it will be found in either the CC&R's for your development, statutes, or case law (aka common law). When your consulted your attorney, he should have prepared a written opinion citing the source(s) for your right to require a copy of the lease. Without a written opinion referencing those sources, your lawyer's opinion is worthless.

Without some sort of legal or contractual authority to have a copy of the lease, it's a private document and the association doesn't have the right to see it.

Why is it so important that the association have a copy of a lease that they are not a party to?

I'll try to answer this as Joe American: "Because it's none of your d*mn business." Then again since in Ohio the owners must file a form with the County stating they are renting their property maybe they are afraid the HOA will attempt to verify they've done this.

How about we turn this around, what are the HOA's reasons for wanting a copy of the lease?

If I remember you are an HOA rather than a COA because 5311 requires the owners to provide: 5311.09(2) Within thirty days after a unit owner obtains a condominium ownership interest, the unit owner shall provide the following information in writing to the unit owners association through the board of directors:

(a) The home address, home and business mailing addresses, and the home and business telephone numbers of the unit owner and all occupants of the unit;

(b) The name, business address, and business telephone number of any person who manages the owner’s unit as an agent of that owner.

(3) Within thirty days after a change in any information that division (A)(2) of this section requires, a unit owner shall notify the association, through the board of directors, in writing of the change. When the board of directors requests, a unit owner shall verify or update the information.

We also require Owners to provide us with the tenants' names, car info (sub. garage with deeded pk. spaces), and contact info.

If I were leasing out my condo, I wouldn't mind giving a copy of the lease to the HOA tho' not a requirement here.

I can see some HOA's wanting a copy of the lease with the consideration redacted if that HOA has a minimum time period that units may be leased, e.g., one year. I'm not saying that the lessor & lessee would be truthful, though.

This topic ALWAYS goes in the same direction. No one seems to have an answer on what could possibly be in a lease other than the rental amount that owners wouldn't want the association to know.
Some of you are giving good reasons for requiring that owners provide their lease agreement but I still can't figure out what the big deal is with providing a copy of the lease.

Glen ... we are a COA and yes they must provide that information under 5311, so that doesn't seem to be the cause of their reluctance. What county department do they have to file rentals under ? That is something that I wasn't aware of. Is that public record ?

Fred, unless the CC&R's require the landlord to provide a copy of the lease, I believe most people simply feel it is none of the HOA's business. As to what could be in there that they don't want the HOA to see. Suppose the HOA requires a minimum one year lease but you could only get the tenant to agree to a month to month. It's much easier to say the deadbeat didn't pay and you got rid of them than it is to say you violated a covenant.

The law is 5323.01(E) but until I went looking, I didn't realize it only affects the 12 largest (population wise) counties.

Butler County
Cuyahoga County
Franklin County
Hamilton County
Lake County
Lorain County
Lucas County
Mahoning County
Montgomery County
Stark County
Summit County
Trumbull County

You can see a pdf file about it here:http://tax.ohio.gov/channels/government/documents/Bulletin24_Rental_Registration_Notice_and_Penalty_Assessment.pdf

Let me put this in perspective. When you give a copy of your lease to the HOA it means you are handing over a document for ALL your neighbors to have a right to see it. Do you want your neighbors to know your an absentee owner or that you rent your property out? Do you feel it is any of your business to know who is renting their house out? Then why do you think that anyone needs to know you are renting yours out?

A lease agreement is between the owner and the tenant. It is NOT between the HOA and the tenant. The HOA can NOT hold the tenant responsible (Except in Florida) for paying dues or following the rules. The owner has a responsibility to put in their lease to agree to the terms of the HOA rules. These rules are NOT listed in an off the shelf rental agreement. Which is what many people purchase at an office store or offline. It has to be modified to reflect following HOA rules is a condition.

Tenants have rights to after signing a lease. A tenant can stay upwards to a year in some areas without paying rent. It can be very difficult even for an owner to evict a tenant. There are laws to be followed. So a HOA can't insist an owner kick a tenant out because the owner has to also follow laws in eviction. It makes it easier for the owner to be able to kick out their tenant if the HOA rule violation details was put into the document. Otherwise, the tenant has to violate the other conditions before being evicted. It took me 5 months to evict a tenant once...

Lease agreements are for the most part none of the HOA's business. It is more with the mortgage companies on the lease agreement than the HOA's. It may be a good thing with showing the HOA lease agreements to be able to enforce rental restrictions. However, rental restrictions except in California still lack any real enforcement. What kind of punishment is handed out if you exceed the rental restriction? Think about that...

So basically what I'm reading is that owners wouldn't want the association to see the lease because they are violatng some part of their governing documents which is exactly why the association has a right to see the lease if the declaration/ bylaws requires certain things to be included in the lease or if there are rental restrictions in place.

Ohio law allows the association to evict tenants on behalf of the owner for violations of the governing documents and charge the owner for the cost of doing so. We have never done that but it appears to be more straight forward and require much less time than what a landlord might have to go through to evict a tenant.

I'm not sure, but I don't believe that owners would have a legal right to see leases belonging to other owners. Not all association records are open to inspection by owners and I believe leases would fall under that catagory, at least they should. If they have to be recorded as Glen suggested then maybe they are public records, but if I am reading the law on examinig books correctly the association woud not be required to provide that information.

