Illegal Rentals

You gather support and serve on the Board yourself. This way, you will be part of the actual decision process. If you have enough support, you can get others who want the same thing you do to serve on the Board. If enough like minded individuals are serving on the Board, they will control the majority vote.

The other option is to seek a legal opinion to see if seeking a court order would be a viable option for you. This is obviously more expensive than the first option, but it could be an option for you.


Bring the issue in front of the Board and cite the section in the governing documents along with any applicable State statutes. The MC works for the Board.


This will sound cold but it isn't meant to be.

You can always move and rent or sell and move.


If they were properly elected or appointed to the Board, then the answer is likely yes.

Typically, the only qualifiers that may be in your governing documents is that a Director must be a member. Most of the governing documents I've seen don't even have that as a qualifier (the documents are silent on the subject).

If the members do not become involved and be willing to serve as Directors or on committees, then those who are willing, will likely be elected and/or appointed to those positions. The way to fix it is to become involved in the process and serve.


1) Volunteer to serve
2) Gather support from neighbors and volunteer to serve.

As for finding out who is renting, check with the local property tax department (many provide information online). They can tell you the mailing address of the owner. If the mailing address is different than the property address and someone is living there, the unit is likely being rented. What you do with this information is up to you.

If you feel that you are not safe or that criminal activity is going on, contact the police.

Tim's replies are thoughtful & seem on target both about the rentals & director. the cheap way is to gather support and vote in a new board in but it may take time and definitely takes patience. The expensive route is through legal channels.

But, first. Have you made your complaints known to the entire Board via a registered letter? In that letter did you say you're requesting that the topic be discussed at the next open Board meeting? Do you attend board meetings?

Btw, you say that some tenants are grandfathered in. When did your HOA make the no-rentals rule? Was it a change to your covenants? or to your Rules & regs? Or?

The no rental clause has been in the documents since I moved here 9 1/2 years ago, and I just looked and the clause in the original documents since the condominiums were built in 1986.

Barbara

I am not nor do I play a lawyer>

Most laws require governing bodies to record minutes of their meetings and to make them available for inspection. The minutes must contain, at a minimum, the names of the BOD members present at the meeting, a description of each motion or other proposal made, and a record of all votes.

I would be quite surprised if GA required more.

Barbara,

At the time of my posting, I was unaware that you were in a condominium. Per that same article I quoted from earlier:

"Condominiums do not have this concern because they are usually already subject to the Georgia Condominium Act, which allows restrictive amendments"

John,

Did you get that from the article I posted earlier?

If you want the rental problem to be in the board's meeting minutes, there somehow should be an item on a Board meeting agenda that the Board must vote on. If the Board declines to take any action on that agenda item, the minutes should reflect that. Without motions & votes by the Board, all other discussion need NOT be mentioned in the minutes. Ideally minutes state what was done, not what was said.

At your recent membership meeting, a member--a homeowner--could have made a motion that the board discuss this topic and another homeowner could've seconded it. Otherwise, the (probably) is no need to put anything about the topic in those minutes.

Try to get the topic on the next Board meeting agenda per my suggestion above. It sounds like they're playing parliamentary-procedure games with you. Again, do you attend Board meetings?

Barbara

I am not nor do I play a lawyer.

Typically all BOD meetings are open to all owners. Understand open to all owners does not mean an owner can speak. Typically a non-BOD member can only speak when asked to speak. Also, typically only BOD members can make motions. Bottom line is a BOD can keep you from speaking at meetings even when you can attend them.

Executive Session Meetings are open only BOD members and those they invite. Purposes for Executive Meetings are limited. One cannot just declare any/all BOD meetings to be Executive Session Meetings.

About the only courses of action open to you are to elect BOD members that think like you do or take legal.

from your link:

"...or possibly an additional amendment to the declaration defining an owner's interest, the association will arguably have to accept a nominal owner as an "owner" for the purpose of occupancy."

"... where identical sales contracts were executed by a defendant involving three condominium units..."

I stand by my post that rental restrictions are NOT enforceable against a member 'renting' a single 'unit'. They MAY be enforceable against an investor renting multiple units.

No one ever likes my comment or opinion on rentals. Even I disagree to it to some extent. However, due to it coming from a lawyer and some research into the matter... HOA's can NOT regulate rentals unless the HOA actually owns ALL of the property. The HOA does NOT own any of the owner's property because a HOA acts more like a "Club membership". Which each individual owns their own property but agree to some rules on managing those properties uniformly.

Yes, your HOA can put in rental restrictions till it's blue in the face. The only state so far that has any kind of ability to restrict rentals is California. That only happened in 2012 and effects properties AFTER 2012. All property before that is still subject to the old laws. Even that restrictive power isn't that strong but it's a start.

