Creative condo rental restrictions

Larry

We just witnessed a presidential primary where one candidate was allowed to say they could do all these things when in fact they can't and they knew before saying it.

I was in the process of commenting on every item when actually reading them, realized that you can't do most of what you suggest without a change to the associations CCRs. You have certain areas of the country where because of the economic downturn many communities were snatched up and used as investment, some as high as 50% or more. Good luck getting rental restriction voted on. The only places where you could pass something like this is places that don't have the issue.

What you are suggesting is that HOA's start to become landlords, when in fact they have enough problems trying to run a small corporation.

And how do you propose dealing with guests?

Larry

Now you are giving out misinformation. There is no case law that says the HOA is a landlord. Are you saying that if the dishwasher broke the HOA is responsible. How about the windows, carpet, drapes, etc. The HOA is NOT a landlord, but does have a moral obligation not to turn a blind eye to a problem.

Assignment of Rents must be in their CCRs. Many of the other items you brought are throw out by §4740.

No direct experience with this - but you asked for thoughts. Here goes:

I'm not sure what problem you're trying to remedy with a one-size-fits-all solution.

I expect that some Condos are set up to handle this level of additional responsibility, but many may not.

In & out fees. Sounds reasonable as long as you can apply it uniformly - and it should probably be based on additional staffing requirements and repairs.

Performance bond. Interesting idea. If you have this, I expect you don't need some of the other measures you suggested. Then again, there probably needs to be another level of decision-making on what you're going to actually try to recover on.

Leasing fee for common area. Too complicated IMO. What about vacancies? What about people who say that the rental does not include use of the amenities - Can they avoid the fee? Etc.

Rental payments to association. Very inefficient IMO. Swallowing a whale to catch a fish.

Copy of lease agreement. Sure.

Government ID. To use a pool or a gym or valet service, maybe. But no, I don't think that Condo has right to know everyone who comes in and goes out.

Codicil. Condo should probably prepare its own and require a signed copy.

Daily fines. Headache for everyone.

In my original question, I asked about guests. Here's my hypothetical. My college-age kid comes home with a few friends. Makes noise. Parties into the wee hours. Kid accompanies guests so satisfies your requirements.

Why do I get away scot free when my kid and guests are likely to cause more problems than someone else's tenant? I see this conflict of tenant vs guest brewing, and I think it could get noisy and angry.

Also, there can be long-term tenants - In my townhouse community, we have had tenants in some houses for 7-8 years. There would be questions why those landlords are being penalized.

Very difficult to impose a new regime. If you're already having rental problems, these measures aren't going to go down smoothly.

Just my thoughts tho.

Larry

Read what you wrote, "under these circumstances", not ALL, but THESE.

I know this case quite well, and I know the area in which Village Green is located. It has gangs all around the complex.

Adrian Adams also used this case to tell me my former association couldn't pull water meters on delinquent homeowners that didn't pay their metered water bills. Village Green NEVER disconnected the power or utility, the homeowner did it on their own.

BTW, the California Supreme Court are the MOST liberal judges in the United States. These actually take up smoking the "maryjanes"

Besides the point that codicils by definition are limited to wills and not contracts at large, amending an existing contract can be impossible and not legal. Furthermore, by doing so the HOA is now party to all applicable eviction laws and liabilities such as unlawful detainer and the like.

But like I said earlier, there is no legal way to force an admendment on an existing contract.

Larry,

Frances v. Village is a load of crap. It also goes back 30 years and as we all know, things are different from 30 years ago. Village Green was an apartment complex converted into a condo. Everyone one of these types of projects have trouble written into them from day one. This specific association was short of funds and in a area with a "bad element". This board made some bad decisions in this matter, but we hear that everyday on this site. She was told to take down the lights, instead turned off the power to the light. The lights were improperly installed and wired. When she turned off the power to the light, it turned off everything. Whose fault was that?

But make no mistake, a condo, its Board, or agents, ARE NOT landlords. This case only identified condos as landlord "ONLY UNDER SPECIFIC CIRCUMSTANCES". What would have been better was stressing that condo association have a duty of care, of which I believe all here would agree.

While some, most or all of your suggestions may or may not have merit, there has to be some authority in the CCRs to create those types of rules. If the CCRs have NO language in them speaking of rentals or leases, you CANNOT just go out and create an arbitrary rule. Rules and Regulations HAVE to be "fair and reasonable" and there must be some form of authority within the governing docs or state statues to create them. If you have within your CCRs a section saying any commercial vehicles are allowed EXCEPT 18-wheelers, and then everyone one in the complex become independent plumbers each with a one ton pickup with neon orange signage, you can't just create a rule saying no more commercial vehicles without properly amending the CCRs.