Larry,
I get that ... and that is basically what everyone is saying but it still is not what I asked origionally. The topic of whether the association has the right has been beaten to death. I still want to know what could be in a lease that owners don't want the association to know about and the only thing that comes up is that the owner is trying to get around the governing documents that are there to protect all owners.

I see two or three things that might be in a lease a member wouldn't want the HOA to know but would not be trying to get around the documents:

1) Price of rent - If I own two or three properties and make deals on the rent with the renter, I would not want anyone other than that renter to know. Leases provided to the Association could be available to inspection by other members who may spread the word.

2) Property Manager - Perhaps I don't want the Association to know who my property manager is. This info could be part of the lease.

3) Duty to protect renters right to privacy - Perhaps their is sensitive information about the renter (SSN, etc.) within the lease. A landlord has a duty to the renter to protect that information and how it is being used.

4) I'm tired of everyone poking their nose into business that doesn't concern them - A polite way of repeating Glen's last comment. The lack of privacy is becoming a huge issue in this county. Come of this privacy is taken away by law (ever fill out a census questionnaire), some by necessity (want the lower prices at the grocery store, let them track your purchases by using their card), some unknowingly (privacy statements in computer programs) and some by choice (normal conversations). At some point, people become fed up and say enough is enough and typically say it to the individual or company that they perceive as having the least right to know this info (the HOA for example).

Our Association also has a policy that the member provides a copy of the lease. This policy hasn't been enforced in years because the reality of it is, there is nothing my Association needs to know about the renter as our contract is with the member and any actions for a renters behavior would be against the member.

Glen,
I guess the main reason is that we are finding some owners are lying to the association and aren't following the governing documents when they lease and disregarding the rights of other owners. Seeing a copy of the lease would tell us what they are requiring of their tenants and if it meets with association guideline as outlined in the governing documents.
We do require a renter's agreement but it seems to me that having tenants fill out a lease and a rental agreement shouldn't be necessary. I have to question why owners would want their tenats to do that rather than simply providing a copy of the lease. Since there is so much resistance to providing a copy of the lease I was trying to figure out if there was a legitimate reason but all I'm getting is a rehash of "not their business".

That doesn't always work. Some of my post-tax season work consists of filing amended returns for individuals that received notices from the IRS after trying to conceal income. The purpose of the amended returns is to try to reduce the amount of taxes the IRS is claiming is owed (since they do not allow for deductions in connection with that income that were not claimed on original returns) and therefore also reduce any interest and penalties.

Again it does NOT matter if the owner has in their lease the renter is to follow the HOA rules. The HOA can't go against the Renter for not following them. They can only go after the OWNER/Member. So it is irrelevant if the owner has the rental agreemement with following the restrictions or not. It does not benefit the HOA. It does benefit the owner instead. That's because it gives additional restrictions/rules for the tenant to obey in their contract. Thus the owner can break the lease if the tenant violates a HOA rule the owner is being held for. If they don't have that in there, then the lease can't be broken for HOA violations.

Fines can't be the basis of liens or foreclosures in most states. Many HOA's documents state they have the ability to fine BUT do not have a fining schedule of which to assess those fines. I can tell you I can fine you for parking your car illegally. However, unless I have it in writing how much, how long, and what for distributed and understood by all the members, I can't enforce a fine. So your documents stating the HOA has the right to fine means nothing.

Most states do not allow rental restrictions to be enforced regardless if they are in your documents. Only California has passed a recent law that has any power to restrict Rentals. However, it's just for HOA's formed in the last year since the law passed. All others have been grandfathered into the former rules.

The rental restriction is a double edged sword for a HOA. The real damage isn't to the physical home/property. That is just visual. The real damage of high rental is when it comes to mortgages. A high number of rental property effects the banks/mortgage companies from offering their loan packages. It's harder to get a loan, pay a higher interest rate, or must qualify for different loan options. Thus making it harder to sell your home to more people. The irony to this means that the new owners who do purchase will be of higher quality. They've had to prove more credit worthiness if you think about it. This is a hidden side of the effect of rental most people are unaware of. Hence why it is more business of the mortgage companies than the HOA. The HOA just really needs to report the percentage of rental property on some loan packages like FHA loans on HUD forms. That would be the only reason why a HOA would need to know how many properties are rental. NOT the information within the lease.

Different strokes for different states. We've used a separate lease addendum since 2005 which requires a copy of the lease with the signed Lease addendum and never had any problem. The Lease addedum was drafted by our attorney who specialized in HOAs. The lease addendum helps open the communication channels between the owner, tenants and HOA. They can remove the montly lease charge and any personal info. We want to make sure that the the lease is not less than 6 months, we want verify who is on the lease and we also encourage the tenants to complete a contact sheet for the PM in the event of emergencies. We try to get the renters to register on the website for updates and include them as much as we can. We want to embrace them and try to do everything that we can to improve communications. Believe me, the lease addendum get everyone on the same page. It does really help and we've never had a complaint.

Last year, one of our older tenants slipped on the ice, hit his head and died on our property. It was brutal finding the owner but you can find anyone the internet anymore. We found his niece who owned the house that the gentlemen lived in 36 hours later, but he was in the hospital all that time and nobody knew who he was. Everyone just waved and smiled at the gentleman since he did not speak any English.

Good luck.