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KathyF1 (North Carolina)
Posts: 3
Posted:
I have been reading the rental related posts and I can not get a good grip on what we can an cannot do in North Carolina. I do appologize if this has been discussed before.
Here is our senario:
We live in a PUD of 29 single famliy homes. The homes are unattached and we have a HOA for our comminity. We will be meeting with an attorney next week, but to save money and time, we just want to get an idea on what we can legally do. A few years back ( 4 or 5) the Board changed the regulations to allow rentals without placing a cap. Currently, we only require that they supply the HOA with a copy of the 1 year or longer lease and the names of the renters. We are now pushing the 50% mark and are getting concerned. Homes for sale are not selling and the first 5 with 3 having "for rent" signs posted in the windows. we are also getting visits for local Law Enforcement due to the renters.

Does anyone have any ideas or information specific to North Carolina and to single family homes (not condos)?

Your input will be greatly appreciated!

Thank you in advance!
Kathy F
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I will give you a "heads up", your HOA may NOT control renters. It's up to the mortgage/lending companies to put restrictions. Unless the HOA has bought all the homes and there are no loans out, then they may be able to pass rules of limiting rental. Highly unlikely that everyone in the HOA doesn't have a mortgage payment.

Now I know many have posted that their HOA has put restrictions or addedums to their documentation. However, I dare say if an owner has a good enough lawyer, when push comes to shove, the restrictions won't pass the mustard in court.

Keep in mind that Renters can NOT pay the dues on the behalf of the owner. The owners are ultimately responsible. The owners must also inform the renters of the rules and regulations of the HOA. It's the owner's feet the HOA has to keep to the ground when rules are broken. It's the owner's investment property and they should be concerned on it's upkeep anyways.

I do want to make sure you do understand "Renter's Rights". You may want to discuss what the laws are for Renters in your area. Did you know that a renter can stop paying rent today, and still have the right to live in the home for over 6 months to a year? Our county has 2 separate 10 day notices that have to be given to the renter before you can evict them. However, those 10 days do NOT count holidays or weekends. So if you give a notice in November or December, it could take longer. You may still have to pay additional costs related to having the Sherrif's department put the person out as well. (My eviction costs on my Renter was several hundred dollars.)

Renter's rights are OUTSIDE of any HOA documentation. They can be part of local, state, or even federal laws. The real issue is making stronger owner's rights to evict unruly renters out rather than restricting renters allowances. Not all renters are bad. Some cases, the owner's need someone to rent while they had to move out of town for job oportunities. Even out of state owner's/investers need tenants. Would you rather see abandoned houses or one's that are lived in?

It's good your asking an attorney questions. They can get you in the right direction. Just be careful of the costs. They can charge you for phone calls or emails. There's the Retainer fee plus hourly rates. Make sure the lawyer is educated in Contractual/Business/corporate laws. This isn't necessarily a Real estate issue. It's a contractual agreement one.

Former HOA President
KathyF1 (North Carolina)
Posts: 3
Posted:
MelissaP- Thank you for your input. I think that the word "control" was poorly chosen. What I should have asked is Can we place restrictions on the rental properties. I fully understand that we as an HOA deal with the homeonwers and not the renters.
Any advice from others is welcomed.

KathyF

North Carolina
RobertG (Arizona)
Posts: 505
Posted:
MelissaP - I have an example from a local attorney that would show that Arizona allows rental restrictions. I do not know if any further appeals were made.

"Arizona Court of Appeals Upholds Association’s Right to Restrict Rentals in an Association
On December 22, 2005, the Arizona Court of Appeals made a landmark decision regarding an association’s ability
to restrict rental properties in a community association. In Vales v. Kings Hill Condominium Association, the Court upheld an association’s amendment to its CC&Rs prohibiting an owner from renting his/her/their unit in the association as soon as the first of the following was to occur: 1) sale of the unit by the owner(s) of the unit at the time the amendment was recorded; 2) death of the owner(s); or 3) if the owner(s) at the time of adoption of the amendment ceases to rent or lease his/her/their unit for more than three consecutive months. Arizona law was previously silent regarding an association’s ability to restrict or eliminate rental properties in an association.
To obtain a full copy of this case, go to www.cofad1.state.az.us/opinionfiles/CV/CV040816.pdf It is important to
note that in most cases, in order to implement a rental restriction, an association will need to obtain the requisite approval of the membership to amend its CC&Rs."
JeanneK3 (Maryland)
Posts: 562
Posted:
I am aware of developments in Maryland that updated their governing documents to prohibit rentals. They grandfathered in all existing rentals with the stipulation that when the unit was sold it would be owner occupied only.
KathyF1 (North Carolina)
Posts: 3
Posted:
Quote:
Posted By JeanneK3 on 07/09/2007 12:52 PM
I am aware of developments in Maryland that updated their governing documents to prohibit rentals. They grandfathered in all existing rentals with the stipulation that when the unit was sold it would be owner occupied only.

JeanneK3 - Do you know if this applies to homes or just condos / attached dwellings. Also, do you have a link to more information on the restriction? Although we are in North Carolina, it may be a good reference to take to our lawyer.

Thanks for all of you help and advice.
KathyF
GloriaM (North Carolina)
Posts: 829
Posted:
Kathy:

Melissa misquoted that it is up to the lenders, this is not so. I can tell you with the upmost confidence that NC HOA's cannot control the rentals unless it is specified in your documents already. There is a case law on the books that prevents HOA's from restricting an ivestors right to rent his home.

However that does not preclude the HOA's right to place restrictions on the Investor in order for them to lease the home. The HOA does have the right to apply reasonable guidelines in order for them to rent within the HOA.

Some of these restrictions could be e.g., Owner must ntoify the MC with the names, # of occupants, cars with tag number, make & model, a copy of the lease agreement, lease may not be less than 1-year, Owner to have tenant sign and agree to HOA's restrictions, etc....

I hope this helps.

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