People think that having rental restrictions state in their rules are enforceable because they are in there. Well, the HOA can put in more restrictions in. However, they must also meet and not exceed local, state, and federal law. Which basically trumps any restriction that violates those laws. Those being the right to rent a property that you own. The HOA does NOT.

Now, who can put on rental restrictions? The mortgage companies/banks. When they sell a home, they can and typically can designate a 2 to 5 year restriction on using the property as rental. Which means you can't flip that house. It has to be your main residence. Now, some HOA's have successfully modified their rules to MATCH this requirement. That is why their rental restrictions seem to work. That being the HOA is backing up already existing laws and restrictions. So if your going to make a rental restriction, then make sure it matches the mortgage or bank rules on the matter.

The real effect of rentals on a HOA is it's ability to offer certain loan packages and good refinance rates. The federally backed loans such as FHA or now Freddie Mac/Fannie Mae do have a PUD form to fill out by the HOA. The HOA fills it out for an appraisal of the health of the HOA. One of which questions the rental rate of the homes. A certain rate of rental, the banks then will either no longer offer FHA type loans or raise the rates of those wanting to refinance. That is the true effect of high rentals. It's not necessarily the perception that rental property isn't kept very well and drives down home sales/value.

So if you want rental restrictions, realize they may not be enforceable. Any good lawyer can fight for an owner's right to rent even if there are rental restriction in the HOA in place. Simply for the fact that the HOA does NOT own the property of which is being rented. They are a third party and can't even put their restrictions onto the renter. It all has to go back to the owner. Besides what punishment you going to put on a person who rents? A fine? Just raise the rent to cover that...

Okay.... So you have the restrictions in your documents... Now what? I can say you can't do something all day long... Where is the punishment? You have to have a fine schedule. If you rent then there is a $100 a month fine. Well, then good I will just pay the fine and keep renting. Can't file a lien against me if I am paying the fine instead. Can only lien if I stop paying the dues. On rental property, my dues are considered tax deductions. Legal costs for bringing a lawsuit against the HOA for restricting my rental ability? Tax deductible too because it involves "investment property".

I say that rental restrictions are more along the lines of "deterrant" than law. If there is a hardship rule in place, then all the better. That's a loophole my lawyer could go with on proving my hardship to allow for me to rent. If I am in a position where I have to move out of state for a job and due to property values selling is not an option, then my .HOA isn't going to stop me from renting out my property. Even if I am #12 and only 10 allowed to rent.

Sorry, I am NOT against rental restrictions in HOA at all. Don't misunderstand that at all. I do believe there should be restrictions. It's just the HOW that is the problem. How does one put on restrictions on property they do not own when it comes to renting? We are not talking conformity issues. Rental property isn't even under the control of the owner when tenant's rights come into play. Which they do and also need to be a consideration when making rental restrictions in your HOA.

All I am saying, is that I don't see HOW a HOA truly can control or limit rentals unless they own all the property. It's one of those good intentions rules that just can't be enforced.

elderly member/owner sells home to children

remains in home via a 'leaseback' trust

? rental ?

member sells home to LLC

remains in home paying expenses

member passes away

LLC sells 1% to relative

relative moves in and pays a monthly 'expense stipend'

? rental ?

member sells home but holds 'deed in trust' and mortgage

buyer defaults after 2 years

member repeats process (contract seller)

? rental ?

Melissa's general point IS VALID - rentals can not be stopped

I have a hunch that most HOA owners don't have enough savvy to learn about & jump through all of the loopholes you illustrated, JohnB26. But "rentals cannot be stopped" per you only has to do with tricks; Melissa is saying that HOAs have no control over rentals in them anywhere in the US. that's a different concept. As (almost) always, she provides no evidence.

We passed a new rule stating that no condo unit (twin towers) could be rented for less than a 30 day period. Our CC&Rs weren't specify enough. Sent it out for owner comment before we board members approved the rule & recommended fine schedule, comments were overwhelmingly favorable. One owner wanted the option to rent our his unit for a few days if a Super Bowl or World Series was played here. He would want to get out of town and have gamegoers pay rent to help him defray his own expenses. He shouldn't have worried, with the $250 fine schedule, he still would net our a big bundle if such an event occurred.

That was about 3 years ago and two owners were called to hearing and fined for breaking the rule (renting to conventioneers). The fine for the first violation is only $250, which isn't even one night's rent, but it can double every violation thereafter. These two have not violated since.

The advice came from a lawyer around 2003 when tasked with looking into rental restrictions. Plain and simple, the HOA does NOT own your home and can not dictate what you can do inside the home or leasing. They can control external only.

