Rental Violations

You’ll have to figure out which unit is currently rented (all of them) and that may not be easy because owners can and do lie. You could try finding out by checking your owner list to see which address is offsite and then poll those owners to find out who’s living there.

You could go to those units in person and talk to whoever’s there, but the tenants may not tell you anything (maybe they’ve been instructed NOT to say anything if the HOA comes along). That’s the problem with rental caps – it’s one thing to set them, but you have to put in a considerable amount of work to keep track of who’s renting, when they started, who started after the cap was reached, when it was reach, did the board issue a waiver upon request (e.g. the owner moved out of state for a new job and needed to waiver to help pay the housing bills until it’s sold).

Also, you didn’t say whether your rental cap grandfathered in the current owners when the homeowners approved it – if everyone was grandfathered in and the homes haven’t changed hands, it’s possible everyone gets to rent out their homes until the house is sold or transferred (and someone may have figured out a way around that like putting the house in trust).

The real problem with rentals is that investor owners don’t always tell their tenants about community rules, and some tenants don’t care about that stuff anyway, so they trash up the neighborhood and the association has to go after the owner (as it should because its contract is with the owner, not the tenants), and then there’s a lot of drama behind that.

Even so, if you’re having problems with people not complying with certain rules, you have to go after everyone, not just the people who rent. Ideally, you shouldn’t be able to tell who rents a house vs. owning and living in it, so you may want to focus on rules compliance. Some investor owners won’t come down on their tenants unless and until it costs them money, so you’ll need to announce increased enforcement on the rules that are most problematic (e.g. illegal parking). Hit folks in the wallet enough times, and they’ll cooperate. At least you may get better tenants.

Kevin

In many counties you can go online and see where the tax bill is being sent. If not sent to the address of the unit (as in the owner) than typically the unit is likely being rented. Some rentals will slip under that test as the owner still has the tax bill sent to the unit and the person living in the unit gives it to the owner. Typically this situation is a "family" member and who knows what the rent situation is and should probably left alone.

Actually, in some communities it could be the appearance.

We drove our neighborhood and my wife and friend guessed at close to 90% accuracy which were rentals.

I have rental houses in another neighborhood - I wrap landscaping into my leases ... if a renter doesn’t want it, they don’t get to lease my houses. They get copies of and agree to the CCRs and I have threatened to evict some.

Of course renters’ houses look, on average, worse than non renters.

Melissa,

You and I will continue to have to disagree on this point.

Ever work for a bank, or better yet, a mortgage company? From experience, you have no clue to what you're talking about!

Yes, it's condos. We have 126 units and are at about 23% rented. Gating is not a cost we want to incur. Thanks.

First, after ensuring you are solid ground with your restrictions, declare a moratorium on additional units being rented, including any continuation of leases from current renters. This gives you an immediate baseline, and hook to the future.

Second, develop list of rented units by reviewing tax records - tax bills will almost always go to the owner’s address vs the taxable property address - if they are the same, it is usually not rented. Not 100% accurate, but a starting point.

Third, as renters move work backwards to 15%.

Now, I gotta tell ya, this is a lot of work - be prepared, have a COA attorney prepared.

Steve,

Actually, no it is not impossible, it is done all the time in condos, but it is difficult and requires constant effort to ensure.

Also, an absolutely solid legal basis.

Kevin

If your docs say no more than 15% rentals you have the power to control it. Others are rambling on about can a limit be set or not but it does not apply to you as you already have one.

How to find the violators is the question and who falls under the 15% another question:

1. Set a procedure/policy for those over 15% such as a $100 per month fine.

2. Search tax records for those owner receiving their tax bill at another address. Assume they are renting it to someone. You will not find all rentals but the tax bill address is a good start.

3. Attempt to find out who has been renting out their unit the longest and build a list. Once you reach the 15%, go after the others as they are the ones violating the docs they signed to adhere to.

Here's a truckload of California case law backing up HOAs/COAs restricting renters, including caps: https://www.davis-stirling.com/HOME/Rental-Case-Law .

I also imagine when the number of renters exceeds say 60%, then these non-resident owners will control much of the HOA/COA, and the de facto mission may very well trend towards doing things as cheaply as possible, without regard to the upkeep of the HOA/COA.

As I've said before, if you dont track it, you cant report it.

I fill out these docs all the time, I always write: to the best of my knowledge, there are no renters. Why? We dont track them!

If a lender or insurance company wants to knock on every door to investigate who rents and who doesnt, they are free to do so.

We are not doing it for them.

I really have no opinion what people do within their home. They own it. They are free to do whatever they want.

And get someone's mortgage denied? No thanks.

If it was important to the mortgage company, they would send someone out.

Steve,

It’s simply a matter of following the rules.

If this isn’t important to you, you’re probably advising on the wrong forum

I meant "cant" be enforced.

And what if they wanted to know how many people in your HOA had the herpes virus. Would you spend hours per month inquiring? Would you track it over time?

Not dishonest. I give the most honest answer I can provide.

I actually did not know that Steve of Mass. is a PM. He seemed to me to be a long-time board member. Steve often is curmudgeonly, but also often gives good advice.

LOL. I'm not. Owner, sometimes board member, sometimes officer. Gotta take a break every now and then. Serving the HOA for free is not my priority in life, but sometimes needs to be done.

I was pointing out how silly the question is about how many renters vs how many people that have herpes. They are both dumb questions and not the HOA's job to figure it out.

It wasn't unlawful when it was added to the deed. We have deeds dating back to 1630 here. Cant delete something from a title search.

Steve, do not know what your point is.

Point is..... every hoa is different.

I think if you had said "coronavirus," then we might have something to debate. [wink]

Thank you for the update KevinH8. I am with you. As interested, consider reading some of those California appeals court decisions. They are chock full of HOA-presented evidence of the danger that renters pose. Interestingly and by my reading, the courts there have agreed that it is reasonable for a HOA/COA to be concerned about too many renters.