10% penalty to rent condo

What does your CC&R's say? From the hip, I would say this isn't an allowed fee.

This has nothing to do with the IRS or non-profit status, profit and income are two different things. HOAs can still have income from various sources.

You need to read your governing docs, specifically the CCRs, covenants, deed restrictions or what ever yours are called. The board/HOA can not pass rules that do not follow those docs.

If I were you I'd contact an attorney who will read your docs and let you know what they can and can't do.

We are not attorneys and if want a legal opinion you need to hire an attorney ... we are simply owners who have or currently serve in our own HOA’s and only offer information based on our experiences. My “personal opinion” is this would not potentially be legal for a single family HOA, but I am not as familiar with Condo statutes. The State CCIOA Condo Statutes which are out there on the internet for anyone and their dog to read state:

If you are a Condo it states regarding assessments:

38-33-104. Assessment of condominium ownership

Whenever condominium ownership of real property is created or separate assessment of condominium units is desired, a written notice thereof shall be delivered to the assessor of the county in which said real property is situated, which notice shall set forth descriptions of the condominium units. Thereafter all taxes, assessments, and other charges of this state or of any political subdivision, or of any special improvement district, or of any other taxing or assessing authority shall be assessed against and collected on each condominium unit, each of which shall be carried on the tax books as a separate and distinct parcel for that purpose and not on the building or property as a whole. The valuation of the general and limited common elements shall be assessed proportionately upon the individual air space unit in the manner provided in the declaration. The lien for taxes assessed to any individual condominium owner shall be confined to his condominium unit and to his undivided interest in the general and limited common elements. No forfeiture or sale of any condominium unit for delinquent taxes, assessments, or charges shall divest or in any way affect the title of other condominium units.

However, the following section also states in part:

38-33-106. Condominium bylaws - contents - exemptions

(3) The bylaws shall contain or provide for at least the following:

(p) Such restrictions on and requirements respecting the use and maintenance of the units and the use of the general and limited common elements as are designed to prevent unreasonable interference with the use of their respective units and said common elements by the several unit owners;

(q) Such restrictions on and requirements concerning the sale or lease of a unit including rights of first refusal on sale and any other restraints on the free alienability of the unit;

Potentially it could depend on what your Bylaws state and this is something we cannot read ourselves. Have you asked the HOA to provide you with where it states under the State Law or the Governing Documents where they have the right to determine a third party regarding the rental of YOUR Property?

Colorado does have a Regulatory Agency, so they also might be able to answer your question: https://www.colorado.gov/pacific/dora/hoa-information-and-resource-center

The State Statutes are also noted on that site or can go to: https://advance.lexis.com/container?c0345494EJAA5ZjE0MDIyYy1kNzZkLTRkNzktYTkxMS04YmJhNjBlNWUwYzYKAFBvZENhdGFsb2e4CaPI4cak6laXLCWyLBO9&crid=156517c0-9326-4b76-bdee-072ade548b4d&prid=3fa62e18-815b-424c-997a-026f71e9a0b3

With Melissa, I don't think I understand the arrangement at your HOA, Carla. The prop. mgr. manages rentals and the prop. mgr. IS your HOA & its board??

Carla would you mind telling us what County or City you are located? I am with Melissa you potentially need an attorney more versed in CCIOA and contracts. I know from past experience finding an attorney who knows CCIOA well is very difficult, but I could give you questions to ask them which could help you narrow down their knowledge of CCIOA. There was one first question I asked attorneys and how they answered determined if I walked out the door. Depending on how they answered they were either pro developer or ignorant regarding CCIOA.

That can't be. A company is a privately ran organization, a HOA is an association of the owners in which membership is limited to property owners and their representatives.

Send me an email at power_of_choice “at” live.com. Substitute “at” with @.

Is the HOA the leasing company or do the two have different names under different corporate umbrellas?

At closing, none of the bylaws mentioned rentals. The HOA and the leasing management is listed as one not-for-profit entity on the secretary of state website. As far as any owner can tell back in 2014the HOA board accepted this from the manager of the leasing/management side. When you ask for any information from the HOA board, it goes back to the same manager.

In 2014, the HOA board agreed with the manager to impose this penalty to owners, who do not allow the HOA/leasing management the rent out their property. This is not part of the by-laws just a rental guideline the board imposed as a penalty to Owner’s. This 10% has nothing to do with accessements. They send the owners an invoice for amount due. If you do not pay then you are not allowed to have access to your property, if I’m understanding this correctly. I have not been renting out my unit, but decided I might want to beginning in the fall.

When a person buys in the community, at no time did anyone from the HOA provide this information as part of the closing documents. I’m not opposed to a fee, but the fee should be the same no matter who is renting the units. The members who allow the HOA to rent their units to guest give back app. 600 a year to the HOA, but if the owner decides not to go that route then it’s 10% of a rack rate.

If I rent for one week in the summer, it’s $228x7 (nights) $1596x10%=$159.60. That’s for one week of possible rental income vs. $600.00 the HOA )owners in their program) gives back if you allow them to make money off your property per year.

Have not received an email from you to discuss questions.

