Invoking Owner-Occupied Clause to Existing By-laws.

I am on the Board of a 36 unit townhome association in Pennsylvania. Currently, there are no laws governing whether units are rentals or owner occupied.
When the Association was formed in 1973, they were all owner occupied. Over the years, they've become about 30% rentals. Over the past few years, they've become rentals that are eyesores. Tenants don't care; we can't reach half the owners by mail or email to remind them about their responsibilities regarding simple things like weeds and general appearance issues. It's gotten to the point where you can almost tell who owns and who rents just by the outside appearance. We have brought up putting owner occupancy in the bylaws. Obviously, whoever is currently renting is grandfathered in, but with four units on the market currently, we're afraid we're going to get more riff-raff (for lack of a better word). Everyone was just sent copies of the bylaws and rules and regulations, but I doubt that's going to change their ways.
Can we vote with the membership to change the bylaws or must this be done through a lawyer?

How to change the Bylaws would be within bylaws themselves.

Please note: Based on researching this type of question in the past, it appears that for rental restrictions to withstand legal challenges the need to be in the deed restrictions (CC&Rs) and not in the Bylaws. Additionally, the Board will need to develop definitions of what is considered a hardship, how to address military personnel who may be transferred, how to rotate rentals when the rental requests exceed the authorized number of rentals allowed, etc.

Due to those issues, it's best to consult with an attorney.

The best rental restriction I have seen has been no actual numbers, which means the Board doesn't need to worry about a lot of the issues above, but it kept out investors. The restriction was simply:

As of the date of this amendment being recorded, new owners may not rent the property during their first two years of ownership.

(not the exact language).

Hope this helps,

Tim

With Tim, I believe you'd need to change your CC&Rs and I'd strongly recommend an HOA attorney. To, for example, revise your CC&Rs may require 67% to even 90% approval! How & to what extent you can restrict or limit rentals might in part be bound by PA laws.

I can understand your frustration. But I'm wondering why your Board cannot reach Owners who're letting their renters misbehave. How do these owners pay their HOA fees, etc??

As far as I know, PA does not have any state specific laws re limiting rentals in HOAs.

Tim's suggestion re 2-year residence would be fine if you were just starting out, but trying to add it now is likely to fail. You won't get enough votes, and even if you did, it could still be challenged in court as a restraint on alienation - which the courts in all states frown on. (Restraint on Alienation = restriction on ownership transfer.)

Have you thought about your HOA taking on responsibility for exterior work and billing the homeowners? Is there language in your bylaws that allows you to do this?

I think the first place to look is your docs to see what lattitude you have already before you try to do a major overhaul.

Some very good suggestions & comments above.

1 - Get a competent lawyer. If you want to 'attorn' or order tenants to redirect rent to your corporation for 'charge-backs' done itself within your state's specific law, you need to get the process correct or face legal challenges including to persuade the tenant(s) and maybe fight rearguard claims.

2 - If the townhouse rental activity may have gone further into zoning-defiant 'bacheloretting' or dorm style lodging, ask that lawyer to look into 'single family' /occupancy standards enforcement with or without municipal involvement.

Both these require skillsets & bucks, but at a cost may sometimes work at least temporarily.

If I'm reading correctly, the actual concern/issue you presented is with a lack of upkeep/cleanliness on the exterior of homes . . . a problem that both owners and renters could be guilty of creating.

I'd recommend first trying to get accurate contact info for all owners. There are probably several other issues you're encountering that are made more difficult without having that info . . . especially collecting assessments.

How many delinquent owners/properties do you have? You don't need to answer, just food for thought. If you can't get in touch with people to collect on money owed, then you'll have more significant problems in the future (if not already).

Then . . . Do your documents contain any verbiage/standards in regard to aesthetic appearance, cleanliness, upkeep of homes exteriors? Do they permit you to fine owners for noncompliance? Do you have a documented process for administering fines? If so, great . . . you need to start using all of that. If not, then you need to create this verbiage.

With all that in place, you need to adhere to your processes, issue violation notices, then issue fines. If people don't pay, then continue with fines. If it comes to it, you could lien the property and/or sue to try and recoup the money. You documents may also permit the HOA to have the property brought up to standards and bill back the owner. Given some time, hopefully things will turn around. Then, even for owners who have messy yards, there will be ways to hold their feet to the fire as well.

Good luck!

1. I got the moxie to do it. That's why I am not wringing my hands and worrying about what to do. If you are going to be a bear, be a grizzly.

2. Who is going to prosecute the alleged "theft, fraud or embezzlement?" The absentee owners entered into an agreement in bad faith, causing damage to all the other owners. If anyone is stealing, it is the absentee owners who profit while contributing nothing to the upkeep. No public prosecutor is going to take up the cause for the slumlords and their own attorneys will tell them flat out to pay up.

I've been on a Pennsylvania 32-unit condominium development's Board for 9 years, and I've lived there for over 30 years. What started out as an all owner occupied development, has gradually shifted over the years until now 10 of our units are rentals. A few times over the decades prior Boards tried to get legal changes instituted to restrict units from going rental, but they could never get a majority of owners to vote in its favor, and those efforts have always failed. Now, thanks to property appreciation, I am told that our units are getting too expensive to be purchased as rentals, so we have seen the trend of any additional units becoming rentals, stall. We have contact information for all of the owners, all of the involved property management firms, and for almost all of the rental tenants. We maintain regular email contact with all parties, and we try to run a fairly tight ship. The rental unit owners for the most part choose considerate mature tenants, so for the most part we have had few troublesome tenants -- counting those on one hand. Rental tenants who have created problems are dealt with directly and immediately via email. If that doesn't work, we contact their property manager or unit owner and get them involved. So far, for 30+ years, those actions have always solved any problems we have had. Thank goodness the few bad apples who have rented here in the past, have moved away.