HOA Charging "Lease Fee" to Property Owners

Is it typical for an HOA to charge property owners a lease fee if owner decides to rent out their condo? What are typical charges and what do the charges cover?

Thanks for the reply.

Some do, some don't, but this is something that might catch on - and I'd be OK with that.

A self disclosure - I'm not a fan of owner-landlords because of the havoc they've created in my community. I live in a townhouse community andcwe have a lot of owners who rent. The problem is there's more wear and tear on the common areas because of all the moving in and out, the owners don't tell the tenants about community rules, nor do they respond quickly when problems arise.

It takes more time (and eventually money) to address owner-landlords because you have to speak to them AND the tenants. Some owner-landlords scream louder than anyone else when assessments are increased because they don't want that to come out of profits, which means they're less inclined to care about reserve funding. If you've read some of the recent conversations on this website and other places, you've seen HOAs are having serious problems with underfunded reserves or no reserves at all, and now special assessments are necessary to pay for major replacements for the common area, like roofing.

There's also the matter of insurance costs increasing for everyone because too many rentals could prompt the insurance companies to treat the community as a rental property and so everyone winds up with higher premiums even if they're owner-occupants like me. Owner-landlords may be able to deduct assessments as a business expense on their taxes, but owner-occupants can't. Finally, property values can take a hut because there are too many rentals, and owner-occupants could have more trouble getting mortgages or refinancing them for the same reason.

So, you can see why I give a side eye to owner-landlords. By the way, a lot of this is aimed at investors, not the owner who lived in tge community fir years zbd us now downsizing or moving out if town or the state and needs a way to help pay the housing expenses until the old one closes. They tend to be more responsible because they risk a bigger financial hit if they wind up with the tenant from hell. I saw that happen in my community.

Now, that I've gotten all that off my chest......

There are no typical charges for leasing fees that I've seen, but they could help subsidize the extra paperwork and time required (you have to keep track of who's living in the home, send the tenants community information, like swimming pool permits, send extra parking passes, if appropriate, etc.) That cost would likely depend on how many rentals you have. I would also like to see the numbers as to how much more the association pays out in dealing with owner-landlords to come up with a fee that's fair. If you want to rent out your home, you can always incorporate that into your rental fee.

Those are some questions you can ask your association board and the property manager, if you have one. But remember, it's not their responsibility to ensure you make money. HOAs, after all, are designed for people who will actually live in the community. The way they think about association issues and the budget, won't necessarily be the same as an owner-landlord, who has profit on the brain.

When our community tried (and failed ) to amend our CCRs to put in a rental cap, one homeowner suggested landlords pay a move in and move out fee whenever tenants changed. He owned a rental unit, but unlike many of the landlords we had at the time, he was responsible (I served with him when I was on the board).
I also think leasing fees could help underwrite the expenses incurred in keeping track of rentals to manage the rental cap.

Our costs with renters are mostly around moving. Moving cost consists primarily of processing cost we pay to the management company, rekeying, extra trash, and repainting hallways more frequently than we would otherwise. It happens that renters move far more than owners so the bulk of the expenses associated with moving is renter related. So we charge a per incident move fee.

Wow. Thanks for bringing these points out. I have never heard it quite so clear but it is so true, there many direct and also indirect costs.

Yes. How much do you think is fair?