Your HOA does this on purpose deliberately so they can be "the manager" These condo-hotels that one casino company built here in Vegas, they get away with it because the declarant owns a bunch of units and the HOA the owners will never become a self governing HOA because the declarant will always own enough units.

I think if someone challenged it in court, that the fee would be deemed unenforceable as a conflict with the CC&Rs and, perhaps, other laws. However, it will stand until someone or a group ponies up for a court battle.

The Covenants, Conditions, and Restrictions (CC&Rs) are a legal contract owners agree to when they buy their property and usually include a procedure for amendments. New conditions and restrictions can only be added by properly amending the CC&Rs. They cannot be added by writing them into guidelines, rules, or bylaws, unless the CC&Rs give that authority. For example, the CC&Rs could say that you can only paint your house colors approved by the ACC. In that case, the guidelines could state which colors will or will not be approved, because they would not be adding a restriction or condition, they would just be clarifying a restriction or condition that already exists in the CC&Rs.

The BOD are amending the bylaws to read....the only way to short term
Lease a unit is for the YUYYY Condo Asdiciation to mange the rental , via the Condo association rental program or owners cannot short term rent their property. Any ideas??

The answer is somewhere in your CC&Rs. As Janet said earlier, "Ask them to provide you the Title and Section in your Governing Documents that gives them the authority to charge any such rental fee."

That authority needs to flow from the CC&Rs. The Bylaws alone can't impose an arrangement that impairs or limits your rights and certainly no in-house "guidelines" can do so either. Your rights are, or should be, spelled out in the CC&Rs.

I doubt this will hurt property values. Someone planning to use the condo for short term rentals might not buy there but I'm not sure the requirement to have the HOA manage the rentals will deter them since many would pay someone to manage the rentals anyway. On the other hand, many people would not want to buy in a condo association that does not restrict short term rentals.

As for changing the declaration, that is something you and the other owners have a right to do if you get enough votes. The Board cannot change it.

Just who does this Condo HOA consist of, Carla?

Please tell us WHAT your Covenants, Conditions & Restrictions (CC&Rs) say about amending them or adding on to them. I don't see in your posts, Carla, that you've read them.

As many with HOA experience....what’s the protocol for a HOA to charge its members
The HOA is a not for profit. It’s Incorporated as a not for profit in Colorado. Units can be leased or rented out. The Board passed a rental restriction. The restriction states” if I do not allow the Condo/HOA to market my property I’m assesd a 10% fee to use the services for my guest.
The title to the property is fee simple, with recorded deeds in Colorado. Yes, I’m a homeowner, but why should I be forced to enter into another contract with my HOA because I will not allow the HOA to collect rental income for short term rentals. HOA’s are not suppose to be organized for an owners profit. If I don’t allow my HOA to use the money in their corporate account to earn interest for rental income, then I’m assessed a fee??

They are admending this to, up the fee to 15%.

, a registered not for profit, can force unit owners into another monetary contract above assessments.

I

As a not for profit, the association has to use the money for expenses not profits. So the more money the association gets from rentals, the lower your condo fees will be. The association can also screen the tenants. If the association did not charge these fees, then the money would stay with individual owners instead of to the property as a whole (all owners), and the owners could rent to any undesirables they wanted to. Make sense?

What I believe Carla and her HOA have is a management company that does both property management (rentals) and HOA management under the same roof and same name. To me, this is unethical, for the reason the residents are complaining about.

My guess is the management company got the Board to enter into a contract that skirts around the legality of the CCRs. Would not be the first time. The management company and the Board may be guilty of discriminate which may violate federal housing laws.

The only law that I can think of that they may be breaking, based on the information you gave us, is antitrust laws., which I hadn't thought of before. I'm not an attorney and I'm not that familiar with antitrust laws but generally a corporation cannot do things that limit competition. It seems like they may be doing just that by requiring members to use the HOA as their rental manager.

There is a federal antitrust law and may be a Colorado law. This would be something for you to discuss with an attorney or you may be able to get info from the Federal Trade Commission.

https://www.ftc.gov/about-ftc/bureaus-offices/bureau-competition/contact-information

https://www.asaecenter.org/resources/articles/an_plus/2015/december/legal-duties-of-association-board-members

Yes, the Condo HOA owners association & short term rental employees are one in the same. I have no problem if it read can only lease for 6 months or more. But the new declaration will read;

If an owner uses any other rental management company or self manages his or her unit on any internet vacation site, the owner will be charged a 15% service fee off the posted daily rack rates.

The Condo HOA is a registered not for profit as most are, but accounting rules state they have to pay taxes on rental income. P

I have. The 1st go around , this rental restriction was voted on by the BOD & property manager only. This go round they are placing a 15% penalty like above & limiting owners that long term rental of 6 months or more is not allowed. No I did not vote this. But who knows if all the other owners will take the time to understand the new dec. being voted on?? We have owners who currently the use their units

for their kids to go to college, so that’s a new issue since they don’t want owners staying more than 6 months.

Carla doesn't seem to listen very well.

And Carla still has not told us if she's read her CC&Rs.