Rental Fees

Started by DennisH10 • 20 replies • 719 views

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DennisH10
Posts: 22

Posted:

I live in a 25 year old Planned community of individual owned row homes.. Many of them were purchased 20-25 years ago, and now the original owners have either moved into nursing homes or have passed away.. Some of the siblings are planning to keep the homes as a rental unit. Of course even though some of these home are currently empty,, and they are continued to be charged the monthly HOA service, fee, NOW this association board has decided that if the siblings decided to Rent the unit in lieu of selling it., Then HOA is going to charge them a $500 per year rental fee on top of their monthly hoa service assessment. QUESTIONS : Has anyone ever heard of this type of fee charge? I just can not imagine that this type of Money grabbing fee charge can be legal. Any other opinions out there ???

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would remind the board that the HOA does NOT own these homes. That means they are NOT part of the rental agreements. What I would recommend instead is that they must have leases with the caveat that renters MUST obey the HOA rules. If they violate the rules, the owner can evict the tenant. The HOA can NOT evict the tenant nor charge them any fees (included HOA) for living there. The HOA holds the owner's feet to the ground for any violations of the renters.

If the HOA requires that HOA rules are part of the lease agreement, it gives more power to the owners to evict or pass on any fine expenses. (Depending how it's written). Tenants have rights too. So a person renting needs to know and understand "Tenant's rights" prior to renting. Believe me after having a guy who fixed motorcycles IN the house and moved a baby Emu into the backyard, (Found after it attacked me) it is good to be educated on rental laws/tenants rights.

Former HOA President

DennisH10
Posts: 22

Posted:

It sounds like you may have misunderstood my question: it is not that the HOA is charging the renters the $500 per year,, but they are planning to charge the owner of the home that they are renting the $500 / year if they decide to take income rent from a renter.

Quote:

Posted By MelissaP1 on 09/08/2018 10:00 AM
I would remind the board that the HOA does NOT own these homes. That means they are NOT part of the rental agreements. What I would recommend instead is that they must have leases with the caveat that renters MUST obey the HOA rules. If they violate the rules, the owner can evict the tenant. The HOA can NOT evict the tenant nor charge them any fees (included HOA) for living there. The HOA holds the owner's feet to the ground for any violations of the renters.

If the HOA requires that HOA rules are part of the lease agreement, it gives more power to the owners to evict or pass on any fine expenses. (Depending how it's written). Tenants have rights too. So a person renting needs to know and understand "Tenant's rights" prior to renting. Believe me after having a guy who fixed motorcycles IN the house and moved a baby Emu into the backyard, (Found after it attacked me) it is good to be educated on rental laws/tenants rights.

DennisH10
Posts: 22

Posted:

Quote:

CathyA3 (Ohio)
Posts: 6,299

Posted:

The only way the HOA would be able to charge a fee to owners who rent their units is if the declaration gives it the authority to do so. So read your declaration carefully, particularly the restrictions to see what they says about rentals. Keep in mind that all the provisions of the declaration must apply to all unit owners equally, so anything that singles out a small group of owners is unlikely to be legal - so even if your declaration allows it, I think the HOA is just asking for a court challenge if it goes ahead.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That is still confusing. Who is charging the $500 to rent if it's not the HOA? IF the plan is to charge a $500 yearly fee for renting out, then that is paid by the owners to whom?

Former HOA President

DennisH10
Posts: 22

Posted:

Yes the HOA Board is charging the Owner of the residence $500 / year,, if they decide to rent their unit out to another. It is like the HOA is saying, well if you ( owner ) are going to make a income off your property,, then we want a cut of it.

Quote:

Posted By MelissaP1 on 09/08/2018 4:12 PM
That is still confusing. Who is charging the $500 to rent if it's not the HOA? IF the plan is to charge a $500 yearly fee for renting out, then that is paid by the owners to whom?

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Dennis,

What do the CCRs say?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

What profit is one making off of rental? That is a HUGE ASSUMPTION that rental property is "Profit" making. Not every rental is for profit but for function. If I get a job out of state, I may need to rent the home out. That's not a profit situation. Plus if the HOA was to get their "cut", it would be considered "Profit" to them. Meaning the HOA (ALL owners) may have to pay taxes on that. The HOA is to be funded ONLY by collection of dues. This isn't a dues collection.

I would vote no and point out the things that make this a bad idea. As everyone else has stated, it's got to be put into your documents to actually make it applicable. That is another project altogether...

Former HOA President

JenniferG12 (Texas)
Posts: 103

Posted:

Quote:

Posted By DennisH10 on 09/08/2018 4:40 PM

Yes the HOA Board is charging the Owner of the residence $500 / year,, if they decide to rent their unit out to another. It is like the HOA is saying, well if you ( owner ) are going to make a income off your property,, then we want a cut of it.

Or it's meant as a deterrent. Most places prefer as many owner occupied units as possible. Or a security deposit against potential damage. Administrative costs if in your state HOAs have duties to tenants. We don't know their reason. As others have said, you need your documents. Find the sections addressing rental properties.

In what form did this new directive come? It is new?

DennisH10
Posts: 22

Posted:

In what form did this new directive come? It is new?

Yes it is just NEW on a recent amendment. This board is almost always changing the covenants in order to take less off of the association responsibilities. and putting it onto the owners.

TimB4 (Tennessee)
Posts: 21,059

Posted:

It sounds like one would have to challenge the amendment in court.

consult a local attorney versed in property law.

PaaN
Posts: 219

Posted:

..... Yes it is just NEW on a recent amendment. This board is almost always changing the covenants in order to take less off of the association responsibilities. and putting it onto the owners. .....

+ 99.99999% of the time the 'board' may NOT unilaterally change the covenants w/o a VAST majority of the memberships' vote

+ on the other hand, it is the owners who fund everything anyway - the association merely 'manages' as per the CCRs

+ YOU need to read AND UNDERSTAND said document

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Dennis,

You need to provide actual language of the CCRs and what you say the amendments are ... otherwise, we are all evaluating technical issues based on summarized inputs ...

KerryL1 (California)
Posts: 14,550

Posted:

Don't know much about this, but wouldn't the HOA, presumably a non-profit, have to claim each $500 as a profit if it's not used to defray HOA expenses related to move-ins/outs?

We have a flat 12 day fee for move ins/outs because we must hire a temp security officer at our lobby doors to the street where the moving vans park. W also charge a refundable damage deposits since the moving route includes elevators and condo corridors.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Dennis,

I still haven’t seen your CCR language re this topic ... are you going to share it?

DennisH10
Posts: 22

Posted:

later,,, can't get it today

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Ok. I’m out of this one.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By KerryL1 on 09/09/2018 12:36 PM
Don't know much about this, but wouldn't the HOA, presumably a non-profit, have to claim each $500 as a profit if it's not used to defray HOA expenses related to move-ins/outs?

Not necessarily "profit", but probably taxable income.

Escaped former treasurer and director of a self managed association.

KerryL1 (California)
Posts: 14,550

Posted:

Knew I probably didn't ask it correctly. Thanks, Douglas.

MichelleK5 (New York)
Posts: 161

Posted:

When I owned an apartment in NYC, my HOA charged the owner one months CC fees(via the management company) if the owner rented the apartment out.
They also required a copy of the drivers licence, a referral letter from the previous landlord, and a bunch of various checks on the tenant (criminal and/or credit history, can't remember now), as well as a ton of paperwork. They also provided the tenant a copy of the bylaws.

The one month CC payment was meant to cover all the above costs since it was the management company who was doing all the paperwork, not the owner.

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