Point is that people or investors bought into a association hopefully having read and understood the rules outlined in the CCRs for rentals or leases. As I worked in the HOA legal field, all new CCRs that were being used for restatement purposes ALWAYS had Assignment of Rent clauses in them. Board then had the proper and legal authority to collect rent to pay delinquent dues and other things.

Want a move in move out fee, why not. If the association can show regular damage to an elevator or property because of people moving in, sure, but it has to apply to all, or that is discrimination. Charge extra for common area, such as pool, that's double taxation. Performance bond, better be in the CCRs. The rest of your suggestions, better have legal authority.

Then, who is going to administer all of this. If self-managed, do the boards have the time and resources to do this. If professionally managed, how much more should we ask for doing this type of administration?

And finally, what happens when and if they decide to change the tax code or even abolish it as some in the political cycle have suggested. Why would anyone now want rental property without tax benefits. If you thought the last housing crisis was bad, well...do the math.

I completely disagree with that statement . . . although I live in a single family housing development with only about 6 rentals out of 120 homes. The majority of our problems are caused by a handful of delightful owners.

I'll start with your last one - the daily fines for non compliance sounds like a good idea, but I'd be concerned about proving it (the tenant can always lie and say he/she are relatives or something). In my state, there's case law prohibiting HOAs from issuing fines because they aren't government agencies (there had been suggestions to amend the law to allow it, but I guess the legislature is too busy attacking gay people!)

One of our board members, who also rents out his unit, once suggested a move in/out fee - unfortunately that came up around the time we were trying to amend the CCRs to put in a rental cap. That effort failed and so the suggestion was dropped.

The performance bond might be a bit much for someone who has to rent out the unit for hardship reasons. Ditto for the monthly leasing fee.

I don't think the rental payments being made to the association would fly, although I agree it could be a great way to ensure the association gets its money. On the other hand, it could result in more expenses if the rent check bounces or the tenant doesn't pay at all - is the association then going to use its resources to go after a tenant who signed a private contract?

I like the idea of requiring a codicil to the lease that would allow the association to evict the tenant at the landlord's expense, but I'm thinking you could also amend the CCRs that could accomplish the same thing (I'd sue them both - the landlord for allowing a tenant to raise hell in the community and the tenant for behaving like a jackass).

I don't think the association needs to see the lease, but I agree the association should know who's living in the unit - it should also know what cars the person(s) drive. If your community has security officers (like mine), they would know which car is supposed to be there and that could eliminate the junk cars (not to mention help with enforcing rules like not parking on the grass).

We also have a lot of rental properties in my community (townhouse community) and I agree too many result in higher costs and ultimately lower property values due to unruly tenants and landlords who don't give a damn as long as the rent check clears. However, once you get a bunch of rental units, it can take years to clear them out, so rules enforcement is critical to taking out the trash and keeping it out. You have to apply the rules equally to on and off site owners alike and once everyone sees the rules will be enforced, regardless of who lives there, landlord/owners will either revve up their checkbooks to pay for tenants behaving badly or do their damn job in screening and educating tenants, as well as shutting down problems as soon as they arise. The HOA is not an el-cheapo property manager that babysits tenants while off-site owners relax and collect rent checks.

And make sure you're enforcing collection policies as well - some investor owners look for the communities with the really low assessments to increase their bottom line, but when you make it clear the assessments will be raised as needed to ensure the property is cared for property and reserves funded, that may keep the flippers and landlords from hell out of the community.

How can you require a codicil, just tell me that? You don't know very much about contracts

What happens when the other individuals refuse to sign the addendum

But the owner/landlord is already responsible

Yes, but maybe not at a detailed level. Example: assignment of rents.

Also, my experience is that some board members are reluctant to pursue vaguely stated rights against absentee homeowners. The right language could turn this around.

I suppose so, but like any provision, it depends on how the board wishes to enforce it. I don't think I would enforce it on an existing tenant. As NpS says, it is more for the future, unless maybe there was tenant criminal activity?

You may very well be right, as we are dealing with occupancy of a person and not just, say, a dangerous dog or the dual wheel truck. Safer to just use it for future tenants.