Investors and rentals

I resigned after 5 years as treasurer and now I am back on the board as the woman who took my place had serious medical issues with her husband.

Our neighborhood has 871 patio homes ---most one level and lawn maintenance is provided by HOA as well as termite inspections and power washing of homes and painting of front columns. Dues are $89 and have not been raised in 6 years. We have no delinquencies and have a healthy reserve.

Presently there are 5 rentals(owners rented during the period when nothing was selling). We have nothing about rentals in our documents.

Presently homes are selling quickly --one got 3 offers the first day, longest time on market about 6 weeks.

Recently an owner sold to a large investment company that is world wide-foreign registry and has reviews on internet that say they are "slum lords". Not yet a problem as they rented to a lovely couple.

Now, this is unbelievable -- an owner here is talking to others owners and to the family of owners who he knows have plans to sell and is facilitating a sale to an investor. One sale has already gone through and now a second house is being considered by this investor.

This is a small neighborhood and there are no secrets and the owners do socialize a lot.

I don't believe this individual is receiving any compensation for this, but I firmly believe he is hurting the neighborhood and the other owners. These investor sales are lowball offers. When another owner tries to sell these sales will determine the comps. Also, this is adding to the number of rentals.

I don't believe the rentals are hurting the neighborhood yet as far a people getting mortgages or keeping people from buying but the number of rentals and investors is rising.

What to do? I am considering contacting him as another owner- not a board member - to talk to him about his actions being detrimental to the neighborhood??? So far only 3 board members know about this and we will bring it up at our Sept meeting

Or, am I just over reacting??? Sorry for being so long winded.

Cecelia,

I don't see an issue. One thing though to keep in mind is that lenders have HOA Certs that are filled out when the house is in escrow and in the financing stage. One of the question asked is " Does any one individual or entity own 10% or more of the units". As you are only speaking of a handful versus 87, I believe you don't you have an issue, at this time.

One rental restriction many seem to like is that one cannot rent their unit during the 1st or 2nd year of ownership. This seems to stop investors but owners do not see it as a severe limit if they desire to rent out their unit at a later time.

Also add a minimum rental of one year to make a place less transient.