What can courts do? They can ONLY make one WHOLE. What damage is a violating a rental restriction for a HOA? They do not make rent or get money from rentals. They can not even collect dues from the renter. (except in Florida for certain conditions). What exactly will the court enforce? The person to pay legal costs for their case? Unlikely. The court may consider it the HOA fault of bringing the suit and must pay their costs.

I am for rental restrictions in a HOA but reality again is that they are unenforceable as existing. One has alot of I's to dot....

By definition, they are loopholes.

Per Merriam Webster:

loop·hole
noun \ˈlüp-ˌhōl\

an error in the way a law, rule, or contract is written that makes it possible for some people to legally avoid obeying it

Per Black's Law Dictionary:

What is LOOPHOLE?

Without violating its literal interpretation, an allowed legal interpretation or practice unintentionally ambiguous due to a textual exception, omission, or technical defect, evades or frustrates the intent of a contract, law, or rule.

there is no 'blind eye' involved - who lives with the member is not the HOA's concern (unless HOPA)

the HOA is NOT the Gestapo

however, there ARE code and zoning issues re: # people per square foot

you would NEVER have anything but a conjecture about 'who lives in ANY house'

unless they VOLUNTARILY inform you who they are and what their $ status is

the HOA's concern is the assessments, NOT the resident

if the occupants break the contract THEN the owner is held accountable

if the HOA (in general) spent 1/4 the time and effort maintaining the common elements and assuring proper funding as they do 'busybodying' the world would be a better place

who lives next door is NOT YOUR BUSINESS unless crimes are committed - then call L.E.

if a contract is broken there are courts available

JohnB said:

What one would like and what is practical are different things.

I would add practical and legal

We do see a lot of people wanting it the way they want it with little regard to practicality or legality. This is especially true when it comes to renters.

Actually Melissa the lenders, Fannie Mae Freddie Mac, FHA who control the lending in many associations have strict guidelines on the number of rentals within a community. So while the HOA doesn't want to enforce the governing documents, owners generally will have some recourse in a matter such as this when they may be potentially harmed by not having the ability to either buy into or sell a unit.

You're right, of course, John26 that enforcement is the key to limiting or eliminating rentals (if permitted in any given state and the HOA's docs). Enforcement is the key to any rules. "Selective enforcement" is not a problem if the HOA enforces the rule in all cases that it knows about. There, obviously, will be and are cases they don't know about.

The best reason to limit the number of rentals is to make the units/homes more marketable, as Richard notes, because (1) lenders have % occupied by tenants as a criterion for lending on the HOA. Why would lenders care?? Because, (2)

(2) Owner occupants are, IN GENERAL, more likely to learn & follow the rules and maintain their properties than renters. Our experience has been that owner occupants also are more likely to make their mortgage payments (and assessments) on time. This matters to lenders.

Two years ago we were 57% owner occupied and got a little nervous re: lenders. Once the market recovered, more landlords were able to sell without taking a bath, and owner occupants now are 63% of our condos. We also have fewer rules violations now than then.

As has been stated, rental restrictions need to be in the CC&Rs (the contract between the homeowners).
As has been stated, there are certainly loopholes in any rental restrictions.
As you have stated, if the contract is broken there are courts available.

There have been cases throughout the county where rental restrictions have been upheld by the courts and also where rental restrictions have been tossed out by the courts.

As has been stated, the number of rentals [currently] affect FHA approval for loans in condominiums.
As has been stated, rental restrictions can be implemented but there may be technicalities to comply with.
As has been stated, some Associations are more concerned about this issue than others.
As has been stated, this issue has been discussed many many many times.

TimB,

if the resident/tenant owns a piece of the pie by definition they would NOT be a renter but an owner/member

that is an undeniable fact

ergo: rental restrictions become unenforceable

Nobody is arguing against that fact. It is, in fact, one of the loopholes mentioned in the article I posted a link to earlier in the thread.

Since nobody is arguing that your statement is incorrect, I don't really understand why you continually bring that fact up when it's not a fact which is in question.

I will repeat:

"sorry, did not mean you personally, just the 'babble' about trying to enforce something which is unenforceable"

Now there is another problem. The investor/owner above me started to install hardwood floors (they aren't allowed per our documents on the 2nd floor). They were told by the management company and a member of the BOD to stop the installation immediately. Yesterday it sounded like bowling balls were being dropped on my ceiling, it was so bad a ceiling vent fell down. So I went upstairs to ask what all of the noise was about, and guess what they had installed the wood flooring anyway, even though they were told not to. So I emailed the managment company, told them, and was rudely told not much we can do about it since they already installed it.

Sorry to be such a pain, causing arguements etc, but I am at my wits end here. It's bad enough they illegally rented it and now this.