Immediate family in Condo with no Lease

My wife and I live in a Condo HOA in Johnson County KS.

There is a resident/owner who had to move into assisted living and her granddaughter is living alone in her grandmothers condo.

A board member believes no one can live in a unit without the owner/resident there without a Lease of the unit.

That sounds very far fetched to me.
Can someone make some sense of this?

Your governing documents, Ron, perhaps your Declaration (CC&Rs) might state that tenants must be registered with the HOA. Ours do, but we have no interest in the rent paid, etc., we only want contact info for the resident in case of an emergency, and car info ( we have underground parking).

It should be no business of the HOA whether the granddaughter lives there free, pays rent, or whatever.

What is the source of your interest in this situation, Ron?

Tim asks a good question.

Ron

If there was a lease it would have to be counted as a rented unit and might cause FHA mortgage issues. The kindly grand daughter is just keeping an eye on the place while Nana is in the hospital.

CarolR11 - There is nothing in our governing documents that gives the HOA the authority to force an owner/resident to rent out their unit. We have no rental policy at this time.

My interest is simply to make sure a kind, older resident who had to go into assisted living, doesn't get trampled on.

As a professional tax preparer I can tell you that renting or leasing a unit complicates the tax return for the owner. First, it must be determined whether or not the unit is being rented at fair market value. If so, then a schedule E is required for the owner's return. There could be other tax issues as well, but I won't go into that.

In any event, unless the HOA governing documents have any specific provisions such as age (55+), number of rentals allowed, etc., then it's none of the HOA's business whether the person living there is leasing the unit or not. That's a matter between the individuals concerned. Other entities, such as tax authorities, may have issues, but that's none of the HOA's business either.

In our community, immediate family members are not required to have a lease if they are "renting out" a unit. More than likely, she is just staying there to make sure things are OK while her loved one is in senior living. And regardless, it's not really your business nor would it be necessary to report such an arrangement when folks are applying for mortgages.

Ron,

If your declaration does not address the issue of rentals, then the situation is none of the association's business. Likewise, if you are not a 55+ community you cannnot prevent a younger person living in Grannie's condo.

Even if you limit rentals, the owner of a property still has the right to decide who lives in the unit and under what conditions. It is not a rental until the owner says it is unless your declaration has some very specific language to define rentals.

Delores,

Assuming that you were referring to my comment, I think you have misunderstood what this thread was about. I never suggested or implied that Ron should not inquire about the well-being of his neighbor. The issue was whether the association had some right to remove a non-owner from her grandmother's condo and not about Ron being concerned about the grandmother's situation.

I stand by my previous statement: "the situation is none of the association's business."

If FHA wants to find out how many rental units are in our association, they can send someone down to knock on every door and investigate it themselves. Otherwise, as far as I know they are all owner occupied.

Legal gambling yes, of course. I was referring to illegal gambling.

I agree with Steve. Do not cut your nose off to spite your face.

I guess I didn't think of it that way. Ignorance is bliss, I guess. It just stinks to watch the revolving door of renters when we're trying to build a sense of community.

My goodness, I didn't realize my question would become a war zone
My wife and I are both retired, me due to disability. She is the Treasurer of our HOA.

We don't believe for a minute that "renter's" are a subclass of the human race, nor are members of our association.

Please no more responses relative to people breaking some law or to Constitutional Rights!
Thanks

I used to be a renter. I have no issues with renter. However, mortgage underwriters like to make loans for owner-occupied, single-family homes. If you are on an HOA board and you are not concerned with your percentage of renters to homeowners getting too high for loans to be underwritten, then you are not doing your job. If your neighborhood no longer qualifies for FHA financing, houses can't move and values fail. And after the last few years, folks are pretty sick of their home values falling.

FHA is not a guaranteed low payment type loan. I have had one. In our area they are used to encourage homeowners to own in certain areas to bring about more buyers. They are incentives for many buyers to get an FHA loan.

The issue here is people equating a HOA or FHA loans keep home values. They do not. They either keep the HOA more ATTRACTIVE to buyers or offers them good rates for purchase. Home values are based on square footage of similar homes with same amenities/bedroom/baths that have sold in a few mile radius. It also factors in location and the number of foreclosures sold/available in the area. Usually every 6 months things are reevaluated when you get a home appraisal.

FHA or other similar federally backed loans use a similar home appraisal form. It is a PUD form to be filled out by the HOA. It has 25 questions on it to gauge the health of the HOA. That is where the renter to owner ratio gets reported amongst other issues. If you HOA does not have available these type of loans then this information is not a factor. However, most loan companies/banks are going to this form. It also means more difficult to get loans, refinance, and higher rates.

i fail to communicate:

FHA is low DOWNPAYMENT which equates to little if any equity

my first home was FHA financed and i looked upon the payments as no more than rent since i had no equity ... if i had encountered any 'problems' i would have ceased paying and simply walked away and 'lost' only closing costs + 3% down ... after a few months of nonpayment i would have been even with renting with no actual losses

luckilly for me AND MY NEIGHBORS all went and ended well

remember, if you have 20% you DO NOT NEED an FHA mortgage
FHA mortgages are routinely issued with 3-5% down

are you still SURE you want FHA mortgages?

at least the person who paid cash or 20% down conventional has some equity at stake