Who's a renter?

​We have two units that are occupied by the parents of the owner. Does the Association have to ID them to lenders as "renters"?

We have at least 3 homes where family of the owner (child or parent) live there. We do not know their arrangements so we do not count them as rentals.

We count family members as renters only when we know they pay rent.

your point is understood

HOWEVER

the use of the word tenant is misunderstood

tenant = ANY legal occupant other than the owner

eg. child, relative, spouse, etc.

all renters are tenants ~ NOT all tenants are renters

tenant DOES NOT equal renter

this 'fine distinction' WILL matter in a court of law

imo: since a man's home is his castle ALL owners are landLORDS

it is not the HOA's concern to monitor 'who lives where' but to maintain the common elements and enforce the reasonable restrictions on the use of THE COMMON ELEMENTS only

You have point, we sent the Agenda, minutes and financial report to the owner. I guess that would make both units "Renters".

Thanks

Yes, I understand that, and we do know who the owners are in this case; we send then the meetings agenda and the minutes and financial report. Our question is "are the parents who live in the units considered "renters"?

So, if I instruct the association to send all notices to me in-care-of my accountant or attorney even though I reside within my own home, would I then be a "renter" because my mail goes elsewhere?

Michael (and others):

You are slitting your own throats by using a broad definition of the term "renter" or even "off-site owner." The broader your define those terms means that more owners fall under those definitions. The larger the number the more you reduce the ability of buyers to obtain mortgage loans. If the number is too high not even FHA will not lend. This results in lowered selling prices and increases the likelihood that future buyers will be investors paying cash.

In many areas, including my own, rental properties are supposed to be reported to the assessor by the owner so that they may be taxed at a higher rate. If there is a similar requirement in your area I would direct any lender making an inquiry to the assessor's office where the records are located. If the owner has not reported it as a rental unit then how can anyone else say it is?

there are NO forms the HOA is required to 'fill out' for a prospective buyer

there ARE forms the seller is required to provide

there are docs the HOA is required to supply to the MEMBER/seller

unless ALL leases are 'registered/recorded' with the BOD or mgmt. co. you have no way of knowing 'how many rentals'

? why not simply answer: we are not sure, but there are no recorded leases on file

OR

we have no method to ascertain an accurate response

OR

we do not know

THEN

let the chips fall where they may

DOH

So your telling me that when a lender is requesting to know how many renters we have we can tell them to stuff it? One of our owners, who was applying for a reverse was required; by a gov agency to, to reveal the number of renters. Apparently if the building has a more a certain percentage of renters they will not grant a reverse.

About 12% of our owner-occupants have their HOA mail sent to the mailing address of their primary residence. Their condos here are 2nd, 3rd, or even 4th homes like the one next door to us. (I know, well, la de dah!) These units are not renter occupied.

We do have a good idea of what % are tenant-occupied because owners are required to give us their tenants' contact info and car license info for our deeded parking spaces.

Tim

I believe where the whatever is sent/mailed is by no means the answer. If anything, it is an over simplification.

I agree it's certainly is a simple way to make the determination and may or may not be accurate.
John, how much effort do you, or anyone, really want to put into answering these questions which may or may not even be required (as per HUD mortgagee letters it's not a determining factor for HOAs but is for COAs).

Reality is, the Association, unless actively involved in the rental process, is never going to know if the unit is really rented, being loaned to relatives, being watched by a house sitter while the member is on extended travel or actually owner occupied. The Association needs to only provide what they know to exist. They are not required to go look for it.

Our PUD statement, which is issued to lenders, simply states:

7. Total number of units within project occupied as:
Owner Occupied (as of mm/yyyy) ###
Investment/rental: ## are known to be rented

We sign the statement with this:

I hereby certify that to the best of my knowledge and belief, the information above is true and correct.

Our knowledge could be inaccurate but this is what our records indicate. Therefore, it's a good faith representation of what we know to be true.

If someone wants to go through the effort of contacting every owner and ask if they are renting their property, go for it. I don't and honestly won't do that.

I will answer questions about rentals to the best of my ability with the information available. I will also properly maintain the membership records based on what is provided and do due diligence to keep them accurate (which includes, as your earlier example suggested, mailing a letter to the address of record and the address on the check, if different, and asking for verification).

Keep it simple is typically the best way to approach many issues.

SG,

That entity would be HUD, see MORTGAGEE LETTER 2009-46 B (page 5), and they specify that 50% of the units must be "owner occupied."

HUD 4551, specifically Chapter 4, Section B defines owner-occupied (scroll down to page 5).

Here is a good article on the subject:
Differences Between the Owner-Occupied Rules for Freddie Mac and Fannie Mae

Note: Use this link to view all mortgagee letters:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee

That would not work for us as our area is very transient. We have many owners who still use checks with their last address on it. Additionally, we have a couple of owners who don't rent their house but use it as a second home and the address on the check is of their other residence.

This helps in best guestimate terms. You never have a complete list but this can help identify those that are not residents. Which can help in an informed guess.

We are a small, 9 unit, condo; we know everyone! We know the parents of adult children; the owners and the unrelated enters of owners; we don't need to "monitor" anyone! It's that simple! We only need to know who qualifies as a "Renter", so we can answer the questions put to us by lenders. Why is everyone making such a fuss?! I feel like I've stirred up a can of angry worms. Lighten up people!

Sorry, but given the issue(loans FHA, VA, etc.) I do not think this can be treated lightly.

If your method is an assumption, best guess, etc. and I cannot sell based on "your" answers there is a good chance we will see each other in court.

Even in your case, can you really be sure you "legally know" the situation, agreement, understanding, between family members? I think not.

My next door neighbor's mother recently "bought" a home down the street. I have been told by both that the mother bought the place. If I am asked about it I can honesty say "to the best of my knowledge", her mother bought/owns the place thus it is not a rental. This is the best and most honest answer I can give unless I am trying to screw up financing so the root question becomes is what is your agenda? Help or hurt?

this has NOTHING to do with 'rentals,' but occupancy

how HUD defines occupancy is very very very vague

an owner who 'shows up' on a regular basis is considered an occupant under HOPA

...who intend... ~ i 'intend' to occupy sometime in the future

let the attorneys get richer

"To the best of our knowledge, without specifically searching, xx% of the XYZHOA appear to be owner occupied."

case closed

We have no rental/lease restrictions in our single-family detached home HOA community.

I've thoroughly read and 'word searched' our documents and the words 'rent' or 'lease' do not appear in ANY of them.

Therefore we have no [official] reason to investigate, monitor, or document rentals.

I'm not looking for a lecture about WHY we SHOULD care... there's been no problems in 17 years.

However, our city does require certain licensing, inspections, etc. for rental properties.
Any interested party could get that information from City Hall.

RwT*

As I wrote above, for about 12% of our owners, their unit in our HOA is not their primary address. When they aren't in residence here, their condos are not occupied by anyone else.

Your below, JohnB26, is exactly how I see it too:

"A 'snowbird' (part-year resident) counts, as per HUD, as an occupant.

HUD / FHA require XX% to be owner occupied.

A non fulltime occupant/owner who has his bills sent to another address is NOT a renter.

DO NOT CONFUSE PERMANENT/PRIMARY RESIDENCE WITH OCCUPANCY.

One can / may occupy multiple addresses."

Excuse me, wrong word, no edit.

Correction:

is it owner occupied or not.